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Jack Dorsey’s Block expands Square Card service to the UK

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Marco Bello | AFP | Getty Images

LONDON — Block, the payments company owned by tech billionaire Jack Dorsey has launched its corporate card service in the U.K. in a bid to deepen its expansion into the country and take on big incumbents like American Express.

The firm’s business-focused payments arm, Square, told CNBC that it opened registrations for its Square Card product in Britain late Wednesday, marking the first time Block has expanded its business card offering outside North America, where it first launched in 2019.

Currently available in the U.S. and Canada, Square Card is a free business spending card that reduces the time between merchants making a sale and having funds available to spend. It competes with offerings from the likes of American Express and Citigroup.

Samina Hussain-Letch, executive director of Square U.K., said the launch of the firm’s corporate card product in the U.K. would give merchants speedier access to funds and help them more easily manage their daily expenses.

“When designing this product we went back to our mission of making commerce easy,” Hussain-Letch told CNBC. Based on internal research Square found that small and micro businesses “prefer their funds to be consolidated in one place,” she said, adding that real-time access to funds was also an important factor.

In the U.K., Square Card will come up against local banking giants like Lloyds and NatWest. It will also heighten competition for some well-funded European fintech players, including Pleo, Payhawk and Spendesk.

Hussain-Letch highlighted The Vinyl Guys as an example of an early adopter of its corporate card offering. The vehicle branding and signage printing shop based in Stafford used the corporate card as part of a testing phase with domestic U.K. customers.

“We’ve had some great feedback about the benefits of having instant access to funds which really helps our small business sellers to run and grow, as we know that the number one reason small businesses fail in the UK is due to problems with cash flow,” she added.

Merchants can personalize employee spending cards with signatures and business branding.

Once an employee is onboarded onto the Square Card program, they can begin using within their own digital wallet apps. The service doesn’t charge monthly fees, maintenance fees, or foreign exchange fees.

Square is deepening its investment in the U.K. at a time when the country is seeking to be viewed as a destination for global technology businesses.

Entrepreneurs have been warning of a possible exodus of talent from the U.K. in response to the government’s controversial taxation changes.

On Wednesday, Finance Minister Rachel Reeves hiked Capital Gains Tax (CGT) — a levy on investment profits. But the news offered some relief for technology entrepreneurs who feared a more intense tax raid on the wealthy. The lower capital gains tax rate will be increased to 18% from 10%, while the higher rate will climb to 24% from 20%, Reeves said. The tax hikes are expected to bring in £2.5 billion.

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Stocks making the biggest moves after hours: ABNB, PINS, EXPE, RIVN

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Traders see good chance Fed cuts again in December, skips in January

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Federal Reserve Chair Jerome Powell speaks during a news conference following the Nov. 6-7, 2024, Federal Open Market Committee meeting at William McChesney Martin Jr. Federal Reserve Board Building in Washington, D.C., on Nov. 7, 2024.

Andrew Caballero-Reynolds | AFP | Getty Images

Expectations for a December interest rate cut remained strong after the Federal Reserve trimmed rates by a quarter percentage point in November, but market pricing is suggesting the likelihood of a “skip” in January.

On Thursday afternoon, the U.S. central bank lowered the federal funds rate, which determines what banks charge each other for overnight lending, to a target range of 4.5% to 4.75%.

Before the Fed released this decision at 2 p.m. ET, market pricing pointed toward a 67% chance of another quarter-point cut in December and a 33% chance of a pause that month, according to the CME FedWatch Tool.

The probability of a quarter-point December rate cut rose to more than 70% following the meeting, while the chances of a pause slipped to nearly 29%. Future rate probabilities found in the CME FedWatch Tool are derived from trading in 30-day fed funds futures contracts.

Meanwhile, the odds that the Federal Reserve would skip an interest rate cut in January was around 71%. This was slightly higher from 67% before the release of the Fed’s November decision on Thursday afternoon.

— CNBC’s Jeff Cox contributed to this report.

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DoubleLine’s Gundlach says expect higher rates if Republicans also win House

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Jeffrey Gundlach speaks at the 24th Annual Sohn Investment Conference in New York, May 6, 2019.

Adam Jeffery | CNBC

DoubleLine Capital CEO Jeffrey Gundlach said Thursday that interest rates could shoot higher if Republicans end up controlling the House, securing a governing trifecta that gives President-elect Donald Trump free rein to spend as he pleases.

Gundlach, a noted fixed-income investor whose firm manages over $96 billion, believes the higher government spending would require more borrowing through Treasury issuance, putting upward pressure on bond yields.

“If the House goes to Republicans, there’s going to be a lot of debt, there’s going to be higher interest rates at the long end, and it’ll be interesting to see how the Fed reacts to that,” Gundlach said on CNBC’s “Closing Bell.”

The race to control the House is undecided as of Thursday after Republicans clinched their new Senate majority. The Federal Reserve cut rates Thursday, and traders expect the central bank to cut again in December and several times in 2025.

Notable investors such as Gundlach have been voicing concerns about the challenging fiscal situation. Fiscal 2024 just ended with the government running a budget deficit in excess of $1.8 trillion, including more than $1.1 trillion dedicated solely to paying financing costs on the $36 trillion U.S. debt.

“Trump says he’s going to cut taxes … he’s very pro cyclical stimulus,” Gundlach said. “So it looks to me that there will be some pressure on interest rates, and particularly at the long end. I think that this election result is very, very consequential.”

If the Trump administration extends the 2017 tax cuts or introduces new reductions, it could add a significant amount to the nation’s debt in the next few years, worsening the already troublesome fiscal picture.

Still, Gundlach, who had predicted a recession in the U.S., said the Trump presidency makes such an economic downturn less likely.

“I do think that it’s right to see the Trump victory as being as reducing the odds for near-term recession fairly substantially,” Gundlach said. “Certainly, the odds of recession drop when you have this type of agenda being promoted in plain English for the past three months by Mr. Trump.”

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