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Today’s news in brief – 7/2/2024

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ING, the Dutch bank, is planning to appoint Deloitte as its external auditor for a four-year term starting January 1, 2026. The decision follows European and Dutch legislation requiring regular auditor changes. Deloitte’s nomination results from a thorough tender process overseen by ING’s audit committee. While KPMG remains the auditor for 2023-2025, the move aligns with the 10-year limit set by legislation. The proposal will be presented at ING’s 2024 Annual General Meeting on April 22.

PwC has reported a 17% decline in UK merger and acquisition (M&A) activity in 2023, with 3,628 deals compared to 4,362 in the previous year. The second half of 2023 saw a significant drop of almost 600 deals compared to H1 2023, though total deal value reached £88bn. The technology, media, and telecommunications (TMT) sector led in activity, while energy, utilities, and resources saw the highest deal value. PwC notes increased private equity involvement with 42% of deals and anticipates renewed confidence in the market as economic conditions improve.

The Institute of Chartered Accountants in England and Wales (ICAEW) has urged the next UK government to develop a plan fostering economic resilience and business growth. Recommendations include business start-up passports for HMRC registration, tax system digitalization, and increased R&D spending beyond 3% of GDP. The ICAEW manifesto outlines a 16-point plan addressing planning reform, housing, infrastructure, and more. Aimed at boosting productivity, the plan draws insights from ICAEW members across sectors. The institute emphasises the need for a supportive environment for entrepreneurs and businesses in the upcoming General Election.

EY has warned that increasing borrowing costs may result in a £20-25bn refinancing burden for UK companies over the next three years. Since January 2022, the average cost of debt financing has risen by 3-6%, impacting an estimated £500bn of debt to be refinanced by UK listed firms between 2024 and 2027. EY anticipates a valuation gap as higher capital costs affect business values, potentially weakening company and asset valuations. The post-pandemic economic challenges, including inflation and interest rate uncertainties, prompt EY to advise companies to consider deleveraging and liquidity strategies to protect balance sheets.

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