Your commercial news round-up: Women’s Euro, Octopus energy, mortgage tests, money laundering, H&M

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Today, the Bank of England announced that it’s raising interest rates to 1.75% – the biggest hike in 27 years – in an effort to curb the inflation driven by the consequences of Russia’s invasion of Ukraine. The bank has also warned that the UK economy will enter into recession later this year. Stay up to date with developments in this area via the major news outlets and consider the wider implications of this hike in interest rates on the commercial sphere. Plus, read snapshot summaries of some of the week’s standout news stories in this week’s round-up.

• Last week, we pondered the commercial impact of the Lionesses beating Germany to win the UEFA Women’s Euro 2022. With records being broken left, right and centre, including the highest attendance ever for any men’s or women’s Euro fixture (87,192 spectators), the victory has not only inspired generations of girls to play football, but is set to change the commercial prospects for the England team themselves.

Director at the M&C Saatchi Sport and Entertainment agency Jenny Mitton spoke to SportsPro: “For the Lionesses, they’ve done something that as a nation we’ve been so desperate to achieve for 56 years. The women have done that after five years of being fully professional.” Mitton has forecast that brands including sportswear giant Nike, as well as Visa and Barclays, which are already active in women’s football, will establish one-off deals with players. Other companies are also likely to want to get involved with the women’s team as they offer a “platform for these brands to talk to the whole nation”.

• Octopus Energy has requested £1 billion in taxpayer funding from the UK government to help it buy Bulb, which collapsed in November 2021. The government has refused to comment “due to commercial sensitivity” but the £1 billion funding is part of a potential package that would include Octopus paying more than £100 million for Bulb’s customers and entering a profit-sharing deal with the government.
   
• A mortgage affordability test, known as the ‘stress test’, has been scrapped as of Monday 1 August as the Bank of England eases mortgage borrowing rules. The test forced lenders to identify whether prospective borrowers would still be able to afford their mortgage if interest rates rose by up to 3%. The removal of the test might make it easier for some people to get loans (eg, self-employed or freelance workers) but other restrictions remain, including the loan-to-income framework. “Lenders will also still use some form of testing but to their own choosing according to their risk appetite,” said Mark Harris, chief executive of mortgage broker SPF Private Clients. Borrowers won’t feel an immediate impact of these decisions because lenders won’t change the way they assess loans.
   
• The UK government has launched a new register of UK property owners, which requires individuals seeking to buy or own UK property via offshore entities to list the identities of the people that control those overseas firms. If they fail to do so, they could face fines of up to £2,500 and prison sentences of up to five years. Lord Callanan, business minister, explained that the new register will help to ensure the UK is a “place for legitimate business only” by exposing the “criminals attempting to hide their illicitly obtained wealth”. These requirements also apply to any overseas entities that have acquired any UK properties since January 1999 – they’ll be given six months to register this information, according to the government.

• In light of an anti-money laundering compliance crackdown, the number of fines handed out by the Solicitors Regulation Authority (SRA) against law firms has increased six-fold to 37 fines in 2021/22 compared with just six in 2017/18. The increase in fines came about due to two different enforcement projects, which saw the SRA review firms’ compliance with anti-money laundering standards and check whether firms were in breach of transparency rules. Checks on firms’ compliance and transparency rules will continue following the “one off” anti-money laundering risk assessment exercise.

• H&M has been accused of “taking advantage of consumers’ interest” in sustainability and products that don’t harm the environment in a new false advertising lawsuit. Chelsea Commodore filed the complaint in a New York federal court on July 22, asserting that the fashion retailer is “misleading” its customers having “created an extensive marketing scheme to ‘greenwash’ its products” to market them “as environmentally friendly when they are not”, according to the Fashion Law. As part of this marketing scheme, H&M used ‘environmental scorecards’ which are displayed in several ways, including on green hang tags and online marketing. The retailer has been accused of sharing “inaccurate and misleading data” on these scorecards by turning negative results into positive ones.

Check the News every Thursday for this weekly commercial news round-up.

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