Welcome to Taking Stock on Thursday 21st September 2023
Taking Stock: Is a look at today's top business news & investment views plus we cover the winners, losers, the most read company news & the most followed. Today this includes:
How will the Bank of England's rate decision effect the markets?
We look at what's moving after the Bank decided to keep interest rates on pause.
MOST FOLLOWED
MOST READ RNS
RISERS
FALLERS
TOP BUSINESS STORIES
Electric cars: Firms still forced to sell more despite petrol ban delay
Car makers will still have to meet targets for selling electric cars next year despite the ban on sales of new petrol and diesel vehicles being delayed, motor industry sources say.
The zero emissions vehicle (ZEV) mandate is set to commence in January, and is expected to ensure at least 22% of cars sold by firms are electric.
If they fail to reach the quota, manufacturers will face heavy fines.
The government is expected to confirm the policy on Friday.
On Wednesday, Prime Minister Rishi Sunak confirmed the planned ban on sales of new, pure petrol and diesel vehicles was being pushed back five years from 2030 to 2035.
Car manufacturers were split on the decision. Ford said the move undermined its electric car investment plans, but Toyota welcomed the announcement, saying the delay was "pragmatic".
The motor industry has been told that a second ZEV policy, which will require that 22% of cars sold by each manufacturer have to be zero emission from 2024, is still set to be introduced.
One manufacturer said that having the zero emissions mandate still in force alongside pushing back the ban on new petrol and diesel car sales would make it harder for car makers to sell the electric cars they will be forced to do so.
If a car maker fails to hit the 22% electric vehicle sales target, it will either face fines of £15,000 per vehicle, or have to buy a surplus credit from a company that has sold lots of electric vehicles. However, a firm could claim back penalties if it surpasses the quota in a future way.
The quota on zero emission sales is expected to rise from 22% to reach 80% by 2030, but it is not known what the target will be after 2030, due to the ban on internal combustion engines being pushed back, meaning new ones could still be sold for a further five years.
Fed holds interest rates steady - for now
The US central bank has kept its key interest rate unchanged as it debates whether it has done enough to stabilise prices.
The decision left the Federal Reserve's rate target at 5.25%-5.5%, the highest level in more than two decades.
The bank has already raised borrowing costs from near zero in March 2022 in a bid to cool the economy and bring price inflation under control.
Some at the Fed expect further action to be needed.
Forecasts released after the meeting showed a majority of policymakers expect rates to stand above 5.5% by the end of the year, implying at least one further hike. They also saw rates remaining higher next year than previously forecast.
UK borrowing shows limited room for pre-election tax cuts
Britain increased its public borrowing in the first five months of the tax year, according to data published on Thursday, and finance minister Jeremy Hunt looks likely to have little room to offer major tax cuts to voters later this year.
Public sector net borrowing, excluding state-owned banks, totalled 69.6 billion pounds ($85.7 billion) in the April-August period, 19.3 billion pounds more than a year earlier.
But analysts said a slowdown in the economy would hurt tax revenues and the Office for Budget Responsibility was likely to revise up its estimates for debt interest spending when Hunt makes his next budget statement in November.
Analysts have questioned how much room Chancellor Jeremy Hunt might have for big spending pledges or tax cuts at the next fiscal event in November.