Today's business and finance round up 8th June 2021
🏫Office provider profits fall as home working rises
8th June 2021
Good morning Summer plans hang in the balance as we’re now facing a shortage of summer products like garden furniture as people stock up for UK staycations.
On the plus side dating apps including Tinder, Hinge and Bumble, have signed up to a government scheme where users will be able to display a vaccination badge on their profiles.
- Office provider profits fall as home working rises
- Digital currency? Not so fast says Bank of England
Yesterday's market moves
FTSE 100 +0.1% 7,077
FTSE 250 +0.3% 22,908
Markets continue to edge up as they flirted with all-time highs. Investors are eagerly awaiting US inflation data due out later this week. Markets are concerned that higher inflation could prove more enduring than the US central bank is saying. If so then interest rates could increase sooner than expected.
Office provider profits fall as home working rises
What’s going on
IWG, the world's largest flexible working space provider, has said lockdowns and new Covid variants will push profits this year “well below” 2020 levels.
Why is this important
The British company, previously known as Regus, posted a £620 million loss in 2020 as millions of people worked from home due to the pandemic.
In the company’s announcement yesterday it said that 2021 wasn’t looking much better. The prolonged impact of Covid means that the return to the office will be slower than previously predicted. The news sent shares down 10%.
IWG has over 3,300 locations across 110 countries and in normal times over 2.5 million people use their workspace.
In markets where restrictions are easing such as the US, the company said it has seen some positive momentum with “unprecedented demand for our flexible work products as many more enterprises adopt hybrid working”.
In a sign of what could be a new trend, earlier this year IWG agreed a global deal with London-headquartered bank Standard Chartered that will allow its 95,000 workers to access IWG’s offices, which may be closer to their homes than the bank’s own sites.
Working in an office 5 days a week could be a thing of the past even as lockdown restrictions lift.
IWG is adapting it’s business model to cater for hybrid working, a popular approach being adopted by many companies.
But not all workers are happy with this model, Apple employees are demanding more flexibility after the company announced plans for staff to be in the office at least three days a week by September.
Digital currency? Not so fast says Bank of England
The Bank of England is looking into creating its own digital currency dubbed ‘Britcoin’. This could potentially replace physical cash in the future.
Unlike Bitcoin, Dogecoin and other cryptocurrencies, Britcoin’s value would be linked to the pound and regulated by the UK central bank. This would make Britcoin less volatile i.e. less chance of the price swinging off the back of an Elon Musk tweet.
Supporters of cryptocurrencies say banking this way is more efficient. Instead of relying on banks to act as middlemen, money can be transferred directly to the recipient and payments can be made in real time.
The head of the Bank, Andrew Bailey, has been vocal in his scepticism of cryptocurrencies calling saying they have “no intrinsic value”.
However the rising popularity of Bitcoin and the like impacts the Bank’s role which is to maintain the financial stability in the UK.
Yesterday the Bank published a discussion paper laying out some of the pros and cons of Britcoin. In short, it still hasn’t come to a decision.
It says a range of issues and uncertainties remain in the way. One of the biggest risks would be if lots of people move their deposits away from current and savings accounts, and into cryptocurrency, this could undermine the stability of high-street banks.
The UK is one of dozens of countries toying with the idea of a digital currency. The Bahamas became the world's first country to actually introduce one, launching its Sand Dollar last October.
Stat of the day
The average millionaire has 7 sources of income
Other stories to keep you in the loop
- US and UK airlines demand end to transatlantic travel restrictions (link)
- Number of Uber UK rides back to pre-pandemic levels (link)
- Halifax says house prices grew at strongest in 7 years (link)
- Google fined $270 million in France for unfair advertising practices (link)
- Amazon chief Jeff Bezos to travel into space next month with his brother (link)