Broadband, Brexit, credit cards and spending

Philip Hammond will provide more than £1 billion to improve broadband speeds for up 2 million homes and businesses as part of an infrastructure plan to be detailed in the Autumn statement tomorrow. The Guardian reports that, following calls from businesses for more support for the digital economy, the Chancellor will back a £400 million digital infrastructure fund. The Treasury hopes this amount will be matched by private sector investors. The Chancellor will also offer local authorities the opportunity to pitch for a percentage of a £740 million fund to trial superfast 5G mobile networks, linking them to fibre-optic systems to provide greater wireless capacity. Sir Mike Rake, chairman of BT, told the Today programme that BT has already developed an interim technology to get more fibre to the home. ‘We are committed to getting fibre to the premises because it’s much more reliable.’ Banks The Times reports that the amount of money in a bank that is protected by central government is expected to be increased to £85,000 early in the new year after a sharp fall in the value of sterling following the Brexit vote. The Bank of England said yesterday that it was considering restoring the deposit guarantee limit to £85,000, only a year after it was cut to £75,000. The level of protection on cash held in a bank or building society is fixed across the European Union at €100,000. Brexit A total of £1.2 trillion was wiped off the UK’s wealth during 2016 following the Brexit vote, according to The Guardian. It reports the findings of a survey by Credit Suisse which also said that a fall in values at the top-end of the property market contributed to approximately 400,000 Britons losing their status as dollar millionaires and one of the biggest drops in wealth among the major economies. Nevertheless, the UK remained third for the number of ultra-high-net-worth individuals, who own more than £50 million in assets, behind the US and China. Meanwhile, government borrowing fell by more than expected to £4.8 billion in October, according to figures from the Office for National Statistics. The figure was £1.6 billion lower than the same month last year. Credit cards

Plans by Lloyds Banking Group to scoop up MBNA’s UK business could lead to soaring credit card costs, consumer groups have warned.

The Daily Mail reports that Lloyds is leading the race to buy its rival’s operations from Bank of America and a deal could be announced in the next few weeks. It would give Lloyds control of 26 per cent of outstanding cash on credit cards in the UK – close to the 28 per cent share of market leader Barclaycard.

Meanwhile, the Government has cut its stake in Lloyds Banking Group to just below 8 per cent in a renewed attempt to return the lender to full private ownership over the next year.

Spending

Festive spending is set to hit £19 billion this year, with Brits ignoring the Brexit blues and splashing out an average of £415 each in the run-up to Christmas – 4.5 per cent more than the same time last year.  

The insight, from price comparison website MoneySuperMarket, explored spending habits on Christmas food, clothes and entertainment and found just one in 10 people (13 per cent) will be more frugal this year. 

Those living in the North West will be the biggest spenders, with an average £480 per person, rising to £520 for Liverpudlians. At the other end of the scale, people in Yorkshire and Humber will be working to a budget of £354. The average Christmas spend in Wales is expected to be £460, while those in Scotland will spend £455.

Insurance

UK insurers paid out the equivalent of £131 million to customers every day during 2016 under general insurance, long-term savings and pension policies according to industry statistics published by the Association of British Insurers. Of this, £74.7 million a day was paid by long-term savings and pension providers, with £56.7 million a day paid out on general insurance policies, such as motor, home, protection and business insurance.