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Petrol garages under fire over rising margins at the pump

Prices at the pump have gone up by over 11p per litre since May, the competition regulator said
Prices at the pump have gone up by over 11p per litre since May, the competition regulator said - Jason Alden/Bloomberg

Petrol retailers have been accused of “taking advantage” of drivers at the pumps after a report showed motorists were hit with “significant increases” in fuel sellers’ margins.

The Competition and Markets Authority (CMA) said that over the past two months, the difference between pump prices and the wholesale cost of petrol and diesel were “significantly above the long-term average”.

The regulator’s first monitoring report for the sector showed that fuel prices have risen by at least 11 pence per litre since May.

It said wholesale prices reduced in September and October while retail prices did not.

It added: “If retail spreads were to remain at these levels for much longer, this would cause concern about the intensity of retail competition in the sector.”

The RAC said the findings were “very disappointing” and demonstrate that “drivers are still being taken advantage of at the pumps”.

Read the latest updates below.

06:25 PM GMT

Signing off

Thanks for joining us today. My colleague James Price will be back tomorrow morning with live coverage of the markets and the world of business. I’ll leave you with some of the latest news:

06:22 PM GMT

Wizz Air hit by Israel conflict and high-tech engines

Low-cost airline Wizz Air has cut its annual profit forecast by nearly £45m after nearly a quarter of its fleet was grounded because of potential problems with their geared turbofan engines. Conflicts affecting Israel and Ukraine have also weighed down on sales, with the operator suspending flights to Israel, which previously accounted for around 5pc of its flights.

József Váradi, the airline’s CEO, said: “On a positive note, despite the challenges, we delivered record numbers on profit, passengers and capacity.

“The impact of the war in Ukraine was unique to us being [its] largest international airline. The war in Israel is also unique to us being the largest international airline in Israel.”

He said that conflict and the use of geared turbofan engines “particularly impacts on us versus the balance of our peer group.”

05:02 PM GMT

FTSE 100 up 0.7pc at close

The FTSE100 index was up 0.7pc in trading today (to 7,455.67). The growth was in part fueled by after AstraZeneca raised its profit outlook for year, and its shared put on 2.6pc.

The biggest share price growth was from AutoTrader, which added 8.47pc. But it was a dismal day for Flutter Entertainment, the owner of Paddy Power and Betfair, which lost 10.22pc after third-quarter revenue missed targets.

The FTSE 250 was up 1.07pc.

04:46 PM GMT

Wind farm group Ørsted gains 5.5pc as UK looks to hike subsidies

A wind farm under construction off the coast of Montrose, Angus in the North Sea.
A wind farm under construction off the coast of Montrose, Angus in the North Sea. - Andy Buchanan/AFP/Getty

Troubled wind farm company Ørsted gained over 5pc on the Nasdaq Copenhagen exchange today after Bloomberg reported that the UK government is planning to offer “significantly higher subsidies” for new offshore wind farms.

Ørsted is behind one of Britain’s largest proposed offshore wind farms, Hornsea 3, off the coast of Yorkshire, which would provide enough power for 3m homes. But the scheme looked in doubt after the company axed a major US offshore project,

Earlier this month its chief, Mads Nipper, warned that the industry was “in a perfect storm, where adverse impacts like skyrocketing interest rates are leading to much higher capital costs and supply chain disruptions.”

04:27 PM GMT

Tesla shares drop after HSBC says price is optimistic

Elon Musk gets in a Tesla as he leaves a hotel in Beijing in May
Elon Musk gets in a Tesla as he leaves a hotel in Beijing in May - Reuters/Tingshu Wang

Tesla has seen 3.7pc shaved off its shared price in trading today after concerns were aired by HSBC analysts. The bank issued a “reduce” rating and suggested a target price of $146 a share. They were at opening today $219.56.

HSBC analyst Michael Tyndall said that while the carmaker is “generally doing what it promises” his caution “stems from the uncertainty around the timing and commercialisation of its varied ideas”. Mr Tyndall also suggested that “CEO Musk is an asset, but also represents a risk”.

04:04 PM GMT

Shell sues Greenpeace over 'extremely dangerous' protest

Environmental activists are focused on targeting oil and gas producers, rather than campaigning to cut consumption, writes Jonathan Leake:

Shell is suing Greenpeace for £1.7m after a group of protesters occupied one of the oil giant’s vessels in the North Sea earlier this year.

Proceedings have been launched as Shell’s chief executive Wael Sawan pursues a shift away from green energy and ramps up the production of fossil fuels.

Shell’s change in strategy has already sparked criticism from campaigners and employees alike, although its lawsuit against Greenpeace, one of the largest ever against an environmental group, will be sure to raise tensions further.

The protest took place on a floating production storage unit in January, as campaigners targeted a vessel destined for Shell’s Penguins oil field near Shetland.

They remained on board for 13 days in a bid to time their protest with Shell’s annual results on February 2, which saw the company post record $40bn (£32.6bn) profits.

Find out more about the war of words between the two sides.

03:54 PM GMT

Taylor Wimpey rises on expectation of 'top end' profit

Builders laying insulation for new homes
Builders laying insulation for new homes - Monty Rakusen/Getty

Housebuilder Taylor Wimpey has risen nearly 3pc today after a trading update reassured investors. Taylor Wimpey said that due to its “focus on optimising price and sharp cost discipline” it now expected operating profit to be “at the top end of our guidance range of £440 million to £470 million”.

Jennie Daly, Taylor Wimey’s CEO, said the builder had “delivered a resilient performance in what continues to be a challenging market backdrop, reporting a robust sales rate and strong financial position, and reiterating our full year 2023 UK volume guidance in the range of 10,000 to 10,500 homes.”

The news is the latest in a set of upbeat announcements this week affecting the construction sector, after rival Persimmon reported an improvement of sales and data from Halifax and the Nationwide Building Society revealed increasing house prices.

03:41 PM GMT

Shares in The Works plunge after footfall drops

Books and stationery retailer The Works has warned it is likely to miss earnings expectations this year as it gears up price cuts to attract customers in the run-up to Christmas.

The discount chain, which also sells toys and art supplies, issued a trading update covering the past six months, explaining that: “The macro-economic environment was challenging throughout the period, characterised by high inflation and low consumer confidence. In the nine weeks since our previous update, consumer demand has softened further and, combined with unseasonable weather conditions, this has caused reduced footfall.”

The company warned that in the coming six months, “consumer spend will be subdued” resulting in the sector engaging in increased levels of discounting. The company said it expected to “maintain a higher level of promotional activity than envisaged” and cut costs.

Earnings before interest, tax, depreciation and amortisation (Ebitda) are now expected to be £6 million this year. Market watchers had expected the company this to be £10 million.

Shares in the company are down by nearly a quarter this afternoon.

03:35 PM GMT

Handing over

That’s all from me today. Alex Singleton will make sure you are kept up to speed with everything you need to know from here.

I will leave you with a shot of Pablo Picasso’s “Femme a la Montre,” or Woman with a Watch, which has sold at auction at Sotheby’s in New York City for £114m.

Pablo Picasso's "Femme a la Montre" at Sotheby's in New York City
Pablo Picasso's "Femme a la Montre" at Sotheby's in New York City - ANGELA WEISS/AFP via Getty Images

03:29 PM GMT

Bond yields rise as Bank of England economist rows back on interest rate cuts

Government borrowing costs have inched higher after the Bank of England’s chief economist rowed back on suggestions interest rates could be cut next summer.

The yield on benchmark 10-year UK gilts has gained more than three basis points to 4.27pc while the two-year yield, which is more sensitive to interest rate movements, was up a single basis point to 4.59pc.

It comes after Huw Pill said at an event today that interest rates would be “at this restrictive level for quite an extended time”.

He declined to refer to comments he made earlier in the week where he said that it was “not unreasonable” for investors to bet on a rate cut by next summer.

Bank of England governor Andrew Bailey intervened this week to say it was “too early to talk about rate cuts” in a sign he was reining in his chief economist.

03:03 PM GMT

Gas prices rise ahead of cold snap

Gas prices have advanced ahead of a cold spell expected over the weekend which is expected to boost demand.

The European benchmark contract has risen 5.4pc today to more than €48 per megawatt hour, while the UK equivalent has gained 5.7pc to nearly 123p per therm.

The UK prices were up for a third straight day, with temperatures expected to slide to 4C in London by Saturday.

However, European storage sites remain at 99.6pc capacity, keeping a lid on price rises.

02:50 PM GMT

Bitcoin tops £30,000 for first time since crypto crash

Bitcoin has rallied past £30,000 for the first time since a crypto crash decimated confidence in digital currencies.

The digital token reached its highest value since May last year, when a collapse in the value of the TerraUSD stablecoin kicked off what became known as the “crypto winter”.

Bitcoin completed its full recovery from that debacle almost exactly to the year after the rout reached its nadir when Sam Bankman-Fried’s exchange FTX filed for bankruptcy.

02:36 PM GMT

Wall Street inches higher at opening bell

US markets edged upwards at the opening bell ahead of speeches by Federal Reserve officials including chairman Jerome Powell.

The Dow Jones Industrial Average was up 0.1pc to 34,124.40, while the benchmark S&P 500 also gained 0.1pc to 4,388.34.

The tech-heavy Nasdaq Composite also inched higher by 0.1pc to 13,664.27.

02:07 PM GMT

Germany unveils tax cuts in £10.5bn package to boost manufacturing

Germany has announced a huge relief package including tax cuts on electricity for the manufacturing sector, in a bid to shore up Europe’s largest economy, which many fear could end the year in recession.

Electricity tax will be slashed from the current 1.537 cents per kilowatt to the European Union minimum of 0.05 cents per kilowatt for the manufacturing sector. The changes will take effect in 2024 and 2025.

Chancellor Olaf Scholz said that the relief would be worth €12bn (£10.5bn), adding that the lowered tax could be extended for a further three years.

The most energy-intensive companies most vulnerable to international competition will also have costs related to their emissions trading reimbursed under the package.

The agreement on the help package for manufacturers came after weeks of hefty discussions between the industry and the German government.

German companies, especially in sectors such as chemical and metal manufacturing, have struggled with a surge in power prices triggered by Russian energy supply cuts in the wake of Moscow’s war in Ukraine.

German chancellor Olaf Scholz has announced €12bn of support for the country's manufacturing sector
German chancellor Olaf Scholz has announced €12bn of support for the country's manufacturing sector - Sean Gallup/Getty Images

01:53 PM GMT

Americans on unemployment benefits rises for seventh straight week

The number of Americans collecting unemployment benefits increased for its seventh straight week in a sign that the jobs market is cooling.

Overall, 1.83m people were collecting unemployment benefits the week that ended October 28, about 22,000 more than the previous week and the most since April, the Labor Department reported.

Slightly fewer Americans applied for jobless claims last week for the first time, with applications down by 3,000 to 217,000 for the week ending November 4.

Jobless claim applications are seen as representative of the number of layoffs in a given week.

The four-week moving average of claims, a less volatile measure, inched up by 1,500 to 212,250.

01:30 PM GMT

Advertisers to spend record £9.5bn this Christmas

Advertisers are expected to spend a record £9.5bn during the Christmas season, according to latest figures.

The amount is up 4.8pc on last year’s then-record £9bn and shows the continued importance of the ads during the festive period, the Advertising Association (AA) said.

A survey by the AA for this year’s Christmas ad season found that almost half of all adults (48pc) credited Christmas ads with helping to spark gift ideas, while 70pc of young adults aged 25 to 34 found the ads to be the “ultimate festive mood booster”.

Many of the UK’s biggest brands have already released blockbuster Christmas ads this year, such as John Lewis, Boots, M&S and Tesco.

Celebrities have played a major role this year, with John Lewis’s ad soundtracked with an original song performed by Italian tenor Andrea Bocelli, Sainsbury’s featuring Eighties pop legend Rick Astley and Asda’s involving a cameo by festive favourite Michael Buble.

Hannah Waddingham is among the celebrities featuring in M&S's Christmas advert
Hannah Waddingham is among the celebrities featuring in M&S's Christmas advert

01:14 PM GMT

Deepening crisis for Sir Martin Sorrell as S4 Capital’s sales plunge

Sir Martin Sorrell’s S4 Capital has suffered a 15pc fall in sales after a slowdown in the advertising sector intensified.

Our media reporter James Warrington has the details:

The digital ad agency said revenues in the third quarter fell to £211.5m as clients continued to cut back.

The London-listed company also warned that its full-year profit margins will be between 10pc and 11pc – down from previous forecasts of 13.5pc.

Shares in S4 plunged after today’s update, dropping by 24pc.

The company is now valued at around £324m, a sharp reduction from its high of £5bn in 2021.

S4 blamed its lacklustre figures on the ongoing downturn in the advertising market, particularly among tech firms.

See how S4 Capital’s share price has fallen.

The value of Sir Martin Sorrell's  S4 Capital agency has dropped to around £324m, down from £5bn in 2021
The value of Sir Martin Sorrell's S4 Capital agency has dropped to around £324m, down from £5bn in 2021 - Hollie Adams/Bloomberg

12:59 PM GMT

Domino's Pizza orders fall as households swap delivery for collection

Domino’s Pizza saw a drop in the number of orders it received in the three months to the end of September as cash-strapped households swapped delivery for cheaper collections.

The company said it had taken a total of 16.7m orders in the period, down 1.2pc compared to the same three months a year ago.

Shares have fallen 8.6pc to leave the food delivery business at the bottom of the FTSE 250.

The decline in orders was due to a drop-off in the number of delivery requests the business received. They fell 6.3pc as the general delivery market was weaker, the business said.

Some of this fall, but not all, was offset by an 8.4pc rise in collection orders during the three months.

The business said that since the end of September, total order numbers have returned to growth helped by improvements in delivery.

Domino’s said it is ahead on plans to open new sites, with 45 openings so far this year, compared to 21 at the same point last year. It now expects to open at least 60 sites this year.

Domino's Pizza delivery orders declined in the third quarter
Domino's Pizza delivery orders declined in the third quarter - Domino's/PA

12:45 PM GMT

Supermarkets 'taking very large margins' on fuel, says RAC

After the CMA published its fuel monitoring report, RAC spokesman Simon Williams said:

It’s very disappointing that the CMA has found that major fuel retailers are still taking far bigger margins than they have done in the past, something we have been saying for a long time, as this means drivers are still being taken advantage of at the pumps.

While supermarket margins may have fallen in the summer, our latest data shows they have more than made up for this since then and are currently taking very large margins.

Even though off the back of the CMA report in the summer the largest retailers are now voluntarily publishing their prices daily for app-makers to use, our data shows this has had no effect whatsoever in improving competition and lowering prices.

In fact, we believe the situation is currently worse than ever as the wholesale fuel market is down significantly, yet forecourt prices are falling like the proverbial feather.

It’s blatantly clear to us that a price monitoring body – as recommended by the CMA – is desperately needed as major retailers cannot be trusted to price fuel fairly for their customers.

But unless this body has the power to take action against major retailers that don’t lower prices quickly enough in a falling wholesale market, we fear little will change even then.

12:09 PM GMT

Wall Street subdued amid interest rate uncertainty

US stock index futures were muted as uncertainty about when the Federal Reserve will start easing financial conditions kept investors on edge.

Signs of a weakening jobs market and a tempering of the Fed’s hawkish stance at its last meeting have pulled US Treasury yields down from 16-year highs, helping stocks stage a stellar comeback from their October lows.

However, the rally has run out of steam as several Fed policymakers this week pushed back against market expectations that the central bank will begin cutting interest rates soon.

The benchmark S&P 500 eked out marginal gains on Wednesday, but managed to extend its longest winning streak in two years.

In premarket trading, the Dow Jones Industrial Average and S&P 500 were up 0.1pc, while Nasdaq 100 futures were down 0.1pc.

11:55 AM GMT

PS5 sales underwhelming, admits Sony

Sony said it has concerns about the hit to its bottom line caused by Hollywood strikes and underwhelming PlayStation 5 sales.

The Japanese electronics titan admitted it faced headwinds despite lifting its full-year net profit and sales forecasts amid strength in its gaming, music and image-sensor sectors.

Sony said it expects net profit to hit 880bn yen (£4.8bn) in the year to March 2024, up from the previous projection of 860bn yen prediction. Annual sales were seen at 12.4trn yen, compared with a previous estimate of 12.2trn yen.

It said a weaker yen helped boost the gaming and music sectors, with the latter was also buoyed by “an increase in revenues from streaming services”.

Gaming has consistently been one of Sony’s main driving forces, with the firm aiming to sell 25m units of its new PlayStation 5.

Chief executive Hiroki Totoki said while the company intended to maintain its PS5 sales target, it was “not something that we can attain very easily”.

Sony aims to sell 25m PS5 consoles
Sony aims to sell 25m PS5 consoles - Kiyoshi Ota/Bloomberg

11:40 AM GMT

Paddy Power owner hit by heavy punter payouts

Gambling giant Flutter remains rooted to the bottom of the FTSE 100 after customer-friendly sports results and weak horse racing in Australia dragged on trading.

The Paddy Power and Betfair owner saw shares slump by as much as 12pc in early trading as it said earnings excluding the US market would be at the bottom of previous targets.

The world’s biggest online gambling firm also announced plans to delist from the stock market in Dublin when it adds a New York listing in the first quarter of 2024.

The company told shareholders it saw gaming growth drive a 13pc increase in total revenues to £2bn for the third quarter of 2023.

However, it said sports betting witnessed a 12 percentage point negative impact from “adverse sports results” against last year.

This included “very customer-friendly results in September and October”, the company added.

Paddy Power is owned by Flutter
Paddy Power is owned by Flutter - Carlotta Cardona/Bloomberg

11:22 AM GMT

Petrol garages increasing margins at the pump, says watchdog

Drivers were hit by “significant increases” in fuel retailers’ margins during the past two months, according to a report.

The Competition and Markets Authority (CMA) said that by the end of October the differences between pump prices and the wholesale cost of petrol and diesel were “significantly above the long-term average”.

It added: “If retail spreads were to remain at these levels for much longer, this would cause concern about the intensity of retail competition in the sector.”

The RAC said the findings were “very disappointing” and demonstrate that “drivers are still being taken advantage of at the pumps”.

Petrol prices
Petrol prices

11:06 AM GMT

Wizz Air hits turbulence as flights grounded

Wizz Air shares have nosedived despite a strong summer as the low-cost carrier cut its profit outlook amid the economic uncertainty.

The Hungarian airline warned that geopolitical tensions and aircraft engine issues could limit its growth, sending its shares down 5.2pc near the bottom of the FTSE 250.

It made a half-year profit of €400.7m (£348.7m), as it was boosted by strong summer demand, with revenues up 39pc to more than €3bn (£2.7bn) in the six months to September.

However, the company will be impacted by the cancellation of flights to Israel amid the conflict in the country, as well as an issue with its engines which will ground 45 of its Airbus aircraft until the end of 2024.

It said net income will be in a range of €350m to €400m, lowering top end of its forecast by €50m.

Wizz Air passengers board a flight at Luton Airport
Wizz Air passengers board a flight at Luton Airport - Steve Parsons/PA Wire

10:44 AM GMT

Oil trades near three-month lows amid China deflation

Oil has continued to trade near its lowest level since July amid growing worries about demand from China as the world’s second largest economy fell into deflation.

Global benchmark Brent moved up 0.9pc to more than $80 a barrel after it retreated to a three-month low on Wednesday, having lost 7pc over the past two days.

A premium placed on the price of oil after the outbreak of war in the Middle East has dissipated as the conflict has remained limited to Israel.

Norbert Ruecker, an analyst at Julius Baer, said:

The market seems to be shifting its focus from fear-driven geopolitics to hard-fact fundamentals.

Ample supplies, incremental production growth, and stagnating demand create an overall soft fundamental backdrop.

Ricardo Evangelista, a senior analyst at ActivTrades, added: “Inflation data from China, the world’s top oil importer, revealed a disinflationary trend that could be the precursor to a slowdown in economic activity that may lead to reduced energy consumption.”

10:30 AM GMT

Auto Trader tops FTSE 100 amid 'resilient' used car market

Auto Trader has topped the FTSE 100, as the online car marketplace forecast annual profit margins to increase from a year ago.

The company’s shares have jumped as much as 7.9pc after it said the volume of buyers on its site is at record levels amid a “resilient” used car market. Vehicles continue to sell on Auto Trader quicker than pre-pandemic levels.

Revenues rose by 12pc to £280.5m in the six months to September, while operating profits gained 10pc to £164.6m.

As a result, bosses said margins are expected to increase year-on-year when it reports its annual results.

Chief executive Nathan Coe said:

It has been a strong start to the year with more buyers spending more time and completing more of their car buying journey on Auto Trader.

We are working in partnership with record numbers of retailers and manufacturers, who are turning to our platform as the most effective and efficient way to source, price and sell their vehicles.

We remain confident in our long-term prospects given the strength of our business and the opportunities to deliver meaningful value for car buyers, customers, our people and shareholders.

AutoTrader said the used car market continues to be resilient
AutoTrader said the used car market continues to be resilient - Justin Kase zsixz/Alamy Stock Photo

10:15 AM GMT

Softbank suffers £5bn loss after WeWork collapse

Japanese investment giant SoftBank has reported a $6.2bn (£5bn) loss as it reeled from the collapse of WeWork.

The company’s Vision Funds suffered a quarterly pre-tax loss worth 258.9bn yen (£1.4bn) in the three months to September as it anticipated the bankruptcy of the flexible office space giant.

The collapse of WeWork, which filed for bankruptcy on Monday, was an expensive lesson for SoftBank founder Masayoshi Son, who invested heavily in the start-up.

SoftBank Group said its overall quarterly loss came to 931 billion yen (£5bn), compared with a 3trn yen profit seen a year ago, when the company benefited from sales of shares in Chinese e-commerce giant Alibaba.

SoftBank Group did not issue annual forecasts.

SoftBank founder and chief executive Masayoshi Son invested heavily in WeWork
SoftBank founder and chief executive Masayoshi Son invested heavily in WeWork - REUTERS/Francis Tang

10:00 AM GMT

End of the John Lewis tearjerker? Watch the new Christmas advert

John Lewis has abandoned its traditional Christmas tearjerker in favour of a more light-hearted advertisement to cheer up the nation.

Our money reporter Madeleine Ross has the latest:

In a departure from its usual poignant tone, this year’s John Lewis advert tells the joyful story of a young boy, Alfie, as he grows his “perfect tree” from a seed in a box he finds in a market.

Instead of the classic fir, a large CGI venus flytrap called “Snapper” emerges, forming a close friendship with the young boy.

But while Alfie loves his alternative Christmas tree, his mother, grandmother, and sister are less convinced that the carnivorous plant is quickly relegated to the garden, alone.

A heartwarming reunion on Christmas morning, when the family discover that Snapper is an expert present unwrapper, provides the moving moment that the adverts have become well known for.

Take part in our poll on whether you like the advert.

09:49 AM GMT

Apple suffers blow over £11bn Irish tax bill

Apple and Ireland have suffered a setback in their clash with the European Union over a €13bn (£11.3bn) tax bill that has become the centrepiece of a crackdown on lucrative deals handed out to some of the world’s most powerful companies.

A legal expert at Europe’s top court has said a lower court committed “errors in law” when it threw out a decision by the European Commission which would have forced Apple to pay more than €13bn in back taxes to Ireland.

Advocate General Giovanni Pitruzzella of the EU Court of Justice issued an advisory notice today which said a previous legal win by Apple should be re-examined.

It is the latest in a long-running legal saga which began when the European Commission’s competition chief Margrethe Vestager launched an investigation into Apple’s tax arrangements in Ireland in 2016.

Apple's site in Cork, Ireland
Apple's site in Cork, Ireland - Aidan Crawley/Bloomberg

09:34 AM GMT

Eurozone interest rate rises are 'over', says Bank of France governor

The European Central Bank will not raise interest rates again unless a “surprise” forces it to resume its fight against inflation, the head of France’s central bank has said.

Bank of France governor Francois Villeroy de Galhau, a member of the ECB’s governing council, said the eurozone is “winning the battle against inflation”.

The ECB kept rates unchanged last month after raising them 10 times since July 2022 in an effort to tame consumer prices that soared following the pandemic and Russia’s invasion of Ukraine.

Mr Villeroy de Galhau said that “barring a surprise or a shock, the rise in our key rates is over,” adding it was “too early to talk about cutting” them.

He said inflation should return to the ECB’s 2pc target by 2025.

Francois Villeroy de Galhau said that rises in ECB interest rates are 'over'
Francois Villeroy de Galhau said that rises in ECB interest rates are 'over' - FABRICE COFFRINI/AFP via Getty Images

09:20 AM GMT

Pound rises as Pill talks of 'extended period' of high interest rates

The pound has crept higher as Bank of England chief economist Huw Pill talked of monetary policy staying at a “restrictive level for an extended period”.

Sterling was 0.1pc higher against the dollar to edge toward $1.23.

08:57 AM GMT

Rate rises not needed to bring down inflation, says Pill

The chief economist of the Bank of England has indicated that holding interest rates at their current level will be enough to bring down inflation to the 2pc target within two years.

Speaking at the virtual UK Regions Economic Summit, Huw Pill said monetary policy is “already restrictive”.

The Bank of England held interest rates at 5.25pc for a second time at a meeting earlier this month.

Mr Pill said that policymakers have assumed in their forecasts for the economy that interest rates will remain “at this restrictive level for quite an extended time”.

He said that “having established monetary policy in restrictive territory, it is not the case we have to raise rates”.

He added that “sustaining rates at restrictive levels will bear down on inflation”.

On Wednesday, Governor Andrew Bailey said it is “too early to be talking about cutting rates” days after Mr Pill said it was “not unreasonable” for investors to bet on a rate cut by next summer.

Bank of England chief economist Huw Pill said interest rates do not need to increase to bring down inflation
Bank of England chief economist Huw Pill said interest rates do not need to increase to bring down inflation - REUTERS/Suzanne Plunkett

08:39 AM GMT

FTSE 100 down as Flutter shares sink

The FTSE 100 has fallen as it was hurt by a drop in shares of Flutter following a dour forecast.

The UK’s benchmark index slid 0.1pc as investors await comments from Bank of England chief economist Huw Pill and Federal Reserve chairman Jerome Powell to gauge the path for global interest rates.

The FTSE 100 was set to mark its fourth session of decline in six, while the mid-cap index FTSE 250 edged 0.1% higher.

Flutter dropped 9pc to the bottom of blue-chip index after the online betting company said it expects full-year earnings, excluding the nascent US market, at the bottom of its previously forecast range.

AstraZeneca was among the top gainers on FTSE 100, jumping 1.8pc after the drugmaker raised its annual core profit outlook, buoyed by strong demand for its oncology and rare blood disorder drugs.

Taylor Wimpey jumped by 2pc after the homebuilder forecast annual operating profit at the top end of its previous outlook range.

08:29 AM GMT

McDonald's UK boss summoned to appear before MPs

The head of McDonald’s in the UK has been summoned to appear before a committee of MPs amid allegations of sexual assault, racism and bullying at its franchises.

The Business and Trade Committee said the fast food giant’s UK and Ireland chief executive Alistair Macrow will appear before them on November 14.

MPs are likely to question him on an investigation by the BBC, in which it is alleged that current and former workers were subjected to sexual assault, harassment, racism and bullying.

McDonald’s is one of the UK’s largest private-sector employers with more than 170,000 people working in 1,450 restaurants.

The restaurant chain told the BBC it is “determined” to root out behaviour that falls below the high standards it expects of staff.

The UK and Ireland chief executive of McDonald's will answer questions from MPs later this month
The UK and Ireland chief executive of McDonald's will answer questions from MPs later this month - Nathan Stirk/Getty Images

08:19 AM GMT

Transport Secretary hopes RMT members accept pay offer

Transport Secretary Mark Harper has said he hopes members of the Rail, Maritime and Transport (RMT) union accept an agreement to settle the long-running row over pay and jobs.

He told Sky News:

There is a deal on the table. It’s been on the table for quite a long time, this deal.

I’m very pleased that the train operating companies and the RMT were able to issue a joint statement yesterday saying they’d reached agreement and now the RMT is going to ask their members to express their view.

When they did on Network Rail, their members voted overwhelmingly to accept it.

That’s what I hope they do, so that they can get a pay rise, we can get on with then focusing on getting more people back on the railways to deal with its financial sustainability post-pandemic.

08:02 AM GMT

UK shares lacklustre at the open

UK shares have begun the day little changed following a rise in Asian markets despite another mixed close on Wall Street.

The FTSE 100 edged upwards less than 0.1pc to 7,411.81 while the midcap FTSE 250 was flat at 17,855.18.

07:57 AM GMT

AstraZeneca clinches £1.6bn obesity drug deal

Along with its growing third quarter profits, AstraZeneca revealed it has agreed a $2bn (£1.6bn) deal for a new diabetes and obesity treatment.

The Anglo-Swedish drugmaker said it has signed a licensing agreement with Eccogene after successful early trials.

It said the new drug, taken as a pill, encouraged glucose and body weight reduction.

Sharon Barr, executive vice president at AstraZeneca, said:

With the number of people living with cardiometabolic conditions and obesity today already over one billion, there is a need for continued innovation and next generation therapeutic options.

Building on the promising Phase I clinical data generated by Eccogene, we believe this oral GLP-1RA molecule could offer alternatives to current injectable therapies both as a potential monotherapy as well as in combination for cardiometabolic diseases such as type-2 diabetes, as well as for obesity.

07:52 AM GMT

National Grid increases spending plans for green energy shift

National Grid has increased its spending plans for the next five years as it moves Britain’s energy infrastructure toward renewables.

The network operator plans to invest £42bn in the UK and US up to its 2025 to 2026 financial year, which is £2bn more than it had planned in May.

It comes as the company revealed its pre-tax profits fell by 18pc to just under £1.4bn in its half-year results, while it increased its dividend by 9pc to 19.4p per share.

Chief executive John Pettigrew said:

This financial performance reflects our role at the heart of the energy transition and a new phase of capital delivery that is firmly underway.

Capital investment in our regulated networks reached a record £3.5bn in this half year, as we step up our investment in 17 major onshore and offshore transmission projects in the UK.

National Grid
National Grid

07:35 AM GMT

Energy suppliers to pay £10.8m fine for missing smart meter targets

Six of Britain’s biggest gas and electricity suppliers will pay out £10.8 million after missing targets to install smart meters, according to the energy watchdog.

Ofgem said British Gas, Ovo, Bulb, E.On, Scottish Power and SSE fell short of the targets for 2022 by just over one million smart meters.

They have agreed to pay the redress into Ofgem’s fund to help vulnerable households, with British Gas paying out the most, at £3.4m, followed by Ovo at £2.4m and Bulb at £1.8m.

Ofgem said as a result of the agreed payouts, it will not conduct a further probe into the reasons for the missed targets.

Cathryn Scott, director of enforcement and emerging issues at Ofgem, said:

The installation of smart meters is a vital step in the modernisation of our energy system and the path to net zero by 2050.

Smart meters give customers better information about their energy usage helping them budget and control their costs.

British Gas will pay a £3.4m fine for missing smart meter installation targets
British Gas will pay a £3.4m fine for missing smart meter installation targets - Christopher Furlong/Getty Images

07:30 AM GMT

WH Smith sales take off as travel industry rebounds

WH Smith has revealed that sales jumped by more than a quarter over the past year as it was boosted by the continued recovery of the travel industry and new openings.

The retail group said it also saw its headline pre-tax profit almost double to £143m in the year to August 31, compared with £73m a year earlier, as a result.

It highlighted the firm’s heightened focus on travel stores compared with traditional high street sites, with travel bringing in a £164m trading profit compared with £32m from its high street arm.

Group revenues for the year increased by 28pc to £1.8bn, as it was supported by a 36pc increase in revenues through its UK travel business.

Chief executive Carl Cowling said:

This has been another year of significant progress for the group. Our travel divisions have all seen strong growth with travel UK total revenue up 36pc, North America up 32pc and Rest of World up 99pc, and I am very pleased with the start to the new financial year.

Our global travel business is growing in all our key markets.

It is highly scalable with multiple medium and long term growth opportunities and we are seeing great results from sharing our expertise and innovation across our different geographies.

WH Smith boss Carl Cowling said it has been 'another year of significant progress for the group'
WH Smith boss Carl Cowling said it has been 'another year of significant progress for the group' - REUTERS/Peter Nicholls

07:25 AM GMT

AstraZeneca boosts earnings as legal action over vaccines emerges

AstraZeneca beat estimates for its profitability as it announced its third quarter earnings as it faces a multi-million pound landmark legal action that will suggest claims over its efficacy were “vastly overstated”.  

Its core earnings per share was $1.73 during the period, up from $1.67 last year and ahead of forecasts of $1.72. Core earnings per share in the first nine months of the year increased 17pc to $5.80.

The company lifted its forecasts for the full year, predicting that total revenue will increase by a mid single-digit percentage and excluding Covid medicines would rise by a percentage in the low teens.

Total revenue hit $33.8bn (£27.5bn), up 5pc despite a decline of $2.9bn (£2.4bn) from Covid medicines.

The Telegraph revealed the company is being sued in the High Court over its Covid vaccine in test cases could pave the way for as many as 80 damages claims worth an estimated £80m.

The Oxford AstraZeneca vaccine saved more than six million lives globally in the first year of the rollout
The Oxford AstraZeneca vaccine saved more than six million lives globally in the first year of the rollout - JENS SCHLUETER/AFP via Getty Images

07:05 AM GMT

Blow for China as economy slides back into deflation

China slipped back into deflation in October, official figures showed, as falling pork prices delivered a blow to the world’s second largest economy.

The consumer prices index, the main gauge of inflation, fell 0.2pc compared to the same month last year, according to the National Bureau of Statistics (NBS).

The reading was twice as big as economists’ expectations and marked a return to deflation, having recovered marginally in September and August from July’s 0.3pc drop.

Food, tobacco and alcohol prices recorded the largest falls in October, with the NBS saying pork in particular plunged 30.1pc.

NBS official Dong Lijuan said in a statement that the fall was linked to declining consumer demand following the mid-autumn holiday, as well as other factors including a high supply of agricultural products.

While deflation suggests goods were cheaper, it poses a threat to the broader economy as consumers tend to postpone purchases in the hopes of further reductions.

A lack of demand can then force companies to cut production, freeze hiring or lay off workers, and agree to new discounts to sell off their stocks - dampening profitability even as costs remain the same.

The slump into deflation in China amid falling pork prices is a story we have been told before.

China experienced a short period of deflation at the end of 2020 and early 2021, largely because of a collapse in the price of pork, the most widely consumed meat in the country. Prior to that, the last deflationary period was in 2009.

The NBS also said producer prices sank for the 13th month in a row, tumbling 2.6pc, against the 2.7pc forecast by economists, suggesting more weakness down the road.

Zhiwei Zhang, chief economist at Pinpoint Asset Management, said the data showed that “domestic demand remains sluggish”.

The declining price of pork was one of the largest factors in dragging China back into deflation
The declining price of pork was one of the largest factors in dragging China back into deflation - China Daily/Reuters

06:46 AM GMT

Good morning

Thanks for joining me. China edged back into deflation territory as the world’s second largest economy was hit by weaker consumer demand during public holidays.

The consumer price index fell 0.2pc in October, declining in large part as a result of a 30.1pc plunge in the price of pork.

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What happened overnight

Asian share markets rallied, even as global investors again sold off the troubled mainland Chinese property sector.

Australian shares were up 0.3pc, while Japan’s Nikkei stock index rose 1.5pc.

Hong Kong’s Hang Seng Index reversed an early gain and was down 0.3pc in the afternoon while China’s bluechip CSI300 Index was 0.1pc higher.

China’s troubled property sector is being closely watched after most major stocks rallied on Wednesday following a Reuters report that Ping An Insurance Group had been asked by the Chinese authorities to take a controlling stake in Country Garden Holdings .

A spokesperson for Ping An said the company had not been approached by the government and denied the report.

The Hang Seng Mainland Properties Index shed 3.7pc and the Hang Seng Properties Index, which covers Hong Kong developers, was down 0.7pc.

On Wednesday, the S&P 500 rose 0.1pc and the Nasdaq Composite added 0.1pc. This extended their winning streaks to eight and nine consecutive sessions respectfully. The Dow Jones Industrial Average fell 0.1pc.

The two-year Treasury yield, which reflects interest rate expectations, rose two basis points to 4.938pc, while the yield on the benchmark 10-year note slid 6.2 basis points to just above 4.50pc.

Oil prices enjoyed a small bounce but made little impact on the losses of nearly seven percent seen in the previous two days caused by demand worries and easing fears over the Middle East crisis.