Pound hits 11-month high against dollar; US bank shares rally after heavy losses; HSBC AGM protests – business live | Business

Julia Kollewe

The CBI has appointed the business ethics consultancy Principia Advisory to help overhaul its operations, after a series of sexual misconduct allegations reported by the Guardian.

The new head of the Confederation of British Industry, Rain Newton-Smith, has written to members to lay out its action plan, just over a week after she took the helm and apologised to the victims of sexual misconduct at the business lobby group.

Newton-Smith, a former chief economist at the CBI, who recently returned to become director general as the group fights for survival, said in the letter that she had spoken to more than 250 members in her first week.

“With a general election looming, the voice of business urgently needs to be heard,” she wrote.

“And we are continuing to provide you with economic insights to make better decisions in these challenging economic times. I just hope that, working together, we can rebuild our culture, redefine our purpose and regain your trust so that we can help make that happen.”

The CBI has called an extraordinary general meeting for midday on 6 June. In the next four weeks, its work will be focused on its culture and purpose, Newton-Smith said.

More here:

Over in Birmingham, climate protesters are disrupting HSBC’s annual general meeting.

Just a few minutes in, one protester told the bank it should be ashamed of its role as an ‘financial arson organisation’.

Interrupting HSBC chair Mark Tucker’s opening address, the protester said:

I don’t know how you can sleep at night, knowing that millions of people are going to starve to death because of the investments that this bank is making.

Barclays’ AGM was also disrupted this week, as environmental protesters put pressure on the financial community to stop funding fossil fuel projects:

Shares in US regional banks are rising in pre-market trading, amid calls for a ban on short-selling to calm the crisis gripping the sector.

PacWest shares are up 9% in pre-market, a small recovery after tumbling 46% on Thursday, while Western Alliance have gained 12.7% after a 38% tumble and First Horizon, who lost 33% yesterday, are up 7%.

Today’s rally comes after Reuters reported that US federal and state officials were assessing whether “market manipulation” caused the recent volatility in banking shares.

The White House vowed to monitor “short-selling pressures on healthy banks”, and the American Bankers Association urged federal regulators to investigate a spate of significant short sales of publicly traded banking equities

In a letter to U.S. Securities and Exchange Commission Chair Gary Gensler, the ABA said it had also observed “extensive social media engagement” about the health of various banks that was out of step with general industry conditions.

Short-selling is the practice of borrowing shares, and then selling them, in the hope of buying them back at a cheaper price for a profit.

Neil Wilson of Markets.com points out that the turmoil has begun at banks who were suffering deposit flight (such as Silicon Valley Bank), but is now spreading to others.

The thinking is that the regulators ban short-selling to buy time to come up with some kind of plan to rebuild the industry.

There may need to be a ‘whatever it takes’ line in the sand moment – clearly the US authorities haven’t done that – it may be that a ban on shorting bank shares forms part of that. Remember this bank stress is just on being the wrong side of rates, we’ve not even had a recession or full credit cycle.

Housebuilding in the UK has slowed to its lowest point since the first Covid-19 lockdowns.

The latest survey of UK construction firms has found that housing activity fell at the fastest rate since May 2020 in April.

Builders blamed delays to new house building projects, and weaker demand as higher borrowing costs hit the market.

This will fuel concerns that the UK will miss its target of building 300,000 homes a year.

But overall, construction activity rose again last month, lifted by rising volumes of commercial work and civil engineering activity.

This pushed the S&P Global / CIPS UK Construction PMI up to 51.1 in April up from March’s 50.7, showing faster growth [any reading over 50 shows expansion].

The sector has now expanded for three months running, despite the lag in housebuilding.

Tim Moore, economics director at S&P Global Market Intelligence, says the construction sector’s recovery is “worryingly lopsided”:

Commercial building work continued to outperform, helped by stabilising domestic economic conditions and a gradual rebound in business confidence. Civil engineering activity was also a driver of construction growth during April, with rising infrastructure work contributing to the best phase of expansion in this segment since the first half of 2022.

However, the return to growth for UK construction output appears worryingly lopsided as residential work decreased for the fifth successive month. Extended delays on new housing starts were reported again in April, due to a considerable headwind from elevated mortgage rates and weak demand. While there have been some signs of a recent stabilisation in market conditions, this has yet to feed through to construction activity.

In fact, the latest reduction in residential building was the fastest since May 2020.

“On a more positive note, the latest survey illustrated a further slowdown in input price inflation across the construction sector. Softer cost pressures partly reflected a sustained improvement in supply chain performance, with lead-times for deliveries of products and materials shortening to the greatest extent since September 2009.”