The week in news

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High street retailer Marks and Spencer loses a key executive to supermarket rivals, British business remains more confident than any other major economies over potential earnings and Manchester United’s signing of a monster sponsorship deal are all among the most-interesting finance news of the last seven days, finds Jermaine Haughton.

1.     Many British SMEs are using substandard internet quality, new research reveals

At a time when 3D printers, driverless cars and 5G internet is being developed by the world’s smartest minds and deepest pockets, can you believe there are still 45,000 small UK businesses that rely on dial-up internet? Yes, it’s true. In fact, a new report published by the Federation of Small Business (FSB) shows that the quality of internet used by businesses across the board is not yet up-to-scratch. Only 15% of businesses said they were very satisfied with their internet service.

The survey also suggests the government lacks ambition in setting its targets for internet quality, with its current broadband policy aiming to provide bandwidth speeds of 24 megabits per second (Mbps) to 95 per cent of premises by 2017, and 2Mbps to the remaining five per cent. By contrast, Denmark plans to have a baseline speed of 100Mbps by 2015.

2.     British companies are the most confident about the future global economy

Despite concerns that interest rates will soon surge and uncertainty in the eurozone, more British companies believe they will sustain future profits than in any other leading economy, according to a new study by Markit.

The survey of 11,000 businesses worldwide found that UK companies was by far more upbeat their peers in America, Germany, Japan and China regarding their expectations of profits, investment and employment over the next year. Only Brazil firm had greater optimism than British companies, as their economy has become lifted by the World Cup and the future Olympic Games.

3.     Tesco poaches M&S finance boss

Marks and Spencer’s chief financial officer Alan Stewart has jumped ship to supermarket giant Tesco, increasing his substantial salary in the process. Stewart’s move across the High Street was announced as M&S reported its 12th consecutive drop in quarterly sales of general merchandise last week.

The new finance chief will be faced with significant challenges to boost the supermarket giant’ trading position and arrest falling profits, as Tesco reported yet another sharp fall in sales in June and a 6% fall in annual profit in April. Set to replace finance director Laurie McIlwee, who agreed to step down from his position in April, Stewart will join Tesco’s board on a basic remuneration of £750,000 compared to the 579,000 he received at M&S.

4.     Manchester United agrees mammoth £750m Adidas sponsorship deal

Under the legendary Sir Alex Ferguson, the Old Trafford club were well used to taking the breaths away of their spectators playing attractive football and winning trophy after trophy, but the club’s new kit deal with sportswear giant Adidas has left even industry experts a gasp.

Following the conclusion of the previous Nike contract at the end of the 2014-15 season which paid Manchester United £23.5m a year, the club will now receive a record-breaking £75m-a-year from Adidas to make their training and playing kit for the next ten years.

With Adidas predicting up to £1.5bn in sales, Dr Leah Donlan, of Manchester Business School, said the deal will help give the brand a competitive advantage over its fiercest rival.

She said: “Adidas is a brand with a very strong heritage in football and securing a kit sponsorship deal with one of the biggest team brands in world sport will be seen to provide them with a significant competitive advantage over its rival Nike.

5.     Scotland: New home of space travel? 

Known for its golf courses and castles, Scotland could add spaceplane to its list of landmarks as the nations is set to have one of the first space ports outside the US, according to new government plans. A UK spaceport is officially in the pipeline to be operational by 2018, with eight UK locations currently under consideration including airports. Six of the aerodrome sites are based in Scotland, including Stornoway Airport, RAF Lossiemouth and Glasgow Prestwick Airport.

Find more interesting articles and news from Jermaine Haughton via this link.

Jermaine Haughton is a journalist and digital media professional.

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