Yahoo Finance FTSE miners plunge as stocks hit lowest level in over two years
FTSE mining stocks have plunged to their lowest level in more than two years amid a flood of cheap Indonesian nickel onto global markets.
Many of the world’s largest nickel mines have been left unprofitable amid plummeting prices for the metal, which is vital for the development of green technologies.
Western governments are scrambling to secure supplies of nickel as they seek to hit net zero goals but coal-fired nickel mining in Indonesia, backed by China, is pricing out more climate-friendly producers.
Nickel prices are trading around their lowest levels in more than two years, although prices have ticked up by about 4.3pc over the last month.
Industrial metal miners across the FTSE 350 have fallen by as much as 2.6pc today and by more than 7pc over the last month to their lowest level since November 2021, as they have also been hit by declining copper prices.
Anglo American chief executive Duncan Wanblad said last week: “There is a serious structural challenge as a result of Indonesian nickel. They don’t seem to be letting up anytime soon.”
Read the latest updates below.
06:38 PM GMT
Signing off
Thanks for joining us today. Chris Price will be back in the morning. In the meantime, here are a couple of our latest business stories from elsewhere on The Telegraph site:
Post Office boss accused of misleading MPs over £15k-a-month PR advice
Morrisons explores sale of bakery business in bid to pay down debts
05:29 PM GMT
Markets suggest interest rates will only fall to 4.5pc by year end
A leading economics consultancy says that the markets don’t believe in aggressive interest rate cuts this year by the Bank of England. Pantheon Macroeconomics, in a briefing paper out this afternoon, says:
Markets now expect Bank Rate merely to fall to 4.50pc by the end of 2024, 4.00pc by end-2025, 3.75pc by end-2026 and to a long-term stable level of 3.50pc thereafter. This very gradual downward path suggests that the aforementioned two-year mortgage rate will fall marginally to 4.50pc by the end of this year and to 4.20pc by the end of 2025 ...
Nonetheless, the hit to real household disposable income from mortgage refinancing will lessen this year. For a start, note that most lenders allow their existing borrowers to reserve a mortgage rate at any point in the six months before their current fixed-rate period expires. As a result, many savvy borrowers who need to refinance soon might have locked in new rates when they were at their lowest point in late January and early February ...
In addition, we estimate that the fixed-rate period will expire for just 26pc of fixed-rate mortgages this year, down from 30pc in 2023. This decline is an echo of the slump in housing transactions between 2021 and 2022, which will reduce the number of households this year rolling off two-year deals.
05:19 PM GMT
Wind turbine crisis is ‘unacceptable’, says boss of Siemens Energy
The chief executive of Britain’s biggest wind turbine maker has branded the crisis in its onshore wind business as “unacceptable”. Adam Mawardi reports:
Christian Bruch, the chief executive of Siemens Energy, was scrutinised by shareholders on Monday over record losses in the German manufacturer’s ailing wind business.
Investors warned that the Siemens Energy’s management board is “now on probation” and needs to rebuild trust after last year uncovering major flaws with its manufacturing process. Speaking at the company’s annual general meeting on Monday, Mr Bruch said: “The losses we incurred in our wind business and the underlying problems are unacceptable.”
“We will not tolerate them. But we will not run away from them, either.”
Siemens Energy owns Britain’s largest wind turbine manufacturing site and employs thousands of UK workers.
The company last year posted €4.6bn (£3.9bn) of losses after facing technical problems in its wind turbine division, Siemens Gamesa.
Losses were triggered by operating issues and warranty claims after the manufacturer discovered wrinkles in rotor blades and faulty gears.
Inflationary pressures also meant Siemens Energy faced higher costs, including higher prices for concrete, labour and specialist ships needed to move large parts, such as blades and towers.
Siemens Energy’s share price has doubled since plummeting to a record low in October after the German government provided a €15bn rescue package designed to shore up the balance sheet of the Munich-based energy group.
05:00 PM GMT
Cost of summer flights could rise by 10pc, warns Ryanair, amid plane shortages
The cost of summer flights could go up by as much as 10pc, the boss of Ryanair has warned, as he warns of a potential shortage of new planes.
Michael O’Leary has said that Ryanair will receive even fewer Boeing aircraft by the end of June than previously expected, potentially causing the budget carrier to cut its summer schedule at the busiest time of the year.
The Dublin-based airline is the first in Europe to warn of disruption due a deepening crisis at Boeing, which has been mired in a regulatory audit and has been prohibited from ramping up 737 Max production since the January 5 mid-air panel blowout of a new Alaska Airlines Max 9.
Ryanair was due to receive 57 Boeing Max 8200 planes by end-April, but just over a week ago Boeing told the airline it would receive around 50 aircraft by end-June, Mr O’Leary said. That could now change.
According to Mr O’Leary:
We don’t really know how many aircraft we’re going to get from Boeing. We’re pretty sure we’re going to get 30 to 40. We’re reasonably confident we’re between 40 and 45. And now we are far less confident we’re going to get between 45 and 50.
A Boeing spokesman said:
We are communicating with customers that some delivery schedules may change as we take the necessary time to make sure that every airplane we deliver is high quality and meets all customer and regulatory requirements.
We deeply regret the impact this is having on our valued customer Ryanair. We’re working to address their concerns and taking action on a comprehensive plan to strengthen 737 quality and delivery performance.
The delays mean Ryanair might have to remove some flights from its summer schedule, Mr O’Leary said, cutting capacity for what is expected to be a record summer of travel.
“If we only get 40, by the end of March we will have to announce some minor schedule cuts,” he said.
That means Ryanair is likely to carry only 200 million passengers for the financial year beginning in April, versus the 205 million previously forecast.
Further capacity constraints could make the carrier less competitive against low-cost rivals like easyJet.
Mr O’Leary said he would pass some of the costs of delays to customers, with prices rising by about 5pc to 10pc this summer.
04:54 PM GMT
Footsie closes down
The FTSE 100 was down 0.29pc. The biggest riser was Rolls-Royce, up 2.29pc, followed by insurer Admiral, 1.86pc. The biggest faller was Ocado, down 6.98pc, followed by St James’s Place, down 3.92pc.
Meanwhile, the FTSE 250 closed down 0.27pc. The biggest riser was the owner of the Photo-Me self-service photo machines ME Group, up 4.58pc, followed by Diversified Energy Co, up 4.30pc. The biggest faller was Wag Payments, down 5.06pc, followed by investment manager Foresight Group, down 4.28pc.
04:48 PM GMT
BYD delivers thousands of cars to Germany as it ramps up challenge to European manufacturers
Thousands of cars from China’s BYD rolled off a ship in the German port of Bremerhaven on Monday, as the world’s biggest electric carmaker brought its challenge directly to Europe’s car-making powerhouse.
The delivery was made by the BYD Explorer No 1, the first of eight cargo ships specially commissioned by the Chinese group to expand its export operations.
The arrival of the shipment could become a further headache for established European car giants, who have trailed upstart rivals in the switch from combustion engines to batteries.
BYD overtook US carmaker Tesla as the biggest maker of battery electric vehicles by volume at the end of last year, delivering over 500,000 units in the last quarter of 2023.
After stopping off in the Dutch port of Vlissingen, the BYD Explorer No 1 docked in Bremerhaven on Sunday, the German port said.
Some 3,000 vehicles were reportedly unloaded on Monday from the vessel.
As well as shipping large numbers of cars to Europe, BYD has plans to establish its own factory in Hungary.
04:38 PM GMT
Shop inflation falls to lowest level in almost two years
Shop price inflation has fallen to its lowest level in almost two years as supermarkets offer cheaper meat, fish and fruit in the battle for customers. Our retail editor Hannah Boland reports:
New figures from the British Retail Consortium (BRC) and NielsenIQ show price rises across stores slowed to 2.5pc in the year to the end of February compared to 2.9pc in January.
This marked the lowest level of shop price inflation since March 2022 and came amid easing energy and fertiliser costs.
Helen Dickinson, chief executive of the BRC, said retailers were “competing fiercely to keep prices down”.
It came as the retail body said more could be done by the Government to help stores lower prices further. The BRC is calling for the Treasury to use April’s lower inflation rate to decide business rates rather than the “sky high” September figure, in a move which would save retailers an estimated £340m.
This would filter through to prices for shoppers, the BRC said. Ms Dickinson said: “The Chancellor should use the spring Budget to make this correction.”
However, the Treasury is understood to be resistant to such a move, with sources saying there is little headroom to fund the cut. The Treasury did not immediately respond to requests for comment.
Regardless of the business rate pressure, experts at NielsenIQ said the “underlying trend in prices will be downwards” over the next few months amid falling costs elsewhere and rising competition.
Clothes prices were down in February, the latest figures show, as retailers offered heavier promotions to tempt shoppers to spend.
04:18 PM GMT
Intuitive Machines’ shares plunge 28pc after imperfect landing
Shares in space exploration company Intuitive Machines have fallen 28pc in trading today. It came after the company, which sent a lunar lander to the moon, said the lander likely landed on its side.
The lunar lander is the first-ever private spacecraft to reach the moon.
03:58 PM GMT
US economists more confident of growth despite interest rate worries
The US economy looks set to grow 2.2pc this year after adjusting for inflation, according to the National Association for Business Economics (Nabe). That’s up from the 1.3pc that economists from universities, businesses and investment firms predicted in the association’s prior survey, which was conducted in November.
It’s the latest signal of strength for an economy that’s blasted through predictions of a recession. High interest rates meant to get inflation under control were supposed to drag down the economy, the thinking went. High rates put the brakes on the economy, such as by making mortgages and credit card bills more expensive, in hopes of starving inflation of its fuel.
In its survey, the Nabe said 41pc of respondents cited high rates as the most significant risk to the economy. That was more than double any other response, including fears of a possible credit crunch or a broadening of the wars in Ukraine or the Middle East.
03:53 PM GMT
There’s ‘no possibility of eye-popping performance’, Warren Buffett tells investors
The celebrated 93-year-old American investor Warren Buffett has cautioned investors in his Berkshire Hathaway conglomerate not to expect ‘eye-popping’ returns. In Berkshire’s annual report, he writes:
There remain only a handful of companies in [America] capable of truly moving the needle at Berkshire, and they have been endlessly picked over by us and by others. Some we can value; some we can’t. And, if we can, they have to be attractively priced. Outside the US, there are essentially no candidates that are meaningful options for capital deployment at Berkshire. All in all, we have no possibility of eye-popping performance.
Nevertheless, managing Berkshire is mostly fun and always interesting. On the positive side, after 59 years of assemblage, the company now owns either a portion or 100pc of various businesses that, on a weighted basis, have somewhat better prospects than exist at most large American companies. By both luck and pluck, a few huge winners have emerged from a great many dozens of decisions.
03:41 PM GMT
Shopping centre sold at £10m discount amid commercial property downturn
A shopping centre in Aberdeen has been sold at £10m discount as the commercial property downturn continues. Riya Makwana reports:
Hammerson, a FTSE 250 company that specialises in retail, has sold the retail area for £111m, 8pc less than its value at the end of last year, as it attempts to offload its “non-core” assets.
Union Square, which has a hotel, cinema and restaurants, will be owned by US-based real estate fund Lone Star by the end of the first quarter of the year.
Hammerson’s portfolio includes Brent Cross in north London, Bullring & Grand Central in Birmingham, Westquay in Southampton and The Oracle in Reading.
Over the last two years, Hammerson has been selling its less profitable assets in order to focus on creating a portfolio of dominant city centre destinations.
It plans to be in places that attract a high proportion of young people, have good connectivity and low unemployment.
The announcement of the sale comes days before the company is expected to release its full-year results.
Commercial property has struggled in the last year as rising interest rates have made the cost of debt more expensive.
Hammerson’s share price has slumped 14.3pc in the last year.
The company has now sold off all of its less-preferred buildings. It has freed up £500m in the last two years and around £950m since it started the sales in 2020.
03:30 PM GMT
Handing over
Thanks for following our live updates so far today. I’m heading off now and will leave you in the capable hands of my colleague Alex Singleton.
I’ll leave you with this image of the Tokyo Metropolitan Government Building No. 1, which secured a Guinness World Record overnight for the “largest architectural projection-mapped display”.
03:15 PM GMT
Video games maker 'to axe nearly a third of staff'
A British video-game maker is expected to lay off about 90 staff in the latest cuts to hit the industry.
Supermassive Games has informed 150 staff members that they are “at risk” of redundancy, according to an email seen by Bloomberg News.
Supermassive, which has more than 300 employees, is a subsidiary of the privately owned Nordisk Gamesand has previously worked on titles such as Until Dawn and The Quarry.
More than 6,000 video-game industry workers have lost their jobs this year amid a post-pandemic lull and high interest rates. A Supermassive Games spokesman said:
It’s no secret that the games industry is currently facing significant challenges, and unfortunately we aren’t immune to this.
After much deliberation and with deep regret, we are therefore undertaking a reorganisation of Supermassive Games. As a result, we are entering into a period of consultation,
which we anticipate will result in the loss of some of our colleagues.This is not a decision that’s been taken lightly, with many efforts made to avoid this outcome. We are all too aware of how unsettling and difficult this process is going to be for all our employees and will be working closely with all those involved to ensure the process is conducted as respectfully and compassionately as possible.
We’re committed to focusing our efforts on our core strengths and upcoming titles to ensure the continued sustainability of the company.
02:55 PM GMT
Microsoft strikes deal with AI start-up as it launches new chatbot
Microsoft has agreed a partnership with French artificial intelligence start-up Mistral in a deal that expands the tech giant’s reach in the burgeoning industry beyond ChatGPT maker OpenAI.
Mistral announced it would be placing its models onto the US company’s Azure cloud computing platform.
The company was formed last year by ex-Google and Meta researchers and has already raised almost €500m (£427m).
It announced an improved language model - the term AI firms use to describe the programmes they build apps on - as well as its first chatbot, called “Le Chat”.
Mistral’s earliest customers would be given access to the bot for testing, before it was released more widely, it said.
“Le Chat is natively multilingual and offers a pedagogical and fun way to explore Mistral AI’s technology,” the company said.
Among European AI firms, only Germany’s Aleph Alpha brought in as much funding as Mistral last year.
OpenAI has attracted billions in investment from Microsoft and is closely tied in with the software giant’s services.
02:35 PM GMT
Wall Street edges higher at the open
US stock markets inched upwards at the opening bell in a week that will feature key US inflation data.
The Dow Jones Industrial Average gained 0.1pc to 39,165.15 as Amazon joined the blue-chip index.
The benchmark S&P 500 rose 0.1pc to 5,093.85 while the tech-heavy Nasdaq Composite gained 0.2pc to 16,017.75.
02:13 PM GMT
Citi poaches JP Morgan's London investment bank chief
Citigroup has hired JP Morgan’s head of global investment banking as it tries to forge a turnaround following its worst quarterly loss since the financial crisis.
Viswas Raghavan will become head of banking and executive vice chairman of the Wall Street bank and report to chief executive Jane Fraser, who is spearheading a transformation of the lender.
Mr Raghavan will run one of the bank’s five core businesses, responsible for investment, corporate and commercial banking.
It comes after Citi announced in January that it would cut about 20,000 jobs over the next two years amid a sweeping overhaul.
01:46 PM GMT
Mining stocks plunge amid flood of cheap Indonesian nickel
FTSE mining stocks have plunged to their lowest level in more than two years amid a flood of cheap Indonesian nickel onto global markets.
Many of the world’s largest nickel mines have been left unprofitable amid plummeting prices for the metal, which is vital for the development of green technologies.
Western governments are scrambling to secure supplies of nickel as they seek to hit net zero goals but coal-fired nickel mining in Indonesia is pricing out more climate-friendly producers.
Nickel prices are trading around their lowest levels in more than two years, although prices have ticked up by about 4.3pc over the last month.
Industrial metal miners across the FTSE 350 have fallen by as much as 2.6pc today and by more than 7pc over the last month as they have also been hit by declining copper prices.
01:16 PM GMT
Chocolate inflation fears as cocoa prices hit new record high
Cocoa prices have surged to a fresh record amid mounting fears about supply shortages as Western markets prepare for high demand for Easter eggs.
Futures climbed as much as 4.6pc today, following the biggest weekly jump since 1999 as prices rose 17pc. Prices have risen 58pc so far this year.
Prices have soared as drought and disease ravaged crops in key West African producers, threatening to raise costs for chocolate makers that risk being passed on to consumers.
The number of beans arriving at ports ready for shipment in Ivory Coast - one of the world’s top growers - are running about a third behind last year’s pace, while Nigerian exports were down in January.
Saxo Bank’s head of commodity strategy Ole Hansen said the shortages have “raised concerns about the availability of cocoa to meet already agreed sales obligations, potentially leaving some of the major chocolate producers shortchanged”.
Meanwhile, the International Cocoa Organisation said that worries about supplies could deepen as European Union regulations on deforestation come into force.
12:56 PM GMT
Lord Rothschild dies: Brilliant financier who applied his creative brain to arts and heritage
Financier and member of the Rothschild banking family, Lord Jacob Rothschild, has died at the age of 87, his family has announced.
The 4th Baron Rothschild, OM, broke away from his family bank to build his own financial empire; he also left a major mark on Britain’s national heritage through his passion for historic buildings and collections.
Jacob Rothschild’s friend Sir James Goldsmith once said of him: “It depends which day it is: on one, Jacob is an excellent banker. The next, he is absorbed by art and heritage. He has been torn between the two strands all his life.”
It was said that Jacob inherited an artistic sensibility from his Bloomsbury mother, a first-class mind from his scientist father, and an appetite for risk from the genes of his Rothschild ancestors.
He also inherited two fortunes, one in the form of a stake in the family bank, NM Rothschild & Sons, which he sold in 1980 when he struck out on his own, and another from his cousin by marriage, Dorothy (“Dollie”) de Rothschild, the châtelaine of Waddesdon Manor. Augmented and sometimes dented by bold investment gambits, his wealth was estimated in 2023 at £825m.
Read on for his Telegraph obituary.
12:29 PM GMT
Amazon poised to join Dow Jones Industrial Average
Amazon is joining the ranks of one of Wall Street’s oldest and most exclusive stock indexes: The Dow Jones Industrial Average.
The e-commerce pioneer will officially take its position among the 30-company Dow before the open of trading today, replacing Boots owner Walgreens Boots Alliance.
S&P Dow Jones Indices opened the door to Amazon’s inclusion in the Dow and Walgreens’ exit to rebalance the index in light of a 3-for-1 stock split by another Dow company, Walmart.
Seattle-based Amazon will share membership in the Dow with the likes of Apple, Boeing, JPMorgan Chase and Coca-Cola.
The Dow is a measure of 30 stocks of established, well-known companies. These stocks are sometimes known as “blue chips,” which are supposed to be on the steadier and safer side of Wall Street.
Once Walmart executes its stock split on today, that will reduce the retailer’s stock price. Because the Dow is a price-weighted index, which means stocks that fetch higher prices are given more weight, Walmart’s stock split will reduce the weighting of the stock in the index.
To account for this, S&P Dow Jones Indices is rebalancing the index by dropping Walgreens, which currently has the lowest stock price of all the companies in the Dow, and adding Amazon.
12:06 PM GMT
Badenoch heads to UAE to seek tariff-free trade
Kemi Badenoch is heading to Abu Dhabi for a summit of the world’s business ministers where she will push for tariff-free trade.
The Business Secretary will seek to use the event to progress talks with counterparts over a trade deal with Gulf nations.
Her visit is also expected to see her come face to face with her Canadian opposite number, days after being challenged over a claim that trade talks with Ottawa were ongoing.
Ms Badenoch and Greg Hands will be among 150 ministers gathering in the United Arab Emirates seeking to negotiate global rules that affect tariffs and regulations.
Watch what the Business Secretary said about the trip:
This week, @KemiBadenoch is in Abu Dhabi to meet her counterparts from around the globe at the @wto’s 13th Ministerial Conference.
Read about the UK’s priorities as we work towards securing agreements that address barriers to trade and reduce costs 👉 https://t.co/5FG9DWALGF pic.twitter.com/m03IBwX8AU— Department for Business and Trade (@biztradegovuk) February 26, 2024
11:50 AM GMT
Fresh row over Google’s AI as it refuses to say paedophilia is wrong
Google is facing renewed criticism of its artificial intelligence after users of its chatbot claimed the system refused to condemn paedophiles and had equated Elon Musk with Adolf Hitler.
Our technology editor James Titcomb has the details:
The search giant’s Gemini bot claimed it was “difficult to say” whether Hitler or Mr Musk had a more negative impact on society in conversations posted by social media users.
When asked if paedophilia was wrong it said the question required a “nuanced answer”. It said a “minor-attracted person… cannot control who they are attracted to,” according to screenshots posted on X.
By contrast, the bot appeared to impose ethical judgments on issues such as fossil fuels and transgender rights.
Read how Google has responded and five times AI went wrong.
11:36 AM GMT
Bond funds give hope for interest rate cuts
Bond investors are their most positive about the outlook for the UK debt market in more than a decade amid hopes that the Bank of England will soon begin cutting interest rates, a Wall Street bank survey has shown.
About 84pc of sterling funds hold so-called long positions in gilts, indicating they think they will increase in value, according to research carried out by JP Morgan.
It comes as the yield on UK gilts - the return the Government promises to pay buyers of its debt - has risen more than European and US peers so far this year.
However, last week Bank of England governor Andrew Bailey said that bets on interest rate reductions this year are “not unreasonable,” meaning higher yielding bonds will be more attractive to potential buyers as the returns from interest rates fall.
The yield on the benchmark 10-year UK gilt was last down one basis point to 4.09pc.
11:21 AM GMT
Wincanton surges amid potential bidding war
Logistics giant Wincanton has revealed it is being eyed by a second potential buyer as it becomes the latest business to become the centre of a bidding war.
Shares in the FTSE All-Share-listed company, which works with brands from Ikea and Primark to Waitrose and Wickes, jumped by more than 10pc following the announcement.
Wincanton said last month that it had agreed to be bought by French shipping specialist CMA CGM, which valued the business at almost £567m.
Today, it raised the offer to value the group at about £605m, as Wincanton said it had received a potential offer from a competing bidder.
The Wiltshire-based business, which manages elements of its customers’ supply chains and has more than 20,000 staff, did not name the second possible buyer.
It also said there has been no formal proposal, including what the terms or price of an offer might be, but that it would be carefully considered if it is put on the table.
The board of Wincanton has recommended that shareholders accept the improved CMA CGM bid.
11:08 AM GMT
Wall Street poised for muted start to the week
US stock indexes were subdued in premarket trading after last week’s scorching AI-driven rally.
A bumper forecast from heavyweight chip designer Nvidia in the previous week boosted euphoria around artificial intelligence (AI), propelling Wall Street to new peaks.
However, as the fourth-quarter earnings season winds down, investors are turning their focus back on upcoming economic data, which will shape expectations for the timing of US interest rate cuts.
The release of January’s personal consumption expenditures price index (PCE)- the Fed’s preferred inflation gauge - on Thursday could hinder the recent stocks rally if the figures point to persistent price pressures.
Meanwhile, Warren Buffett’s Berkshire Hathaway rose 4.5pc after the conglomerate on Saturday posted its second straight record annual operating profit on a boost from its insurance business.
In premarket trading, the Dow Jones Industrial Average and S&P 500 were down 0.1pc, while the Nasdaq 100 was flat.
10:43 AM GMT
Oil prices fall ahead of closely-watched data
Oil prices have slipped as investors hold back ahead of key data expected later this week.
Brent crude, the international benchmark, has fallen by 0.5pc towards $81 a barrel after shedding more than 2pc last week.
US-produced West Texas Intermediate fell 0.5pc towards $76.
The fall comes ahead of the International Energy Week conference in London and US inflation figures published on Thursday.
Oil has traded in a narrow range of about $3 a barrel for the past two weeks, with tensions in the Middle East and Opec supply cuts offsetting the impact of higher production from outside the group, including the US.
10:29 AM GMT
Lord Rothschild dies, aged 87
Financier Lord Jacob Rothschild has died at the age of 87, his family have announced.
The British peer started his career in the family bank, NM Rothschild & Sons, in 1963, before going on to co-found the then J Rothschild Assurance Group, now St James’s Place, with Sir Mark Weinberg in 1980.
In a statement, the family said:
Our father Jacob was a towering presence in many peoples’ lives - a superbly accomplished financier, a champion of the arts and culture, a devoted public servant, a passionate supporter of charitable causes in Israel and and Jewish culture, a keen environmentalist and much-loved friend, father and grandfather.
He will be buried in accordance with Jewish custom in a small family ceremony and there will be a memorial at a later date to celebrate his life.
10:20 AM GMT
Pound rises as interest rates expected to stay high for longer
The pound edged up as traders have reduced bets on the Bank of England cutting interest rates quickly.
Sterling has gained 0.1pc against the dollar to $1.26 after rising by 0.6pc last week - its strongest since mid-December.
Paul Robson, head of G10 FX strategy at NatWest, said: “With the Bank of England still waiting for more evidence hat inflation is heading back to target, it seems unlikely that the central bank will be in the first wave of central bank cutters.”
Traders have reduced bets on the number of interest rate cuts to about 70 basis points - less than three quarter of a point cuts - compared to a full percentage point of cuts nearly a month ago.
09:58 AM GMT
Mortgage lenders raise rates in blow to first time buyers
First time buyers were handed a fresh blow as another mortgage lender raised borrowing rates in a sign of a turning tide in the property market.
Coventry announced it is increasing all fixed rates from tomorrow night, as money markets delayed their expectations for the Bank of England to begin cutting interest rates from their 16-year highs of 5.25pc.
The lender had only just raised rates on its products last week amid a flurry of activity.
The last-standing sub-4pc fixed mortgage deal, offered by HSBC, was removed from the market last week, while NatWest Santander and TSB have all also increased prices on selected mortgage products.
Katy Eatenton of Lifetime Wealth Management said:
This is not a good start to the week, especially considering Coventry only increased rates last week.
They are the only lender that gives 48 hours’ notice, so at least brokers have enough time to properly advise clients and package cases compliantly rather than rushing through to get applications submitted within four hour windows.
09:46 AM GMT
PM defends scrapping HS2's northern leg as he pledges cash for local projects
Rishi Sunak has defended the decision to scrap HS2’s northern leg and put the money into “transformational” local projects.
The Prime Minister told BBC Radio York:
We could have carried on with a project that was going to cost well over £100bn, take decades and have a very specific set of benefits, whereas I made a different decision.
I said ‘I’m going to take that money, and instead I’m going to give it to local areas to spend on their local transport priorities’.
And that’s already started to happen. So local authorities have already got money at the end of last year for more road resurfacing and potholes. They’re going to get more of that this year. We’ve already capped bus fares at £2.
And today we’re announcing several years of funding that local areas are going to get for their local transport priority.
So our plans are already delivering benefits to people and, I think, will be transformational for spreading opportunity, improving connectivity across the North and Midlands in a way that’s never happened before.
09:09 AM GMT
Commuter chaos after signalling failures
Rail commuters faced major disruption this morning due to a widespread signalling failure.
Thameslink, Southern and Gatwick Express, which operate in south-east England, said shortly before 4am that “no trains will be running until further notice”.
Some routes reopened by 7am but others remain closed or have severe delays.
There are no Southern trains between Littlehampton and London Victoria, while services between Brighton and Chichester are heavily disrupted and reduced to an hourly timetable.
Thameslink is not running services between Cambridge and Brighton, while there is a reduced service at Preston Park, Hassocks, Burgess Hill and Haywards Heath towards Gatwick Airport.
A Network Rail spokesperson said:
At 3.04am there was a loss of power across some of the UK Power Network which significantly impacted our Three Bridges Signalling Centre which controls the signalling, the railway’s traffic light system, across the majority of our Sussex route.
All signalling was restored at 6.30am and while some Southern services have resumed operating across the Sussex route, a number of Southern and Thameslink services remain significantly disrupted and there are currently no Gatwick Express services in operation until further notice.
We’re really sorry to any passengers disrupted this morning and we encourage passengers to check with their train operator before travelling for the latest information and updates.
08:46 AM GMT
Housebuilders' shares slump after competition investigation launched
UK markets edged lower as housebuilders’ shares fell after the competition watchdog announced a probe into potential information-sharing and said the industry needs “significant intervention”.
The Competition and Markets Authority (CMA) launched the investigation into Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey, and Vistry.
As a result, shares in Barratt were down 1.4pc, Taylor Wimpey fell 1.9pc, Persimmon dropped 1.8pc and Bellway was down 2pc. Redrow was down 2.6pc.
The FTSE 100 index was fractionally lower, while the mid-cap FTSE 250 slipped 0.1pc.
Industrial metal miners fell as much as 1.9pc, tracking declines in copper prices on the back of a firmer dollar and rising stocks in China.
Investors will be watching out for comments from Bank of England Deputy Governor Sarah Breeden and chief economist Huw Pill at an event later today.
Among individual stocks, Wincanton jumped 10.5pc after CEVA Logistics, a unit of French shipping firm CMA CGM, raised its offer to buy the firm to about £604.7m.
Bunzl slid 5.3pc to the bottom of the FTSE 100 after the business supplies distributor warned its operating margin this year would be slightly below 2023 levels.
08:32 AM GMT
Potential information sharing not 'key driver' of poor housing market, says CMA
The UK competition watchdog has opened an investigation into eight housebuilders following evidence they may be sharing commercially sensitive information.
The Competition and Markets Authority (CMA) launched the probe amid concerns it could be affecting the development of sites and prices of new homes.
It came as the regulator warned that the housebuilding sector “needs significant intervention” amid concerns over the quality of new homes, “high and unclear” estate management charges and planning issues.
The CMA formally started a probe into state of the housebuilding sector and the private rental market in February last year.
CMA chief executive Sarah Cardell told BBC Radio 4:
We have seen evidence of potential exchanges of confidential commercially sensitive information relating to sales prices between some of the major UK housebuilders.
We don’t believe that is a key driver of the fundamental poor outcomes in this market but it is clearly critically important that all companies comply with competition law.
08:06 AM GMT
UK markets open lower
The energy heavy FTSE 100 has begun the week lower amide falling oil prices.
The UK’s blue chip stock index has slipped 0.1pc to 7,700.12 while the midcap FTSE 250 fell 0.2pc to 19,144.9.
08:04 AM GMT
Bellway 'engaged and co-operated fully' with regulator
After the launch of the competition investigation, a Bellway spokesman said:
We are reviewing the CMA’s report. Bellway has engaged and co-operated fully with the CMA throughout its market study - and will continue to do so.
Bellway is committed to exceptional customer care. We remain focused on the delivery of high-quality new homes that meet local demand and enhance the communities we build in as we work to increase the supply of UK housing.
07:52 AM GMT
Bunzl to buy catering equipment supplier Nisbets for £339m
Distribution and outsourcing group Bunzl has agreed a deal to buy catering equipment firm Nisbets in a deal worth at least £339m.
Bunzl said it will acquire an initial 80pc stake in Bristol-based Nisbets, with the final price depending on an earn-out period over 2024 and the option to buy the remaining 20pc in the future.
Nisbets founder Andrew Nisbet will remain with the group as a non-executive director after the deal, with the family continuing to hold a minority stake in the group.
It comes after Bunzl also agreed a deal in January to buy distributor Pamark in Finland, which will complete later this month.
Bunzl announced the deals as it reported a 4.4pc rise in underlying pre-tax profits to £853.7m in 2023 as efforts to boost margins and easing cost inflation helped offset a 2pc fall in revenues.
07:34 AM GMT
UK planning system needs 'streamlining,' says competition watchdog
Sarah Cardell, chief executive of the CMA, said:
Housebuilding in Great Britain needs significant intervention so that enough good quality homes are delivered in the places that people need them.
Our report, which follows a year-long study, is recommending a streamlining of the planning system and increased consumer protections.
If implemented, we would expect to see many more homes built each year, helping make homes more affordable.
The CMA has also today opened a new investigation into the suspected sharing of commercially sensitive information by housebuilders which could be influencing the build-out of sites and the prices of new homes.
While this issue is not one of the main drivers of the problems we’ve highlighted in our report, it is important we tackle anti-competitive behaviour if we find it.
07:32 AM GMT
Housebuilding sector 'needs significant intervention,' says regulator
The UK competition watchdog has warned that the housebuilding sector “needs significant intervention” amid concerns over the quality of new homes, “high and unclear” estate management charges and planning issues.
The Competition and Markets Authority (CMA) said in its final report on the UK housebuilding market that the current planning system and limitations of speculative private development “have seen too few homes built”.
It also found “substantial concerns” about estate management charges, with homeowners facing significant charges for the management of facilities, such as roads, drainage and green spaces.
07:31 AM GMT
Red Sea attacks disrupting half of UK manufacturers and exporters
Britain’s businesses have begun to feel the pinch over disruption in the Red Sea, which has seen container ships attacked by Houthi rebels.
More than half of manufacturers and exporters said they have been affected by the disruption, a survey of 1,000 businesses by the British Chambers of Commerce found.
William Bain, head of trade policy at the BCC, said that the full implication of the disruption was yet to be felt across the economy.
Mr Bain said:
There has been spare capacity in the shipping freight industry to respond to the difficulties, which has bought us some time.
But our research suggests that the longer the current situation persists, the more likely it is that the cost pressures will start to build.
The Red Sea route through the Suez Canal normally accounts for 15pc of global sea trade.
The US and the UK have been launching retaliatory strikes against the rebels since January, but Houthi representatives said that the bombing would not stop further attacks.
07:27 AM GMT
Housebuilders investigated by watchdog over price of new homes
Housebuilders in Britain are facing an investigation by the competition watchdog amid concerns that commercially sensitive information is being shared to influence the price of new homes.
The Competition and Markets Authority announced the probe as it unveiled a report blaming the UK’s complex and unpredictable planning system and limitations on private development for the under delivery of new properties.
It said it would investigate practices at developers Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey, and Vistry under the Competition Act 1998.
It said it had “found evidence during the study which indicated some housebuilders may be sharing commercially sensitive information with their competitors, which could be influencing the build-out of sites and the prices of new homes”.
It also raised concerns about the quality of some new housing after the number of owners reporting snagging issues increased over the last 10 years.
There are persistent shortfalls in the number of homes built across England, Scotland, and Wales, with less than 250,000 built last year across Great Britain – well below the 300,000-target for England alone.
07:01 AM GMT
Job vacancies tumble as interest rates bite
Job vacancies have tumbled nearly 15pc as businesses struggle to hire in the face of high borrowing costs and the UK battles a recession.
Vacancies in January fell below 900,000 for the first time since April 2021, according to data from the jobs search engine Adzuna.
The downturn will fuel hopes of an interest rate cut sooner rather than later, after the Bank of England froze the rate at 5.25pc last August following a series of 14 consecutive increases.
In high interest rate environments, businesses’ budgets are stretched as borrowing becomes more expensive. This means there is less cash to hire new employees. Economic uncertainty in times of recession also slows hiring.
Changes in the Bank Rate take approximately a year to filter through to employers’ decisions, but the weakening jobs market suggests that the effects have started to be felt.
Andrew Hunter, of Adzuna, said:
As we predicted last month, January 2024 has proven to be one of the most difficult starts to the year for job hunters in recent years with companies continuing to put hiring plans on ice.
This will be disappointing for those hunting for work and only serves to drive up competition nationwide for available roles.
06:53 AM GMT
Good morning
Thanks for joining us. We begin the week with figures showing that the number of job vacancies in January tumbled by 15pc compared to the same month last year.
Higher interest rates have stretched business budgets, as vacancies fell below 900,000 for the first time since April 2021, according to jobs website Adzuna.
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What happened overnight
Tokyo’s key Nikkei index closed at a fresh all-time high after two of the three main US indices hit records last week, although Asian markets were mostly lower.
Investors are turning to profit-taking as last week’s mega market rally - fuelled by stellar results from US technology titan Nvidia - loses steam, analysts say.
The Nikkei 225 index added 0.4pc, or 135.03 points, to 39,233.71, while the broader Topix index rose 0.5pc, or 12.91 points, to 2,673.62.
But Chinese shares faltered, with Hong Kong and Shanghai both down 0.4pc.
Singapore dropped 1pc and Seoul fell 0.6pc. Bangkok, Jakarta and Wellington were lower, but Sydney and Taipei inched up.
Oil prices were down, extending losses on Friday as the G7 countries pledged new sanctions on Russia two years after its invasion of Ukraine.
US stock markets finished mixed on Friday, with the Dow and the S&P 500 hitting fresh peaks, while the Nasdaq slipped slightly following Thursday’s Nvidia-fuelled surge.
