A task force will explore the uses and risks of a digital currency, the Bank of England and Treasury said. They haven’t made a decision on whether to introduce one.
But the move will let Britain catch up with other central banks. The Federal Reserve and the European Central Bank have already started researching a digital dollar and a digital euro.
Rishi Sunak, Britain’s top finance official, also said on Monday that the Treasury would make changes to the financial technology industry and public listings process based on the recommendations of two recent reviews. The changes are intended to make it more appealing for tech companies to go public in London instead of New York, and let founders retain more control of their companies when they do. There will be more regulatory help for growing fintech companies and those experimenting with distributed ledger technology like blockchain.
Since Britain left the European Union on Dec. 31, some trading in shares and derivatives has moved from London to other financial centers, and the financial industry is wondering what will go next. The government has sought to reestablish the City of London’s reputation as a financial hub. Sweeping reviews and consultations have been introduced in a range of areas, from capital markets to making finance more green.
A report by New Financial, a London-based research firm, found that more than 440 companies had moved or are planning to move staff, assets or other business out of London because of Brexit. “While this is higher than previous estimates, it underestimates the real picture,” the report published on Friday said.
Bank assets worth more than 900 billion pounds, or $1.3 trillion, about 10 percent of the total assets in Britain’s banking system, have been moved or are being moved, the report said. Its authors, Eivind Friis Hamre and William Wright, wrote that these numbers might be smaller than the reality because their analysis might have missed banks and assets managers already based in the European Union. And fewer European firms than previously expected will open an office in Britain.
“Over time we expect there to be a drip-feed of business and activity from the U.K. to the E.U.,” the report said. It recommended that the city consider the Brexit losses as unrecoverable, and set its sights on opportunities further afield.
First-quarter earnings season picks up steam this week, with analysts expecting that profits for S&P 500 companies rose roughly 27 percent in the three months through March, compared with a year earlier when the pandemic sent corporate earnings into a tailspin.
Companies such as Coca-Cola, United Airlines, Netflix, AT&T and American Express all slated to issue results this week, offering a relatively well-rounded look at the state of corporate America in the early days of what could be a powerful year for the U.S. economy. It might also help set expectations for the stock market, after a big rally already this year.
The consensus among 76 economists polled by Bloomberg is that gross domestic product will expand by 6.2 percent in 2021, which would make it the best year for economic growth since 1984. And sentiment among analysts covering the stock market is almost universally bullish, given that strong economic tailwind.
“You’d almost have to be self-deceiving to expect U.S. companies overall to underperform consensus, given how the macro backdrop is driving revenues so well,” wrote John Vail, chief global strategist at Nikko Asset Management.
The expectations for profit growth are even more elevated for the current quarter: Analysts expect that the three months ending in June will see companies in the S&P 500 notch a 54-percent rise in profits, compared with the prior year.
That increase, of course, reflects a rebound from the worst of the pandemic-bred downturn. But it also is a result of “economic re-acceleration, and a rebound in commodity prices,” said Jonathan Golub, a stock market analyst at Credit Suisse.
Of course, if everyone is expecting such a surge in profits, the good news could already be fully incorporated into stock prices — and that means anything short of perfect results would make for a difficult stretch for stocks.
That has certainly been the case with some of the banks that reported earnings last week. Shares of Morgan Stanley, for example, dropped 2.8 percent on Friday even though the bank reported record revenue and profit.
The S&P 500 is already up more than 11 percent in 2021, and hit yet another record high on Friday.
That could mean the market is due for a pullback anyway. The index is relatively expensive by metrics such as the price-to-earnings ratio, which compares stock prices as a share of expected corporate profits over the next 12 months.
The S&P 500 is trading at nearly 23 times expected earnings. That’s roughly the valuation the index has held for most of the past year, but it’s very high by historical standards.
Over the last 20 years, the S&P 500 has traded at an average of 16 times expected earnings.
By comparison, a valuation of 23 times expected earnings is closer to where stock market valuations stood at the tail-end of the dot-com bubble of the late 1990s. When that ended, the S&P 500 fell roughly 50 percent before it hit bottom.
Journalists at Insider, the news site formerly called Business Insider, said on Monday that they had formed a union, joining a wave that has swept digital media companies.
A majority of more than 300 editorial workers, a group that includes reporters, editors and video journalists, voted in support, union representatives said.
Insider, which changed its name this year, was co-founded by Henry Blodget in 2007 as a business-focused publication with an emphasis on the tech industry. In recent years, it has expanded its areas of coverage.
Axel Springer, a digital publishing company based in Berlin, paid $343 million for a 97 percent stake in the company in 2015 and bought the remaining 3 percent in 2018. Mr. Blodget stayed on as chief executive. Insider, which has grown during the pandemic, bumped up the minimum annual salary for staff members to $60,000 in February.
The Insider Union is asking the company for voluntary recognition. It is represented by The NewsGuild of New York, which also represents editorial employees at The New York Times and other publications.
“I’ve seen how we’ve moved from the start-up energy of a young company into a much larger, much more formal corporation,” said Kim Renfro, an entertainment correspondent who has worked at Insider since 2014. “I see the union as being a natural part of that progress.”
William Antonelli, an editor at Insider, said that the union would focus on diversity and inclusion, pay equity and more transparency on how company executives rate employees.
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Nicholas Carlson, Insider’s global editor in chief, said in a statement: “The satisfaction, job security and happiness of our journalists is extremely important to us. We will fully respect whatever decision our newsroom ultimately makes.”
The formation of a union at Insider is part of a broader industry trend, following organizing efforts at BuzzFeed News, Vice, The New Yorker and Vox Media. Last week, a group of more than 650 tech workers at The Times formed a union.