IT’S BACK!

CITYAM.COM
THURSDAY 2 MARCH 2017
NEWS
07
Hammond offers
help on discount
rate conundrum
OLIVER GILL
@ojngill
INSURANCE leaders have called on the
government to set a new discount rate
this year in an attempt to mitigate the
dramatic effects of its decision to cut
the rate on Monday.
Justice secretary Liz Truss surprised
insurers by cutting the personal injury
discount rate, which takes into account
the long-term cost of care and
loss of earnings when claimants
choose to take an upfront lump sum.
Shares in some of the UK’s leading insurers
were sent tumbling after the announcement
– FTSE 100 firm Direct
Line fell more than seven per cent.
Chancellor Philip Hammond convened
an urgent meeting with the sector’s
heavy-hitters on Tuesday evening.
Attendees included the director general
of the Association of British Insurers
(ABI), Huw Evans.
“What we need is a new law that allows
a new discount rate to be set this
year. That’s what needs to happen, if
the government is going to be able to
mitigate some of the impact that are
going to be felt by consumers,” Evans
told City A.M. yesterday.
“The chancellor is personally committed
to trying to find a way forward.
That came across very clearly.”
The discount rate, which was adjusted
from 2.5 per cent to minus 0.75
per cent, is defined by the Damages Act
1996. The reference rate is that of
index-linked government bonds and
Truss’ move reflected the yield investors
can expect given the lower for
longer interest rate environment.
“It is not too late to get the law
changed and get a proper rate in place
that takes into account a wider range
of factors,” said Evans who was joined
by RSA boss Stephen Hester and Direct
Line’s Paul Geddes at the meeting.
“I think it’s been an uncomfortable
few days for the government. But then
it should be. Because it took a decision
that is without precedent,” he said.
Octogenarian media baron Rupert Murdoch wed former model Jerry Hall last year
Fox will fire starting pistol in bid
to gain sign-off for Sky merger
OLIVER GILL
@ojngill
MEDIA giant 21st Century Fox will
take one step closer to sealing its
takeover of Sky by lodging documents
with European authorities this week.
Fox is expected to ask Brussels to
approve the deal, a move that starts
the clock on a 10-day window for
culture secretary Karen Bradley to
open a review into the £11.7bn deal.
Howard Cartlidge, the head of EU
and competition at law firm DWF
said: “An investigation by Ofcom is
likely. But given the very different
political climate we’re operating in
today, I’ll be surprised if the deal isn’t
cleared this time.”
Rupert Murdoch is the chairman
of Fox News, while his son James is
the chairman of Sky.
DB boss upbeat
about future of
German group
SHRUTI TRIPATHI CHOPRA
@shrutitripathi6
DEUTSCHE Boerse will keep calm
and carry on following speculation
that its planned £21bn merger with
the London Stock Exchange (LSE)
could be called off, the German
Group’s chief executive said
yesterday.
“We feel very well prepared as a
company for the future,” Carsten
Kengeter said.
On Sunday night the LSE
announced that it was in dispute
with the European Commission
over its stake in MTS, a trading
platform in Italy. Kengeter refused
to comment on the LSE’s decision.
“It is pointless to me to speculate
on what the reasons behind our
merger partner’s decision were,” he
said.
The LSE said over the weekend
that the European Commission is
“unlikely to provide clearance for
the merger”.
“Taking all relevant factors into
account, and acting in the best
interests of shareholders, the
London Stock Exchange board
today concluded that it could not
commit to the divestment of MTS,”
it said at the time.