Cyber-attacks – Being held to ransom

Cybercrime incidents are on the rise. Being held to ransom

Over the weekend, Heathrow and Berlin airports faced major disruption following a reported cyber-attack of check-in desk software.

High level cybercrime incidents are on the rise.

Cyber-attacks can happen at all levels of industry. Recently, the Information Commissioner’s Office (ICO) issued the UK’s Electoral Commission with a reprimand, after personal information for 40 million people was accessed by Chinese hackers. For over a year, the cyber attackers accessed information held on the Electoral Register. It was revealed that The Electoral Commission did not have appropriate security measures in place and furthermore, did not ensure that its servers had uploaded the latest security updates.

More recently, Jaguar Land Rover (JLR) has admitted that some data may have been taken by hackers in a cyber-attack that halted car production and forced it to send workers home. Production lines at JLR’s factories in Solihull, Hazelwood and Wolverhampton were forced to shut down.

The JLR cyber-attack is believed to have been carried out by the Scattered Lapsus$ Hunters, which made an attack earlier this year on the Co-op, Marks & Spencer and Harrods. The attack on M&S stopped customers from ordering online and is estimated to have cost £300m. The Co-op narrowly averted being locked out of its computer systems during the cyberattack by ‘yanking their own plug.’

The Data Protection Act and UK GDPR legislation makes data protection a fundamental legal responsibility. However, it is just as important for companies to be able to keep operating – manufacturing and distributing products. JLR has already lost almost three weeks production so far. Given it usually builds 1,000 cars a day, this will have a significant impact on JLR’s numerous suppliers. Many of these are small businesses, which may be forced to lay off staff.

Given the current geo-political situation, it seems that hackers operating from, or backed by China, North Korea or Russia are not going to ease up on cyber-attacks anytime soon. Microsoft and major software providers are playing catch up to correct flaws and software vulnerabilities. It is important that all users, domestic and professional, regularly download software updates.

What have we been watching?

The US Federal Reserve (Fed) deliver its first interest rate cut of 2025 albeit expectations of future cuts have eased very slightly. The NASDAQ US tech index hit another record high after AI chipmaker Nvidia agreed to invest $5bn for a 4% stake in Intel, which jumped 22% in value on the news.

The technology power struggle between the US and China continues. Trade talks continued ahead of the latest 10th November deadline. The US announced a framework deal with China to resolve their dispute over TikTok which must be sold, or it will face a US ban. However, China’s view appears to differ and meanwhile it has announced that AI chip maker Nvidia has run afoul of the country’s anti-trust rules and will face an additional probe.

China’s internet regulator also told Chinese tech companies to stop buying Nvidia AI chips and terminate existing orders. Meanwhile, Trump announced that he and President Xi Jinping would meet in person next month at the Asia-Pacific Economic Co-operation Summit in South Korea.

While in the UK, Trump admitted that Putin ‘has let me down’ but it is still unclear how he intends to break the deadlock in Ukraine. Meanwhile, three Russian fighter jets entered Estonian airspace last week, a worrying development for NATO after Russia’s drone incursion into Poland.

 

In the UK, Trump’s state visit generated £150bn of potential investment deals by American companies including in AI by the US tech majors. While supportive of the UK economy, over the longer-term these deals were overshadowed by more bad news for Chancellor Rachel Reeves. The Office for Budget Responsibility (OBR) is likely to downgrade its estimates for productivity meaning that the Chancellor could be facing a possible deterioration in the UK’s fiscal position of between £9bn-£18bn.

Tax rises loom in the November Budget but will the Chancellor be able to stick to Labour’s manifesto pledge on income tax, VAT and NICs to restore her fiscal buffer? Meanwhile, the Bank of England (BoE) kept interest rates on hold as expected, with the vote split 7-2. Grocery prices rose for the fifth month-in-row in August to 5.1% although headline inflation was unchanged on the month at 3.8% with higher food costs being offset by lower airfares.

 

In the US, the Fed delivered its first interest rate cut, lowering the Fed funds rate by 0.25%, as expected. However, Fed Chair Jerome Powell described the decision as a ‘risk-management cut’ which left markets feeling less confident about the pace of future interest rate cuts. He also noted that the balance of risks was still slightly tilted towards inflation concerns and de-emphasised the Fed’s interest rate ‘dot-plot’ chart which is signalling two further cuts of 0.25%.

The Fed committee said that from now, it would decide on a ‘meeting-by-meeting’ basis. The Fed’s ‘dot-plot’ chart currently suggests two cuts of 0.25% in 2025, down from three totalling 0.75%. The pace of cuts for 2026 and 2027 have also been lowered by 0.25% to 3.4% and 3.1% respectively.

 

The Bank of Japan (BoJ) held interest rates at 0.5% as expected but there were two ‘hawkish’ developments. First, two members of the committee voted for a 0.25% rate hike. Secondly, the BoJ announced its intention to start selling its holdings of ETFs. Both these surprise developments saw Japanese bond yields climb to multi-year highs in response.  

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Brent oil was steady at $67.

Finally, new issue (IPO) mania appears to be back in the US. For example, buy-now pay later company Klarna recently made its US market debut and surged 30% on the first day of dealings. Impressive, particularly as it is loss-making! Meanwhile, over our side of the ‘pond’, new issue activity is also stirring into life – about time!

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