Market Loop - 💷Living wage set for 7% rise

ECONOMY
Living wage set for 7% rise

What’s going on?
Ahead of tomorrow’s autumn budget, the government has announced that the national living wage will rise from £8.91 to £9.50 an hour from next April.

Why is this important?

The national living wage is what the government has called the national minimum wage for anybody above 22-years-old since 2016.

It’s the lowest amount that can legally be paid to employees and is adjusted every April.

The 6.6% increase will impact over 2m people and is worth £1,074 a year for a full-time worker – but that’s before tax and the rising cost of living that could swallow up the gain.

Although the increase is above the current inflation rate of 3.1%, it comes into effect next April after a winter of surging energy bills and petrol prices. Also the recent Universal Credit cut of £20 a week and the announcement of the increase in National Insurance means millions of households will see their incomes decrease.

Takeaway
On the surface a 6.6% pay rise for millions of workers sounds generous but in an environment of rising prices, tax increases and benefits cuts it could be a damp squib. 

BANK
Loan performance boosts HSBC

Yesterday HSBC kicked off a busy week of company quarterly results when it reported a 74% increase in profits for the three months to September.

The London-headquartered bank reported a pre-tax profit of £3.9bn, easily beating the £2.8bn expected by analysts.

The jump in profits was driven by the £500m in cash the bank released, having been previously set aside in case bad loans spiked during Covid.

The bank feels confident that the worse of the pandemic is behind it with its loan book performing better than previously expected. This confidence led it to announce a share buyback programme to give $2bn to shareholders.

HSBC’s strong performance comes days after fellow lender Barclays reported record profits driven by mortgage lending and a rise in investment banking activity. 

High street banks NatWest and Lloyds are also due to announce their third-quarter numbers later this week.