Don’t expect Britain’s first hedge fund premiership to be smooth or enjoyable | Ed Conway

Published

3 years ago

October 24, 2022

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Rishi Sunak is not just our first British Asian prime minister, our first Hindu PM.

He is not just the youngest prime minister of the modern era. He is also the youngest since the Napoleonic wars and the first millennial PM.

Just as intriguingly, and possibly even more consequentially, he is Britain’s first hedge fund prime minister too.

Before he was a politician, Mr Sunak worked in finance, both at Goldman Sachs and Chris Hohn’s hedge fund – The Children’s Investment Fund Management. His time in the sector was relatively short, but it nonetheless makes for a CV quite unlike almost every other resident of 10 Downing Street.

Rishi Sunak wins race to be prime minister – live updates

Markets shaped him. And now, at the very point when the rise and fall of certain benchmarks are influencing British politics more than in any era since at least the early 1990s, we have a prime minister who takes those markets unusually seriously.

Markets helped him through the door. For, in the end, what did for Liz Truss was the extraordinary response to her mini-budget, which contributed to a dramatic leap in interest rates on both government debt and mortgages. That in turn triggered a crisis in the gilt markets which underlie Britain’s financial system.

And markets have welcomed him. The news that Boris Johnson was pulling out of the leadership race was followed by a sudden rise in the value of the pound. When trading opened in government bonds this morning, they very quickly rallied. The implied interest rate on these bonds dropped sharply.

And since these markets are the foundations of the rest of the financial system, that had an instant effect on prices elsewhere. After the mini-budget, traders were expecting Bank of England interest rates to rise to well above 6% next year; this morning the expected peak dropped below 5% for the first time since that fiscal event.

At this stage you are doubtless wondering: why on earth does any of this matter? Why are we paying so much attention to the markets? Why (as some might put it) is Britain allowing the whims of the globalist elite – the “Davos consensus” – to shape its policy? Whatever happened to democracy?

And, frankly, you have a point. A democratic country’s policies should be shaped by politicians elected by its people. That’s part of the unwritten social contract that binds us.

But the reality – depressing as it might be – is that the ability of those politicians to act is circumscribed by markets. They can, to give you a straightforward example, only borrow to the extent that investors around the world are willing to lend them money.

Markets matter not because they are right or wrong (that’s not how it works) but because that’s where the money is. And Britain, a country with enormous “twin deficits” on its current account and government account, is more reliant than pretty much any other developed economy on borrowing from those markets. This is just the way it is – ask anyone who worked at Goldman Sachs.

And that logic is worth keeping in mind as Britain’s first hedge fund prime minister takes office and begins to shape policy. Our ability to do what we want to do as a country is dependent on persuading the millions of investors around the world, taking second-by-second decisions on where to put their money, that we are on the right course. Other prime ministers (certainly the last couple) tried to ignore that; it’s unlikely that a “hedge fund prime minister” would.

However, the economic challenges that face Mr Sunak go well beyond the tick-tick-tick of a gilt chart. He enters Number 10 with the UK economy quite plausibly in recession. Energy costs remain at unprecedented highs (even though the wholesale cost of gas has fallen sharply).

So too do food prices and the costs of all sorts of household sundries. Further shocks from the Ukraine war seem highly likely. And on top of this, households will have to contend, in the coming year or so, with a very sharp increase in mortgage costs. Even the slight improvement in those interest rates since Mr Sunak became the odds-on favourite for PM does little to change that.

In short, even in a best-case scenario for the markets, the coming months for the UK economy are likely to feel grim, with households squeezed at every corner – more than they have been for decades. One can argue the toss over who bears the most responsibility for this – whether that’s the Tory party, central banks or, yes, markets. But that’s what we’re heading for.

Mr Sunak spent most of his time as chancellor doling out money during the pandemic. Normally in a recession, governments tend to “loosen fiscal policy” – which is to say, dole out more money.

But that brings us back to markets. Will those investors be relaxed about Britain borrowing more in the coming years? Will they be assured enough by the hedge fund credentials of the PM to give Britain the benefit of the doubt? Will Mr Sunak want to take that risk?

The past few weeks have been an astonishing ride in politics. We are now off the Truss rollercoaster. The Sunak journey might feel different; it might not have the same twists and turns; but don’t expect it to be especially smooth or enjoyable either.

Business

WSL Football bosses hire Goldman to kick off financing review

Published

19 hours ago

October 4, 2025

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WSL Football bosses hire Goldman to kick off financing review

Football chiefs are to bring in Wall Street’s best-known investment bank to explore options for financing the growth of women’s football in England.

Sky News has learnt that the board of the WSL are close to hiring Goldman Sachs to evaluate opportunities for raising new funding.

The project is at a very early stage, with further details on the potential outcome unclear this weekend.

The possibility of selling a stake in the WSL and the rebranded Championship – now known as WSL2 – has been explored in the past, and could be reviewed again as executives seek to capitalise on the sport’s profile.

The England women’s team made history during the summer by retaining their European Championships title after a penalty shootout in the Final against Spain.

In the last few months, both Chelsea and West Ham United have sold stakes in their women’s teams to external investors, with the former striking a deal with the husband of former tennis superstar Serena Williams.

Deloitte, the accountancy firm which has been involved in a string of prominent recent sports deals, including the sale of stakes in the eight Hundred cricket franchises, is also said to be being lined up to work with the WSL Football board.

A WSL Football spokesman told Sky News: “Like any responsible business with ambition, WSL Football is working in collaboration with member clubs to explore long-term growth strategies that can accelerate the positive momentum within the women’s game.”

The spokesman declined to comment on the involvement of Goldman Sachs or Deloitte.

News of the review comes with the WSL and WSL2 seasons well underway.

On Friday night, Chelsea surrendered their 100% record at the top of the WSL when Manchester United came from behind to draw with the Londoners.

In the WSL2, Birmingham City and Charlton Athletic lead the race for promotion to the top tier.

The WSL Football board, which is chaired by media veteran Dawn Airey and run by chief executive Nikki Doucet, has secured a string of lucrative commercial and broadcast partnerships in the last 12 months.

These have included deals with British Gas and Nike, as well as a three-year title sponsorship extension with Barclays.

On the broadcast front, it struck a record £65m domestic TV rights agreement with Sky Sports – which shares a parent company with Sky News – and the BBC.

According to Deloitte’s annual review of football finance, the 12 WSL clubs generated aggregate revenue of £65m in 2023-24, a 34% increase on the prior season’s figure of £48m.

This rise was, according to the report, driven by revenue growth at Arsenal and Chelsea, although every top-flight club recorded double-digit increases in total revenue.

In attendance terms, WSL’s average and cumulative crowds in 2024-25 were slightly down, but this was offset by increases in attendances at second-tier matches, meaning that across the two divisions, last season was flat with an overall cumulative attendance of just over 1.1 million.

The impending appointment of Goldman comes four-and-a-half years after rival investment bank Rothschild was hired to undertake a similar review, with the sale of a stake to private equity investors under consideration for months before being abandoned.

Goldman Sachs declined to comment.

Business

Reeves seeks outsider to run Britain’s banking watchdog

Published

23 hours ago

October 4, 2025

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Reeves seeks outsider to run Britain's banking watchdog

Rachel Reeves, the chancellor, is seeking a heavyweight outsider to run Britain’s main banking watchdog, with a senior Barclays executive expected to be among the top contenders for the job.

Sky News has learnt that the Treasury is to advertise the post of chief executive of the Prudential Regulation Authority (PRA), which oversees financial services firms such as banks and insurers, within days.

One source said the recruitment process could kick off as early as next week.

The process, which will run for several months, will lead to the appointment of a successor to Sam Woods, a long-serving official who has served two terms in the role.

This weekend, it emerged that Katharine Braddick, a former senior Treasury civil servant who joined Barclays in 2022, is expected to be among the applicants for the role.

Whitehall insiders said Ms Braddick would be a strong contender for the post if she decided to apply.

A former director-general, financial services at the Treasury, Ms Braddick has been Barclays’ group head of strategic policy and advisor to the bank’s chief executive for three-and-a-half years.

Prior to the Treasury, she worked at the Financial Services Authority and was heavily involved in political negotiations on financial services legislation relating to Brexit.

Barclays declined to comment on Ms Braddick’s behalf on Saturday.

In response to an enquiry from Sky News, a Treasury spokesperson said: “Growing the economy is the Chancellor’s number one mission.

“Every regulator has a part to play by regulating for growth not just risk.”

The chancellor is said to be keen to identify candidates from outside Britain’s existing regulatory set-up to head the PRA.

A small number of internal candidates is thought to include David Bailey, the Bank of England’s executive director for prudential policy.

Ms Reeves’s apparent desire for an outsider comes amid a wider push for Britain’s economic watchdogs to remove red tape and reorient themselves towards growth-focused policies.

Earlier this year, Nikhil Rathi, chief executive of the Financial Conduct Authority, was appointed to a second term in charge following intensive discussions about the body’s five-year strategy.

Since then, both the FCA and PRA have removed rules relating to diversity and inclusion in the financial sector, while the former abandoned a plan to ‘name and shame’ companies which were the subject of enforcement investigations.

The Payment Systems Regulator (PSR) was abolished earlier this year as part of the government’s drive to reduce unnecessary regulation.

The search for the next PRA boss will get underway less than two months before the chancellor delivers an autumn Budget in which she is expected to have to raise tens of billions of pounds through additional tax rises.

Mr Woods’ next move will be closely watched in the City.

He has been seen as a potential candidate to succeed Andrew Bailey when the Bank of England governor’s term runs out in 2028, although it is unclear whether he covets the job.

As CEO of the PRA, Mr Woods is also a deputy governor of the Bank of England, a member of the Bank’s Court of Directors, and a director of the FCA.

The chancellor has shown a willingness to recruit from outside the Treasury, appointing Bank of America investment banking veteran Jim O’Neil as second permanent secretary to the Treasury earlier this year.

Mr O’Neil had also served as the head of UK Financial Investments, the agency set up to manage taxpayers’ stakes in Britain’s bailed-out banks.

Business

Baroness Mone: I have no wish to rejoin Lords as Conservative peer

Published

2 days ago

October 3, 2025

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Baroness Mone: I have no wish to rejoin Lords as Conservative peer

Baroness Michelle Mone has broadened her attack on her political critics, accusing Conservative leader Kemi Badenoch of using “inflammatory” and “reckless” language that could prejudice a police investigation into her role in the awarding of PPE contracts.

A day after she wrote to Sir Keir Starmer, accusing the government of pursuing a vendetta against her, the former Conservative peer responded to comments by Ms Badenoch following a High Court ruling that a company linked to Baroness Mone’s husband must repay £122m received for surgical gowns.

The court found that PPE Medpro, founded by her husband Doug Barrowman, was in breach of contract with the Department of Health and gave it two weeks to repay the sum.

While not a director of the company, Baroness Mone used her political contacts to introduce PPE Medpro to the government’s “VIP fast-lane” at the start of the pandemic, and a family trust of which her children are beneficiaries received £29m of the profits.

A separate criminal investigation by the National Crime Agency (NCA) is ongoing, and assets linked to the couple worth £75m have been frozen while it continues.

In a series of radio interviews, Ms Badenoch criticised Baroness Mone, accusing her of bringing shame on the Conservative Party and calling for her to step down from the House of Lords.

“Where people do wrong, they should be punished,” she said. “They should face the full force of the law and this is something that I very strongly believe in,” she said.

“And as the prosecution against her continues, they should throw the book at her for every single bit of wrongdoing that has taken place.”

In a letter from her private office, Baroness Mone accuses the Tory leader of being ignorant of the facts and calls out a series of other Conservative politicians who introduced companies to the VIP lane.

“I was shocked to the core to read about your inflammatory language on BBC Radio yesterday calling for me to resign from the House of Lords,” she writes.

“You are commenting on a live criminal investigation that could prejudice the outcome of any trial, and in so doing, you are reportable to the attorney general for breach of and contempt of court. Does no one ever tell you these things before you and your colleagues make reckless statements in the public domain?”

Baroness Mone goes on to say the NCA investigation has “nothing to do with PPE Medpro and the contracts”.

“The case theory of the NCA investigation is that I somehow misled the Conservative government about my alleged concealed involvement and ended up pocketing a lot of money,” she writes. “Well I’m sorry to disappoint you, but it isn’t true.”

She also says the Conservative government knew of her involvement and names former health secretary Matt Hancock, Lord Agnew, Lord Feldman and Lord Chadlington as being among 51 “mostly Conservative peers and MPs” who introduced providers to the VIP lane.

“So Kemi, my role was exactly the same as all other Conservative MPs and peers who were trying to help provide PPE… if I have done wrong, then so have all the others in the VIP lane. In which case, you should be calling out for them to resign as well. That’s if you manage to work out what it is they are supposed to have done wrong.”

She concludes by saying she has no wish to rejoin the Lords as a Conservative peer when her leave of absence ends, “that’s assuming there still is a Conservative Party before the next General Election”.

The letter comes as an online petition calling for Baroness Mone to step down from the Lords, launched by the Covid-19 Bereaved Families for Justice, attracted 60,000 signatures in 24 hours.

The Conservative Party has been approached for comment.