Mortgage rates hit a 15 year high, Royal Mail strikes end and the US approves the Microsoft-Activision deal

Good morning and welcome to second ever issue of trxn. Today’s topics include:

• Average 2-year mortgage rates reaching 6.66%, a 15-year high

• Royal Mail reaching a deal with their workers, ending the workers strike action

• The US approving the Microsoft-Activision deal, putting the pressure back on the UK’s competition authority who have rejected the deal

• A brief overview of the Economics of Wimbledon

Mortgage rates hit 15 year highs

• The BBC reported that mortgage rates have hit 15 year highs. The average rate on a mortgage is now 6.66%. To illustrate just how much that is, assume you buy a house worth £500k and put down a £100k deposit - thus taking a £400k mortgage. At 6.66%, you’ll pay £26,640 in JUST interest payments the first year. (This doesn’t include the amount you’d be repaying towards the £400k mortgage).

  • Higher mortgage rates don’t just hit people buying houses - it affects almost everyone:

    • If you own a house, you’ll likely be paying more when you remortgage.

    • If you are selling, you’ll find that you might not get as much as you could last year, with house prices falling (as we reported yesterday).

    • And if you’re renting, you might find your landlord putting up rents to cover their mortgage costs ( - although the amount you pay is determined by a range of factors, not just the landlord’s mortgage).

  • All this is to say that almost everyone is affected by rising mortgage rates as we all need a roof over our heads!

Royal Mail strike end (hurrah!)

• You may recall that Royal Mail workers carried out a number of strikes last year. 18 days in fact. 115,000 workers took part in these strikes (which some ‘quick maths’ tells us may have been worth £400 Million in worker hours)*

• ‘Strike-news fatigue’ has been growing with strikes across transport, healthcare, education and more. So we are pleased to finally report some good news (for users of these services)!

• The CWU (Communication Workers Union) stated that “76% voted in favour of the pay agreement, which included a 10% salary increase and a one-off lump sum of £500, in a ballot that recorded a 67% turnout”.

*Based on 200 working days a year and an average worker salary of £30k per year

Microsoft’s Activision deal approved in the US

• Microsoft announced a $69bn deal to take over Call of Duty and World of Warcraft maker Activision in January 2022 - the biggest deal of its kind in the history of the gaming industry.

• They’ve since been doing the rounds to get approval for this deal from government’s, regulators & courts across the world.

• The latest announcement is that the US court has rejected a request from the US regulator to block the deal. This has given a boost to the possibility of closing the deal, leading to a 10% increase in Activision’s share price.

• With Europe having also approved the deal, this leaves the UK the ‘odd-one-out’ so far, having rejected this deal.

  • The primary reason why regulator’s are concerned about this deal is because it may yield Microsoft, maker of the Xbox, the power to deny rivals access to Activision's games

  • Microsoft’s president (Brad Smith) lashed out strongly upon the rejection of this deal in the UK. He stated that this marks the “darkest day in our four decades in Britain, [and that the decision would] discourage innovation and investment in the United Kingdom … the impact of this decision is far broader than on Microsoft or this acquisition alone. People’s confidence in technology in the United Kingdom has been severely shaken.”

  • Microsoft and Activision will now turn their attention back to the UK with a view to resolve differences and push the deal through.

Other snippets

• Gary Linekar tops the pay chart for BBC once again, despite his kerfuffle with the BBC over his Twitter posts. See the full list of highest paid BBC stars here.

• Bank of America has been found guilty of opening credit cards without customers' permission and ordered to pay out $150m (£116m) in fines for doing so.

• Wage growth has continued strongly, with a 7.3% annual rise. However, the jobless rate has also started to increase, from 3.8% to 4.0%, with signs of an economic slowdown looming over the UK economy. (Reuters)

The Economics of Wimbledon

• Let’s delve into some of the economics of Wimbledon. Here are the 5 most interesting facts about money in Wimbledon:

  1. A recent study found that the Wimbledon fortnight delivers a £200 million boost to the London economy - mostly on accommodation, food and drink, transport and merchandise. This makes it the most valuable annual sporting event in Britain.

  2. Despite this, the ball boys and ball girls earn nothing from Wimbledon. Whilst their uniforms and expenses are paid for, their ‘payment’ is being up close to the players.

  3. Some players’ sponsorship deals stipulate that they must wear certain items or clothing whilst competing. One of those is Nadal, who wears a Richard Mille whilst competing.

  4. Getting injured can result in big time losses for players! If you injure yourself, retire from that tournament and then subsequently withdraw from future tournaments, you’d never get an opportunity to pick up your prize money 😲. Furthermore, most sponsors structure deals with players whereby the player gets paid less if they don’t play.

  5. And last but not least, this year’s prize money for winning is a whooping £2.35m for the singles champions. But being a runner up isn’t so bad (financially) as you still get £1.175m. You can see the full list of prize money here.