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You can find the current article at its original source at https://www.theguardian.com/business/live/2019/may/22/trade-war-china-us-blacklist-uk-inflation-public-finances-british-steel-business-live
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| Huawei crisis deepens as ARM suspends work - business live | |
| (32 minutes later) | |
| ARM has issued a brief statement on the Huawei ban, saying: | |
| “ARM is complying with all of the latest regulations set forth by the U.S. government. | |
| No further comment at this time.” | |
| The crisis facing Huawei has deepened today, as British chipmaker ARM suspended business with the Chinese company. | |
| ARM took the move after America put Huawei on its “banned entity” list, which forbids US companies to supply it with technology. | |
| ARM - one of the success stories of British technology in recent decades -- reportedly believes it is affected by the US ban as some of its processor designs were developed in California and Texas. | |
| The BBC, which broke the story, says the ban could present Huawei with “insurmountable” problems. That’s because ARM’s designs are widely used, and licensed by other semiconductor providers. | |
| An internal memo has told ARM employees to halt “all active contracts, support entitlements, and any pending engagements” with Huawei and its subsidiaries. | |
| So potentially, Huawei could be unable to use ARM-based chips in its smartphones, or network equipment. | |
| An exclusive from @DaveLeeBBC - UK chip designer ARM has sent a memo to its staff telling them to suspend business with Huawei in a move that could threaten the Chinese firm's ability to create its own smartphone chips https://t.co/778iE5TUnl | |
| The sight of Theresa May hanging onto her premiership by her fingernails is hurting sterling, says Fawad Razaqzada, analyst at foreign exchange firm Forex.com. | |
| It looks like the Conservatives have had enough of their Prime Minister, as calls grow ever louder from her own party to quit. Although Mrs May looks dejected, she will not bow out without a fight. She still fully intends to put her Withdrawal Agreement Bill to a vote in the Commons in the week beginning June 3 for one last time. | |
| This time, she has promised to offer Parliament a choice on customs arrangements and a vote on a second referendum, if they pass her withdrawal agreement bill. Essentially, the deal is very similar to the previous three that have already been rejected and offers nothing significant to appease hard line Brexiteers. | |
| John Goldie, FX Dealer at Argentex, fears that the pound will suffer more volatility, as a no-deal Brexit becomes a bigger risk: | |
| “Historically, we are at significantly low levels and have been since the Referendum. In the short term risks remain for the pound and are unlikely to go away anytime soon. | |
| The withdrawal agreement will go back to the Commons at the start of next month – coincidentally the same week Donald Trump is in town – and more imminently we have the EU elections which it seems like the Brexit party are going to dominate in. The risk of No Deal was at its highest just before Christmas where the low was cemented around 1.25. This is the closest we have been to that since the turn of the year.” | |
| The pound has continued to slide on the foreign exchange markets, as Brexit uncertainty bubbles away. | The pound has continued to slide on the foreign exchange markets, as Brexit uncertainty bubbles away. |
| Sterling continues its record-breaking losing run against the euro, down half a eurocent at €1.1320. That’s a new three-month low, and the 13th daily fall in a row - the worst since the euro was created 20 years ago. | Sterling continues its record-breaking losing run against the euro, down half a eurocent at €1.1320. That’s a new three-month low, and the 13th daily fall in a row - the worst since the euro was created 20 years ago. |
| The pound has also fallen further against the US dollar, down half a cent at $1.265. | The pound has also fallen further against the US dollar, down half a cent at $1.265. |
| Traders are reacting to the looming prospect that the government’s Brexit deal is rejected for the 4th time by parliament soon. Theresa May has just faced MPs at Prime Minister’s Questions, with little sign of support. | Traders are reacting to the looming prospect that the government’s Brexit deal is rejected for the 4th time by parliament soon. Theresa May has just faced MPs at Prime Minister’s Questions, with little sign of support. |
| No cheers, no jeers, no booing even, just the worst sign for a prime minister possible in the chamber- a consistent dull muttering. They’re not even listening any more. | No cheers, no jeers, no booing even, just the worst sign for a prime minister possible in the chamber- a consistent dull muttering. They’re not even listening any more. |
| Several Brexit-supporting cabinet ministers were late for PMQs, as plotting reaches fever-pitch. | Several Brexit-supporting cabinet ministers were late for PMQs, as plotting reaches fever-pitch. |
| Hearing there are "ongoing conversations" among cabinet ministers about whether there is any point at all in pressing the wab to a vote. "Today could be fluid", says one cabinet source. All eyes on the PM's statement this afternoon. | Hearing there are "ongoing conversations" among cabinet ministers about whether there is any point at all in pressing the wab to a vote. "Today could be fluid", says one cabinet source. All eyes on the PM's statement this afternoon. |
| Pizza club absent from frontbench as PMQs gets underway. Karen Bradley has moved to fill Andrea Leadsom’s usual seat | Pizza club absent from frontbench as PMQs gets underway. Karen Bradley has moved to fill Andrea Leadsom’s usual seat |
| Financial analyst Frances Coppola certainly isn’t convinced that Brexit uncertainty drove British Steel to the wall. | Financial analyst Frances Coppola certainly isn’t convinced that Brexit uncertainty drove British Steel to the wall. |
| The fact the company is now being liquidated means it is effectively insolvent, suggesting more deep-seated problems. | The fact the company is now being liquidated means it is effectively insolvent, suggesting more deep-seated problems. |
| OMG. British Steel has gone in to compulsory liquidation, not administration as was predicted. In other words it is totally bust and short-term loans would not have saved it. Just like Carillion. | OMG. British Steel has gone in to compulsory liquidation, not administration as was predicted. In other words it is totally bust and short-term loans would not have saved it. Just like Carillion. |
| I agree. British Steel tried to coerce the government into supporting them by arguing that their problems were due to Brexit uncertainty, but I don't believe it. Compulsory liquidation means they are completely bust. Can't see Brexit slowdown causing that. | I agree. British Steel tried to coerce the government into supporting them by arguing that their problems were due to Brexit uncertainty, but I don't believe it. Compulsory liquidation means they are completely bust. Can't see Brexit slowdown causing that. |
| Greybull Capital has insisted that Brexit uncertainty, not mismanagement, caused British Steel’s demise. | Greybull Capital has insisted that Brexit uncertainty, not mismanagement, caused British Steel’s demise. |
| A spokesperson says: | A spokesperson says: |
| “Having rescued the business from closure over three years ago, we have worked hard to bring this important company back on its feet. Since 2016 we have arranged a financing package of more than £500 million, appointed a new and talented management team, helped the business open up new markets and reduce costs whilst addressing long-term underinvestment. | “Having rescued the business from closure over three years ago, we have worked hard to bring this important company back on its feet. Since 2016 we have arranged a financing package of more than £500 million, appointed a new and talented management team, helped the business open up new markets and reduce costs whilst addressing long-term underinvestment. |
| “The turnaround of British Steel was always going to be a challenge, and yet the business overcame many difficulties, and until recently looked set for renewed prosperity. | “The turnaround of British Steel was always going to be a challenge, and yet the business overcame many difficulties, and until recently looked set for renewed prosperity. |
| That “until recently” probably refers to the shortfall of EU carbon credits to cover its emissions. | That “until recently” probably refers to the shortfall of EU carbon credits to cover its emissions. |
| The statement continues to blame political instability: | The statement continues to blame political instability: |
| “The Workforce, the Trade Unions and the Management team, have worked closely together in their determination to strengthen the business, however, the additional blows dealt by Brexit-related issues have proven insurmountable. | “The Workforce, the Trade Unions and the Management team, have worked closely together in their determination to strengthen the business, however, the additional blows dealt by Brexit-related issues have proven insurmountable. |
| We are grateful to all those who supported British Steel on the attempted journey to resurrect this vital part of British industry. We are now focused on assisting all involved as best we can through this process.” | We are grateful to all those who supported British Steel on the attempted journey to resurrect this vital part of British industry. We are now focused on assisting all involved as best we can through this process.” |
| Here’s our news story on today’s rise in inflation: | Here’s our news story on today’s rise in inflation: |
| Higher energy bills and transport costs drive up UK inflation | Higher energy bills and transport costs drive up UK inflation |
| British Steel's owners charging firm £20m a year in fees and interest | British Steel's owners charging firm £20m a year in fees and interest |
| British Steel’s liquidation has already sent shockwaves through the sector. | British Steel’s liquidation has already sent shockwaves through the sector. |
| Industrial and property group Hargreaves Services warned investors this morning that its revenues and profits would be hit if British Steel failed. Its share price has slumped by 15% this morning, to a two year low. | Industrial and property group Hargreaves Services warned investors this morning that its revenues and profits would be hit if British Steel failed. Its share price has slumped by 15% this morning, to a two year low. |
| Tens of thousands of jobs could be threatened across the UK economy, at companies which worked with British Steel. | Tens of thousands of jobs could be threatened across the UK economy, at companies which worked with British Steel. |
| Mike Cherry, National Chairman at the Federation of Small Businesses, says many small businesses will be “very concerned”. | Mike Cherry, National Chairman at the Federation of Small Businesses, says many small businesses will be “very concerned”. |
| “The closure will have a huge knock on impact across the communities surrounding the company’s plants. A raft of small firms like caterers, cafes, cleaners, shops and visitor attractions, all of which employs their own staff, rely heavily on British Steel. | “The closure will have a huge knock on impact across the communities surrounding the company’s plants. A raft of small firms like caterers, cafes, cleaners, shops and visitor attractions, all of which employs their own staff, rely heavily on British Steel. |
| “Businesses throughout the supply chain will need guidance and support as the situation develops.” | “Businesses throughout the supply chain will need guidance and support as the situation develops.” |
| The first potential casualty in the supply chain- Hargreaves Services warns of profit hit from possible British Steel... https://t.co/lMNAr6pycy #BritishSteel | The first potential casualty in the supply chain- Hargreaves Services warns of profit hit from possible British Steel... https://t.co/lMNAr6pycy #BritishSteel |
| Greybull Capital, the private equity firm which owned British Steel, is facing serious questions over the company’s collapse. | Greybull Capital, the private equity firm which owned British Steel, is facing serious questions over the company’s collapse. |
| Greybull bought the business for £1 in 2016, and have since taken millions out of the company in management fees. | Greybull bought the business for £1 in 2016, and have since taken millions out of the company in management fees. |
| My colleague Nils Pratley points out that management hasn’t always gone smoothly either: | My colleague Nils Pratley points out that management hasn’t always gone smoothly either: |
| A fortnight ago the government agreed a £120m loan to cover British Steel’s cost of buying carbon credits under an EU-scheme to limit emissions. At the time it seemed a respectable use of public money since the delay in the UK’s exit from the EU meant the allocation of credits to all UK companies had been temporarily suspended. | A fortnight ago the government agreed a £120m loan to cover British Steel’s cost of buying carbon credits under an EU-scheme to limit emissions. At the time it seemed a respectable use of public money since the delay in the UK’s exit from the EU meant the allocation of credits to all UK companies had been temporarily suspended. |
| But the FT later reported that Greybull had already sold surplus allocations in what appeared to be an a badly timed trade. Other UK steel producers, note, have not asked for loans to get over the permit obstacle. Again, there is an issue of trust with Greybull. | But the FT later reported that Greybull had already sold surplus allocations in what appeared to be an a badly timed trade. Other UK steel producers, note, have not asked for loans to get over the permit obstacle. Again, there is an issue of trust with Greybull. |
| Who are the villains of the British Steel crisis? | Nils Pratley | Who are the villains of the British Steel crisis? | Nils Pratley |
| Devi Shah, Partner at law firm Mayer Brown, hopes that some jobs at British Steel can be saved: | Devi Shah, Partner at law firm Mayer Brown, hopes that some jobs at British Steel can be saved: |
| The immediate priority will be to seek a buyer, and secure the future of as many employees as possible, especially since this is an area where options for those affected will be limited, and the repercussions are likely to be felt across the region. | The immediate priority will be to seek a buyer, and secure the future of as many employees as possible, especially since this is an area where options for those affected will be limited, and the repercussions are likely to be felt across the region. |
| British Steel’s collapse is the biggest industrial insolvency since Rover in 2005, says Freddy Khalastchi, business recovery partner at accountancy firm Menzies LLP. | British Steel’s collapse is the biggest industrial insolvency since Rover in 2005, says Freddy Khalastchi, business recovery partner at accountancy firm Menzies LLP. |
| He fears the worst for the company... | He fears the worst for the company... |
| “Unfortunately, the writing has been on the wall for some time and the business has been struggling to compete in a market flooded by cheap imports from China. The business has also experienced a slump in orders due to Brexit. | “Unfortunately, the writing has been on the wall for some time and the business has been struggling to compete in a market flooded by cheap imports from China. The business has also experienced a slump in orders due to Brexit. |
| “In the past we might have expected the Government to intervene to protect a major industrial employer and key supplier to the UK defence sector. However, we are in uncertain times and it is not clear whether it will be possible to tap into Brexit mitigation funds in this case. The fact that British Steel recently borrowed more than £100m from the Government to pay an EU carbon bill and avoid further fines also suggests further intervention may be unlikely. | “In the past we might have expected the Government to intervene to protect a major industrial employer and key supplier to the UK defence sector. However, we are in uncertain times and it is not clear whether it will be possible to tap into Brexit mitigation funds in this case. The fact that British Steel recently borrowed more than £100m from the Government to pay an EU carbon bill and avoid further fines also suggests further intervention may be unlikely. |
| “Having failed to secure a last-ditch £30 million rescue package, regrettably there is unlikely to be a way back from the brink on this occasion. | “Having failed to secure a last-ditch £30 million rescue package, regrettably there is unlikely to be a way back from the brink on this occasion. |