Bank of America boss commits to UK, despite recent political and economic turmoil
The chairman and chief executive of one of the world’s biggest banks says he is “committed to the UK”, despite recent political and economic turmoil.
Brian Moynihan, of Bank of America, also told Sky News that he is not concerned about the prospect of an increase in corporation tax, adding: “We don’t live or die by our tax rate.”
Mr Moynihan said of the UK’s recent political turbulence: “We don’t get too wound-up about [elections].
“It’s always something in the moment, but it’s a population’s job to elect officials and our job to manage our company given those elections.
“I think the UK is one of the leading economies and leading countries in the world and is a bastion of stability in general sense.
“And we’ve got to go through a midterm election in the US, we’ve got to get to the other side of that, and then stability can settle in.
“So we always say our company’s been around for 230-plus years, we’ve been through a lot of elections, and our job is just to manage through them.”
Bank of America is the second-largest bank in America with a market capitalisation of nearly $300bn (making it roughly 10 times bigger than Barclays, Lloyds and NatWest, and more than three times bigger than HSBC).
It has about 5,000 employees in the UK, mainly in London but also Chester and Bromley.
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Mr Moynihan – one of the longest-serving Wall Street chief executives – has been leading Bank of America since 2010 over which time the share price has returned 175%.
He addressed the very difficult economic challenge that the new UK prime minister faces, but was not too upset at the prospect of the UK corporation tax rate rising instead of falling, as had been planned by Rishi Sunak’s predecessor Liz Truss.
“I think governments have to get a balance between taxation of corporations, individuals and what they spend the money on – and that’s a long-term problem for all governments,” he said.
“People shouldn’t be bidding for people’s business on tax rates, because ultimately, that leads to things which get a little out of skew.
“So I think the key is to have a consistent rate where people can invest across long periods of time, that’s fair to the companies and fair to the people they employ and fair to the business they generate, and tax revenues they generate, and then also fair to the citizens, so the governments can do what they need to do.
“I think those things settle over time, they go up and they go down.
“And you know, we don’t live or die by our tax rate, we live or die by having great customers doing great things with them – generate a lot of revenue, keep expenses in check, generate a lot of pre-tax income, and then we’ll figure out what the taxing authorities do.”
Corporation tax in the United States is 21% (with some surcharges depending state), which was lowered by president Donald Trump from 35% in 2018.
President Joe Biden has suggested it should rise again to 28%.
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The UK corporation tax rate is currently 19% and due to rise to 25% by April 2023 – a rise that Ms Truss planned to cancel, but now looks set to remain in place.
Mr Moynihan was sober about the global economic outlook, saying: “Our economists, and most economists around the world predict recessions in various economies over the next 12 to 18 months.”
That said, he felt the US economy was looking resilient.
“The US economy at the end of the day, it’s a consumer-driven economy.
“We see our consumers even for the first three weeks of October, they’re now spending still 9%-plus over what they spent last year, which is one-and-a-half times to two times the rate they’re spending pre pandemic.
“And so that’s a good thing.
“Now, ahead of them, you know, we’ve got the Fed raising rates and slowing down the economy.
“At the end of day, [US consumers] have good credit statistics and have the ability to borrow, so that’s good news.”
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Mr Moynihan was brought in to lead Bank of America after the financial crisis, and is always on the lookout for the next potential issue for his company and his industry, particularly following the UK’s recent issue with certain pension funds having too much exposure to Liability Driven Investments (LDI’s).
“We always look for, if you think about the Princess and the Pea analogy, under all those mattresses, you’re always looking for that pea to figure out where the risk is and where the risk gets bottled up.
“And you saw some that come out when you had a particularly strong movement in gilts, in the bonds in the UK.
“But the market now loves stability…and you’re seeing it settle back down given the circumstances over the last few weeks. But yeah, that was interesting. We looked around and said: Where else could this infect the economy?
“But the good news is the banking systems across the world are in pretty good shape.”
The government has signalled that plans to bring a second runway at Gatwick into regular use will get the green light if environmental conditions are met.
Transport Secretary Heidi Alexander said she was “minded to approve” the airport’s plans but the deadline for a decision had now been pushed back until the end of October.
The main stumbling blocks facing Gatwick’s proposals are related to its provisions for noise prevention and public transport.
The Planning Inspectorate had made recommendations in those two areas after initially rejecting the scheme.
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The airport welcomed the government’s statement but did not say whether it saw a need to adjust its plans to meet the conditions.
Gatwick has until April 24 to respond to the new proposals.
The northern runway already exists at the airport parallel to the main one, but cannot be used at the same time as it is too close.
It is currently limited to being a taxiway and only used for take-offs and landings if the main one has to shut.
Gatwick wants to move it 12 metres further away to solve this problem.
The northern runway is currently only used for emergencies or where the main one is closed. Pic: PA
It says being able to run both at the same time would allow around 100,000 more flights per year and create 14,000 jobs.
Gatwick says the £2.2bn project would not need government money, would be 100% privately funded, and could be complete by the end of the decade.
The airport is already the second busiest in the UK, and the busiest single runway airport in Europe.
Campaigners argue the additional traffic would be catastrophic for the environment and the local community in particular.
Today’s update comes after the chancellor said last month the government also supported a third runway at Heathrow as part of its wider effort to bolster UK economic growth.
However, the formal planning process is still to take place.
Gatwick’s additional runway would be unlikely to open until the end of the decade, assuming any legal challenges were swiftly overcome.
A government source told Sky News: “The transport secretary has set out a path to approving the expansion of Gatwick today following the Planning Inspectorate’s recommendation to refuse the original application.
“This is an important step forward and demonstrates that this government will stop at nothing to deliver economic growth and new infrastructure as part of our Plan for Change.
“Expansion will bring huge benefits for business and represents a victory for holidaymakers. We want to deliver this opportunity in line with our legal, environmental and climate obligations.
“We look forward to Gatwick’s response as they have indicated planes could take off from a new runway before the end of this Parliament.”
Stewart Wingate, Gatwick’s chief executive, said: “We welcome today’s announcement that the Secretary of State for Transport is minded to approve our Northern Runway plans and has outlined a clear pathway to full approval later in the year.
“It is vital that any planning conditions attached to the final approval enable us to make a decision to invest £2.2bn in this project and realise the full benefits of bringing the Northern Runway into routine use.
“We will of course engage fully in the extended process for a final decision.”
He added: “We stand ready to deliver this project which will create 14,000 jobs and generate £1bn a year in economic benefits. By increasing resilience and capacity we can support the UK’s position as a leader in global connectivity and deliver substantial trade and economic growth in the South East and more broadly.
“We have also outlined to government how we plan to grow responsibly to meet increasing passenger demand, while minimising noise and environmental impacts.”
A spokesperson for campaign group Communities Against Gatwick Noise Emissions (Cagne) responded: “We welcome the extension by the secretary of state until October as she has obviously recognised the many holes in the Gatwick airport submissions during the planning hearings.
“Cagne do not believe Gatwick has been totally up front with their submissions, and the planning hearings left so many questions unanswered.”
Greenpeace UK’s policy director, Doug Parr, said of the process ahead: “By approving Gatwick’s expansion the government will hang a millstone the size of a 747 around the country’s neck.
“Such a decision would be one that smacks of desperation, completely ignoring the solid evidence that increasing air travel won’t drive economic growth. The only thing it’s set to boost is air pollution, noise, and climate emissions.”
Nvidia has signalled no drop in demand for its flagship chips among big artificial intelligence (AI) spenders despite the low-cost challenge posed by Chinese rival DeepSeek.
The leading AI chipmaker said it expected Blackwell sales to continue to grow after its latest earnings beat market expectations.
Nvidia forecast revenue of around $43bn (£34bn) for its first quarter after achieving a figure of $39.3bn (£31bn) over its last three months – up 12% from the previous quarter and 78% from one year ago.
Just a month ago, its shares took a hammering when it emerged DeepSeek‘s primary chatbot, which uses lower-cost chips, had become the most popular free application on Apple’s App Store across the US.
Nvidia’s shares lost almost $600bn in market value in a day.
It also prompted investors to question whether the AI-led stock market rally of recent years was overblown.
There was anxiety ahead of Nvidia’s earnings report though shares only fell fractionally in after-hours dealing.
Market analysts suggested demand from Microsoft, Amazon and other heavyweight tech companies racing to build
AI infrastructure remained robust, given Nvidia’s revenue guidance even though the bulk of it is accounted for through data centres.
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Nvidia founder Jensen Huang said Nvidia has ramped up the massive-scale production of Blackwell and achieved “billions of dollars in sales in its first quarter”.
“Demand for Blackwell is amazing as reasoning AI adds another scaling law – increasing compute for training makes models smarter and increasing compute for long thinking makes the answer smarter.
“AI is advancing at light speed as agentic AI and physical AI set the stage for the next wave of AI to revolutionise the largest industries,” he said.
Derren Nathan, head of equity research at Hargreaves Lansdown, said of the report: “The longer-term investment case for the driver of the AI train is looking difficult to pick holes in, with Meta’s $200bn just one of the latest mega investments in data centres to be unveiled recently.
“By virtue of scale, growth may be slowing a little but upgrades to analysts full-year numbers can be expected off the back of today’s results. At a around 30x forward earnings, the valuation still doesn’t look overcooked.”
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