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What to watch: Google tax, Iran tensions, Virgin and Ocado Brexit warnings, and Bank report

Tom Belger
Finance and policy reporter
A Google logo. Photo: Ng Han Guan/AP Photo

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

France decides on Google tax

The French upper house will vote Thursday on a possible 3% tax on tech firms’ revenues in the country, which is expected to hit mainly US firms like Google, Amazon, and Facebook.

There are fears of a fresh trade dispute between the EU and the US, with US President Donald Trump claiming US firms are unfairly targeted. The US is expected to retaliate with tariffs.

Trump has ordered an investigation into the digital services tax, and new penalties could be imposed if it finds the French reforms are unjust.

But France is planning the measures because it believes such big firms do not contribute enough tax for their huge size and revenue.

“The threat of EU-US trade spat needs to be considered,” Neil Wilson, chief analyst at, said.

“Trump will use this to beat the French and we can expect Tariff Man to do something.”

Oil at seven-week high as Iran-UK tensions build

Oil reached seven-week highs on Wednesday amid renewed global tensions involving Iran after three of its government’s vessels reportedly tried to block a British ship.

The UK government said on Thursday morning that Iranian vessels had tried to stop a British ship passing through the Strait of Hormuz, but eventually withdrew.

Britain urged the Iranian authorities to "de-escalate the situation in the region.”

"HMS Montrose was forced to position herself between the Iranian vessels and British Heritage and issue verbal warnings to the Iranian vessels, which then turned away," a British government spokesman said.

Virgin and Ocado warnings on no-deal Brexit

A delivery van leaves the dispatch area of an Ocado warehouse. Photo: Peter Nicholls/Reuters

Sir Richard Branson warned sterling could plummet to the same value as the dollar if Britain crashes out of the EU without a deal.

The Virgin boss said it could leave Britain “near bankrupt,” causing big losses at his UK companies and forcing them to shift investment out of the country

“The pound was at $1.53 when the referendum took place. The pound today it is at $1.22, $1.23, and the pound will collapse to parity with the dollar if there is a hard Brexit,” Branson told the BBC.

"It obviously is going to result in us spending a lot less money in Britain, and just putting all our energies into other countries.”

Ocado (OCDO.L) chief executive Tim Steiner also took to the airwaves Thursday morning to warn it was “just not possible” for the company to prepare for huge delays at the border, with inadequate storage to keep more than a week of stocks.

“To buy a week of inventory we would have to double the size of our facilities and our facilities are full so we’d have to buy replica facilities for that one week. It's just not possible," Steiner told the BBC.

Bang & Olufsen woes

Struggling luxury TV and stereo maker Bang & Olufsen (BO.CO) reported an operating loss in the last quarter.

But the Danish company said it expected to return to sales growth this year, planning to open more sales points and launch new products.

Bang & Olufsen shares have fallen more than 70% over the past year, largely blamed on weak TV sales and slow progress in its turnaround plan at a time when subdued consumer spending has hit retailers across the EU.

"Our unsatisfactory results were primarily due to difficulties related to the transition of our sales and distribution network and fewer product launches compared to last year," chief executive Henrik Clausen said in a statement.

The company reported a fourth-quarter operating loss of 66 million Danish crowns (£7.95m), compared with a profit of 55 million crowns one year earlier.

Bank of England stability report

Governor of the Bank of England Mark Carney during the Bank of England's financial stability report. Photo: Press Association

Many will be watching the Bank of England’s latest financial stability report when it is released Thursday morning.

The report looks at how stable the financial sector is in the UK and the Bank’s handling of such risks, as well as highlighting key investor concerns.

Governor Mark Carney will then take questions from the media mid-morning at a difficult time for the UK economy.

The UK is battling headwinds from Brexit uncertainty to global trade tensions, a sluggish property market, and productivity figures to poor recent performance in retail, manufacturing, construction, and services.

European markets higher

European stocks broadly strengthened in early trading as expectations grow of an interest rate cut from the US Federal Reserve.

The pan-European STOXX 600 index (^STOXX), Euro Stoxx 50 (STOXX50E), and Euronext 100 (^N100) were all up 0.3%.

Britain's FTSE 100 (^FTSE) and France's CAC 40 (^FCHI) were all also up 0.3%, while Germany's DAX (^GDAXI) was almost flat.

Asian markets were mixed overnight, with Japan's Nikkei 225 (^N225) up 0.5%, Hong Kong's Hang Seng index (^HSI) 0.8% higher, and China's benchmark Shanghai Composite (000001.SS) flat.

Sterling was down 0.33% against the dollar (GBPUSD=X) on Thursday, to around $1.248, and down 0.22% against the euro (GBPEUR=X), to around €1.113.

What to watch in the US

US stock futures were also pointing to a higher open on Thursday over dovish remarks by the chair of the Fed.

S&P 500 futures (ES=F), Dow Jones Industrial Average futures (YM=F), and Nasdaq futures (NQ=F) were all up 0.2%.

“The S&P 500 briefly broke through 3,000 to achieve an all-time high, but closed a few points short of its record close at 2,993.07. The Dow also set a new intra-day peak, while the Nasdaq set a closing high,”’s Wilson said.

“The Fed chair has well and truly left the door open to a rate cut in July, albeit there remain doubts about whether this is going to be first of several cuts or just an ‘insurance’ cut designed to keep markets on an even keel.”