Thanks for joining us today. Foreign banks may be forced to set up subsidiaries rather than less expensive local branches under plans reportedly being examined by the Bank of England.
The plan is part of a review being carried out following the collapse of Silicon Valley Bank in the US and the subsequent sale of its UK subsidiary to HSBC for £1 in March.
Such a move is likely to be unpopular with banks as setting up full-blown subsidiaries is more expensive than creating local branches.
5 things to start your day
1) Nigel Farage hits back at Coutts over claims his bank account had insufficient funds | Leading Brexiteer disputes suggestion he was immediately offered replacement account
2) Brexit critic to join budget watchdog | New appointee has advocated for broader tax base and VAT payments on school fees
3) Thames Water fined £3.3m for ‘reckless’ sewage dump | Company allowed millions of litres of effluent to be pumped into rivers near Gatwick Airport
4) Toyota hails battery breakthrough for electric cars | Carmaker claims new technology will increase cruising range and reduce charging times
5) Sir Jim Ratcliffe hits out at ‘aggressive’ and ‘hostile’ monopolies regulator | Billionaire accuses CMA of stymying British businesses after blocking takeover
What happened overnight
Asian shares fell on after a slowdown in China’s services activity dented sentiment and as markets turned their focus to the release of Federal Reserve minutes for the rate outlook ahead.
Market conditions were subdued following the Independence Day public holiday on Wall Street on Tuesday.
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.6pc.
Tokyo stocks closed lower on Wednesday as investors took profits after climbing to three-decade highs.
The benchmark Nikkei 225 index lost 0.3pc to 33,338.70, while the broader Topix index was flat at 2,306.03.
In China, a survey showed the services sector, which has rebounded strongly after the lifting of lockdowns, expanded at the softest pace in five months in June, adding to evidence that the economic recovery is losing steam.
Chinese blue chips fell 0.6pc and Hong Kong’s Hang Seng index slumped 1.3pc.
Traders are now looking ahead to the release of the minutes of the Fed’s last policy meeting later today to see whether the Fed would need to hike more than once to contain inflation.
