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25/08/2016

KB News Bites: Score a touchdown

Score a touchdown: Contactless payments technology is on fire in the UK and now accounts for 18% of all card spending, more than double the 7% recorded last year. In terms of both the amount spent and the total number of transactions, usage in the first half of 2016 has overtaken that in all of 2015. Indeed, with average transaction amount of just £8.60, it implies that many consumers are tapping their cards in lieu of cash. (23/08)

Sight for Sorre eyes: Global advertising bellwether WPP reported revenue was up 11.9% to £6.5 billion for the first half of 2016; its stock price jumped 6% and is up about 40% in the past year. In spite of this excellent performance, WPP CEO, Sir Martin Sorrell – recently in the news due to his £70 million annual pay package – believes the world is a “difficult place”. Of particular concern to him was China, where he thinks the actual GDP growth rate is between 2% and 4%, considerably less than the approximately 7% reported. (25/08)

Brexports: A weak Sterling has led to booming sentiment for British manufacturing exports. In the Confederation of British Industry’s latest monthly survey, 21% reported export orders to be above normal and 27% below, resulting in a net balance of -6%, the highest since August 2014 (-3%). Importantly, 30% of the companies expect a rise in output growth over the next three months, with only 19% expecting a fall, leaving a healthy net positive balance. This is the latest in a growing list of post-referendum economic data or surveys showing the UK economy’s early immunity to “Brexit”. (24/08)

Seeing the Woodford the trees: In a departure from the norm in the financial industry, Neil Woodford, one of the UK's most respected investors, has scrapped bonuses at his firm, arguing that they are "largely ineffective". Instead, his firm's 35 staff will get a rise in basic pay and benefits as compensation. The announcement went on to say, "[Bonuses] produce the misleading assumption that most people are selfish and self-interested, which in turn erodes trust." Of course, not all firms have the luxury to attract, retain and motivate talent to the same degree and will have to rely on bonuses. (23/08)

Jump at the chance: Team GB finished second the Rio Olympics with 27 gold medals, ahead of China and second only to the US – an amazing achievement! Twenty years ago, the UK was 36th in the medals table. The incredible improvement is partly due to an excellent system of funding from the National Lottery – each medal costs about £4 million in training, coaching and equipment. However, what no amount of money can buy is the toil and talent of the athletes, worth more than all the gold in the world. (22/08)

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