• Market Loop
  • Posts
  • Today's business and finance round up 2nd July 2021

Today's business and finance round up 2nd July 2021

🔌Nissan backs UK electric car industry

2nd July 2021

Good morning Primark and Gap, two high street fashion giants who have revealed vastly different fortunes in the past couple of days. Primark is setting sales records whilst Gap is closing all 81 of its UK and Ireland stores. Primark is remaining firmly an offline / in-store offering whilst Gap’s British customers will have to buy their goods online from September.

Today's stories

  • Nissan backs UK electric car industry

  • Gov savings go green

Yesterday's market moves

FTSE 100  +1.3%  7,125 FTSE 250  +1.1%   22,623

Markets started the third quarter of the year in fine form as investors patiently await US job numbers (due out later today) that could provide further clues about when the Federal Reserve will reduce support for the US economy.

AUTONissan backs UK electric car industry

What’s going on?Japanese carmaker, Nissan, is going all in on UK electric vehicle (EV) manufacturing. It’s announced a huge expansion of EV production at its car factory in Sunderland which will create over 1,600 jobs and thousands more in the supply chain.It’s also investing £1bn, through its partner Envision AESC, to create a battery plant aka gigafactory. 

Why is this important?

The announcement has got the government very excited with Boris Johnson calling it a "major vote of confidence in the UK".

Nissan’s decision to invest in the UK car industry counts as a win on two fronts for the government:

  1. Cars solely powered by petrol or diesel are on their way out, from 2030 sales of them will be banned with the UK. So it’s vital that the country has the capacity to produce the EVs that will replace them.

  2. During the Brexit negotiations Nissan had warned that the future of its Sunderland plant could be at risk. The government was determined to avoid this as Nissan is a major employer, with 46,000 workers in the UK. 

TakeawayBut it’s not all good news. The UK is some way behind its European peers in terms of battery production capacity so more investment will be needed as the transition is made to EVs. Also it's unclear how much public money was offered to Nissan to 'oil the wheels' to get the deal done.

SAVINGSGov savings go green 

The Chancellor has revealed details of a new savings product – Green Savings Bonds - that will fund environmental initiatives. Key features include:

  • Available to anyone over the age of 16.

  • People can put in anything from £100 to £100,000.

  • Money will be tied in for three years with a guaranteed fixed interest rate – the exact rate is yet to be announced.

It’s all part of the government’s ambition to reach net-zero emissions by 2050 and it’s aiming to raise £15bn with the launch of this new product later this year.Projects likely to be funded include new zero-carbon buses, subsidies to farmers to encourage the take-up of green agricultural methods and reducing the cost of making buildings less energy intensive.In November Glasgow will host the United Nations Climate Change Conference aka COP26. The government has come under fire for not doing enough to tackle climate change and wants to boost its green credentials ahead of the conference.But reaching net-zero emissions is likely to cost hundreds of billions if not more - £15bn is a mere drop in the ocean.However the government is jumping on a fast growing trend of ‘green’ investing. More investors are seeking out environmentally and socially conscious ways to invest their money.Also organisations like Make My Money Matter are educating people on how to invest in companies that are making the world a better place.

Stat of the day

The average British house is 729 sq ft - 20% smaller than in the 1970s

Other stories to keep you in the loop

Forward to Friend