Supermarkets told to make prices clearer, mortgage rates fall and Netflix subscriber numbers jump

Good morning and happy Friday!

Here are the top 5 stories for British business leaders today:

1) Good news as mortgage rates (finally!) start to fall

• What happened: The average 2-year fixed mortgage rate fell from 6.81% to ( … wait for it …) 6.79%. The percentage change is small, yes, but the fact they fell at all signals optimism from lenders that interest rates may not increase by as much as they’d previously thought. (Read more)

• Why it matters: Compared to even just a year ago, mortgage rates have increased substantially. This makes the cost of borrowing extremely high, discouraging people from buying new property and thus a decline in house prices. A small decrease in mortgage rates could signal a turning of the tide towards cheaper borrowing costs.

2) Supermarkets are being forced to make prices of products clearer

• What happened: The UK’s competition watchdog (The Competition and Markets Authority - CMA) has told supermarkets that they must make pricing clearer. For instance, they ‘found tea bags priced per 100g for some products and others priced per tea bag.' This is confusing for buyers as it makes it hard for them to compare products against each other. (Read more)

• Why it matters: With the price of food increasing at extremely high rates, the ability to readily compare groceries against each other is important for consumers. Whilst the CMA found that supermarkets aren’t profiteering on groceries, they said it was important to keep the market "under review" as supermarkets look to increase their profits again.

3) Virgin Money is shutting 39 branches as a result of falling customer demand

• What happened: Virgin Money has announced that it will be closing down a third of its bank branches. This is the result of fewer people visiting a bank branch for their banking needs. In fact, a spokesman for Virgin Money said that more than 96% of customers visit a branch less than once a month. (Read more)

• Why it matters: This shut down will lead to the potential redundancies of 255 staff. It also means fewer places to bank in person. Whilst it may not be used by everyone, in-person banking continues to be important for older or vulnerable people who struggle to bank online.

4) The number of Netflix subscribers has jumped since they cracked down on password-sharers

• What happened: Netflix subscribers ended June with more than 238 million subscribers, adding 5.9 million members since March. They anticipate further increases as they continue with the crackdown. It has been estimated that more than 100 million households share passwords in breach of Netflix’s rules, so the potential gain from a crackdown are significant. (Read more)

• Why it matters: Netflix’s share price is significantly below its peak as a result of competitive pressures from the likes of Disney and a slowing economy putting pressure on people’s finances. They introduced an ad-driven model in a number of country’s for price-conscious users. The success of the crackdown on password-sharing appears to be yielding dividends and could pump significant growth for them.

5) Development of offshore wind farm is halted with a warning that Britain needs better incentives to achieve its sustainability targets

• What happened: Vattenfall, a Swedish wind-farm developer, has said that it will stop development of its British Norfolk Boreas offshore wind project due to rising costs. (Read more)

• Why it matters: Boris Johnson’s government set a target for the UK to reach 50GW of offshore wind energy by 2030 to accelerate the transition towards a Net Zero economy. This is an ambitious target given the UK is currently at 13.7GW, so has to almost increase capacity 3-fold from today over a 7 year period. The pulling out of a wind developer over cost concerns spells alarm-bells as it could mean that the incentive regime is not sufficient to encourage the development required to reach this target.

The Baader-Meinhof phenomenon ( - more commonly known as ‘seeing something again and again after hearing about it once’)

I had a conversation with a friend today (and an avid reader of this email). He mentioned something related to Anglo American. And next thing I know, I come across Anglo American today in my research for this newsletter. (Their stock price climbed 3.3% as a result of strong production numbers and hopes for a stimulus for China's slowing economy. Read more here if interested).

This got me thinking that this can’t be a coincidence. It happens time and again that I hear something and next thing I know, it’s popping up everywhere I go.

Turns out there is a name for this - The Baader-Meinhof phenomenon.

It also turns out that it isn’t actually that often it isn’t that something is occurring more, instead it’s just that you are noticing it more.

This article explains it best…“Last week you decided you’re going to buy a red car to stand out from the crowd. Now every time you pull into a parking lot, you’re surrounded by red cars. There are no more red cars this week than there were last week. Strangers didn’t run out and buy red cars to gaslight you. It’s just that since you made the decision, your brain is drawn to red cars.”

This phenomenon of noticing things is simply related to your brain reinforcing newly acquired information. Your brain takes certain ‘short-cuts’ to process the vast amounts of information it comes across each day. This reinforcement of information is one such shortcut.

Therefore, next time you notice something again and again, ask yourself whether there is a rationale reason for it appearing more often or whether it is just this phenomenon taking place.

Have an awesome weekend and see you on Monday! (If you have any feedback on this week’s emails, just reply to this email).