Rolling business and finance news, including Vodafones forecast-beating results and the new rules on payday lenders.Vodafone: hefty drop in income in Southern EuropeMPs divided over payday lending caps 11.22am GMT Over in Greece, the eKathimerini newspaper is reporting that Athens government has been handed a list of targets by its troika of lenders.Demands include covering a fiscal gap for 2015 that the troika puts at 2.6bn, reducing the number of instalments in which debtors can honour their dues, pushing through a second phase of pension reform and completing an overhaul of the tax administration system.The troika is also seeking the governments proposal for an across-the-board wage structure for public sector employees, plans for the restructuring of Greek public utility companies and legislation in view of the liberalization of the natural gas market.Impossible to pass throu parliament MT @Elbarbie he 19 actions #Greece has to do in order to complete Troika review http://t.co/g4ZEcZtWUD#Greece - Negotiations with the Troika at a very critical stage. Parl majority for requested reforms unlikely Snap elections possible 10.36am GMT Back in the financial markets, the Russian ruble has had another bad morning, losing 1.8% against the US dollar.One dollar now buys 46.6 rubles, up from 45.8 last night. Russia has ample foreign exchange reserves but defending a currency can deplete them v fast so good to see end of rouble defenceAnyone who's expecting the Russian rouble to bounce back will be gutted by this chart http://t.co/Qs83YN7uE2 pic.twitter.com/rlCGjCtK3O 10.34am GMT It may be the case that there will be no high-street payday lenders by this time next year FCAs Martin Wheatley pic.twitter.com/CIV0f0eNsp 10.30am GMT If payday lenders are driven out of business by todays caps, can more ethical lenders pick up the slack?If #payday lenders do disappear from the high st that will raise the stakes hugely on supporting credit unions and other fairer alternatives 10.11am GMT The Labour party has warned that regulators must enforce the new cap on payday lending.Cathy Jamieson MP, Labours shadow financial secretary to the Treasury, has called for todays proposals to be reviewed by the end of 2015. We want to see more done to promote safer and more ethical forms of lending, and that is why a Labour Government would extend the levy on the profits of payday lenders and use the additional money raised to increase the level of Government funding for alternative credit providers such as credit unions. 10.04am GMT Back in the financial markets, and Vodafone has driven the European telecoms sector to its highest level since 2008.Vodafones shares are now up 5.6%, on track for their best day this year, after beating revenue forecasts and nudging its profit estimates for this year.The ferocity of competition shows no sign of relenting and there are pockets in Europe such as Germany, Italy and Spain where service revenues continue to decline quite steeply. Furthermore, net debt has shown an increase given the recent acquisition activity, whilst regulatory overhang and an uncertain European economic outlook provide further causes for concern. 9.59am GMT Payday lenders may vanish within year as result of todays price cap, one economist warned last night.... 9.33am GMT So how much of a difference will todays payday lenders cap make?An interest rate of 0.8% per day works out at £24 interest on a £100 loan, after a month.FCA total cap of 100% of £200 loan kicks in at 96 days when APR is again down to about 1200%APR. This is not cheap borrowing! 9.26am GMT Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, says payday lenders are still a major cause of financial angst:We hope that these measures [details] will bring an end to the inappropriate lending that we have seen from this industry. However, the FCA will need to be vigilant to ensure that lenders do not simply change their business models to try to evade the rules. Calls to National Debtline about payday loans have actually declined slightly from their peak in 2013, but we are still seeing around one in 10 calls relating to this kind of borrowing. 9.00am GMT Fiona ODonnell, Labour MP for East Lothian, agrees that the payday lending cap isnt tight enough.Financial Conduct Authority needs to rethink cap on credit. Almost indistinguishable from current charges #sharkstoppers #debtbusters 8.50am GMT Stella Creasy, who led the charge against the likes of Wonga, is not impressed by the FCAs new clampdown on payday lenders.Todays news will be welcomed as an early Christmas present for Britains legal loansharks. This cap is just £1 lower than their current charges. This is an industry where some firms are making nearly three quarters of a million pounds a week from British customers- such a high cap will do little to tackle these rip off charges.Weve warned regulators this cap needs to be much lower to really change the behaviour of these companies, but todays announcement shows they are still not listening. Other countries are much stronger at taking on these companies. Borrowers in countries like Japan, Australia, Canada and parts of America all have better protection from being preyed on by these companies, showing what can be done to end legal loan sharking.Weve fought so hard 2 end legal loan sharking lets not let predatory lenders slip through net now -tell @TheFCA cap 2 weak! #Sharkstoppers*whistles* twitter can you help tell @TheFCA cap on cost of credit needs to be lowered to help end legal loan sharking? #Sharkstoppers RT 8.41am GMT UK chancellor George Osborne has welcomed the new caps and fees being imposed on payday lenders (details here), and condemned the way they operated in the past.The Financial Conduct Authority has now confirmed the cap on the total cost of payday loans not just the interest rate, but also the arrangement fees as well as the penalty fees that will come into force in the New Year. This is all part of our long term economic plan to have a banking system that works for hardworking people and make sure some of the absolutely outrageous fees and unacceptable practices are dealt with.@montie @George_Osborne you failed to mention it was Labour with @stellacreasy who showed initiative on payday lenders 8.23am GMT The other big news this morning is that UK payday lenders are being hit with new restrictions on how much they can charge for their loans.The Financial Conduct Authority has declared that interest and fees will be capped at 0.8% a day, lowering the cost for most borrowers. This confirms a proposal made this summer.If the price cap was any lower, then we risk not having a viable market, any higher and there would not be adequate protection for borrowers. For people who struggle to repay, we believe the new rules will put an end to spiralling payday debts. For most of the borrowers who do pay back their loans on time, the cap on fees and charges represents substantial protections.Financial Conduct Authority confirms its plans for a cap on payday loans - nothing changes from before consultation: £24 per £100 borrowed 8.13am GMT Shares in Vodafone have jumped by over 4% at the start of trading, up 9p to 216.9p.Investors appreciate the news that it has raised its profit forecasts. They had also been braced for a 2.8% drop in organic service revenue; Vodafone actually reported a 1.5% decline. 8.08am GMT Good morning, and welcome to our rolling coverage of the financial markets, the world economy, business and the eurozone.Vodafone has got the morning rolling with a reminder that Europes weaker countries remain a tough place to operate.We have made encouraging progress during the quarter. There is growing evidence of stabilisation in a number of our European markets, supported by improvements in our commercial execution and very strong demand for data.Vodafone 2Q U.K. organic service rev. growth -3%, Germany -3.4%, Spain -9.3%, Italy -9.7%, India +13.2%Vodafone paints an ugly picture of Spain and Italy... organic service rev growth -9.3% in Spain and -9.7% in Italy.Vodafone 2Q revenue in Europe very weak across the board Continue reading...
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