40% of mortgage deals pulled since mini-budget; financial markets in turmoil – business live | Bonds

Sir Martin Sorrell, founder and chairman of the media company S4 Capital, has predicted a “bathtub” shaped recession for the UK, with two difficult years in 2023 and 2024.

While he broadly welcomed the government’s growth strategy, he said the timing was wrong. He added that the corporation tax change (rather than rising to 25% from April 2023, the rate will remain at 19% for all firms) will not encourage investment, as long as there is heightened uncertainty over the UK’s future.

He told Sarah Montague on BBC radio 4’s World at One:

I don’t think rates of tax necessarily determine whether people invest, it’s certainty or uncertainty that makes you invest and the environment partly as a result of his statement on Friday and what he said over the weekend that there might be other unfunded tax reductions… has created even greater uncertainty. The issue of uncertainty is the real issue. Businesses will gust go on strike, they won’t invest until they see some clarity and we’re not going to get clarity for the next few weeks: no parliament, the Conservative party conference coming up…

This is just like the CEO and the CFO of a company coming up and saying: my revenue’s down, my costs are up and I have no specific plan for dealing with it, just leaving the shareholders in limbo. Unfortunately the shareholders only vote at times of elections so we have to wait for two years to see what the result of this is.

There will be falls in employment [in part] as a result of this [the mini-budget].

Asked about the likely shape of the recession, Sorrell said:

This is a bathtub [recession]. What we’re going to see 2023 and 2024 are difficult.

(Simon Johnson, former chief economist for the International Monetary Fund, has said that a U-shaped recession is like a bathtub: “You go in. You stay in. The sides are slippery. You know, maybe there’s some bumpy stuff in the bottom, but you don’t come out of the bathtub for a long time.”)

Sorrell went on to explain:

We’re in a difficult place. I don’t think we’ll see a recovery until the US presidential election in 2024. What I think the government has done here is gamble politically that by the general election in the UK in 2024 there will be some growth and that will bail them out. That is a heck of a gamble, particularly if you don’t have a fiscal plan.

Forty-one per cent of mortgage products have been taken off the market since Kwasi Kwarteng’s mini-budget last Friday, which sparked panic in financial markets, and expectations of a jump in the Bank of England’s base rate to 6% by next summer.

A further 321 products were withdrawn overnight, on top of the record 935 pulled the day before, according to Moneyfacts.

Between Friday and today a total of 1,621 residential mortgage products have been withdrawn leaving 2,340 on sale today.

According to Defaqto, more than 20 providers have withdrawn their entire fixed rate mortgage range.

Katie Brain of Defaqto says:

What products are left are changing at a rapid pace, lenders seem to be really unsure of what to offer and what price with so many changes in the money markets at the moment.

Consumer finance expert Martin Lewis has tweeted:

Liz Truss was asked about mortgages this morning.

As a reminder:

EU leaders will discuss next week what they regard as “sabotage” on the subsea Nord Stream gas pipelines, according to an EU official in Brussels.

He said:

The attack on strategic infrastructure means that the strategic infrastructure in the entire EU has to be protected.

This changes fundamentally the nature of the conflict as we have seen it so far, just like the mobilisation… and the possible annexation.

He was referring to Russia’s mobilising of 300,000 more troops for its war in Ukraine and expectations that president Vladimir Putin will annex eastern Ukrainian regions. He is expected to begin formally annexing 15% of Ukrainian territory on Friday to add four Ukrainian regions to Russia.

As gas continued to leak into the Baltic Sea for a fourth day since leaks were first discovered, it remained unclear who might be behind any deliberate attack on the pipelines.

Russia said the incidents looked like “an act of terrorism”, and that the leaks off the coasts of Denmark and Sweden occurred in territory that is “fully under the control” of US intelligence agencies.

Lindt & Sprüngli has won its battle against the German discount retailer Lidl, as Switzerland’s highest court ruled that the Swiss chocolatier’s famous Easter chocolate bunnies deserve protection from copycat products.

It has ordered Lidl to stop selling a similar bunny in Switzerland and to destroy its remaining stock.

The Federal Court said surveys submitted by Lindt showed its gold foil wrapped Easter bunny was well known to the public. It added that the two products were likely to be confused even though there are some differences.

Regarding the inventory destruction, the court said in a summary of its verdict:

Destruction is proportionate, especially as it does not necessarily mean that the chocolate as such would have to be destroyed.

The Swiss premium chocolate maker Lindt has fought many court battles over the years to protect the Easter bunny, one of its best-selling products. Germany’s federal court ruled last year that the gold tone of Lindt’s foil-wrapped bunny had trademark protection.

Porsche has made its stock market debut, one of the biggest public offerings in Europe ever.

Shares in the German sports car maker initially rose to €84 when they started trading in Frankfurt, valuing the company at €75bn. They were priced at the top end of the announced range, at €82.50, last night. The stock has since fallen back 7.9% to €62.50, amid a general share selloff. The Dax has fallen 1%, or 122 points, to 12,059.

The parent company Volkswagen is offering 911m shares, in a nod to Porsche’s famous 911 model.

Porsche hailed the beginning of a “new era” and chief executive Oliver Blume said:

Today, a big dream comes true for Porsche. Our increased degree of autonomy puts us in a very good position to implement our ambitious goals in the coming years.

Other companies are thought to be delaying going public because of the market turbulence.

Liz Truss said this morning that fracking will only be allowed to take place where a community has consented, and the government is working on the “detailed issues” about how support can be assessed.

She told BBC Radio Lancashire, which broadcasts in the region where fracking for shale gas was halted after earth tremors:

It’s very important for me as prime minister that any fracking has local community consent.

This month, her government controversially lifted a moratorium on fracking in England that had been in place since 2019, arguing that strengthening energy supply was an “absolute priority”. However, many experts, communities and MPs are strongly opposed to fracking.

Britain’s financial watchdog has told insurers to help customers struggling to pay the premiums on their policies, which could leave them unprotected.

The Financial Conduct Authority said it was writing to the bosses of insurance firms to to make sure their customers are protected from unnecessary products or add-ons and unfair penalties. Where poor practice is found, the FCA vowed to quickly intervene to protect customers from harm.

The watchdog said firms can help customers in financial difficulty by:

• Reassessing customers’ needs

• Considering whether there are other products that better meet the customer’s needs

• Providing clear information to consumers about the additional cost of premium finance

• Working with customers to avoid the need to cancel necessary cover

• Waiving fees associated with adjusting a customer’s policy in line with the reassessments

• Considering whether cancellation fees should be removed for customers in financial difficulty

Sheldon Mills, executive director of onsumers and competition at the FCA, said:

Customers who are struggling with their finances should contact their providers as soon as possible. We encourage customers to continue to shop around to find the best deal.

Firms should not unfairly penalise them for any payment difficulties but instead work with them to find solutions.

A fourth leak has been found on Nord Stream pipelines, Sweden’s coast guard says, the latest twist in Europe’s energy crisis.

The coast guard discovered a fourth gas leak on the damaged Nord Stream pipelines earlier this week, a coast guard spokesperson told the Svenska Dagbladet newspaper.

”Two of these four are in Sweden’s exclusive economic zone,” the spokesperson, Jenny Larsson, told the newspaper.

The two other holes are in the Danish exclusive economic zone, according to a translation of the report published by Reuters.

You can read more on our Russia-Ukraine war live blog with Martin Belam here.

The European Union suspects sabotage was behind the gas leaks on the subsea Russian pipelines to Europe and has promised a “robust” response to any intentional disruption of its energy infrastructure.