Great Britain

Latest story

138 Shares92 Views

Bond Market Sell-Off Prompts Bank of England to Make Unusual Move

by

The Bank of England ditched its plan to sell some of its holdings of long-term bonds next week, after U.S. Treasuries led a rout in the global government bond market.Stock markets have taken a hit since President Trump announced steep tariffs on dozens of countries, but the turmoil also swept into the bond market this week. Yields on U.S. Treasuries, which move in the opposite direction to prices, jumped higher as investors sold the assets traditionally considered a haven in turbulent times.Mr. Trump on Wednesday paused some of his tariffs, saying the markets were getting “yippy.” The U.S. government bond market is enormous and can influence moves in other assets around the world.Yields on British government bonds, known as gilts, have jumped higher in recent days, particularly long-dated debt. The yield on the 30-year gilt soared to 5.58 percent on Wednesday, the highest since 1998.Even as the yield came down somewhat on Thursday, the Bank of England said it would sell 750 million pounds, or $970 million, from its holdings of short-term bonds instead of longer-maturing ones “in light of recent market volatility.”Since late 2022, the Bank of England has been selling bonds that it bought to bolster the economy during the 2008 financial crisis and the coronavirus pandemic. The plan got off to a rough start: It was delayed when the central bank stepped back in to buy bonds to halt the turmoil triggered when former Prime Minister Liz Truss proposed an aggressive tax-cutting budget that incited market chaos.Andrew Bailey, the Bank of England governor, has previously said that there would be a “high bar” for changes to its plan for gilt sales outside of the regular annual review process.The adjustment to the schedule on Thursday is an unusual move. The bank will sell the same amount of bonds. But by offloading short-term debt the pressure is reduced on long-term bonds — selling of those bonds by other investors has been the most intense and raised interest rates for government borrowing.Long-dated gilt sales will be rescheduled for next quarter, the central bank said. It owns £621 billion in gilts, down from £875 billion at its peak in early 2022. More

More stories

  • 150 Shares105 Views

    in Economy

    Britain Tried Everything, Including a Royal Invite. It Got a 10% Tariff.

    by

    After all that — the chummy Oval Office meeting, the extraordinary royal invitation, the paeans to the “special relationship” — Britain and its solicitous prime minister, Keir Starmer, still got swept into President Trump’s tariffs, along with the European Union and other major American trading partners.Mr. Trump imposed his basic tariff of 10 percent on Britain, while hitting the European Union with 20 percent. That drew sighs of relief from Mr. Starmer’s aides, who said the difference would protect thousands of British jobs. They claimed vindication for Mr. Starmer’s charm offensive toward the American president; others said it was a dividend of Britain’s decision to leave the European Union in 2016.Yet in another sense, it was a Pyrrhic victory: Britain was subject to the same blanket tariff as dozens of countries, even though the United States runs a trade surplus with Britain, according to U.S. statistics.Britain clearly hopes to strike some kind of trade deal with Mr. Trump down the road, which could spare it the tariffs’ lasting effect. On Thursday, Mr. Starmer told business executives that the British would react with “cool and calm heads.”The question is whether he will stick to his strategy — resisting pressure to impose retaliatory tariffs, for example — or fall into line with other countries, like Canada, in striking back against the United States. Downing Street said it would not impose tit-for-tat measures while trade talks were underway.“His strategy up till now has been perfectly understandable,” said Jonathan Portes, a professor of economics and public policy at King’s College London. “If I were him, I would have done the same. Now he needs to avoid confrontation for the sake of it, but there’s no point in appeasement either.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 125 Shares189 Views

    in Economy

    A New Fine-Dining Restaurant in London, Staffed by Ex-Homeless People

    by

    In London’s upmarket Primrose Hill, a Michelin-starred chef is employing people on the edge of homelessness as chefs, wait staff and cocktail makers.It’s been three weeks since the restaurant, Home Kitchen, opened its doors and Mimi Mohamed is pretty sure she knows the lemon tart recipe by heart. But just in case, a small notebook where she has carefully written out the ingredients is propped up at the back of the steel counter: 18 lemons; 420 grams of butter; 900 grams of sugar; 24 eggs.The recipe is from Adam Simmonds, a celebrated Michelin star-winning chef. Novices like Ms. Mohamed are not usually found in his kitchens, but this new, upscale dining venture is not usual. Almost every member of the 19-person team has been homeless.“The crew downstairs in the kitchen, they make so many mistakes, but that’s OK,” Mr. Simmonds said with a laugh. “We accept that and we learn from it.”He is sitting upstairs in the front dining room. A large window overlooks the main commercial street in Primrose Hill, a neighborhood in north London that oozes British charm.The idea was hatched four years ago by Alex Brown, director of Soup Kitchen London, where Mr. Simmonds took a turn cooking at the start of the pandemic. The most common question from those who lined up for food was “Do you know of any jobs?”Home Kitchen is aimed at breaking the cycle of homelessness and joblessness by training people for a career in the restaurant industry.Andrew Testa for The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 113 Shares199 Views

    in Economy

    How Economic Grievances Were Exploited in Britain’s Violent Unrest

    by

    Nationalist hatred has been linked to forces like stagnant wages and declining services, even though research shows immigration helps many economies.Like many cities around Britain shaken by anti-immigrant riots over the past week, Hartlepool, a seaside town on the northeast coast, has partly recovered from the devastating waves of industrial decline that began washing over the country in the 1980s.Still, the scars linger. Disposable income is below the national average, and more people are out of the work force, according to the Office for National Statistics. There are fewer active businesses, healthy life expectancy is lower and the crime rate is 89 percent higher.In Britain, as well as throughout Europe and in the United States, economic problems — like stagnant wages, roaring inequality and declining public services — have been linked to the rise of anti-immigrant attitudes.Even though research shows that immigration is an overall plus for most economies, far-right politicians have been able to exploit those frustrations to energize supporters and gain political power.In Britain, Nigel Farage, the leader of the populist, anti-immigration party Reform, has regularly made false claims that refugees and migrants drained public budgets. He has complained, for instance, about Britain having to “build a house every two minutes” to accommodate legal migrants and warned of “those arriving on the back of lorries” trying to get benefits.Mr. Farage, who was elected to Parliament in July, added to the web of disinformation that helped kindle the riots by inaccurately suggesting the man who fatally stabbed three young children at a dance class in Southport was an undocumented immigrant. He later came out against the violence.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 163 Shares139 Views

    in Economy

    He Won by a Landslide. Why Is He Fighting for His Political Life?

    by

    Ben Houchen, a regional mayor in the north of England, faces a close re-election race, partly thanks to the broader troubles of Britain’s Conservative Party.The last time Ben Houchen ran to be mayor of Tees Valley, a struggling, deindustrialized region in northeastern England, he stormed to victory with almost 73 percent of the vote.Three years on, Mr. Houchen, a Conservative politician, faces a re-election contest in which even a narrow win would do.As voters in England prepare to vote in Thursday’s local and mayoral elections, the governing Conservatives, led by Prime Minister Rishi Sunak, are trailing badly in the opinion polls to the opposition Labour Party ahead of a general election expected later this year.So Mr. Houchen has campaigned on his own achievements, relying on his personal brand as the poster boy for “leveling up” — the Conservatives’ flagship policy of bringing prosperity to disadvantaged regions of England.But with Britain’s economy stagnating and its health service in crisis, will that be enough to outweigh the backlash facing the broader Conservative Party?“If Houchen loses, given the profile that he has, and given that in mayoral elections people are more likely to vote for the individual, that would suggest that it is actually his Conservative links that have done for him,” said Paul Swinney, director of policy and research at the Center for Cities, a research institute. “Him losing would be bad news for Rishi Sunak.”The result in Mr. Houchen’s region could determine not just his fate, but that of the embattled Mr. Sunak. Victory would give the prime minister something positive to talk about on Friday when results come in and the Conservatives expect losses elsewhere. Defeat could stir panic among Tory lawmakers and possibly prompt a push to replace Mr. Sunak.Leveling UpHeidi McCullagh, second from left, says business has picked up for her sandwich shop and catering company while Mr. Houchen has been mayor.Mary Turner for The New York TimesOnce an area controlled by the left-of-center Labour Party, Tees Valley is part of a swath of England’s formerly industrial North and Midlands where voters switched en masse to the Conservatives in the 2019 general election.Since Mr. Houchen first became mayor in 2017, a vast, derelict steelworks near the town of Redcar has been demolished and cleared for new projects, a failing airport has been saved and civil servants and filmmakers have been lured far from London to the northeast.Many people in the area give him credit for these achievements. Heidi McCullagh, 42, runs a sandwich shop and catering business near the historic Transporter Bridge across the River Tees.“We are 110 percent behind Ben Houchen because he has created so many jobs,” said Ms. McCullagh whose windows display his posters. “We do quite a lot of catering for businesses in the area; it’s definitely picked up,” she said. “Ben Houchen does everything he can to make Tees Valley a better place.”Not everyone agrees. At the heart of his regeneration plan is an ambitious project called Teesworks, where, on the site of the former steelworks, construction vehicles busy themselves on a moonscape-like tract of land.Land clearance on the Teesworks site, near Redcar.Mary Turner for The New York TimesRay Casey and Helen Taylor, members of a group opposing the re-election of Mr. Houchen.Mary Turner for The New York TimesThe idea is to convert this into a hub for low-carbon industries, but critics accuse Mr. Houchen of mishandling things to the financial advantage of two businessmen.The project, which has involved hundreds of millions of pounds in public investment, was initially half publicly owned, but a subsequent deal left the private-sector partners in the venture with 90 percent ownership. (Mr. Houchen declined requests for an interview, but has publicly defended the deal.)An independent review in January found no evidence of corruption but described “issues of governance and transparency” and said a number of decisions had not met “the standards expected when managing public funds.”Last week, Steve Gibson, a former collaborator on the project and the chairman of a major soccer club in the area, accused Mr. Houchen of “giving away everything they had worked for,” an intervention that may boost the chances of Labour’s candidate, Chris McEwan.‘An Emerald City’Hanging a protest banner against Mr. Houchen over a bridge near Redcar last week.Mary Turner for The New York TimesOn a bitingly cold day last week, five activists hung a banner from a road bridge near Redcar.“Honk if you want Houchen out,” the banner read, and a steady flow of motorists sounded their horns as the protesters, wearing masks of Mr. Houchen’s face, cheered and waved.“He promises that Teesside will become an emerald city,” said Ray Casey, a member of a small group that opposes Mr. Houchen, called Teesside Resistance. “It’s always just over the horizon, though — we never get there.”Sipping a beer later, Mr. Casey, 63, said he felt the mayor ran “an operation entirely based on public relations and spin.”Yet no one disputes that investment has come to a region of 304 square miles with a population of around 660,000 people, or that Mr. Houchen has good contacts. Last year he was nominated for a seat in the House of Lords by his ally Boris Johnson, the former prime minister. He also has ties to Michael Gove, the Conservative minister responsible for “leveling up.”In the town of Darlington, a shiny, modern building is now the northern base of the Treasury, Britain’s finance ministry. Rail stations are being spruced up. A film studio has risen from the site of an old bus depot in Hartlepool, a gritty seaside town a long way from Hollywood in every sense.Sacha Bedding, the chief executive of a charity, says the area is so far just “creating the conditions” for real regeneration.Mary Turner for The New York TimesThe Transporter Bridge, a major landmark in the Tees Valley.Mary Turner for The New York TimesThe question is how much this is benefiting local communities.Sacha Bedding, chief executive of the Wharton Trust, a charity based in Hartlepool, said investment was “creating the conditions that will give the area a proper stab” at regeneration, but that little had yet improved in the neighborhood.“The number of people who have fallen into financial insecurity has grown, and people who are working have struggled massively,” said Mr. Bedding, adding that many lacked hope. “When not a lot feels like it has changed, you almost end up with the attitude, ‘Well, what’s the point in voting?’”Sitting on a bench in Darlington, Ryan Walton, 19, said he planned to vote Labour. “Things have improved but not enough,” Mr. Walton said. “It would be better if they broadened their horizons and redeveloped areas where people live.”Green ShootsThe site of the Northern Studios, a regeneration project of television and film studios, in Hartlepool.Mary Turner for The New York TimesIn a fractious televised debate last week, Mr. Houchen defended his record against attacks from Labour’s Mr. McEwan and Simon Thorley of the centrist Liberal Democrats.In a dark suit, white shirt and striped tie, Mr. Houchen was confident and pugnacious, accusing critics of peddling conspiracies. “If you think you can turn around and change fortunes in just a few short years, that just doesn’t happen, but what we are seeing is the green shoots,” Mr. Houchen said when asked whether local people felt better off.For the filmmaking business, some of those green shoots can be seen in a movie called “Upgraded,” parts of which were filmed at Teesside International Airport, which stood in for a New York airport.Teeside International Airport, which Mr. Houchen took into public ownership.Mary Turner for The New York TimesMr. Houchen brought the loss-making airport into public ownership in 2019, an unusual market intervention for a Conservative politician.But in terms of its main business — aviation — Teesside International has yet to break even and offers only a handful of flights on most weekdays.Waiting in a largely deserted departure area before flying to Amsterdam, Derek Muir, 68, praised Mr. Houchen for saving the airport and said he would vote for him because “he gets things done and brings investment into the area.”Looking around the airport, however, he said that the lack of any flights to London was disappointing. “I would like it to be more busy,” he added. More

  • 113 Shares99 Views

    in Economy

    E.U. Relaxes Trade Rules on Electric Cars From Britain

    by

    The NewsThe European Union plans to postpone strict local-content rules that would have led to costly tariffs imposed on cars traded between the bloc and Britain beginning Jan. 1.“This removes the threat of tariffs on export of E.U. electric vehicles to the U.K. and vice versa,” Maros Sefcovic, the European Union’s executive vice president, told journalists in Brussels Wednesday.The tariffs would have forced consumers in Britain and the European Union to pay more for many electric vehicles. Andrew Testa for The New York TimesWhy It Matters: Relief for carmakers that were facing tariffs.The proposal provides for a three-year delay in the trade rule, and represents a huge reprieve for many carmakers, especially those with plants in Britain. Eighty percent of cars made in Britain are exported, with 60 percent of them going to the European Union. The delay means that British electric vehicles with batteries made outside Europe will no longer face tariffs of up to 10 percent starting in three weeks.European carmakers would have faced similar hits in their sales of cars to Britain, a major market. The delay will probably be seen as a win for Prime Minister Rishi Sunak’s British government, which lobbied for the change along with the European car industry.Background: Europe and Britain do not make enough batteries.The rule would have made it virtually impossible for cars made in Britain with batteries from Asia to be imported tariff-free into the European Union. Neither Britain nor the Europe Union is manufacturing enough batteries for the rising number of electric vehicles expected to be produced in coming years. Batteries are the most expensive components of electric vehicles.Local origin rules are designed to discourage automakers from importing expensive parts, and to encourage local production. But this rule would have been counterproductive, the auto industry argued, by forcing consumers to pay more for many electric vehicles. Those higher prices could have opened the door for electric vehicles from outside Europe, especially China, whose makers are churning out low-cost models that have gained traction in Britain.What Happens Next: Time for the battery industry “to catch up.”The proposal still needs the support of European Union governments. Early indications are that it will be welcomed by auto industry. An extension would give “the European battery industry time to catch up,” the Society of Motor Manufacturers and Traders, a British trade group, said Wednesday in a statement.Mr. Sefcovic also said the European Union planned to provide 3 billion euros ($3.25 billion) to encourage local manufacturing of batteries. More

  • 138 Shares149 Views

    in Economy

    At COP28, More Than 20 Nations Pledge to Triple Nuclear Capacity

    by

    The group, including Britain, France and the United States, said the agreement was critical to meeting nations’ climate commitments.The United States and 21 other countries pledged on Saturday at the United Nations climate summit in Dubai to triple nuclear energy capacity by 2050, saying the revival of nuclear power was critical for cutting carbon emissions to near zero in the coming decades.Proponents of nuclear energy, which supplies 18 percent of electricity in the United States, say it is a clean, safe and reliable complement to wind and solar energy. But a significant hurdle is funding.Last month, a developer of small nuclear reactors in Idaho said it was canceling a project that had been expected to be part of a new wave of power plants. The cost of building the reactors had risen to $9.3 billion from $5.3 billion because of increasing interest rates and inflation.Britain, Canada, France, Ghana, South Korea, Sweden and the United Arab Emirates were among the 22 countries that signed the declaration to triple capacity from 2020 levels.Tripling nuclear energy capacity by 2050, which would also help Europe reduce its dependence on Russia oil and gas, would require significant investment. In advanced economies, which have nearly 70 percent of global nuclear capacity, investments has stalled as construction costs have soared, projects have run over budget and faced delays. On top of cost, another hurdle to expanding nuclear capacity is that plants are slower to build than many other forms of power.Addressing the issue of financing, John Kerry, President Biden’s climate envoy, said that there were “trillions of dollars” available that could be used for investment in nuclear. “We are not making the argument to anybody that this is absolutely going to be the sweeping alternative to every other energy source — no, that’s not what brings us here,” he said. But, he added, the science has shown that “you can’t get to net-zero 2050 without some nuclear.”Nuclear power does not emit carbon, and an International Energy Agency report last year that said nuclear was crucial to helping to reduce carbon emissions in line with the Paris Agreement goals outlined in 2015. President Emmanuel Macron of France said nuclear energy, including small modular reactors, was an “indispensable solution” to efforts to curb climate change. France, Europe’s biggest producer of nuclear power, gets about 70 percent of its own electricity from nuclear stations.Mr. Macron and other leaders, including Prime Minister Ulf Kristersson of Sweden, called on the World Bank and international financial institutions to help finance nuclear projects. Mr. Kristersson said that governments must “assume a role in sharing the financial risks to strengthen the conditions and provide additional incentives for investments in nuclear energy.”While world leaders on Saturday called nuclear the most effective alternative to fossil fuels, some climate activists said nuclear energy was not a panacea.David Tong, a researcher at Oil Change International, said the pledge was divorced from the reality of nuclear energy — that it was too costly and too slow. “It’s a self-serving political pledge that doesn’t reflect the role that nuclear is likely to play in the energy transition, which is menial,” he said. “There is very small growth in nuclear — certainly nothing like tripling.” He said he rejected the stance that there was no pathway to limit global warming to 1.5 degrees Celsius above preindustrial levels, a goal set in the Paris Agreement to avoid the worst effects of global warming, without nuclear. Masayoshi Iyoda, an activist from Japan with 350.org, an international climate action campaign, cited the nuclear disaster at Fukushima in 2011 and said that nuclear power was a dangerous distraction from decarbonization goals. “It is simply too costly, too risky, too undemocratic, and too time-consuming,” he said in a statement.“We already have cheaper, safer, democratic, and faster solutions to the climate crisis, and they are renewable energy and energy efficiency,” Mr. Iyoda said.All but four of the 31 reactors that have begun construction since 2017 were designed by Russia or China, with China poised to become the leading nuclear power producer by 2030, the International Energy Agency said. This year, Germany shut its last three nuclear plants.Nuclear capacity rose in the 1980s, particularly in Europe and North America, but dropped sharply over the subsequent years after accidents at Three Mile Island in Pennsylvania in 1979 and Chernobyl in 1986. New technology and tighter regulations have been put in place since then. Americans are conflicted about nuclear power, but a growing number favor expansion compared with a few years ago, according to a Pew Research Center study published in August. More

  • 125 Shares189 Views

    in Economy

    For Many Small-Business Owners, a Necessary Shift to Digital Payments

    by

    The pandemic accelerated a transition to cashless payments, forcing a reckoning among small-business owners. But there are benefits: One owner said the switch saved her $3,000 a month.“Making It Work” is a series about small-business owners striving to endure hard times.When Egypt Otis opened her business, Comma Bookstore and Social Hub, three years ago in Flint, Mich., the pandemic was full blown. But her neighbors welcomed the literature and art she sold in her store that celebrated people of color, as well as the community programs she hosted.Despite the warm reception, Ms. Otis quickly found that she had a sales problem: Her customers wanted to pay with their cellphones.“I realized that people were hardly keeping a wallet or a physical card, which limited my ability to sell and make money,” Ms. Otis said. So she upgraded her transactions platform to include tap-and-go purchases on mobile devices. “People are not carrying cash,” she said. “It’s becoming obsolete.”The number of Americans who say they are “cashless” has jumped in the last five years. Forty-one percent of Americans said they did not use cash for their purchases in a typical week in 2022, up from 29 percent in 2018, according to a Pew Research Center survey released last October.Small-business owners increasingly are making the switch to cashless payments for several reasons, including rising consumer demand, faster checkout, lower labor costs and increased security. Those who wait risk losing revenue, experts say.But there are drawbacks to going cash-free, including a learning curve for entrepreneurs who may not understand how to set up digital payments, a lack of accessibility to credit cards for low-income consumers, and privacy concerns.Signs at a pizza joint in New York indicating it takes multiple forms of cashless payments, a switch that accelerated in the pandemic.Karsten Moran for The New York TimesJuanny Romero was an early adopter of digital payments for her small business. Fifteen years ago, when she founded Mothership Coffee Roasters, a chain of coffee shops in Las Vegas, she began using Square, a low-cost digital payments system for small businesses.“​​I was a young businesswoman and not astute,” she said. But Square saved her $3,000 a month in merchant fees for credit card processing.As Ms. Romero expanded her businesses (to four locations in Las Vegas, with two more on the way), she added more payment options, including Apple Pay and Google Pay.But she noticed a shift during the pandemic: Her customers no longer wanted to use cash, and her employees did not want to handle it. “We didn’t know where Covid was coming from,” she said. “There were still people bringing in cash, but it was scary and dangerous.”When the coin shortage hit in 2020, she ran out of cash altogether, but Ms. Romero found it saved on labor costs. “My managers were standing in line for two hours to deposit the cash,” she said. “I can’t get an armored car service to pick up $100 in cash.”Even so, customer demand prompted her to return to cash sales, which Ms. Romero said are holding steady at about 11 percent of her overall revenue. She said she would go cashless if the share dipped below 10 percent.A digital transaction at Mothership Coffee Roasters in Las Vegas.Bridget Bennett for The New York TimesThe pressure to adapt is growing. More that 2.8 billion mobile wallets were in use at the end of 2020, and that is projected to increase nearly 74 percent to 4.8 billion — nearly 60 percent of the world’s population — by the end of 2025, according to a study released in 2021 by Boku, a fintech companyThe United States lags other countries in adopting cashless payments. Among the most cashless countries in the world is Britain, where the pound makes up only 1 percent of all transactions, according to a report from Merchant Machine, a payment research firm based in London. But in the United States, some small-business owners do not understand the complexities of digital payments.“Smaller merchants, they don’t always have the knowledge and resources to know what to do,” said Ginger Siegel, who leads the North America small-business segment at Mastercard, which offers training to business owners like Ms. Otis of Comma Bookstore.Ms. Otis said she noticed an increase in sales when she began offering mobile payments, which made the checkout process faster. “As a retailer, you want to make the experience as efficient as possible,” she said. “It is a matter of survival.”A veteran using a tap-and-go device to collect donations for the Royal British Legion in London in 2020.Guy Bell/AlamyBenefits include immediate payment, increased sales and the ability to sell to customers who might use other currencies. “You have to set it up, but it’s worth it,” said Kimberley A. Eddleston, a professor of entrepreneurship at Northeastern University.But some business owners say they are hesitant to move too quickly, worried that today’s technology could become obsolete tomorrow. And there are compatibility and cost issues to consider, said Wayne Read, the chief executive of Forged & Formed, an online jeweler with a physical store, Studio D Jewelers, in Woodstock, Ill. In his jewelry sales, where items can be pricey, he said a speedy transaction might not be suitable. “We don’t want people to feel they have rushed their decision,” he said.Despite advances in technology, many Americans still have little or no access to financial services like credit cards and mobile wallets, although that is slowly improving. An estimated 5.9 million households did not have a bank account in 2021, down from 7.1 million households in 2019, according to a survey by the Federal Reserve.Rewards points displayed on a checkout screen at Mothership. Mobile apps allow for cashless payments and can increase customer loyalty.Bridget Bennett for The New York TimesAnother obstacle to adoption is privacy concerns: Some people prefer the anonymity that cash provides. And cash is perceived as a way for consumers to remain aware of expenditures. Complicating the transition to the digital economy, the recent banking turmoil in the United States has made many depositors question the security of financial institutions.But experts agree that cash is unlikely to go away. Consumers in lower income households continue to rely on cash for payments, according to the Fed survey.And small-business owners say that despite the speed and efficiency that cashless payments offer, cash is still a viable option for their customers.“At the end of the day, I know the people I serve,” Ms. Romero said. “I would feel conflicted if I didn’t do the right thing.” More

  • 100 Shares109 Views

    in Economy

    Facial Recognition Spreads as Tool to Fight Shoplifting

    by

    Simon Mackenzie, a security officer at the discount retailer QD Stores outside London, was short of breath. He had just chased after three shoplifters who had taken off with several packages of laundry soap. Before the police arrived, he sat at a back-room desk to do something important: Capture the culprits’ faces.On an aging desktop computer, he pulled up security camera footage, pausing to zoom in and save a photo of each thief. He then logged in to a facial recognition program, Facewatch, which his store uses to identify shoplifters. The next time those people enter any shop within a few miles that uses Facewatch, store staff will receive an alert.“It’s like having somebody with you saying, ‘That person you bagged last week just came back in,’” Mr. Mackenzie said.Use of facial recognition technology by the police has been heavily scrutinized in recent years, but its application by private businesses has received less attention. Now, as the technology improves and its cost falls, the systems are reaching further into people’s lives. No longer just the purview of government agencies, facial recognition is increasingly being deployed to identify shoplifters, problematic customers and legal adversaries.Facewatch, a British company, is used by retailers across the country frustrated by petty crime. For as little as 250 pounds a month, or roughly $320, Facewatch offers access to a customized watchlist that stores near one another share. When Facewatch spots a flagged face, an alert is sent to a smartphone at the shop, where employees decide whether to keep a close eye on the person or ask the person to leave.Mr. Mackenzie adds one or two new faces every week, he said, mainly people who steal diapers, groceries, pet supplies and other low-cost goods. He said their economic hardship made him sympathetic, but that the number of thefts had gotten so out of hand that facial recognition was needed. Usually at least once a day, Facewatch alerts him that somebody on the watchlist has entered the store.Mr. Mackenzie adds one or two new faces a week to the Facewatch watch list that stores in the area share.Suzie Howell for The New York TimesA sign at a supermarket that uses Facewatch in Bristol, England. Suzie Howell for The New York TimesFacial recognition technology is proliferating as Western countries grapple with advances brought on by artificial intelligence. The European Union is drafting rules that would ban many of facial recognition’s uses, while Eric Adams, the mayor of New York City, has encouraged retailers to try the technology to fight crime. MSG Entertainment, the owner of Madison Square Garden and Radio City Music Hall, has used automated facial recognition to refuse entry to lawyers whose firms have sued the company.Among democratic nations, Britain is at the forefront of using live facial recognition, with courts and regulators signing off on its use. The police in London and Cardiff are experimenting with the technology to identify wanted criminals as they walk down the street. In May, it was used to scan the crowds at the coronation of King Charles III.But the use by retailers has drawn criticism as a disproportionate solution for minor crimes. Individuals have little way of knowing they are on the watchlist or how to appeal. In a legal complaint last year, Big Brother Watch, a civil society group, called it “Orwellian in the extreme.”Fraser Sampson, Britain’s biometrics and surveillance camera commissioner, who advises the government on policy, said there was “a nervousness and a hesitancy” around facial recognition technology because of privacy concerns and poorly performing algorithms in the past.“But I think in terms of speed, scale, accuracy and cost, facial recognition technology can in some areas, you know, literally be a game changer,” he said. “That means its arrival and deployment is probably inevitable. It’s just a case of when.”‘You can’t expect the police to come’Simon Gordon, the owner of Gordon’s Wine Bar in London, founded Facewatch in 2010. As a business owner, “you’ve got to help yourself,” he said. Suzie Howell for The New York TimesFacewatch was founded in 2010 by Simon Gordon, the owner of a popular 19th-century wine bar in central London known for its cellarlike interior and popularity among pickpockets.At the time, Mr. Gordon hired software developers to create an online tool to share security camera footage with the authorities, hoping it would save the police time filing incident reports and result in more arrests.There was limited interest, but Mr. Gordon’s fascination with security technology was piqued. He followed facial recognition developments and had the idea for a watchlist that retailers could share and contribute to. It was like the photos of shoplifters that stores keep next to the register, but supercharged into a collective database to identify bad guys in real time.By 2018, Mr. Gordon felt the technology was ready for commercial use.“You’ve got to help yourself,” he said in an interview. “You can’t expect the police to come.”Facewatch, which licenses facial recognition software made by Real Networks and Amazon, is now inside nearly 400 stores across Britain. Trained on millions of pictures and videos, the systems read the biometric information of a face as the person walks into a shop and check it against a database of flagged people.Facewatch’s watchlist is constantly growing as stores upload photos of shoplifters and problematic customers. Once added, a person remains there for a year before being deleted.‘Mistakes are rare but do happen’Every time Facewatch’s system identifies a shoplifter, a notification goes to a person who passed a test to be a “super recognizer” — someone with a special talent for remembering faces. Within seconds, the super recognizer must confirm the match against the Facewatch database before an alert is sent.Facewatch is used in about 400 British stores.Suzie Howell for The New York TimesBut while the company has created policies to prevent misidentification and other errors, mistakes happen.In October, a woman buying milk in a supermarket in Bristol, England, was confronted by an employee and ordered to leave. She was told that Facewatch had flagged her as a barred shoplifter.The woman, who asked that her name be withheld because of privacy concerns and whose story was corroborated by materials provided by her lawyer and Facewatch, said there must have been a mistake. When she contacted Facewatch a few days later, the company apologized, saying it was a case of mistaken identity.After the woman threatened legal action, Facewatch dug into its records. It found that the woman had been added to the watchlist because of an incident 10 months earlier involving £20 of merchandise, about $25. The system “worked perfectly,” Facewatch said.But while the technology had correctly identified the woman, it did not leave much room for human discretion. Neither Facewatch nor the store where the incident occurred contacted her to let her know that she was on the watchlist and to ask what had happened.The woman said she did not recall the incident and had never shoplifted. She said she may have walked out after not realizing that her debit card payment failed to go through at a self-checkout kiosk.Madeleine Stone, the legal and policy officer for Big Brother Watch, said Facewatch was “normalizing airport-style security checks for everyday activities like buying a pint of milk.”Mr. Gordon declined to comment on the incident in Bristol.In general, he said, “mistakes are rare but do happen.” He added, “If this occurs, we acknowledge our mistake, apologize, delete any relevant data to prevent reoccurrence and offer proportionate compensation.”Approved by the privacy officeA woman said Facewatch had misidentified her at the Bristol market. Facewatch said the system had ”worked perfectly.”Suzie Howell for The New York TimesCivil liberties groups have raised concerns about Facewatch and suggested that its deployment to prevent petty crime might be illegal under British privacy law, which requires that biometric technologies have a “substantial public interest.”The U.K. Information Commissioner’s Office, the privacy regulator, conducted a yearlong investigation into Facewatch. The office concluded in March that Facewatch’s system was permissible under the law, but only after the company made changes to how it operated.Stephen Bonner, the office’s deputy commissioner for regulatory supervision, said in an interview that an investigation had led Facewatch to change its policies: It would put more signage in stores, share among stores only information about serious and violent offenders and send out alerts only about repeat offenders. That means people will not be put on the watchlist after a single minor offense, as happened to the woman in Bristol.“That reduces the amount of personal data that’s held, reduces the chances of individuals being unfairly added to this kind of list and makes it more likely to be accurate,” Mr. Bonner said. The technology, he said, is “not dissimilar to having just very good security guards.”Liam Ardern, the operations manager for Lawrence Hunt, which owns 23 Spar convenience stores that use Facewatch, estimates the technology has saved the company more than £50,000 since 2020.He called the privacy risks of facial recognition overblown. The only example of misidentification that he recalled was when a man was confused for his identical twin, who had shoplifted. Critics overlook that stores like his operate on thin profit margins, he said.“It’s easy for them to say, ‘No, it’s against human rights,’” Mr. Ardern said. If shoplifting isn’t reduced, he said, his shops will have to raise prices or cut staff. More