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10 COMMERCIAL 16.6.2022 Bigger rates rise off the table as BoE ponders change Qualcomm wins fight against €997m EU competition fine US chipmaker Qualcomm has today won its fight against a €997m fine im- posed by EU competition regulators four years ago. e decision deals a major setback to EU competition chief Margrethe Ve- stager's crackdown on Big Tech. e European Commission in its 2018 decision said Qualcomm paid billions of dollars to Apple from 2011 to 2016 to use only its chips in all its iPhones and iPads in order to block out rivals such as Intel. Qualcomm's fine is one of several im- posed by Vestager on companies rang- ing from Alphabet unit Google to banks and truckmakers over anti-competitive practices. Apple, Amazon and Facebook are be- ing investigated. e General Court, Europe's sec- ond-highest, annulled the EU finding and faulted the EU competition enforc- er over the handling of the case. "A number of procedural irregularities affected Qualcomm's rights of defence and invalidate the Commission's analy- sis of the conduct alleged against Qual- comm," judges said. "e Commission did not provide an analysis which makes it possible to support the findings that the payments concerned had actually reduced Apple's incentives to switch to Qualcomm's competitors in order to obtain supplies of LTE chipsets for certain iPad models to be launched in 2014 and 2015," they said. e EU competition enforcer can ap- peal on matters of law to the EU Court of Justice (CJEU), Europe's highest court. e Commission said it would careful- ly study the judgement and its implica- tions and consider its next steps. is is the second major defeat for Ve- stager who in January lost the court's backing for a €1.06 billion fine on Intel 12 years ago for squeezing rival Ad- vanced Micro Devices. Vestager's next test is on September 14 when the General Court will rule on Google's challenge against a record €4.34 billion antitrust fine levied for using its Android mobile operating sys- tem to squeeze out rivals. Wednesday's decision is a major setback to EU competition chief Margrethe Vestager's crackdown on Big Tech THE contraction in the UK econo- my that was revealed this week likely rules out anything more than a small increase in interest rates as the Bank of England sets out its decision on Thursday, analysts have said. The Bank's Monetary Policy Com- mittee is expected to hike interest rates for the fifth time in a row. It was widely predicted to increase its base rate from 1%, already the highest in 13 years, to 1.25%. It would be the first time since Janu- ary 2009 that the rate has been higher than 1%. Some had even speculated that it might reach 1.5% – a so-called 50 ba- sis points (bps) rise. But that was before official data showed that gross domestic product (GDP) shrank 0.3%, worse than many had predicted. It will now fall to the nine-person committee to decide what is the best outcome. These include Andrew Bai- ley, the Bank's Governor, two deputy governors: Sir Jon Cunliffe and Ben Broadbent; but also Huw Pill, its chief economist. "April's GDP data … surely will mean that the internal block – Bailey, Broad- bent and Pill – sticks to voting to raise Bank Rate by 0.25% this month," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics. "And given that some members thought last month that the guidance regarding further rises in interest rates was obsolete, we expect to see at least one of them, most likely Cunliffe, to vote for no change. "With markets currently pricing in a 34bp increase in Bank Rate this week and a further 41bp rise for the August meeting, we expect both rate expecta- tions and sterling to drop in the wake of this week's meeting." Committee members will want to rein in inflation, which has hit highs not seen for decades. Laith Khalaf, head of investment analysis at AJ Bell, said: "The Bank of England faces a stern test of its mettle at the next interest rate decision, and any hesitation is likely to result in the pound being punished on the curren- cy markets." Such a drop would mean that the price of petrol and diesel, and other imports that the UK pays for in dol- lars, would rise. This month, the average price of fil- ing a family car topped £100 for the first time. Any further jump is unlikely to be welcomed by drivers. There are many indications that the Bank might hike rates. The MPC has voted for a rise in each of the last four meetings, in Decem- ber, February, March and May. Last time three out of nine members of the Monetary Policy Committee al- ready voted for rates to be set at 1.25%. However, some things have changed since then. The UK economy looks set to struggle, with an OECD forecast predicting it will be the weakest in the Group of Seven (G7) next year. "By raising interest rates, the Bank is putting the brakes on an economy that is already slowing of its own accord," Mr Khalaf said. "That risks the economy stalling, or worse, going into reverse." The Bank has been given a little more wriggle room by the Chancellor, who is set to funnel billions to strug- gling households to help them deal with soaring energy bills. An interest rate raise will eat away at some of this handout, because the cost of borrowing will go up for homeowners. But equally drivers would suffer if rates are maintained and savers will benefit from a hike. People are certainly expecting rises to come. According to a survey com- missioned by the Bank of England and performed by Ipsos in early May, 70% of people expect rates to rise over the next 12 months. The survey, released on Friday, showed that 28% thought a rate rise would benefit the economy, 22% said the same about a drop, and 28% want them to remain at current levels. Governor of the Bank of England Andrew Bailey is likely to vote to only rise rates by 25 basis points, one expert said

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