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Some £342m of UK investments will help fund Chinese debt

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some 342m of uk investments will help fund chinese debt

Hundreds of millions of pounds of British investments are set to be ploughed automatically into Chinese government debt.

Calculations for the MoS reveal that £342million held in UK funds is set to flow into the Communist country’s national coffers after Chinese government bonds were upgraded by the London Stock Exchange (LSE).

The LSE has given the green light for the Chinese Communist Party to list its bonds on the World Government Bond index. China’s sovereign debt is currently in the emerging market category.

Promotion to the global index gives China access to much larger pools of capital

Promotion to the global index gives China access to much larger pools of capital

Promotion to the global index gives China access to much larger pools of capital

UK funds have already invested £3billion in Chinese sovereign bonds, according to analysis by stockbroker AJ Bell. Promotion to the global index gives China access to much larger pools of capital.

China is expected to gain access to more than $140billion (£110billion) of investments when its bonds appear on the index from 2021. It will replace Britain as the sixth-largest member of the index.

Many UK funds – including some managed by Standard Life Aberdeen, Barings and Legg Mason – invest in the World Government Bond index and would become owners of Chinese bonds by default unless they actively avoid them.

The LSE group has negotiated with Chinese officials for a year to push for the rule changes needed for the listing. The exchange will now monitor Chinese markets for six months to ensure traders stick to the new regulations before starting to list the bonds.

Chinese sovereign debt boasts yields of up to 3.5 per cent – compared with near-zero, zero or negative yields on debt from most developed countries.

China’s promotion comes as UK banking giants face intense pressure from the Communist regime.

HSBC and Standard Chartered have been forced to pledge allegiance to Beijing even as the UK admonishes China for its crackdown in Hong Kong.

Neil O’Brien, Conservative MP for Harborough, said: ‘We allow China to access large amounts of capital – including the investments of British savers – but they have an extensive list of things we can’t invest in within China. The Chinese are trying to have it both ways, where they have access to Western capital, but don’t really run a free-market economy.’ 

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ITV, KPMG and Diageo are among 20 top firms in race pledge

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ITV, KPMG and Diageo are among 20 top firms pledging to have at least one ethnic-minority director on their boards by 2024. 

The group, which also includes PwC, Axa and Pearson, will publish a plan to increase diversity at the highest levels and disclose the ethnicity pay gap within two years as part of the Confederation of British Industry’s Change the Race Ratio campaign. 

Change: ITV is part of a group that will publish a plan to increase diversity at the highest levels

Change: ITV is part of a group that will publish a plan to increase diversity at the highest levels

Change: ITV is part of a group that will publish a plan to increase diversity at the highest levels

A report in February found 37 FTSE 100 firms had no black or ethnic-minority directors. 

This month, Legal & General, one of Britain’s biggest institutional investors, told FTSE100 firms with all-white boards it will vote against them unless they hire an ethnic-minority director within 15 months.

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Outsourcer Capita accused of destroying property firm

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outsourcer capita accused of destroying property firm

Capita may be forced to sell a prestigious property developer at a loss following allegations that its bosses ‘destroyed’ the company. 

The outsourcing firm bought GL Hearn, which has worked on the regeneration of Swansea city centre and the expansion of Luton Airport, in a deal worth up to £30m in 2015. 

Bosses said it would be a ‘transformative’ addition to the company – but it is now thought the firm will fail to recoup its investment. 

Under the microscope: Capita bought GL Hearn in a deal worth up to £30m in 2015

Under the microscope: Capita bought GL Hearn in a deal worth up to £30m in 2015

Under the microscope: Capita bought GL Hearn in a deal worth up to £30m in 2015

GL Hearn is one of half a dozen or so businesses Capita intends to offload to raise £200m – including its events and translation divisions. 

The Mail understands that the sales process has been put on hold temporarily – but the businesses are still earmarked for disposal. 

Alarm bells began ringing at GL Hearn last year when a string of senior employees, including the planning director and head of strategic planning, left for rival firms. 

In October an entire team of nine town planners quit to join rival Knight Frank. 

Capita, which collects the BBC licence fee and runs the London congestion charge, has been accused of turning the firm into a ‘sinking ship’. 

One employee, who claimed to have worked for the developer for three years, said: ‘It has been eviscerated following its acquisition and mismanagement by Capita.’ 

Another said it had been a ‘very good multi-disciplinary consultancy with an enviable reputation’ but was ‘a rump of its former self’ and ‘unsalvageable’ after Capita ‘destroyed the company for good’. The allegations were made on the Glassdoor website, where employees can leave reviews of their workplaces. 

Capita has issued a string of profit warnings in recent years and made a £62m loss in 2019. It has suffered under the pandemic, taking a 10 per cent hit to revenue in the first half of 2020. 

It recently sold Eclipse, its legal software business, for £56.5m and may flog its education software arm, ESS, which helps schools record student attendance, manage lunch payments and keep in touch with parents, for up to £500m. 

The sale plans are the result of a tricky restructuring initiated by chief executive Jon Lewis, who took over after predecessor Andy Parker was ousted, to move the company away from low-value, labour-intensive contracts to more lucrative hi-tech work. 

Capita declined to comment last night.

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Britain on brink of double-dip recession due to Covid

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Britain is on the brink of a double-dip recession because Covid restrictions are ‘squeezing activity’, economists warn. 

They predict a GDP crash this winter as the second wave bites and jobs are lost. 

'Squeezing activity': Economists predict a GDP crash this winter as the second wave bites and jobs are lost

'Squeezing activity': Economists predict a GDP crash this winter as the second wave bites and jobs are lost

‘Squeezing activity’: Economists predict a GDP crash this winter as the second wave bites and jobs are lost

George Buckley, from Nomura, said the UK would experience a ‘lopsided W-shaped recovery’ with a ‘second, smaller dip in GDP over the winter’. 

Capital Economics said the economy was taking a worrying turn after purchasing managers’ index scores fell for two months even before restrictions ‘begin to bite’. 

Paul Dales, its chief UK economist, said: ‘The trajectory is worrying and suggests Covid restrictions in September are squeezing activity. It’s not looking good.’

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