Drivers face fuel price rises as oil tops $90 a barrel, warns RAC
Motorists are braced for higher petrol prices after the price of oil hit its highest level since November as Saudi Arabia extended its unilateral cuts to production.
Brent crude oil, the international benchmark, has risen 1.3pc today to top $90 a barrel after the kingdom announced it would continue its reduction in output for another three months.
The move will hold output at about 9m barrels a day, the lowest level in several years.
Drivers have already experienced a sharp riser in prices at the pump during August as wholesale prices jumped amid the production cuts driven by Saudi Arabia and Russia.
RAC spokesman Rod Dennis said: “Drivers had already seen a sharp increase in pump prices through the course of August as a result of the oil price rising.
“An even higher oil price is likely to force wholesale fuel prices up further, and – if these are sustained – that’s likely to spell further price rises on forecourts up and down the UK in the coming weeks.”
06:56 PM BST
Signing off
That’s all from us today. I’ll leave you with this article from Barnabas Reynolds, a partner at law firm Shearman & Sterling, who argues: Woke banks rejected Farage – but it was Brussels that let them
06:32 PM BST
Canadian pension giant buys stake in British wealth manager in post-Brexit boost
One of Canada’s biggest pension funds has snapped up a UK wealth manager in a vote of confidence for post-Brexit Britain.
Banking and financials services correspondent Simon Foy has the story:
Ontario Teachers’ Pension Plan (OTPP) is buying a majority stake in Seven Investment Management for £255m in cash from Caledonia Investments, the listed investment vehicle of the Cayzer family, which made its fortune in the shipping business.
OTPP, which has around C$250bn (£146bn) in net assets, has previously expressed concerns about the impact of Brexit. But the deal suggests the fund remains keen to back UK businesses.
The Canadian retirement scheme already has holdings in London City, Bristol and Birmingham airports, as well as a division of energy company SSE, which it acquired last year for £1.5bn.
The deal also deepens the consolidation in Britain’s money management industry as investors seek to purchase investment advisers to either sell them to a competitor or publicly list them.
Dean Proctor, chief executive of Seven Investment Management, said: “We are now well positioned for our next phase of growth, and I am excited about our new partnership with OTPP, who are deeply supportive of the team and the firm’s strategy.”
Iñaki Echave, senior managing director at OTPP, said: “We are excited to partner with Dean and his team. [Seven Investment Management] is one of the highest-quality, fast-growing financial services platforms in Europe and a perfect example of our strategy to make control investments in our high-conviction sectors.
“We intend to leverage our sector expertise and flexible capital to accelerate [Seven Investment Management]’s growth organically and through M&A.”
Seven Investment Management oversees assets for more than 2,300 advisory firms and 7,000 private clients in the UK.
Caledonia bought its stake in the wealth manager in 2015 from insurers Zurich Insurance and Aegon.
Caledonia said it expects the deal to be completed in late 2023 or early 2024.
Tom Leader, Caledonia’s head of private capital, said: “In the eight years since our acquisition of 7IM in September 2015, the business has more than doubled assets under management, nearly trebled headcount, and significantly enhanced its revenue and profitability.
“Caledonia’s investment philosophy is to focus on growth over the long term, ensuring that our portfolio companies are well placed for exit when the right time comes for all stakeholders. Our investment in 7IM embodies this philosophy and we are delighted with what Dean and his team have achieved during our partnership.”
Last year, OTPP made a 4pc gain on its investment despite turmoil in global markets.
06:28 PM BST
TikTok hires UK cyber security firm to audit data amid Chinese spying fears
TikTok has hired a British cyber security company to monitor and protect the data of its UK users in an effort to soothe fears about Chinese spying.
Senior technology reporter Matthew Field reports...
The video-sharing app has retained NCC Group, the FTSE-listed company, to oversee the security of its European data centres.
NCC will watch for any attempts to improperly access sensitive user-data from its 150m users in the UK and on the Continent.
The fast-growing social media company has been trying to reassure politicians that its data is safe from Chinese state surveillance by promising to store and process information in Europe.
TikTok has opened a data centre in Ireland, with two more facilities planned in Norway, under a programme internally called “Project Clover”. A similar effort is under way in the US, dubbed “Project Texas”, to ensure that Americans’ information cannot be accessed from China.
The deal means that NCC will check for data risks from TikTok’s processes in real time. NCC already works closely with Britain’s National Cyber Security Centre, part of GCHQ, as one of its approved security suppliers.
NCC will provide regular updates on security as part of TikTok’s transparency reports, and it will have permission to alert government authorities about any concerns surrounding TikTok’s app.
Stephen Bailey, NCC’s global director of privacy, said: “We are going to be monitoring [TikTok’s] gateways 24/7, 365.”
“We will be looking for suspicious or malicious traffic, including looking for security vulnerabilities.”
He said NCC would carry out software reviews of the company’s source-code in addition to physical security checks of TikTok’s data centres.
The measures come as TikTok, which is owned by Beijing-headquartered Bytedance, is hit with increasingly severe bans in the US.
The White House has already banned the app from US government phones, while several states are preparing to block the app entirely. A US national security committee has also demanded that TikTok’s Chinese investors sell their stake in the company.
In Europe, governments have also moved to restrict the app from official smartphones amid concerns that China could demand the company hand over information on individuals.
These fears were exacerbated after several TikTok staff members were sacked by the company for trying to spy on journalists from Forbes and the Financial Times.
Elaine Fox, TikTok’s head of privacy in Europe, said the new measures would “restrict access to protected data from employees who are based in China”. This would include sensitive personal information users share with the app.
Theo Bertram, TikTok’s vice president of public policy, said the company’s controls meant European data would be “safeguarded in a special-designed protective environment” that can only be accessed with independent oversight.
Mr Bertram said TikTok would be briefing governments in Europe on how the system will work in practice. Mr Bertram said that under the deal, NCC would be able to discuss TikTok’s security with regulators and government without the involvement of TikTok staff.
06:17 PM BST
John Lewis hires retail turnaround expert as it battles to revive fortunes
John Lewis has recruited a retail turnaround expert to its board as it battles to revive its fortunes.
Retail editor Hannah Boland has the story:
The partnership, which also owns the Waitrose supermarket chain, said it has hired Will Kernan as a non-executive director to replace Nish Kankiwala, who was appointed John Lewis’s first chief executive earlier this year.
Mr Kernan was chief executive of River Island for three years, during which time he cut hundreds of jobs and helped the retailer return to profit after it struggled in the pandemic.
River Island recorded an operating profit of £74m in 2021, its latest accounts show, compared to a loss of £36m the prior year. Mr Kernan stepped down from the role in November last year.
Click here for more details...
05:31 PM BST
Low-cost carrier Jet2 appoints new boss
Budget airline Jet2 has named a successor to its founder Philip Meeson, who stepped down after 40 years at the helm.
Robin Terrell on Tuesday was appointed as Jet2’s new non-executive chairman, three years after joining the package holiday company as an independent non-executive director in April 2020.
He previously served on the boards of New Look, William Hill and Wilko, among others.
He replaced Mr Meeson, who bought the carrier in 1983 and transformed it from a small cargo and mail delivery company to the UK’s third largest airline.
The announcement came after Mr Meeson, a former RAF pilot and five-time British aerobatics champion, in July revealed plans to retire as executive chairman.
The founder said: “Although I am stepping back from the Board, I’m proud to remain a significant shareholder and will remain a strong supporter of the business.”
04:50 PM BST
FTSE 100 closes in the red
The FTSE 100 has closed 0.20pc lower at 7,437.93. The FTSE 250 midcap index tumbled 0.18pc to 18,491.42.
The FTSE 100 surged during early trading, with BP and Shell among the top risers amid rising oil prices.
However, the FTSE 100 was weighed down by B&M, who sank to the bottom of the blue-chip index after revealing plans to buy 51 stores from Wilko.
04:37 PM BST
NHS stocks up on Novo Nordisk’s weight-loss drug
The NHS has received supplies of Novo Nordisk’s slimming jab Wegovy, a day after the Danish drugmaker launched its “miracle” weight loss drug into its fifth market.
Senior economics reporter Eir Nolsøe reports on why the sudden rush of demand for Wegovy has been met with mixed reactions in Denmark...
04:30 PM BST
Closures and redundancies are necessary without 'viable offer' for Wilko, says administrators
The lack of “viable offers” for Wilko mean that layoffs and store closures are necessary, according to administrators.
Edward Williams, joint administrator at PwC, said:
In the absence of viable offers for the whole business, very sadly store closures and redundancies of team members from those stores are now necessary, in addition to the already announced redundancies at the support centre and distribution centres.
We know this has been a deeply unsettling time for everyone concerned and would like to express our gratitude to all Wilko team members for the dedication and support they have continued to give the business in the most trying of circumstances.
04:23 PM BST
Airbnb owners have less than a month to install fire doors
Holiday let owners will have to replace the doors in their holiday lets and put a smoke alarm in virtually every room of the house under a government health and safety crackdown.
Money reporter Madeleine Ross has the details:
Rules changes coming into force on October 1 in England and Wales will mean even those who let out a room for a single night will have to prove their homes are fire safe and ensure fire risk assessments are carried out and recorded, providing evidence of fire doors, keyless locks and smoke alarms in every bedroom and other rooms of their properties.
Previously, small-scale holiday lets, defined as those with less than five employees, did not need to formally record their fire safety risk assessments.
While rules meant they were still required to have smoke alarms and fire doors, there are fears that a rise in the use of letting sites such as Airbnb means some accommodation providers are not fully compliant with strict health and safety measures which apply to the hotel and accommodation sector, putting guests at risk.
Click here for the full story...
04:16 PM BST
Wilko to cut over 1,300 jobs, says trade union GMB
Administrators for Wilko have confirmed they will make 1,332 workers redundant and close 52 stores, according to trade union GMB.
It said that 24 of these sites will close on Tuesday September 12, and the remaining 28 will be closed two days later. This will lead to 1,016 redundancies, GMB said.
The job losses also include 299 at Wilko’s two warehouses, plus a further 17 redundancies among the collapsed retailer’s digital team at its support centre.
The announcement comes after discount retailer B&M announced it had agreed to buy up to 51 Wilko stores from administrators for £13m.
However, GMB also indicated that workers these 51 shops will not transfer automatically to the new owner.
“Accepting that all details, including even the number of stores involved, are covered by confidentiality agreements, we can say that any such bid would appear to be for store premises only. This would mean that whilst new brands may open on site, workers would not transfer to these,” it said.
The union added: “We are making inquiries about the possibility of current staff being given preferential treatment in applying for any jobs that may appear, but at time of writing we cannot confirm these will apply.”
04:03 PM BST
Warner Bros warns against $500m costs related to Hollywood strikes
The Hollywood actors’ and writers’ strikes will cost Warner Bros Discovery as much as $500m (£397.6m).
The US entertainment giant said it expects to be lumbered with between $300m and $500m in costs related to the industrial action, denting its full year earnings.
As a result, Warner Bros Discovery now forecasts adjusted earnings before interest, taxes, depreciation, and amortisation of between $10.5bn to $11bn.
The mass media group, which released summer blockbusters Barbie and The Flash, previously predicted that its adjusted earnings would be at the lower end of between $11bn to $11.5bn.
In a financial statement released on Tuesday, Warner Bros Discovery:
While [Warner Bros. Discovery] is hopeful that these strikes will be resolved soon, it cannot predict when the strikes will ultimately end. With both guilds still on strike today, the company now assumes the financial impact to [Warner Bros. Discovery] of these strikes will persist through the end of 2023.
03:35 PM BST
Handing over
That’s all from me today. Adam Mawardi will make sure you are kept updated with everything you need to know for the rest of the day.
03:19 PM BST
Man Utd takes £550m hit as Glazers consider shelving sale
Nearly $700m (£552m) was wiped off the value of Manchester United on Wall Street amid reports that the Glazer family is poised to take the club off the market.
Shares in the Premier League giants plunged by 18pc to value the club at around $3.2bn (£2.6bn) in early trading.
The Glazers, who have owned the club since 2005, are minded to shelve a sale of the club until 2025 when they hope they can attract more bidders, according to the Mail on Sunday.
Sheikh Jassim Bin Hamad JJ Al Thani, a member of the Qatari royal family, and British billionaire Jim Ratcliffe had made offers to buy the club, thought to be somewhere between £5bn and £5.5bn.
03:10 PM BST
Shoplifting no longer seen as a crime, says Asda chairman
Shoplifting is no longer seen as a crime, the chairman of Asda has said, as police forces come under mounting pressure to tackle the rise in theft from stores.
Our retail editor Hannah Boland has the latest:
Lord Stuart Rose, who previously headed up Marks & Spencer, has thrown his weight behind calls for more to be done to stem the surge in shoplifting which has been blighting retailers.
Incidents of violent and abusive behaviour towards retail staff have doubled since before the pandemic, according to industry figures.
At the same time police forces have come under fire for seemingly doing little to clamp down.
Forces on average fail to respond to 71pc of serious retail crimes reported, figures obtained by Co-op following a Freedom of Information request earlier this year showed.
This graph shows how shoplifting offences crossed 100k for the first quarter on record.
02:58 PM BST
Allow more nuclear, fracking and solar to ease energy bills, says think tank
After the Government confirmed it will relax planning laws that will pave the way for new onshore wind farms, Andy Mayer of the Institute of Economic Affairs think tank said:
Planning reform is the secret sauce to stimulating a UK economic recovery.
Making it easier to build one type of energy infrastructure is a welcome step in the right direction, but there is much more to be done.
Making it easier to build nuclear, fracking, solar, geothermal, and tidal infrastructure would be even better.
Then letting them compete to provide secure energy would provide meaningful relief from high energy bills.
02:41 PM BST
Oil tops $90 for first time in 10 months after Saudi supply cuts
Brent crude oil has topped $90 a barrel for the first time since November as Saudi Arabia extended its unilateral cuts to production.
The international oil benchmark has risen 1.5pc today after the kingdom announced it would continue its reduction in output for another three months.
The move will hold output at about 9m barrels a day, the lowest level in several years.
Russia said it would reduce exports by 300,000 barrels a day until the end of the year, aligning with Riyadh.
Oil prices have recovered amid the production cuts driven by Saudi Arabia and Russia, complicating the task of reducing inflation.
Brent #Oil hits $90/bbl for 1st time since Nov as Saudi Arabia extended its unilateral oil production cut by another three months. pic.twitter.com/PHXXN5HCDd
— Holger Zschaepitz (@Schuldensuehner) September 5, 2023
02:36 PM BST
Wall Street falls amid China's struggles
The S&P 500 and the Nasdaq opened lower after downbeat data on services activity in China stoked worries over demand in the world’s second largest economy.
The S&P 500 opened lower by 0.1pc at 4,510.06, while the Nasdaq Composite dropped 0.3pc to 13,994.54 at the opening bell.
The Dow Jones Industrial Average was little changed at the open to 34,843.22.
02:27 PM BST
Onshore wind farms to return under streamlined planning rules
The Government has officially announced it will speed up the approval process for onshore wind projects in England that are supported by local people by streamlining planning rules.
In a statement, the Department for Levelling-Up said the new procedures will ensure that the “whole community has a say, not just a small number of objectors” in areas affected by wind farm applications.
Developers are poised to revive up to 50 rejected bids to build wind farms under plans which mean new projects can no longer be rejected on the back of a single local objection.
02:19 PM BST
Recession fears grow as British services shrink for first time since January
Rising interest rates and falling house prices threaten to derail banks and the wider economic recovery, a global financial watchdog has warned.
The Financial Stability Board (FSB) said the failure of banks including Credit Suisse and Silicon Valley Bank earlier this year show the system is under strain as businesses, households and lenders face the unexpected burden of higher borrowing costs.
Klaas Knot, chairman of the FSB and President of the Dutch central bank, said: “The global economic recovery is losing momentum, and the effects of the rise in interest rates in major economies are increasingly being felt.
“So far, the global financial system has remained resilient overall, not least thanks to the strong bank capital buffers introduced by the post-crisis G20 reforms.”
However he warned that higher rates and bank failures have “exposed vulnerabilities in individual institutions relating to poor liquidity and interest rate risk management and governance” with the crunches “a stark reminder of the speed with which vulnerabilities can be exposed in the current environment”.
It comes as interest rate increases are already biting with business activity in Britain’s services sector falling last month for the first time since January, a closely-watched survey showed.
The S&P Global purchasing managers’ index (PMI) dropped to 49.5 in August from 51.5 in July - a seven-month low. Any score below 50 indicates activity is shrinking.
01:57 PM BST
Italian meat suppliers told to increase standards by Waitrose
Waitrose has rolled out higher animal welfare standards for all its suppliers of Italian meat amid accusations that standards have lagged behind those in Britain.
The supermarket said the move means its Parma ham, Mortadella and Prosciutto have come from animals that live a life free from confinement in Italy.
The retailer said the pigs have more room to roam and socialise, and have deep straw bedding to root around in.
It comes as welfare standards for continental meat have tended to lag behind those of British meats.
Waitrose attributes its long term partnership with supplier The Compleat Food Group as the reason they were the first Italian meat producer to win a Good Pig Award from Compassion in World Farming in 2016.
The supermarket said it has now rolled out the same high standards across all of its Italian producers.
01:36 PM BST
Banks warned of 'cancelling agenda' over Farage debanking scandal
Ministers have been warned not to “play the sinister cancelling agenda of the woke brigade” by allowing banks to wrongly deny politicians and their relatives access to services.
Treasury minister Andrew Griffith told the Commons that financial institutions should “focus on doing their core functions” rather than take sides on political issues.
Conservative MP Marco Longhi raised the summer debanking scandal surrounding Nigel Farage with the Treasury front bench at their first outing in the Commons after the summer recess.
He said: “Does the minister agree with me that banks and the corporate world should follow this example and focus their efforts on their core business, rather than play the sinister cancelling agenda of the woke brigade that saw Nigel Farage have his accounts wrongfully closed?”
Mr Griffith responded: “He is quite right. Although they are private entities, banks do benefit from a privileged place in society and they should focus on doing their core functions brilliantly well, treating customers fairly, making a sustainable return for shareholders, rather than taking sides on politically contentious matters.”
01:19 PM BST
Elon Musk threatens to sue anti-Semitism campaigners putting advertisers off Twitter
Elon Musk has threatened to sue a group of anti-Semitism campaigners, claiming they have driven away investors and wiped $4bn (£3.2bn) from the value of Twitter.
Our senior technology reporter Matthew Field has the details:
The Tesla billionaire said he had “no choice” but to file a defamation lawsuit against the advocacy group known as the Anti-Defamation League (ADL), which previously called for a pause on ad spending on the social network.
The group alleges Mr Musk has failed to clamp down on hate speech on the social media platform since his takeover last year, allowing disinformation to proliferate – something Mr Musk strongly denies.
Mr Musk has now threatened legal action on the basis the claims are scaring off advertisers, which he claims is having a dramatic impact on the business’ finances.
Read his comments on X and the response.
To clear our platform’s name on the matter of anti-Semitism, it looks like we have no choice but to file a defamation lawsuit against the Anti-Defamation League … oh the irony!
— Elon Musk (@elonmusk) September 4, 2023
01:02 PM BST
Wall Street on track to fall at opening bell
US stock markets are expected to fall when they open as higher Treasury yields weigh down major growth stocks.
The yield on the 10-year Treasury notes climbed to 4.21pc after downbeat data on services activity in China, the UK and the eurozone.
Major technology-linked stocks such as Apple, Nvidia, Meta and Netflix lost between 0.5pc and 1pc before the bell.
US economic data since the Fed’s July meeting has added to the impression the economy is cooling without cracking, likely bolstering the case against further interest rate increases.
All three main US stock indexes logged gains in the previous week after a raft of data pointed to a softening jobs market.
Traders’ bets that the Fed will leave rates unchanged in the next policy meeting stood at 93pc, while pricing in a near 59pc chance of a pause in November, up from 52pc a week ago, according to the CME FedWatch tool.
Meanwhile, Goldman Sachs lowered the chances of a US recession in the next 12 months to 15pc from 20pc amid continued easing inflation and labor market data.
In premarket trading, the Dow Jones Industrial Average was down less than 0.1pc, the S&P 500 had fallen 0.1pc and Nasdaq 100 futures had dropped 0.3pc.
12:52 PM BST
Hunt: 'We now need to halve inflation'
As he announced his Autumn Statement plans in the Commons, Chancellor Jeremy Hunt said:
On Friday, the Office for National Statistics published an update to the UK’s GDP growth figures which shows the UK economy was 0.6pc larger than pre-pandemic levels by the fourth quarter of 2021.
It means our economy had the fastest recovery from the pandemic of any large European economy, thanks to decisions such as furlough that protected millions of jobs.
For that growth to continue we now need to halve inflation, which I am pleased to report is now nearly 40pc below its 11pc peak. I can also tell the House I will deliver the Autumn Statement on November 22.
12:45 PM BST
Chancellor sets date for Autumn Statement
Jeremy Hunt will set out his Autumn Statement on November 22, the Chancellor has told MPs.
He has commissioned an Office for Budget Responsibility forecast, which will be presented alongside the statement.
The Prime Minister and Chancellor have spent recent months promising to halve inflation, amid a series of Bank of England interest rate rises designed to ease soaring prices.
Mr Hunt has also faced pressure from some Tory MPs for tax cuts ahead of the next general election, expected before January 2025.
But he and Rishi Sunak have so far resisted these calls, pointing to ongoing efforts to curb inflation and ensure financial stability.
Mr Hunt confirmed the date in a statement in the Commons.
12:39 PM BST
Disney heiress leads call for tax on ‘super-rich’
An heiress to the Disney empire has led calls for a tax on the “super-rich”, accusing the world’s wealthiest of creating an “economic, ecological, and human rights disaster”.
Our deputy economics editor Tim Wallace has the story:
Abigail Disney, who has previously said she feels such guilt at being born rich that she struggles to sleep, is among the signatories of a letter sent to leaders of the G20 nations ahead of the summit later this week.
The letter, which has been signed by 300 people including the film director Richard Curtis, US politician Bernie Sanders and Labour MPs, said: “Decades of falling taxes on the richest, based on the false promise that the wealth at the top would somehow benefit us all, has contributed to the rise in extreme inequality.
“Our political choices allow ultra-wealthy individuals to continue to use tax shelters and enjoy preferential treatment to the extent that, in most countries in the world, they pay lower tax rates than ordinary people.”
Ms Disney, who has a net worth of $110m, is an outspoken social activist and has previously criticised chief executive Bob Iger’s running of her family’s business.
Read what she said in an interview.
11:58 AM BST
Arm aims to raise $4.9bn in New York listing
Arm is aiming to raise up to $4.87bn (£3.9bn) in the chip designer’s listing on US stock markets, regulatory documents show.
Its owner SoftBank is offering 95.5m American depository shares of the Cambridge-based company for a price of between $47 and $51 apiece, which is likely to value the business at more than $50bn.
Bosses had been hoping for a $60bn to $70bn valuation after raising between $8bn to $10bn but the target was lowered after SoftBank decided to buy to 25pc stake held in Arm by its Vision Fund and hold onto a larger proportion of shares.
Arm’s return to the public markets will be a milestone for SoftBank, which has sought to attract several marquee technology names as investors in the company. Arm’s designs power more than 99pc of the world’s smartphones.
The listing is expected to buoy the initial public offering (IPO) market globally and prompt other start-ups to move ahead with their offerings.
Arm has also already signed up many of its major clients as investors in its IPO, including Apple, Nvidia, Alphabet, Advanced Micro Devices, Intel and Samsung Electronics.
11:45 AM BST
Birmingham City Council declares effective bankruptcy
Birmingham City Council has effectively declared itself bankrupt as it announced it will cease all but essential spending.
Our breaking news editor Jamie Bullen has the details:
Europe’s largest local authority, which provides services for more than a million residents, has issued a Section 114 notice - meaning expenditure will solely be used to protect core services.
In a statement, the council’s Labour leadership said the action was a “necessary step” to ensure the city can return to a “sound financial footing”.
In June. the council said it was in talks with the government as it faced having to pay up to £760m to settle equal pay claims. The bill is equivalent to its entire annual spending on services and had grown to up to £14m a month.
Read how the costs were incurred and what it means for residents.
11:33 AM BST
B&M 'cherry picking Wilko's best stores'
B&M was one of the discount retailers that squeezed Wilko’s market share, so its takeover of some of up to 51 sites makes sense, according to some analysts.
Orwa Mohamad, analyst at Third Bridge, said:
B&M’s ambition to get to 950 stores has been given a significant boost by the potential cherry picking of Wilko’s best stores, i.e. the ones that are most profitable.
B&M’s general focus on out-of-town locations means it can incorporate many of Wilko’s high street stores and locations with limited cannibalisation impact.
From an assortment perspective, there’s a high degree of crossover between Wilko & B&M in households, garden, toys, accessories. Quite often, Wilko & B&M sell the same product, meaning consumers have a strong incentive to continue frequenting those stores regardless of the banner.
11:17 AM BST
Regulators to investigate debanking after Farage scandal
The City watchdog will probe how banks are deciding to close the accounts of politicians and their families in the wake of the Nigel Farage debanking scandal.
The Financial Conduct Authority (FCA) said a review will look into how financial companies are performing extra checks on so-called politically exposed persons (PEPs). Banks are required to carry these checks out to guard against corruption and money laundering.
The watchdog will consider how firms are conducting risk assessments of UK politicians, their family members and known close associates. It will also check on how banks communicate with their exposed customers and are reviewing their controls.
The review came after Nigel Farage’s account with high-value bank Coutts was closed, sparking fury from the former Ukip leader and triggering a scandal that led to the resignation of NatWest chief executive Dame Alison Rose.
FCA executive director of markets Sarah Pritchard said:
These rules follow international standards and are designed to keep the financial system clean, free from corruption and guard against financial crime.
It’s important that they are implemented proportionately and don’t create unnecessary barriers for public servants and their families.
We have already persuaded some firms to improve their approach and we will use this review to identify if we need to provide further guidance to firms.
11:03 AM BST
Royal Mail delivered hope of reprieve over Saturday post
Ofcom will review Royal Mail’s requirement to deliver letters on Saturdays in a potential reprieve for the struggling postal delivery service.
Regulators said they would examine how the universal service agreement “might need to evolve to better reflect the changing needs of postal users”.
Royal Mail’s plans to axe Saturday letter deliveries was blocked by the Government in June, risking a further increase in prices which had already jumped by an inflation-busting 16pc in April,
Ofcom has estimated that cutting Saturday letter deliveries would save Royal Mail up to £225m per year.
The regulator said it is gathering evidence on how the universal service might need to evolve to more closely meet consumer needs and will set out its findings in detail later this year.
10:47 AM BST
Shoppers holding back on big-ticket items, says Asda chairman
British consumers are thinking very hard about spending on big ticket items, the chairman of Asda has said.
Lord Rose, a veteran of the retail sector who was formerly the boss of Marks & Spencer, said the gap between the rich and poor in Britain has widened.
He told LBC radio:
There is no doubt about it, public confidence is down, people are thoughtful about spending money because they have to be, people are very thoughtful about big ticket spending.
The rich have got even richer, the middle classes are actually doing not too badly, those at the bottom of the pile are having a tough time.
Britain’s consumers have largely defied high inflation and rising borrowing costs to keep up their spending in 2023.
However, industry data published today showed British consumer spending growth lost pace last month, adding to signs of a weakening economy.
10:34 AM BST
Oil slips amid worries for UK and China economies
Oil has edged lower from the highest level this year as the dollar strengthened in the wake of the weak economic data for China, the UK and Europe.
Global benchmark Brent slipped 0.6pc below $89 a barrel amid a risk-off sentiment in markets, including stocks.
The closely-watched S&P Global purchasing managers index figures showed shrinking service sectors in the UK and the eurozone, as well as a sharp slowdown in China.
It helped to send the value of the dollar higher, making commodities priced in the currency less appealing.
US-produced West Texas Intermediate has fallen 0.2pc to $85 a barrel.
Crude has rallied by about a quarter since late June as the impact of supply reductions — which have been led by Saudi Arabia and Russia — worked their way through the market.
Riyadh and Moscow are expected to announce their next steps in the coming days, with the cuts expected to be extended.
10:19 AM BST
Wilko administrators seek deal for hundreds of stores
Doug Putman, the Canadian businessman who bought HMV out of administration in 2019, remains in talks with administrators about buying a sizeable number of Wilko stores.
Our senior business reporter Daniel Woolfson has the details:
Mr Putman is understood to be interested in acquiring hundreds of Wilko stores, however he has reportedly run into issues with companies that supplied products to Wilko before it collapsed in August. The Telegraph attempted to reach Mr Putman for comment.
Sky News said Mr Putman was in talks with PwC about a slimmed-down deal but that there was no certainty an agreement would be reached.
After M2 Capital’s bid collapsed last week, redundancies began at Wilko on Monday, affecting staff in its offices and warehouses.
The 93 year-old company employed around 12,500 people across around 400 stores when it called in the administrators on August 10.
Wilko collapsed after it struggled to recover from supply issues during the pandemic which left it scrambling to secure enough stock and overexposure to Britain’s ailing high streets.
As well as B&M, fellow discounters Poundland, The Range and Home Bargains are also circling portions of Wilko’s estate, with The Range reported to have offered to buy Wilko’s brand and online operations.
09:56 AM BST
B&M snaps up 50 Wilko stores
Discount retailer B&M has agreed to buy a tranche of Wilko stores as the break-up of the high street stalwart begins.
B&M European Value Retail has agreed to buy up to 51 Wilko stores from administrators for £13m, the discount retailer has announced.
B&M said in an update to investors: “The consideration is fully funded from existing cash reserves and the acquisition is not expected to be conditional on any regulatory clearances.”
It said an update on the timing of the new store openings will be provided alongside its half-year financial results on November 9.
The deal comes as administrators PwC continue talks with a consortium led by HMV owner Doug Putman about buying a substantial number of the failed chain’s stores.
09:50 AM BST
Pound drops in wake of UK and China slump
The pound has dropped and the FTSE 100 has fallen after subdued economic data for Britain and from China, fuelling concerns about a feeble recovery.
Sterling has fallen 0.7pc toward $1.25, its lowest level since mid-June, while the UK’s blue-chip index - which is more heavily influenced by international trade - has fallen as much as 0.8pc in early trading.
An influential survey showed Britain’s services sector contracted last month for the first time since January as the downturn facing businesses deepened.
The S&P Global purchasing managers’ index also showed China’s services sector in August expanded at the slowest rate since Covid restrictions were lifted, as the economy was hit by a weaker outlook and ongoing turmoil in its property market.
The data sent US Treasury yields higher as traders mulled the possibility US interest rates may stay higher for longer.
The dollar has marched toward levels last seen in March amid the outperformance of the US economy in recent months, which risks fuelling inflation.
09:36 AM BST
UK services sector shrinks for first time since January
Business activity in Britain’s services sector fell last month for the first time since January as higher interest rates reduced consumer and corporate demand, a closely-watched survey showed.
The S&P Global/CIPS Purchasing Managers’ Index (PMI) for Britain’s services sector dropped to 49.5 in August from 51.5 in July - a seven-month low but above an initial estimate which showed it matching January’s two-year low of 48.7.
The broader composite PMI - which also includes Friday’s very weak manufacturing PMI - dropped to 48.6 from 50.8, again the lowest since January but revised up from an estimate of 47.9 for August, which was the lowest since January 2021.
Tim Moore, economics director at S&P Global, said: “Service providers saw customer spending reverse course during August as higher borrowing costs, subdued business confidence, and stretched household finances all acted to curtail sales opportunities.”
Backlogs of work fell by the most in more than three years as fewer orders came in, and businesses responded by hiring staff at the slowest rate in five months.
#UK service providers experienced a renewed downturn in business activity with the #PMI falling to 49.5 (Jul: 51.5) amid the first reduction in new work since January. @cipsnews
Read more: https://t.co/4XmsBivmtF pic.twitter.com/4uR6FM2VB7— S&P Global PMI™ (@SPGlobalPMI) September 5, 2023
09:20 AM BST
New car market grows by nearly a quarter
The new car market grew 24.4pc in August, the Society of Motor Manufacturers and Traders said.
Some 85,657 new cars were registered last month, compared with 68,858 in August 2022.
Despite this improved performance, the market remained 7.5pc below pre-pandemic levels, with 92,573 registrations in August 2019.
📢"With the automotive industry beginning a second year of growth, recovery is underway with EVs energising the market"@MikeHawesSMMT comments on the new car figures for August pic.twitter.com/naD6UquVum
— SMMT (@SMMT) September 5, 2023
09:11 AM BST
Eurozone at risk of recession as business activity slumps
The eurozone risks dropping into recession, a closely-watched survey suggests, as business activity declined faster than initially thought last month to its lowest level since the pandemic.
HCOB’s final Composite Purchasing Managers’ Index (PMI), compiled by S&P Global and seen as a good barometer of overall economic health, dropped to 46.7 in August from July’s 48.6, a low not seen since November 2020 .
That was below the 50 mark separating growth from contraction for a third month and shy of a preliminary estimate for 47.0.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said:
The eurozone didn’t slip into recession in the first part of the year, but the second half will present a greater challenge.
The disappointing numbers contributed to a downward revision of our GDP ‘nowcast’ which stands now at minus 0.1pc for the third quarter.
The headline services PMI sank to 47.9 from 50.9, below the flash 48.3 estimate, as indebted consumers feeling the pinch from increased borrowing fees and high living costs reined in spending.
The new business index, a gauge of demand, dropped further below breakeven to 46.7 from 48.2, a low not seen since early 2021.
Eurozone output contracts at the fastest rate in nearly three years, latest @HCOB_Economics #PMI survey data showed (46.7; Jul: 48.6), as services activity drops for the first time in 2023 so far and cost inflation quickens. Read more: https://t.co/C0DMSfUnra pic.twitter.com/5GRfGlpd6g
— S&P Global PMI™ (@SPGlobalPMI) September 5, 2023
08:59 AM BST
National Lottery takeover doubles revenues at Allwyn
Allwyn has seen half-year turnover nearly double after snapping up National Lottery operator Camelot and hailing resilient demand despite cost pressures on consumers.
The Czech company reported total revenues of €3.7bn (£3.2bn) for the six months to June 30, up from €1.9bn (£1.6bn) a year earlier.
Revenues in the second quarter jumped 115pc higher to €2.05bn (£1.8bn) after its performance was boosted through the takeover of Camelot UK and Camelot Lottery Solutions, which runs the Illinois Lottery, in the first quarter of 2023.
With the newly acquired firm stripped out, Allwyn said revenues rose 12pc in the first half to €2.1bn (£1.8bn) and were 7pc higher over the second quarter.
The group said consumer confidence was being affected by the cost-of-living crisis but that its business saw “only a limited impact”.
It said demand remained resilient “due to the low price point of our products and low average spend per customer, as well as our large number of regular players”.
Allwyn also said its business has been shielded from much of the wider cost inflation, given that “a significant portion of our costs is directly linked to revenues and the low proportion of energy in our cost base”.
The Czech company, previously known as Sazka, also runs lotteries in Austria, Italy and Greece.
08:45 AM BST
UK markets slump amid China slowdown
London’s main stock indexes opened lower after subdued economic data from China.
The blue-chip FTSE 100 index was down 0.8px, while the FTSE 250 index dipped 0.6pc.
Asian and European markets, overall, came under pressure after data showed China’s services activity expanded at the slowest pace in eight months in August.
Weak demand continues to dog the world’s second-largest economy and stimulus has so far failed to meaningfully revive consumption.
Investors will keenly watch services sector data for the UK and the eurozone, due later today.
B&M European Value Retail dropped about 6pc to the bottom of the FTSE 100 after JP Morgan downgraded the retailer’s stock to “underweight.”
Ashtead Group’s shares fell 5.2pc after the company lowered its annual UK rental revenue growth forecast, blaming softening market conditions.
Overall, retailers declined 1.8pc after Barclays data showed British consumer spending growth lost pace last month.
08:29 AM BST
North Sea operator slumps to loss amid windfall taxes
EnQuest shares have dropped by 11pc as the North Sea oil operator revealed it slumped to a loss in the first half of the year as it grappled with the windfall tax on energy profits.
The company revealed it suffered a loss of $21.2m after tax in the six months to June, following a profit of $203.5m over the same period last year.
Before the application of the windfall tax, officially called the Energy Profits Levy (EPL), it made a pre-tax profit of $112.9m (£89.7m), down 38pc on $182.6m in 2022.
EnQuest chief executive Amjad Bseisu said:
The UK’s oil and gas sector faces significant challenges and loss of competitiveness due to uncertainty following the adverse changes to the fiscal regime.
While we appreciate the Government’s intentions to improve the attractiveness of the sector through the Energy Security Investment Mechanism, we believe timely legislative reform is required to restore confidence in the UK oil and gas sector to protect jobs and deliver both energy security and decarbonisation.
As we navigate the challenges posed by the EPL, we remain focused on further strengthening our balance sheet, to unlock
organic and inorganic growth opportunities, as well as our differentiated tax advantage, to grow the business and deliver returns to shareholders.
08:18 AM BST
Lidl opens largest warehouse in the world as it steps up supermarket battle
Lidl has opened its largest warehouse in the world in its latest effort to lure more of Britain’s supermarket shoppers.
The regional distribution centre (RDC) in Luton will service 150 stores and create up to 1,500 jobs – almost triple that of any other warehouse run by the German discounter.
The 1.2m square foot site could fit three of Lidl’s existing warehouses inside and is the company’s first to feature automation, which will help it handle more than 9,400 pallets a day.
Chancellor Jeremy Hunt said: “It’s fantastic to see Lidl investing in the UK and creating thousands more well-paid jobs.”
Lidl opened more than 50 new stores last year – more than any other supermarket in Great Britain – and opened a further 19 stores at the beginning of 2023.
Lidl’s chief development officer Richard Taylor said: “The fact that Lidl’s largest RDC in the world is here in Great Britain speaks for itself not only in terms of us needing to meet the growing demand from customers, but also in terms of our ambition to grow that demand in the future.”
08:07 AM BST
UK markets slip at the open
The FTSE 100 has opened lower amid the slowdown in China’s economy.
The UK’s internationally-focused benchmark index fell by 0.5pc after the open to 7,413.91 while the midcap FTSE 250 has fallen 0.3pc to 18,460.60.
07:54 AM BST
Troubled China developer Country Garden avoids default
Struggling Chinese developer Country Garden has reportedly made multi-million-dollar interest payments on two outstanding loans, narrowly avoiding what would have been its first default.
The firm in August said it was unable to make the payments, worth $22.5m, and was given a 30-day grace period.
That grace period was due to end either today or Wednesday, but the company paid the interest, Bloomberg News reported. The payment was also reported by Chinese media.
China’s largest private property developer had racked up debts estimated at 1.43trn yuan (£160bn) by the end of 2022, and last week reported a 48.9bn yuan loss for the first six months of the year.
Country Garden’s cash squeeze highlights the fragile state of China’s real estate sector, which accounts for roughly a quarter of the economy and whose situation has deteriorated since a government campaign against high leverage began in 2021.
Making matters worse is a lacklustre post-pandemic economic recovery.
07:32 AM BST
China 'economic momentum still weak'
Stocks in Asia declined after the disappointing China services data showing activity expanded at the slowest rate this year in August.
The MSCI Asia Pacific Index is heading for its first decline in seven days but stimulus being pumped into China’s economy by Beijing may soon begin to take effect.
After the weak Caixin services purchasing managers’ index (PMI) was published, Capital Economics China economist Sheana Yue said:
The PMI surveys suggest economic momentum stabilised in August after months of slowdown.
Downward pressure on manufacturing activity appears to have dissipated, while construction activity accelerated.
These have offset a further softening in services activity.
Overall economic momentum is still weak, but assuming policymakers continue to step up support then a modest cyclical recovery is likely.
China's service sector expansion slowed in August with the Caixin China General Services #PMI Business Activity Index posting 51.8 (Jul: 54.1). Input cost inflation dipped to a six-month low. @caixin Read more: https://t.co/hh5zICwnbb pic.twitter.com/wlAjCNV6qY
— S&P Global PMI™ (@SPGlobalPMI) September 5, 2023
07:17 AM BST
Good morning
Thanks for joining me. China’s efforts to become the world’s largest economy have come under threat after the damage done by zero-Covid policies.
China’s gross domestic product will not exceed that of the US until the mid-2040s and even then it may be by “only a small margin” before “falling back behind”, according to a Bloomberg Economics study.
Before the pandemic, China had been expected to take and hold the position as the world’s largest economy as early as the start of next decade.
The study said: “The post-Covid rebound has run out of steam, reflecting a deepening property slump and fading confidence in Beijing’s management of the economy.
“Weak confidence risks becoming entrenched — resulting in an enduring drag on growth potential.”
It comes as a survey of China’s services sector in August showed output expanded at the slowest rate since Covid restrictions were lifted, as the economy was hit by a weaker outlook and ongoing turmoil in its property market.
The Caixin services purchasing managers’ index fell to 51.8 last month from 54.1 in July, its weakest pace since December.
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2) Hinkley Point C delays raise ‘big questions’ about nuclear power, says RWE chief | Britain’s flagship nuclear power station will not open until 2027 at the earliest
3) How Denmark’s economy got hooked on Wegovy | Amid the celebrations concerns are being raised about an over-dependence on one niche
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5) Net zero ban on petrol cars means EU and Britain cannot compete with China, says BMW chief | Chinese manufacturers have price advantage in electric vehicle production
What happened overnight
Asian stocks fell after disappointing China services data added to concern over the nation’s economic malaise.
Hong Kong shares led regional equity declines, with the benchmark index slipping more than 1pc.
China’s services sector saw the slowest growth this year in August, an industry survey showed, adding to evidence the economic recovery is losing traction.
The MSCI Asia Pacific Index is heading for its first drop in seven days. Japan’s Topix fell 0.3pc.
Australian stocks and the Aussie dollar were both little changed after the central bank kept rates unchanged for a third month in the final meeting under Governor Philip Lowe.
Wall Street was closed on Monday for a national public holiday.
