AGP Executive Report

Banking Scrutiny: The Bank of England is examining whether Barclays traders misrepresented risks tied to private-credit deals, adding pressure on the lender’s shares. Market Strains: Profit warnings from UK-listed firms have hit a near two-year high as energy costs rise and businesses brace for the Budget. AI Investment: Microsoft’s withdrawal from Nscale’s UK data-centre project highlights grid constraints and puts the cloud firm’s IPO plans at risk. Financial Stability: BoE deputy governor Sarah Breeden warned that hedge funds’ growing role in bond markets could spread shocks through the financial system. Digital Finance: The FCA has called for disclaimers on AI-generated financial advice, while Brite Payments launched Pay by Bank in the UK after securing an FCA licence.

AI and Consumer Protection: The FCA is urging ChatGPT, Gemini and other AI platforms to clearly flag the limits of financial advice. Only 40% of consumers know they may have no recourse if they act on it. Fintech Growth: Zilch plans to more than double its London office, investing £77m over 10 years and creating space for more than 400 staff as it prepares for European expansion. UK AI Investment: Microsoft has pulled out of a major Nscale data-centre deal in Essex, where power delays have held up a planned 23,000-chip facility. The exit casts doubt on Nscale’s expected IPO valuation. Mortgage Pressure: More than half of first-time buyers now pay higher monthly mortgage bills than their previous rent, Hamptons says. Average fixed rates are near 6%, while mortgage deals are lasting just 13 days on average. Takeover Watch: Gamma Communications has pushed back a shareholder vote on Epiris’s £1.02bn offer to November 2, after turnout fell short of the required level.

AI Investment: Microsoft has withdrawn as anchor tenant from Nscale’s planned Essex data centre, putting a 23,000-chip project and the UK firm’s targeted $35bn IPO under pressure. Reports cite construction and power concerns; Nscale says its wider Microsoft relationship remains strong. Bank Tax Debate: Chancellor John Healey is reportedly weighing an increase in the bank profits surcharge from 3% to 8%, potentially raising £2bn. Banks warn higher costs could curb lending and investment, while the IMF has urged Britain to cut pension and social-care spending rather than raise bank taxes. Rates and Growth: UK GDP grew 0.1% in August, but stubborn inflation is fuelling forecasts of Bank of England rate hikes. Fintech: Brite Payments has launched Pay by Bank in the UK after securing an FCA licence. Savings: Top fixed-rate accounts now offer more than 5%, with savers potentially earning £215 more a year on £10,000 than at a 3% rate.

Bank Profits and Budget: Britain’s largest lenders made £29bn in pre-tax profits in the first half of 2026, up more than a fifth year on year, as Chancellor John Healey considers a windfall tax. The IMF has urged the UK to cut spending rather than raise bank taxes. Cyber Resilience: G7 finance authorities will run simulations of AI-driven cyberattacks to test how they would respond to disruption, with banks potentially joining some exercises. Mortgage Lending: The Bank of England has scrapped its cap on high loan-to-income mortgages, giving lenders more scope to offer larger loans. Payments: Brite Payments has launched Pay by Bank in the UK after securing an FCA licence. Pensions: Around three million UK households have lost track of pension pots worth an estimated £18.7bn, underlining the value of checking old workplace savings.

Payments: Brite Payments has launched Pay by Bank in the UK after securing an FCA electronic money licence, adding a new option in a market where most card payments still run through Visa or Mastercard. Fintech deals: Intuit has agreed to buy London-founded Sequence for a reported $200 million, bringing its AI-powered revenue management tools to QuickBooks and other business software. Mortgage lending: The Bank of England has scrapped its cap on high loan-to-income mortgages, giving lenders more scope to offer larger loans. Bank tax debate: The IMF has warned against raising taxes on banks ahead of the Budget; one estimate suggests a proposed levy could cost the Treasury £700 million a year in lost revenue. Crypto rules: The FCA has finalised guidance on which crypto activities fall within its regulatory remit, ahead of firms’ authorisation applications. Cyber resilience: The Bank of England is pressing lenders to strengthen recovery plans as AI-powered cyber threats grow, while G7 leaders plan finance-sector cyberattack drills.

Bank Tax Debate: The IMF urged Chancellor John Healey to cut spending rather than raise taxes on banks, as reports of a surcharge increase weighed on bank shares. Lenders warn a higher bill could hurt UK growth. Mortgage Rules: The Bank of England scrapped its cap on high loan-to-income mortgages, giving lenders more scope to offer larger loans relative to borrowers’ earnings. Economy & Rates: UK GDP grew 0.1% in August, beating forecasts and prompting markets to raise their bets on interest-rate hikes. Fintech Moves: Payments firm PhotonPay secured a UK electronic money licence, while Intuit is reportedly buying British AI start-up Sequence for $200m. Wise also reported 22% growth in cross-border payment volumes in its latest quarter, to $71.7bn. Cyber Risk: The BoE and IMF warned that cyberattacks, including those enabled by AI, could undermine trust in banking; G7 finance leaders agreed to run cyberattack exercises.

Bank Tax Debate: The IMF urged Chancellor John Healey to favour spending reforms over higher bank taxes, warning the UK’s tax burden is already historically high. A reported plan to restore the bank surcharge from 3% to 8% could raise £2bn and pushed Barclays, Lloyds and NatWest shares lower. Markets and Rates: UK GDP grew 0.1% in August, beating forecasts, while analysts say the surprise growth could leave room for Bank of England rate hikes. The FTSE 100 still posted its strongest week in six months as investors shifted towards defensive stocks. Fintech Investment: The British Business Bank committed £180m across six AI and deeptech funds, backing investment in UK technology firms. Banking Resilience: G7 finance leaders agreed to simulate AI cyberattacks on banks, amid warnings that cyber threats and poorly governed AI could undermine financial stability. Digital Finance: Starling is developing a UK-based AI model with Nvidia and Civo, while firms prepare for the UK’s new cryptoasset rules.

Bank Tax: Chancellor John Healey is reportedly considering restoring the bank surcharge from 3% to 8%, potentially raising £2bn a year. The Treasury has not confirmed plans, but reports sent major bank shares lower and prompted warnings about investment and competitiveness. Embedded Finance: 10x Banking will provide the core ledger for Tungsten Automation’s Pay+ payments product, extending its technology beyond regulated banks into business software. Growth and Rates: UK GDP rose 0.1% in August, beating forecasts, while analysts say the surprise growth could strengthen the case for Bank of England rate rises. Cyber Resilience: G7 finance leaders agreed to run exercises simulating AI-driven cyberattacks, with the aim of testing and improving response plans for financial authorities and potentially banks. Fintech Investment: British Business Bank committed £180m across six AI and deep-tech funds, backing investment in UK businesses.

Wise Growth: Wise’s Q2 FY27 revenue rose 21% year on year to $739.1m, as active customers climbed 20% to 12.5 million and cross-border payments grew. Banking Resilience: The Bank of England and IMF warned that a major cyberattack disrupting payments or access to deposits could damage trust in the financial system. AI in Finance: Starling is building a banking-focused AI model with Nvidia, trained on 15 billion anonymised transactions in a UK sovereign cloud, with fraud detection first in line. The FCA, meanwhile, plans to use AI in supervision but says it will not introduce a separate AI rulebook. Economy and Budget: UK GDP grew 0.1% in August, beating forecasts but slowing from July; production drove growth as services were flat and construction fell. Chancellor John Healey has signalled a possible bank tax increase ahead of the Budget. Crypto Rules: The FCA has finalised guidance on which crypto activities fall within its regulatory perimeter, ahead of an authorisation application window for firms.

UK Economy: GDP grew 0.1% in August, beating forecasts, with production up 0.8%; services were flat and construction fell. Growth over three months was 0.7%, ahead of Chancellor John Healey’s first Budget. Fintech Leadership: Wise has named former NICE chief Barak Eilam to its board, with plans for him to become chair next April. Housing Investment: Edinburgh-based Ediston has teamed up with Singapore investor 42 Capital Partners to raise £150–200 million for rented homes, initially in Scotland. Crypto Regulation: The FCA has finalised guidance on which cryptoasset activities fall within its regulatory perimeter, ahead of an authorisation application window. Investor Protection: A Financial Ombudsman ruling has cleared the way for NatWest to compensate investors who lost about £100,000 in the collapse of jeweller Vashi, potentially opening the door to claims from others. Wealth Trends: A Saltus survey found 30% of wealthy UK residents are considering leaving, up from 25% a year ago, with tax changes a key concern.

IPO Pipeline: Downing Street brought UK listing hopefuls including fintech Zilch and crypto firm Kraken together with major investors, the London Stock Exchange and British Business Bank to revive the market for large flotations. Crypto Rules: The FCA has finalised guidance on which crypto activities will need authorisation, giving firms a clearer route ahead of the regime’s 2027 start. Separately, a UK trader is suing BitMEX for about $27m in bitcoin, claiming the exchange offered unlicensed derivatives. Digital Banking: Standard Chartered named Ying Ying Tan global head of securities services and digital assets, with a brief to expand custody, tokenisation and trading capabilities. Business Funding: The British Business Bank committed £3m to TSP Ventures, backing early-stage companies developing critical-resource technologies; UK venture funds also raised a record $6.9bn in the latest quarter. Markets: The FTSE 100 closed higher as weaker sterling lifted exporters, while Bank of England chief economist Huw Pill questioned market expectations for four rate rises.

Crypto Legal Battles: A UK software engineer is suing BitMEX for about $27m in Bitcoin, arguing the exchange offered derivatives without FCA authorisation. Separately, a High Court ruling strengthens the government’s position over $5bn in seized Bitcoin, though victims are appealing and ownership is not yet decided. Financial Stability: Bank of England governor Andrew Bailey and IMF chief Kristalina Georgieva warned that rising cyber fraud could undermine trust in money and push people away from formal finance. Banking & Fintech: HSBC plans to phase out fixed-pay allowances from 2028, shifting more employee compensation towards performance-linked pay. UK venture funds raised a record $6.9bn in the latest quarter, while SaaScada and Zumo announced a route for UK banks to offer regulated crypto services. Economy & Markets: The IMF sees UK growth holding up this year but warns that higher energy prices could lift inflation and weigh on next year’s outlook, complicating Chancellor John Healey’s budget plans. The FTSE 100 edged higher as investors weighed US bank results and inflation data.

Markets and Deals: London Stock Exchange owner LSEG is in talks to buy US financial data group Octus for £2.6bn, while UK stocks rose on banking-sector strength. Banking Risk: Regulators are stepping up scrutiny of AI in banking amid concerns about financial stability. FCA Watch: The FCA is consulting on fair redemption terms for authorised funds holding illiquid assets and has opened its authorisation gateway for crypto firms. UK Outlook: The IMF raised its UK growth forecast but warned that higher energy prices could push inflation up and weigh on growth. Digital Finance: HM Treasury named six banks to lead a UK digital bond pilot. Crypto Ruling: A High Court decision strengthened the government’s claim to most of a £5bn Bitcoin seizure, though an appeal is ongoing. Economic Crime: The government is consulting on financial rewards for whistleblowers who expose economic crime.

Banking Standards: The UK was rated “largely compliant” with the Basel Committee’s leverage-ratio rules, one grade below the top rating, in the first round of international assessments. AI Oversight: Regulators are tightening scrutiny of banks’ AI use, citing cyber risks, third-party reliance and the potential for disruption to financial stability. Credit Unions: Northern Ireland’s Executive has approved a bill to update rules on membership, governance and operations, affecting a sector with almost 600,000 members. Motor Finance: The FCA’s proposed redress scheme faces a legal challenge from three lenders and consumer group Consumer Voice at the Upper Tribunal on 16–26 February 2027. Crypto: A High Court ruling puts the UK closer to retaining a seized 61,000-Bitcoin cache worth up to £5bn, though victims plan to appeal and ownership remains unresolved. Economic Outlook: The IMF raised its UK growth forecast for this year to 1.3%, but expects inflation to reach 3.3% and growth to slow in 2027 as energy costs rise.

Economic Outlook: The IFS expects UK growth to slow from 1.4% this year to 1.2% in 2027, with inflation above target and energy costs adding pressure. It forecasts Bank Rate could reach 4.25% by February. Fintech Rules: The FCA has opened its authorisation gateway for crypto firms and will move fund applications and notifications online through Connect, starting on 2 November. Digital Money: The Bank of England says there is no rush to launch a digital pound, as private stablecoins and tokenised deposits develop. The Treasury has also named six banks to lead a government digital-bond pilot. Crypto and Courts: A High Court ruling puts potential Bitcoin gains at risk for thousands of fraud victims, while the UK has sanctioned three crypto firms over alleged links to Russian finance networks. Prudential Oversight: The PRA proposes updating eligible regulatory thresholds every five years in line with nominal GDP growth, with the first changes due in 2031.

Digital Finance: The Bank of England says it will act as “the banker to the stablecoin” as the UK develops its digital-money framework. Revolut is also eyeing a Philippines digital-bank licence. Payments: Affirm has expanded in the UK, adding Amazon.co.uk to a growing list of major retailers offering its buy-now-pay-later service. Investment: Family-office appetite for UK assets rose over the past year, while interest in distressed investments nearly doubled. But investors are also pulling back as rate rises and tax changes weigh on confidence. Pensions: More than three million UK pension pots worth at least £18.7bn are estimated to be lost, with the average pot valued at £6,220. Households & Markets: UK lenders have cut mortgage availability for the first time in three years, while rising inflation and Budget uncertainty are adding to pressure on consumers and City jobs. Financial Advice: A study commissioned by UK fintech Saturn found AI models gave complete, accurate answers to just 43% of tested money questions, highlighting the risks of relying on chatbots for financial guidance.