Huawei 5G, Twitter, economy, legal industry revenue, Nationwide, VAT cut, ASOS, Boohoo, Lidl: your commercial news round-up

The deadlines for training contract applications are getting ever closer, making it increasingly important for you to stay up to date with the latest news from the business and legal worlds. We have selected some of the biggest news stories from the past week and summarised them below – your next step is to delve into the details of a story that interests you and analyse its implications. Remember, to succeed in a training contract interview – among other things – you must show that you can ‘think business’.

• UK mobile providers will be banned from purchasing new Huawei 5G equipment after 31 December. They are also required to remove all Huawei 5G kit from their networks by 2027. Digital Secretary Oliver Dowden revealed that the supply ban would delay the unveiling of the UK’s 5G by one year. Dowden said: “This has not been an easy decision, but it is the right one for the UK telecoms networks, for our national security and our economy, both now and indeed in the long run.” Meanwhile, the Chinese firm said that the ban was “bad news for anyone in the UK with a mobile phone" and could "move Britain into the digital slow lane, push up bills and deepen the digital divide.” The UK’s decision to ban Huawei 5G supplies follows sanctions imposed by Washington, which claims the Chinese firm poses a national security threat – Huawei denies these allegations.

• Twitter has announced that it is investigating the account hacks of several high-profile US figures, including Barack Obama, Elon Musk and Bill Gates, as well as corporate accounts for Uber and Apple, in what was an alleged Bitcoin scam. The fake tweets were offering to send $2,000 for every $1,000 sent to a Bitcoin address.

• During the UK’s lockdown – between March and June –  the number of UK payroll employees fell by 649,000, while employees worked fewer houses and earned less despite measures implemented by the government to support the economy. However, the government-backed furlough scheme meant the numbers were not as high as previously feared, according to the BBC. With the scheme due to end in October, economists say the full effect on employment will be felt then.

• The UK’s economy grew just 1.8% in May – much slower than expected, despite the easing of lockdown measures. Economists had expected a growth of at least 5% in May, with the Office for National Statistics revealing that the UK economy is now 24.5% smaller than it was in February.  

• The UK’s legal industry generated £2.35 billion in May 2020, falling 12% compared to May 2019 – making it the lowest-earning month in four years, according to figures from the Office for National Statistics. Prior to the pandemic, the legal industry was set for a strong year; March 2020 became the third highest month ever for the UK legal industry, while April 2020 showed only a 5% reduction on March. Meanwhile, earlier in the week international law firm CMS revealed that its global revenue has increased 4.5% at €1.4 billion and UK LLP revenue had grown 3.7% on last year (£566 million).

• Following the government’s announcement of a temporary stamp duty holiday, the Nationwide – the UK’s largest building society – is set to reduce the minimum deposit it requires from first-time buyers from 15% to 10% from 20 July. The building society will offer first-time buyers an unlimited number of 90% loan-to-value mortgages amid indications that the housing market is picking up. Director of mortgages at Nationwide Building Society Henry Jordan said: "First-time buyers are vital to breathing life into the housing market and economy. We understand one of the biggest barriers to home ownership is raising a deposit."

• The UK’s big four accountancy firms, as well as some of the smaller firms, have received criticism from the industry’s watchdog due to an “unacceptable” decline in the quality of their work, with a third of the audits falling below the watchdog’s expected standard. PwC, KPMG and Grant Thornton were criticised most heavily by the Financial Reporting Council (FRC), after their involvement in the well-known corporate failures at Thomas Cook, Carillion and Patisserie Valerie.

• Following a £4 billion cut in VAT several businesses within the food, drink and hospitality sectors have cut prices. Rishi Sunak ordered a temporary VAT reduction from 20% to 5%, which will remain in place until 12 January 2021, in a bid to help businesses recover and encourage consumers to spend. Among the firms promising reductions are Nando’s, Pret A Manger and McDonald’s; with Nando’s revealing that it will pass on “100% of the benefits” from the tax reduction to its customers and reduce the price of a quarter chicken by 55p.

• Following a 10% growth in sales to £1 billion during lockdown, online fashion retailer ASOS has announced that it will repay cash to the government that it claimed for furloughing workers. Meanwhile, fast-fashion retailer Boohoo’s shares plummeted 17.7% at the beginning of the week. The share price drop comes after claims of poor working conditions in Boohoo’s garment factories in Leicester. Luxury fashion brand Burberry has also revealed a decline in sales, as well as 500 job cuts.

• Discount supermarket chain Lidl reveals its plans to open 25 new stores over the next six months, in turn creating 1,000 new job opportunities. A £1.3 billion investment is also planned for 2021 with the opening of another 100 stores in 2022, which will create 4,000 jobs. According to the Independent, the retailer aims to have 1,000 stores operating in the UK by the end of 2023.

Be sure to check the News every Thursday for this weekly commercial news round-up. Follow @LawCareersNetUK on Twitter and like us on Facebook for instant business news updates.