!css
12/08/2016

KB Weekly News Bites: Cutting loose

Cutting loose: Donald Trump finally offered a teaser of his US economic policy. This includes setting three tax brackets for individuals – from the current seven – at new, lower tax rates of 12%, 25% and 33%. This largesse would also extend to corporations, cutting their taxes from 35% to 15%; and to the superrich, eliminating inheritance tax which is currently payable on estates above $5 million (a billionaire’s heirs would presumably save hundreds of millions). There was no detail on how these cuts – conservatively estimated to cost trillions – will be funded. (09/08)

So naira, yet so far: South Africa has regained its status as Africa’s largest economy, pipping Nigeria to claim the top spot as a result of a relatively stronger exchange rate. Over the course of this year so far, the South African rand is up 15% versus the US dollar, while the Nigerian naira is down about 35% after abandoning its peg to the US dollar. (12/08)

Whole new ball game: Manchester United yesterday completed a world-record £89 million transfer for French midfielder Paul Pogba, four years after the 23 year-old left the club for £1.5 million. It is the first time in 20 years that an English club has paid a world record transfer fee to acquire a footballer. The last time, it was Alan Shearer going to Newcastle for £15 million. That would imply an inflation rate of over 20% per year. (10/08)

Finding common pound: While a “Brexit” related economic slump is expected, one clear positive has been the increased number of flight bookings to the UK due to cheaper Sterling. In the 28 days before the 23 June referendum, flight reservations were running 2.8% behind the same period last year; in the month after, they were up 4.3%. Given that Sterling is back below $1.30 given the differing monetary trajectories of the US and UK, those of us living in London can expect to be increasingly asked for directions, or to help take pictures. (09/08)

Pay the consequences: The CEOs of FTSE 100 companies earned an average an average of £5.5 million last year according the High Pay Centre, rising by 10%. However, the average was skewed by WPP CEO Sir Martin Sorrell, who took home £70 million, more than the next two CEOs combined. Median pay – perhaps a better measure – rose to just under £4 million, or about 144 times the average UK salary. Increasingly exorbitant levels of pay, not supported by rising share prices, or inflation, have prompted a number of shareholder revolts in the past few months, most notably at BP. (08/08)

Disclaimer

Your eligible deposits with Kleinwort Benson Bank Limited are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit guarantee scheme. Any deposits you hold above the limit are unlikely to be covered.

Please click here for further information or visit www.fscs.org.uk

Kleinwort Benson places all client deposits with a spread of approved counterparties including other parts of the Societe Generale Group (the “Group”). As such their financial standing is linked to that of the Group. Depositors should form their own view of the financial standing of the Group based upon publicly available information.

Kleinwort Benson is a participant in the Guernsey Banking Deposit Compensation Scheme (the ‘Scheme’). The Scheme offers protection for ‘qualifying deposits’ up to £50,000.00 subject to certain limitations. The maximum total amount of compensation is capped at £100,000,000.00 in any 5 year period. Full details are available on the Scheme’s website www.dcs.gg or on request. Please note deposits with Kleinwort Benson outside the UK are not covered by the UK FSCS.