Review of the Year: View from the UK in 2013 took in 'Crystal Methodist' Rev Paul Flowers, but also saw stock markets spring back to life

The tide turns for the better amid a float furore and drug-fuelled orgies

Economic recovery

It doesn’t seem long ago that the doomsayers were queuing up to take aim at the UK economy with a triple-dip recession a real possibility.

However, the tide began to turn in 2013 and coincided with the arrival of a dashing Canadian, Mark Carney, who replaced Lord Mervyn King at the helm of the Bank of England.

In April, the UK economy avoided falling back into recession, having grown by 0.3 per cent during the first quarter, and within months Mr Carney had stamped his authority on the Old Lady by announcing his forward guidance policy in August, declaring the BoE will not raise interest rates until unemployment falls to 7 per cent or below. 

By the time of the Autumn Statement on 5 December, and some high-profile trade missions to China, including a David Cameron-led deal to sell pig semen, the UK’s growth figures had been upgraded, although the Government’s austerity policy remains unpopular. At least we’re not French though – our Gallic cousins end the year in economic disarray while Ireland has exited the EU’s bailout programme. Let’s raise a pint of Guinness to that.

Return of the IPO market

Sympathy has been in short supply for our investment bankers over the past few years, with M&A activity and stock-market flotations as rare as a Manchester United win under David Moyes.

Things improved this year as the number of listings reached their highest level since the financial crisis, raising about £7bn for the owners of businesses like Esure, Foxtons and Merlin. The state-backed sale of Royal Mail in October was easily the most controversial and its £3.3bn valuation was deemed too low by many.

MPs said its advisers – Goldman Sachs and UBS – had “misled the taxpayer”. It later emerged JPMorgan had valued it at up to £8.5bn in a failed pitch in the run-up to the flotation. While this was all happening, the FTSE 100 continued to soar and experts are predicting it could soon break 7,000. Watch this space. 

A new kid in town

By the time Hector Sants had quit as head of compliance at Barclays due to stress in November, the empire he had built at the Financial Services Authority had been taken apart. The City watchdog was split into the Prudential Regulation Authority and Financial Conduct Authority in April and sharpened its claws as experts called for an end to light-touch regulation. However, there was one score to settle before it bowed out, with the FSA censuring Prudential boss Tidjane Thiam and fining the insurer £30m for its failed bid for AIA in 2010.

The consumer-facing FCA has picked up the mantle, keeping its head of enforcement Tracey McDermott busy throughout the year.

Time to say goodbye

In 2013, the City seemed more like the Premier League as some of its best-known companies saw changes at the top.

For every Sir Alex Ferguson though there was a Nigel Adkins at Southampton (unlucky) and a Martin Jol at Fulham (inevitable). Stephen Hester’s departure as Royal Bank of Scotland boss was probably in the Mr Adkins camp and came after intervention from Chancellor George Osborne, who wanted a new man to lead the bank ahead of its privatisation. Mr Hester was widely judged to have done a good job in his role, unlike some of the others to stand down.

Nick Buckles, who presided over G4S’s Olympic security fiasco, parted ways with the FTSE 100 giant in May while Tom Albanese quit Rio Tinto after it announced $14bn (£8.6bn) in writedowns. Another to move in acrimonious circumstances was Simon Lee, who left RSA this month following the discovery of a black hole in its Irish business.

In contrast, Paul Walsh stepped down in glory from Diageo with a £14.8m pay package having overseen huge growth, while Angela Ahrendts left Burberry for Apple to great acclaim. 

A tale of two banks

When it comes to the Rev Paul Flowers, you couldn’t have written the script any better. As hordes of Brits tuned in to watch the finale of Breaking Bad, in which a chemistry teacher sells drugs after being diagnosed with terminal cancer, little did they know that an even more shocking story was unfurling closer to home.

Mr Flowers, chairman of the Co-op bank, was filmed allegedly handing over £300 to buy drugs and later accused of taking part in drug-fuelled orgies with rent boys. Dubbed the Crystal Methodist, the exposé came at a terrible time for the Co-op Group, which was forced to cede control of its troubled banking arm to hedge funds.

The Co-op had pulled out of talks to buy more than 600 bank branches from Lloyds Banking Group in April. These were later rebranded as TSB and played a part in the Government’s decision to sell down its stake in Lloyds.

The moral of the story? We should all know that by now: almost anything can happen in the world of business …

Review of the Year: View from the US saw a female hand on the Fed tiller, and two fine messes  

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