EQ weekly roundup 5-9-18

This week’s roundup includes news that the boss of TSB is stepping down after the bank’s notorious IT failures, International Trade Secretary Liam Fox has rejected the Chancellor’s warnings about a no-deal Brexit and Mark Carney is in talks to extend his Governorship at the Bank of England.

This week’s roundup includes news that the boss of TSB is stepping down after the bank’s notorious IT failures, International Trade Secretary Liam Fox has rejected the Chancellor’s warnings about a no-deal Brexit and Mark Carney is in talks to extend his Governorship at the Bank of England.

TSB boss steps down after IT fiasco

TSB chief Paul Pester is to step down after seven years in charge, in the wake of a major IT failure at the bank.

In April this year, customers were left without access to online banking services for several weeks when an attempt to move data to a new computer system went wrong. The bank is still struggling to get its IT systems to work properly.

On Monday, it apologised to customers who faced disruption to their online and mobile banking over the weekend.

Following Pester’s departure, TSB chairman Richard Meddings will take on the role of executive chairman until a new chief executive is appointed.

In June, the Financial Conduct Authority launched a formal investigation into the meltdown. Its chief executive, Andrew Bailey, took the unusual step of making the probe public, ‘given the level of public interest’.

In July, TSB said the IT meltdown had cost £176.4m and pushed it to a half-year loss.

Fox rejects Hammond’s Brexit warning

International Trade Secretary Liam Fox has refused to back Chancellor Philip Hammond’s warning that a ‘no-deal’ Brexit could damage the economy.

Speaking on the BBC’s Andrew Marr show, he said: ‘This idea that we can predict what our borrowing would be 15 years in advance is just a bit hard to swallow.’

Treasury analysis estimates that by 2033 borrowing would be around £80bn a year higher under a ‘no-deal’ scenario. It also forecasts no deal could mean a 7.7% hit to GDP over the next 15 years.

Fox added: ‘Can you think back in all your time in politics where the Treasury have made predictions that were correct 15 years out. I can’t. They didn’t predict the financial crisis. No-one could.’

Divisions have deepened within the Conservative party in recent months as Brexiteers accuse Hammond – who is seen to be pushing for a softer version of Brexit – of embarking on ‘another instalment of dodgy project fear’.

Carney willing to stay on as Governor

Mark Carney said he is willing to stay on as governor of the Bank of England if it will help the government “smooth” the Brexit transition.

Carney is due to step down from the role in June 2019 and told the Treasury Committee that he has been talking to the chancellor about his future.

He said he was happy to do whatever he could “to promote a smooth Brexit and an effective transition at the Bank.”

Carney added that an announcement on his future would be made soon.

Argentina to axe half its ministries

Argentina has announced austerity measures in a bid to tackle the ‘emergency’ created by the country’s currency crisis.

In a televised address, the country’s President Mauricio Macri said Argentina could not keep spending more than it earned.

Taxes on exports of some grains and other products will rise and ‘about half’ of the nation’s government ministries will be abolished.

The government has not said which ministries will be closed or merged.

Argentina is the biggest exporter of soy meal and soy oil and is also a big producer of corn, wheat and raw soybeans.

From 1 January, those primary exports will be taxed four pesos for every dollar in value. Processed products will be taxed three pesos for every dollar in value.

Argentina’s currency has lost about half its value this year against the US dollar, despite the central bank raising interest rates to 60%.