Biden spending binge triggers fastest US growth in two years

The New York Stock Exchange is poised to open higher after the US economy grew faster than expected
The New York Stock Exchange is poised to open higher after the US economy grew faster than expected - REUTERS/Brendan McDermid

The US economy grew faster than expected in the third quarter of the year amid a surge in spending by Joe Biden’s administration.

The US economy grew by 5.2pc in the three months to September, better than previous estimates of 4.9pc.

Consumer spending also grew, albeit at a slower than forecast pace of 3.6pc, fueling a rally on stock and bond markets amid growing signs that the Federal Reserve will be able to begin cutting interest rates soon.

The two-year US Treasury bond yield - which moves inversely to its price - has fallen to its lowest level since July at 4.66pc while stocks on Wall Street also made gains.

It comes as Joe Bidens’ Inflation Reduction Act hands out green subsidies to companies investing in the United States, adding $260bn of government spending over the next decade.

Money markets have fully priced in the first US interest rate reduction by May after Fed Governor Christopher Waller, deemed a hawk, hinted on Tuesday at lower interest rates in the months ahead if inflation continued to ease.

Bond yields have also been falling in the eurozone as data from showed lower-than-expected inflation in Germany. The German DAX stock index rose 1pc to touch a four-month high.

Read the latest updates below.

06:23 PM GMT

Signing off

That’s it from this live blog today. Chris Price will be back tomorrow morning, but in the meantime, I’ll leave you with a few of the latest business stories from The Telegraph:

05:04 PM GMT

Deliveroo to expand into DIY

Deliveroo is planning to start selling everything from hammers and drills to makeup in a bid to boost its flagging growth rate, reports Daniel Woolfson:

Customers will soon be able to order DIY equipment, electronics, toys and beauty products through the takeaway app.

New additions will include a selection of 500 home improvement tools from retailer Screwfix and Christmas gifts from Boots.

Deliveroo said it wanted to provide “a quick solution to issues at home from plumbing, electrical, decorating and more”. Orders will be delivered by its network of around 80,000 riders.

The company will also introduce the ability to “gift” items to be delivered to friends and family ahead of Christmas.

Chief operating officer Eric French said these changes would cater “for a wider set of consumer needs and occasions”.

Continue reading...

A Deliveroo rider on an electric bike in the City of London earlier this month
A Deliveroo rider on an electric bike in the City of London earlier this month - Daniel Leal/AFP

05:02 PM GMT

UK households face years of falling living standards, says OECD

Big government expenditure means that householders will continue to see value their after-tax income decline, despite falling inflation, according to the Organisation for Economic Co-operation and Development (OECD).

The Paris-based organisation has said that real wages will “finally grow” as pay outgrows prices, but that “higher fiscal pressure will reduce household disposable income”.

It said that:

Fiscal pressure on households and businesses has increased significantly since the spring Budget, due to the freeze of income tax brackets and the corporate income tax rate increase.

A Treasury spokesperson said:

While the UK has the lowest tax burden of any major European economy, we had to take difficult decisions on tax to help pay off our Covid pandemic debt.”

With inflation now falling, we are taking the long-term decisions needed for growth, which is why we have cut National Insurance contributions for 29 million working people, worth £450 for the average employee.

We reported earlier today that OECD was calling for the pension triple lock to pay for net zero policies.

04:54 PM GMT

Market close: FTSE 100 down, FTSE 250 up

The FTSE 100 closed down 0.39pc. The biggest risers were JD Sports (up 5.71pc) and precious metals mining company Fresnilo (up 5.62pc). The biggest drops occured in the shares of Ladbrokes owner Entain (down 4.1pc) and Prudential (down 3.52pc).

The FTSE 250, meanwhile, rose 0.44pc, with EasyJet up 5.98pc, followed by telecommunications testing company Spirent Communications up 5.88pc. Digital 9 plunged 13.49pc, and Qinetic dropped 4.26pc.

04:33 PM GMT

Billionaire investor warns of 'hard landing' for US economy if interest rates are not cut

The billionaire New York investor Bill Ackman, whose Pershing Square Holdings forms part of the FTSE 100, says the US Federal Reserve will start cutting interest rates sooner than markets predict.

“We’re betting that the Federal Reserve is going to have to cut rates more quickly than people expect. That’s the current macro bet that we have on,” he told a forthcoming episode of David Rubenstein’s Bloomberg podcast.

According to Bloomberg, Mr Ackman said that if the Federal Reserve keeps rates at around 5.5pc when inflation trends below 3pc, “that’s a very high real rate of interest.”

He reportedly added that he has already seen evidence of a weakening economy and said: “I think there’s a real risk of a hard landing if the Fed doesn’t start cutting rates pretty soon.”

Bill Ackman of Pershing Square Holdings yesterday
Bill Ackman of Pershing Square Holdings yesterday - Jeenah Moon/Bloomberg

04:18 PM GMT

Investors smile on EasyJet after strong annual results

Shares in the FTSE 250 airline EasyJet have risen sharply today, by 6.1pc, boosted by yesterday’s annual results. These showed the group had switched to a £324m profit for the year to the end of September, compared with a £169m loss 2022 the year before, when it was still affected by the pandemic.

Gerald Khoo, an analyst at Liberum, recommends the shares, saying that the price “does not reflect the recent structural improvements to profitability”.

EasyJet is looking to grow its market share. It is targeting a 5pc increase in seat capacity from 2023 to 2028, according to Conroy Gaynor, a Bloomberg Intelligence analyst.

Passengers queue at Easyjet check-in desks in face masks in 2022
Passengers queue at Easyjet check-in desks in face masks in 2022 - Angel Garcia/Bloomberg

03:59 PM GMT

London Metal Exchange defeats US hedge fund Elliott in dispute over nickel crisis

The London Metal Exchange (LME) has triumphed over US hedge fund Elliott in a dispute over last year’s nickel crisis. Michael Bow reports:

The High Court sided with the LME over its decision to freeze billions of pounds worth of trades after nickel prices soared following Russia’s invasion of Ukraine.

Elliott, alongside investment fund Jane Street Capital, launched legal action over claims they lost out on huge profits due to LME’s cancellation of trades.

Jane Street argued it had lost $15m and Elliot around $456m, although a London judge dismissed the pair’s claim in a ruling on Wednesday.

Elliot has said it plans to appeal the decision.

A spokesman said: “Elliott is naturally disappointed by the court’s decision and concerned about the precedents that it establishes for market participants in the UK.

“This judgment raises fundamental questions for UK market participants, who trade not only on the LME but more broadly on other exchanges, about an absence of trade certainty prior to settlement, and about a lack of effective checks and balances on UK exchanges cancelling or varying trades in ways which may protect just one cohort of traders, or even the exchanges themselves.”

The legal battle arose after nickel prices surged by 69pc last March, which was the biggest market move in the last 20 years.

This rapid jump led to the LME suspending trades, which spared some parties significant losses but led to others missing out on profits.

03:54 PM GMT

Castore worth £1bn after securing £150m from investors

Castore, the British sportswear clothing firm taking on Nike, is now valued at £1bn, after securing £150m from a range of new and existing investors, according to a Sky News report.

Investors include Raine Group, the US-based investment bank, with the succesful fundraising expected to be announced tomorrow.

Castore was founded by two brothers, Thomas and Philip Beahon, from Wirral, Merseyside, who won gained funding from Asda co-owners, Mohsin and Zuber Issa, two years ago.

The Telegraph profiled the founders of Castore earlier this month.

Andy Murray in Castore Andy Murray Collection (AMC) clothing
Andy Murray in Castore Andy Murray Collection (AMC) clothing - Mike Hewitt/Getty Images

03:40 PM GMT

Foreign exchange markets vulnerable to shocks, says Andrew Bailey

Andrew Bailey, the Governor of the Bank of England, has today warned that foreign exchange (FX) markets “can threaten systemic stability” and that a lesson of the global financial crisis was to highlight “evidence of unacceptable practices in the FX market, exposing weaknesses in historical national approaches”.

In remarks to at the 50th anniversary of the London Foreign Exchange Joint Standing Committee, he said:

FX markets can still dry up in stress periods, particularly in the presence of material imbalances in currency demand... FX markets can threaten systemic stability through settlement risk [the risk that one party to a transaction will pay on time].

Today’s market structures have the capacity to meet consumer needs in ways undreamt of decades ago. But such decentralisation, dare I say fragmentation, also poses daunting challenges for the unwary, in terms of understanding where they can find the best liquidity, and on what terms. As the market structure gets more complex, transparency has never been more important.

While noting improvements to regulation, he said that those who trade in FX markets need to “observe proper standards of market conduct and that the Joint Standing Committee, part of the Bank of England, played a “central role in ensuring the FX market remained fair, and resilient throughout these changes”.

Mr Bailey also noted that the benefits of FX markets: “Exchange rates, particularly floating ones, can be important buffers against unanticipated shocks, allowing economies to adjust without more painful corrections in less flexible domestic prices.”

The Governor of the Bank of England, Andrew Bailey, earlier this month
The Governor of the Bank of England, Andrew Bailey, earlier this month - Neil Hall/EPA-EFE/Shutterstock

03:30 PM GMT

Handing over

I’ll sign off at this point. Alex Singleton will make sure all the latest updates are sent your way from here.

On another day of rising stocks on Wall Street, here is a look at the S&P 500 during the month of November:

03:25 PM GMT

Taylor Swift most-streamed artist on Spotify in UK this year

Taylor Swift is continuing to dominate the musical landscape as she was named the most streamed artist on Spotify this year.

The US singer, 33, secured the coveted spot as she has garnered more than 26.1bn global streams since the beginning of the year, according to the music platform.

Swift was also the most streamed artist in the UK chart, followed by Canadian stars Drake and The Weeknd with Sheffield-based Arctic Monkeys coming in fourth and Yorkshire-born Ed Sheeran placing fifth.

Swift’s 2022 release Midnights, which went to number one on both sides of the Atlantic, was the most the streamed album in the UK for 2023.

Taylor Swift was the most streamed artist in the UK on Spotify this year
Taylor Swift was the most streamed artist in the UK on Spotify this year - SARAH YENESEL/EPA-EFE/Shutterstock

03:11 PM GMT

We cannot afford to take aid spending back to 0.7pc of GDP, says Hunt

Britain cannot afford to raise spending on overseas aid back to 0.7pc of GDP, the Chancellor has told MPs.

Jeremy Hunt said the Government remains committed to raising foreign aid spending “when it is affordable to do so” as he appeared in front of the Treasury Select Committee.

Boris Johnson reduced the target to 0.5pc of GDP in 2021.

Mr Hunt told MPs:

I don’t think the fiscal position makes it possible to do that but I would say... we are very committed to do that when it is affordable to do so.

I fully share your judgment that the aid we do as a country is a very big statement of our values and makes a very massive difference all around the world and, absolutely, I’m committed to returning to 0.7pc when it is affordable to do so.

02:38 PM GMT

US markets open higher amid hopes of interest rate cuts

Wall Street’s main stock indexes opened higher as Treasury yields slipped to two-month lows on growing optimism about an interest rate cut from the Federal Reserve next year.

The Dow Jones Industrial Average rose 19.82 points, or 0.1pc, at the open to 35,436.80.

The S&P 500 opened higher by 16.95 points, or 0.4pc, at 4,571.84, while the Nasdaq Composite gained 85.36 points, or 0.6pc, to 14,367.11 at the opening bell.

02:24 PM GMT

Growth will be how we reduce our debt, says Hunt

Jeremy Hunt is appearing before the Treasury Select Committee this afternoon and has begun by outlining why he prioritised growth in the Autumn Statement over cutting the UK debt.

He told MPs that growth would be the “way we will generate income to make significant inroads to reduce our debt”.

He added that the OBR had said that since the Autumn Statement last year, the OBR forecast that borrowing will be less in the next five years than it was expected.

02:04 PM GMT

US economy's resilience will worry Fed, say investors

After the larger than expected third quarter growth for the US economy, Charles Hepworth of GAM Investments said:

Revisions higher in business investment and government spending seem to be the bigger needle movers in this GDP release while consumer spending advanced a more modest 3.6pc.

Even with this higher growth rate, the consensus seems to still suggest rates have peaked and that may be corroborated in modestly weaker consumer spending.

However, the resilience of US growth will continue to worry the Federal Reserve.

01:43 PM GMT

US economy grows faster than expected in third quarter

US consumers shrugged off high interest rates to help drive the economy to growth of 5.2pc in the three months to September.

The increase in gross domestic product (GDP) was larger than the previous estimate of 4.9pc for the third quarter of the year.

Consumer spending, the lifeblood of the economy, rose at a rate of 3.6pc from July to September — still healthy but a downgrade from the previous estimate of 4pc.

The world’s largest economy, has proved resilient even as the Federal Reserve has raised its benchmark interest rate 11 times since March 2022 to 22-year highs of 5.25pc to 5.5pc.

01:36 PM GMT

Dowden urged to intervene in Abu Dhabi takeover of The Telegraph

Oliver Dowden is being urged to intervene in an Abu Dhabi-backed takeover of The Telegraph on national security grounds.

Our reporter James Warrington has the latest:

More than a dozen Conservative MPs have written to the Deputy Prime Minister warning of a “very real potential national security threat” if the deal goes ahead.

Lloyds Banking Group, which took control of The Telegraph and The Spectator in June from the Barclay family, is pursuing a £1.2bn deal to hand over control of the titles to RedBirdIMI, a fund backed by Sheikh Mansour bin Zayed Al Nahyan, the UAE vice-president.

The MPs wrote: “During a time of increased geopolitical tensions, information warfare is more relevant than ever – and with the UAE’s increasingly influential position as a mediator and power-broker, the risk for interference in Britain’s national conversation seems self-evident if the acquisition is allowed to go ahead at the end of this week.”

Read on for details.

Deputy Prime Minister Oliver Dowden
Deputy Prime Minister Oliver Dowden - James Manning/PA Wire

01:19 PM GMT

German inflation lower than expected

German inflation was less than expected in November, boosting hopes that the European Central Bank will begin cutting interest rates.

The harmonised consumer price index for Europe’s largest economy was 2.3pc, lower than the 2.5pc predicted by analysts.

The data helped bond markets rally, with the yield on Germany’s two-year bund, which is susceptible to changes in interest rates, down eight basis points to 2.83pc.

The equivalent bond in the UK was down four basis points to 4.54pc. Yields move inversely to prices.

01:04 PM GMT

Oil rises ahead of crunch Opec meeting

Oil has climbed as traders count down to a high-stakes Opec+ meeting which is expected to set out production quotas.

Global benchmark Brent rose 1.5pc to nearly $83 a barrel, after rallying by more than 2pc on Tuesday.

Prices have firmed up as markets expect that the US Federal Reserve has finished raising interest rates and may start cutting borrowing costs next year.

The speculation has weakened the recent dollar, which has helped to boost the price of Brent and US-produced West Texas Intermediate, which are sold in the global reserve currency.

Meanwhile, the Opec+ cartel will hold a meeting on Thursday to set policy for 2024, but has yet to resolve a dispute over output quotas for some African members.

Keshav Lohiya, founder of consultant Oilytics, said: “A macro risk-on mode rally helped oil prices move up.

“Oil markets are generally quiet as the market awaits the Opec decision tomorrow.”

12:24 PM GMT

Wall Street on track to rise at opening bell

US stock indexes rose in premarket trading as bond market yields slipped to two-month lows amid growing optimism about an interest rate cut from the Federal Reserve next year.

Wall Street indexes ended marginally higher on Tuesday after Fed Governor Christopher Waller, deemed a hawk, hinted at lower interest rates in the months ahead if inflation continued to ease.

Other similar positive comments sent Treasury yields tumbling, with the yield on the benchmark 10-year note last at an over two-month low of 4.28pc.

Charalampos Pissouros, senior investment analyst at XM, said: “This was the first time a Fed official discussed the possibility of a cut, and that’s maybe why market participants ignored comments by Governor Bowman that higher rates may be needed in order to bring inflation back down to the 2pc objective.”

The drop in yields lifted megacap stocks, with Nvidia, Tesla and Alphabet up between 0.4pc and 1.4pc in premarket trading.

Futures on the Dow Jones Industrial Average were up 0.3pc, the S&P 500 had gained 0.4pc and the Nasdaq 100 was up 0.5pc.

12:07 PM GMT

Pound inches lower as Bailey says he is a 'realist' about UK growth

The pound has edged down after the Governor of the Bank of England insisted he is not “ultra-pessimistic” about the UK economy.

Sterling has slipped 0.1pc against the dollar to less than $1.27 after Andrew Bailey said he was a “realist” about the UK’s growth prospects.

The pound has gained 4.7pc verses the global reserve currency over the last month as investors have increased bets that the US Federal Reserve will begin cutting interest rates before long.

Sterling was flat against the euro, which is worth 86p.

11:45 AM GMT

Housing recovery stalls after pandemic, official figures show

A recovery in housebuilding following the impact of the pandemic looks to have stalled, Government figures suggest.

Some 234,397 new homes were supplied in England in 2022/23, broadly unchanged on 234,462 for the previous 12 months.

The total includes 212,568 new builds and 22,163 properties that saw a change of use from non-domestic to residential.

There were 4,499 conversions between houses and flats and 641 net other gains, along with 5,474 demolitions, according to data published by the Department for Levelling Up, Housing and Communities.

The number of new homes supplied in England - defined as “net additional dwellings” - hit 248,591 in 2019/20, the highest for any financial year so far this century, before falling to 217,754 in 2020/21 during the first year of the Covid-19 pandemic.

At the 2019 general election the Conservative Party renewed its commitment to a target of 300,000 new homes per year in England by the mid-2020s.

11:21 AM GMT

Elliott plans to appeal ruling on London Metal Exchange nickel crisis

Elliott Management said it intends to appeal after the failure of its lawsuit against the London Metal Exchange over the nickel crisis last year.

An Elliott spokesman said:

Elliott is naturally disappointed by the court’s decision and concerned about the precedents that it establishes for market participants in the UK.

This judgment raises fundamental questions for UK market participants, who trade not only on the LME but more broadly on other exchanges, about an absence of trade certainty prior to settlement, and about a lack of effective checks and balances on UK exchanges cancelling or varying trades in ways which may protect just one cohort of traders, or even the exchanges themselves.

We therefore intend to appeal the judgment and will continue to seek redress for the LME’s unprecedented cancellation of trades in March 2022.

11:14 AM GMT

German shares lead gains in Europe as inflation eases

German shares have led gains in Europe today after data pointed to easing inflation in the most populous state in the country, boosting expectations that the European Central Bank will cut interest rates next year.

The German DAX rose 1pc to touch a four-month high after data showed consumer prices in the state of North Rhine-Westphalia fell 0.3pc month-on-month in November and to 3pc year-on-year.

The preliminary inflation figure for Germany will be released at 2pm, while overall eurozone inflation numbers will be published on Thursday.

European bond yields fell, with the benchmark 10-year German bond yield falling to a more than three-month low of 2.4pc.

11:08 AM GMT

Gas prices on track for monthly decline

European gas prices are heading for their first monthly loss since July as concerns eases about demand during the winter months.

The continent’s benchmark contract has slipped 1.8pc today and is down 12pc over the last month, wiping out a spike in prices triggered by the start of the conflict between Israel and Hamas.

UK contracts have experience similar falls as huge stockpiles and a relatively mild autumn has kept a lid on prices.

Jefferies analysts wrote in a note to clients: “Winter weather risk in 2023-24, while still important, is becoming a less fundamental variable, given a mild outlook in both Europe and Asia.”

10:52 AM GMT

London Metal Exchange wins court case over short-squeeze crisis

The London Metal Exchange has won its court case against one of the world’s oldest fund managers over its controversial decision to halt a runaway short squeeze in the nickel market last year.

The LME was catapulted into the global spotlight last March and drew widespread criticism after it suspended the nickel market and retroactively cancelled $12 billion of trades.

Elliott Management and Jane Street were seeking damages of $472m (£372m) but their challenges were dismissed in a ruling today.

Traders in the Ring at the London Metal Exchange in the City of London
Traders in the Ring at the London Metal Exchange in the City of London - Yui Mok/PA Wire

10:33 AM GMT

Network Rail faces probe over late trains in Wales and West of England

Britain’s rail watchdog has launched an investigation into late trains and across Network Rail’s Wales & Western region.

The Office of Rail and Road (ORR) said that punctuality and reliability has continued to deteriorate in the region while the wider network across Great Britain has seen performance stabilising.

The network covers services in Cornwall, Devon, Cardiff and Bristol, as well as those travelling from the region into London, Birmingham, Manchester and Liverpool.

Feras Alshaker, a director at the ORR, said:

While Network Rail has begun making good progress in stabilising performance elsewhere on the network, performance in the Wales & Western region has continued to deteriorate, meaning poor reliability and punctuality for passengers and freight.

Our investigation will take a detailed look at the root causes of the region’s performance issues and will consider wider contributing factors.

As part of our work we will convene a roundtable with key players in the region to support Network Rail in taking pragmatic and effective action to improve performance for all the region’s rail users.

10:07 AM GMT

Jeremy Hunt should scrap triple lock to reach net zero, says OECD

Jeremy Hunt should scrap the pension triple lock to pay for net zero policies, the Organisation for Economic Cooperation and Development (OECD) has said.

Our deputy economics editor Tim Wallace has the details:

The Paris-based organisation urged the Chancellor to revisit the policy as he seeks ways to reduce Britain’s national debt.

Currently, the triple lock means the state pension rises by the highest of inflation, average earnings or 2.5pc. Next year, it is going up by 8.5pc, from £10,600 to £11,502, matching wage growth.

The anticipated rise comes as the UK faces increased decarbonisation costs and a surge in interest payments on the national debt, the think tank said.

Slashing emissions from power, cities, and industry is set to cost the Government 0.5pc of GDP per year, the OECD said – equivalent to around £14bn.

The loss of fuel duty from the move to electric cars is forecast to cost another 0.4pc, or around £11bn per year, by 2030.

This chart shows how the pressure comes as the British economy is already struggling..

09:54 AM GMT

Property recovery will be 'muted', warn economists

The substantial rise in mortgage approvals in October still leaves approvals below their pre-pandemic average.

Mortgage approvals rose from 43,700 in September to 47,400 in October, according to the Bank of England, which is still well short of the typical 66,000 before Covid.

Imogen Pattison, assistant economist at Capital Economics, said:

Despite the stronger reading in October, mortgage approvals for house purchase are on track to total just 570,000 in 2023, the lowest since 2010.

Our view that mortgage rates will hover close to 5pc until the second half of 2024 means the recovery from here will be muted, with approvals only rising to 600,000 in 2024 still someway short of their usual level of around 800,000 before the pandemic.

09:45 AM GMT

Mortgage approvals rise for first time since June

Mortgage approvals increased in the UK for the first time in four months in a sign that stability is returning to the property market.

The net number of agreements rose from 43,700 in September to 47,400 in October, which was the most since July, according to data from the Bank of England.

The figure was ahead of 45,300 expected by economists.

The data also showed that gross lending fell from £18.1bn in September to £16.2bn in October.

09:17 AM GMT

Global bonds head for best month in 15 years

Global bonds are soaring at the fastest pace since the 2008 financial crisis, new analysis shows, as traders increasingly bet that interest rate cuts are not far away.

The rally has sent Government borrowing costs sharply lower in the wake of comments by US Federal Reserve Governor Christopher Waller on Tuesday.

The previously hawkish US interest rate setter said the current level of policy - which sits at 22-year highs - looks well positioned to slow the economy and bring down inflation.

The two-year yield on US Treasury bonds hit its lowest since mid-July at 4.69pc and the benchmark 10-year yield fell six basis points to its lowest since September at 4.28pc.

It comes as a Bloomberg gauge of global sovereign and corporate debt has returned 4.9pc in November, heading for the biggest monthly gain since it surged 6.2pc in the depths of the recession in December 2008.

The yield on two-year UK gilts fell to 4.55pc and on the 10-year gilt dropped to 4.14pc.

Euro zone sovereign bond yields also fell and markets increased bets on policy rate cuts after data from North Rhine-Westphalia, Germany’s most populous state, supported expectations for a drop in German inflation.

08:51 AM GMT

Export-focused FTSE 100 hit by stronger pound

The FTSE 100 slipped as the strengthening pound impacted the exporter-heavy market.

The UK’s benchmark index was down 0.3pc, while the domestically-focussed midcap index added 0.3pc.

Insurance giant Prudential lost 1.3pc after Deutsche Bank reduced its price target on the stock, with Aviva dropping 2.1pc as the bank downgraded its shares. The life insurance sector slid 1.1pc.

The pound hovered near a three-month high against the dollar as the greenback slipped on growing bets that the US Federal Reserve could begin cutting interest rates next year.

HSBC shares have fallen 2.2pc and Standard Chartered has dropped 2.4pc, dragging down the FTSE 100.

Among individual stocks, Halfords Group shed 19.6pc after the bicycles-to-car parts retailer narrowed its annual profit forecast range and lowered the upper end of its expectations.

08:37 AM GMT

Farfetch shares surge as founder plans to take company private

British luxury fashion site Farfetch saw its shares surge by 23pc in New York after the Telegraph revealed its founder is plotting to take the company private after a disastrous US float.

José Neves is understood to be in talks with bankers and top shareholders, who include Cartier-owner Richemont, about a deal that would bring an abrupt end to its short but calamitous stint on the New York Stock Exchange.

Following the exclusive, the company cancelled its third quarter results and said it would not be providing any forward guidance.

The shares climbed a further 12pc in post-market trading.

Farfetch has lost more than 90pc of its value since listing on the New York Stock Exchange in 2018
Farfetch has lost more than 90pc of its value since listing on the New York Stock Exchange in 2018 - REUTERS/Brendan McDermid

08:29 AM GMT

Deliveroo plans extension into DIY and electricals

Takeaway delivery app Deliveroo is planning to extend its order options to include DIY, homeware and electricals.

The tech company announced the move after the Supreme Court ruled last week that its riders are not classed as workers and cannot seek collective bargaining with trade unions.

Bosses said the business remains on track to deliver its target of 4pc adjusted underlying pre-tax profits by 2026.

Ahead of an investor day, founder and chief executive Will Shu:

I’m pleased to be hosting Deliveroo’s first capital markets event today. It has been 11 years since Deliveroo was founded and almost three years since our IPO. I am excited as ever about the future of the business - there continues to be significant headroom for growth.

We remain relentlessly focused on improving the delivery experience and providing value for money to consumers. I believe that this is critical to unlocking the full growth potential in our industry and I am exceptionally proud of the work our team has done in this area already.

One further driver of growth will be the expansion of our platform to encompass retail, such as DIY, homeware and electrical goods. This enhancement of our offering will leverage our existing capabilities to bring more of the neighbourhood to consumers’ doors.


08:07 AM GMT

UK markets mixed at the open

UK markets were mixed ahead of mortgage data from the Bank of England released later this morning.

The UK’s blue-chip index fell 0.3pc to 7,430.99 while the midcap FTSE 250 was up 0.1pc to 18,406.31.

07:59 AM GMT

Bailey: I’m not gloomy, I’m just keeping it real

Andrew Bailey has claimed he is not an “ultra-pessimist” when it comes to the UK economy, just days after he warned that the outlook for growth was among the worst he’d ever seen.

Our economics editor Szu Ping Chan has the latest:

The Governor of the Bank of England hit back at accusations he was being too gloomy, insisting that he was a “realist” about the UK’s growth prospects.

Furious Tory MPs accused the governor of talking Britain down after he said there was “no doubt” that the UK’s growth potential was “lower than it has been in much of my working life”.

However, talking to the Daily Staffordshire on a regional visit on Tuesday, he said: “I’ve been written up this week as being an ultra-pessimist but I don’t see it that way. I see it as a realist view.

“That translates to us getting our sleeves rolled up and tackling the issues we face.”

Mr Bailey said Threadneedle Street policymakers were focused on bringing down inflation, which currently stands at 4.6pc.

He said: “We’ve got to get on and bring inflation down to our target of 2pc. That is the best thing we can do for growth in the economy – and we will do it.

“We start with a realist view but we are very, very, committed on behalf of the people of this country to get on with tackling the job.”

Bank of England governor Andrew Bailey at the Global Investment Summit earlier this week
Bank of England governor Andrew Bailey at the Global Investment Summit earlier this week - CHRIS RATCLIFFE/POOL/EPA-EFE/Shutterstock

07:56 AM GMT

South West Water owner Pennon boosts dividend after leakage fines

Water supplier Pennon has increased its dividend months after one of its companies was fined for dumping raw sewage off the Devon and Cornwall coast.

The utility business said it would increase its payout to shareholders by 8.3pc to 14.04p despite underlying profit before tax falling 59.6pc to £9.1m.

It comes six months after South West Water, which it operates, was fined £2.1m by the Environment Agency for pollution offences over a period of four years.

Chief executive Susan Davy said:

Pennon has continued to make progress in the last six months on delivering for customers and shareholders, improving operational resilience across the group through an 87pc step up in investment, supported by a healthy balance sheet.

We are executing on our twin track strategy of organic and acquisitive growth in UK water, creating long term value and making progress on what matters most to those across our regions.

Pennon has increased its dividend months after being fined over pollution incidents
Pennon has increased its dividend months after being fined over pollution incidents - East Devon District Council

07:44 AM GMT

Brands pushing up prices for baby formula and baked beans, warns regulator

The competition watchdog has said some branded food suppliers have pushed up prices faster than their costs have risen - contributing to inflation.

The Competition and Markets Authority found that most inflation had been caused by suppliers passing cost increases onto customers.

However, it said around three-quarters of branded suppliers of infant formula, baked beans, mayonnaise and pet food have increased their profitability and contributed to food prices increasing.

Brands also told the CMA that when their costs started to fall they would offer promotions to customers, rather than cut the standard costs of their products.

The Competition and Markets Authority said around three-quarters of branded suppliers of infant formula, baked beans, mayonnaise and pet food have increased their profitability
The Competition and Markets Authority said around three-quarters of branded suppliers of infant formula, baked beans, mayonnaise and pet food have increased their profitability - Paul Grover for the Telegraph

07:35 AM GMT

Halfords warns of weakening sales for big-ticket items

Halfords has revealed a rise in sales and profits for the past half year but cautioned over softer demand for big-ticket products “in the last couple of months”.

The motoring and cycling business said it has seen slower like-for-like sales growth in recent months as a result.

It came as the company told shareholders that revenues grew 13.9pc to £873.5m over the six months to September 29, compared with the same period last year.

Halfords also revealed that pre-tax profits improved by 3.3pc to £19.3m for the period.


07:32 AM GMT

Supermarket loyalty schemes to be probed by regulators

Loyalty schemes used by supermarkets to lure customers with discount deals will be examined by the competition watchdog.

The Competition and Markets Authority set out in its latest review of competition in the groceries sector that it would examine loyalty pricing schemes from January, in particular to understand the impact on consumers and competition of this approach to promotions.

The regulator also said that it had found evidence that some brands in the baby formula market were pushing up prices by more than their level of cost increase.

Supermarket loyalty schemes will be examined by competition regulators
Supermarket loyalty schemes will be examined by competition regulators - REUTERS/Paul Childs

07:18 AM GMT

Good morning

Thanks for joining me. Saudi Arabia will own 10pc of Heathrow after Spanish infrastructure giant Ferrovial announced it was offloading its 25pc stake in Europe’s busiest airport.

Ferrovial, which was the transport hub’s largest shareholder, said it has reached a £2.4bn deal to sell its remaining shares to the Saudi Public Investment Fund (PIF) and Paris-based Ardian, which will take a 15pc holding.

The deal brings to an end Heathrow’s long association with Spanish company, which began with controversy in 2006 when Ferrovial launched a successful hostile bid for BAA, the UK airports operator.

The sale, first mooted in August last year, comes after Heathrow said it recorded its highest-ever September passenger numbers of more than seven million, which also marked the first time it exceeded pre-pandemic traffic figures.

Saudi Arabia’s PIF has become a major investing force around the world as part of Crown Prince Mohammed bin Salman’s efforts to diversify’s the Gulf state’s economy away from oil. It aims to hold $2trillion (£1.6trn) in assets by 2030.

Luke Bugeja, head of Ferrovial’s airports business, said: “Over the last 17 years, we have been contributing to Heathrow’s transformation, together with our fellow shareholders, achieving some excellent milestones throughout our long-term role as investor.

“We are very pleased to have made Heathrow one of the world’s most connected airports and the busiest airport in Europe.”

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2) Taxi war cools as black cabs return to Uber for first time in six years | Taxi union says its drivers are unlikely to sign up due to company’s track record

3) Why the Bank of England’s doom mongers are a thorn in Rishi Sunak’s side | Growing divisions spell trouble for the Prime Minister gearing up for a difficult election

4) Warren Buffett’s right-hand man Charlie Munger dies aged 99 | The duo were famed for their long run of outperforming the American stock market

5) Jeremy Warner: The Brexit betrayal is complete: surging migration is becoming an economic burden | Without the promise to take back control of Britain’s borders, Leave would not have won

What happened overnight

The S&P 500 index of 500 listed American companies was up 0.098pc yesterday at 4,554.89. The Dow Jones Industrial Average of 30 leading US companies rose 0.24pc to 35,416.98, while the Nasdaq Composite index, which is skewed towards technology businesses, rose 0.29pc to 14,281.76.

The yield on 10-year US Treasury bonds declined five basis points to 4.33pc after comments by US Federal Reserve Governor Christopher Waller, who votes on US interest rates. He said: “I am encouraged by what we have learned in the past few weeks - something appears to be giving, and it’s the pace of the economy.” Economic data from October “are consistent with the kind of moderating demand and easing price pressure that will help move inflation back to 2pc”, he told a conference.

Asian stocks briefly made one-week highs on Wednesday, bonds rallied and the dollar sank on new hints at US interest rate cuts.

In New Zealand, the dollar jumped after its central bank said another hike may be necessary if inflation proves stubborn. The New Zealand dollar was last up 1.1pc at a four-month high of $0.6207, having blown past resistance.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5pc in early trade before weakness in Hong Kong tech shares dragged it back to flat. Japan’s Nikkei fell 0.2pc.

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