Stock markets across the world have fallen as US government borrowing costs soared to a 16-year high.
The benchmark 10-year Treasury yield surged to its highest level since 2007 after new data showed that the US labour market remains overheated.
The number of US job openings increased from 8.9m in July to 9.6m in August, the US Labour Department said on Tuesday.
It is the latest sign of a resilient US economy, fuelling concerns that the Federal Reserve will have to keep interest rates higher for longer.
Higher Treasury yields have weighed down on major stock indexes in the US and Europe.
The Dow Jones Industrial Average has shed 1.20pc or 374 points to 33,029.19.
The broad-based S&P 500 is down 1.39pc to 4,228.79, while the tech-heavy Nasdaq Composite has dropped 1.87pc to 13,058.81.
In the UK, the internationally-focused FTSE 100 index ended trading 0.54pc lower at 7,470.16.
Meanwhile stock markets in France and Germany closed down 1.01pc and 1.06pc, respectively. The Euro Stoxx 50, which represents blue-chip companies across the eurozone, finished 1.02pc lower.
07:02 PM BST
See you tomorrow!
That’s all from us. I’ll leave you with the latest update from our economics editor, Szu Ping Chan, who reports from Manchester:
Andrew Griffith has delivered a clear message on no near term tax cuts, saying “not now, not today”.
The City minister added: “The responsible thing that falls to us as Conservatives because if nothing else, we are always responsible, is to to make sure that we balance the nation’s books and that we don’t inflict upon people, the hidden tax rise of inflation (which currently stands at 6.7pc).”
He also refused to be drawn on which tax cuts are good.
Speaking in Manchester, Mr Griffith said: “The real thing that we’ve got to do is look at that broader agenda of spending your money wisely, and tackle the delivery of public services because that’s the sustainable path.”
06:50 PM BST
Sir Jacob Rees Mogg: Government net zero targets are 'idiotic'
The Government’s net zero targets are “idiotic” and should never have been implemented, according to Sir Jacob Rees Mogg.
Economics editor Szu Ping Chan reports from Manchester:
The former business secretary said Britain’s legally binding commitment to slashing carbon emissions by 2050 was “pure tokenism” and did not reflect huge costs that will be imposed on the public.
“Legally binding targets are idiotic and a very bad form of legislation,” he told an event in Manchester on the fringe of Tory conference.
He added that targeting net zero by 2050 amounted to “one of the worst tokenistic pieces of legislation we passed recently.”
He said moving towards net zero should be led by technology instead of targets.
“We’ve got to be practical, allowing the technologies to come first and then if they work, moving in that direction. Because ultimately people will not vote, and nor should they vote to be cold and poor.”
06:08 PM BST
Miners weigh down on FTSE 100
Britain’s commodity-heavy FTSE 100 fell on Tuesday as miners weakened on soft metal prices.
The blue-chip index closed 0.54pc lower at 7,470.16, with the mining sector shedding 2.3pc as the soaring dollar weighed on metal prices.
Mining companies Antofagasta and Glencore fell 3.2pc and 2.3pc respectively as copper prices hit a four-month low.
05:17 PM BST
Chinese company poised to steal Tesla’s crown as world’s biggest electric vehicle maker
Elon Musk’s Tesla is on the verge of losing its crown as the world’s biggest electric carmaker after the Chinese giant BYD came within touching distance of its US rival.
Technology editor Jame Titcomb reports:
BYD, whose founder Wang Chuanfu has pledged to “demolish” established Western carmakers, sold 431,603 vehicles in the third quarter of the year, just 3,456 fewer than Tesla’s 435,059.
The Chinese company has embarked on a global push outside of its home country, selling its first cars in the UK and growing sales in Europe.
Massive state support and China’s dominance in battery production means the company has been able to undercut European and American companies that have been slow to move to electric cars.
BYD’s sales rose 23pc from the second quarter, while Tesla’s fell by 7pc as the impact of price cuts and subsidies from the Biden administration wore off.
04:37 PM BST
Global stock markets sink as US bond yields hit 16-year highs
Stock markets across the world have sank after US bond yields reach 16-year highs.
In the US, the Dow Jones Industrial average has shed 1.31pc or 440 points to 32,996.07. The S&P 500 is down 1.51pc to 4,223.83, while the Nasdaq Composite has dropped 1.82pc to 13,065.58.
In Europe, the UK’s FTSE 100 has fallen 0.54pc to 7,470.16, while France’s CAC 40 is down 1.05pc and Germany’s DAX has tumbled 1.01pc.
Yields on 10-year and 30-year US government bonds have hit their highest since 2007 after higher-than-expected jobs data fuelled fears that interest rates will have to remain higher for longer.
04:18 PM BST
Greggs promises not to raise prices ahead of Christmas
Sausage-roll maker Greggs has vowed not to raise prices in the run-up to Christmas, after it said inflation was starting to ease.
Retail editor Hannah Boland has more:
The baker said there were no plans to increase prices in the short term. It last raised its prices in June on the back of surging costs. However, Roisin Currie, chief executive of Greggs, said inflation had come down since then in line with earlier expectations.
She said: “Cost inflation is decreasing on items such as dairy and veg oils. They’re probably the ones that spiked significantly last year, so we’re seeing them coming back down.” Greggs is, however, still experiencing inflation in its proteins, she said.
The comments came as the baker revealed a 21pc rise in sales in the 13 weeks to Sept 30, with customers visiting more regularly as it pushes into evening trade.
Ms Currie told Reuters that Greggs was also looking at opportunities overseas, saying it had a live project where a small team of three people were working on taking the bakery chain abroad again.
She said: “We are doing research around markets, the customer proposition, the demographics, where we think Greggs would work.” It pulled out of Belgium 15 years ago to focus on the UK.
04:07 PM BST
US labour market remains tight after unexpected increase in job openings
US job openings rose unexpectedly in August, in the latest sign that the US labour market remains strong in the face of higher interest rates.
US employers posted 9.6m job openings in August, up from 8.9m in July, the Labour Department said Tuesday.
This is higher than economists’ predictions of only another 8.9m vacancies. The number of layoffs and of people quitting their jobs — a sign of confidence in their prospects — remain essentially unchanged from July.
The Federal Reserve wants to see the red-hot US job market market cool off, reducing pressure on businesses to raise salaries, which can feed into higher prices.
The US central bank has raised its benchmark rate 11 times since March 2022 to combat inflation.
Looks like that tight #labor market not loosening up anytime soon as the #JOLTS #Job Openings report showed an increase of 690,000 (which was 795k above estimates) to 9.61mm. The #quits rates was unchanged at 2.3 while the job openings per unemployed declined slightly to 1.5122… pic.twitter.com/Ys96pFakWm
— Macro84 (@macro84) October 3, 2023
03:57 PM BST
TikTok piloting subscription service
TikTok is reportedly trialling a new paid subscription service for people who do not want to see adverts on the video-sharing platform.
The social media giant, owned by by China’s ByteDance, is reportedly piloting the service in an unspecified market outside of the US.
Some users of the app have been offered the ad-free subscription plan for a monthly fee of $4.99 (£4.13), Android Authority first reported.
The platform currently remains free to use by showing people personalised adverts based on their activity on the platform and data from third parties, if tracking is enabled on their device.
Brands or creators can pay for adverts to appear alongside regular content on users’ feeds.
It comes as Instagram plans to charge millions of users for ad-free version of its photo-sharing platform.
03:49 PM BST
ChatGPT founder accused of ‘espionage’ in Africa for scanning people's eyes
A company started by the founder of ChatGPT has been accused of “espionage” after scanning people’s eyeballs in exchange for cryptocurrency.
Technology editor James Titcomb has the story:
A report by Kenyan MPs claimed that Worldcoin, founded by OpenAI chief executive Sam Altman, was a “threat to statehood”.
It recommended that the project be shut down in the country, where thousands of people have queued to have their retinas scanned in exchange for £45 worth of cryptocurrency.
Kenya has already ordered Worldcoin to stop signing up new users, warning about how data is stored and saying it is concerned biometric information is being exchanged for financial reward.
However, the app still operates for existing users.
03:31 PM BST
That’s all from me today. Adam Mawardi will make sure you stay up-to-speed with everything that’s going on.
A short time ago, the yen weakened to 150 to the dollar, a level some analysts think could prompt concerned Japanese authorities to intervene to prop up the currency.
The dollar rose as high as 150.165 yen, its highest since October 2022, as the greenback pushed higher against most currencies, driven by surging US Treasury yields.
However, the currency has quickly bounced back in a move which has puzzled analysts and sparked speculation that the Bank of Japan made some kind of intervention.
The yen has weakened more than 12pc versus the dollar this year as the Bank of Japan has maintained the world’s last negative interest-rate regime while rates elsewhere climbed.
— Matt Weller CFA, CMT (@MWellerFX) October 3, 2023
looks like we may have found the line in the sand...haha pic.twitter.com/8266DcrsGY
— Neil Wilson (@marketsneil) October 3, 2023
Ok, USD/JPY - WTH happened there..
— Michael Hewson 🇬🇧 (@mhewson_CMC) October 3, 2023
03:24 PM BST
Bankman-Fried did not hold plea-deal discussions before fraud trial
Lawyers have revealed that Sam Bankman-Fried did not enter any plea deal discussions as his trial on charges of stealing billions of dollars from customers of his FTX cryptocurrency exchange was poised to get underway.
Before prospective jurors entered, prosecutor Nicolas Roos said no plea discussions were ever held with Bankman-Fried and that no offers for a plea deal were made. Mark Cohen, a lawyer for Bankman-Fried, confirmed that was the case.
The first step in the trial will be selecting the 12-member jury.
Before prospective jurors entered, US District Judge Lewis Kaplan told prosecutors and defense lawyers that he would begin jury selection by asking the pool to indicate if there was any reason they could not serve.
He is then expected to ask questions about their backgrounds and experiences in an effort to weed out any prospective jurors who may be biased.
The trial is expected to last up to six weeks.
03:11 PM BST
Poundland offers jobs to 200 former Wilko staff
Poundland has offered jobs to more than 200 former Wilko workers as it continues to open stores bought by administrators for the collapsed retailer.
Last month, Poundland bought up to 71 Wilko stores from administrator PwC following the collapse of the high street chain.
All of the stores will be relaunched under the Poundland brand, with the first 10 shops reopening their doors last weekend.
No workers were directly transferred to Poundland as part of the rescue deal, but the discount chain encouraged former Wilko staff to apply for roles and said it would “prioritise” them for positions at the stores.
Today, Poundland said it had made job offers to more than 200 former Wilko staff, with that “number increasing day-by-day”. Wilko’s collapse put 12,500 jobs at risk.
It came as the Pepco-owned business revealed the next 10 former Wilko stores it will reopen under their brand.
Rescued stores in Melton Mowbray, Matlock, Chepstow, Nottingham, Worcester, Ellesmere Port, Brigg, Redruth, Ferndown and Pontypool are to open on Saturday October 7.
02:53 PM BST
Jury selection begins in trial of Sam Bankman-Fried
Sam Bankman Fried is poised to go on trial on fraud and conspiracy charges related to the FTX, the now-bankrupt cryptocurrency exchange he founded and led.
Jury selection is underway but the process can take some time, so it is unclear when we will begin hearing opening statements.
We will keep you up to date when anything happens.
02:34 PM BST
Wall Street slumps as US bond yields hit 16-year high
US stock markets have slumped after the 10-year and 30-year yield on US Treasuries hit 16-year highs amid fears that interest rates will remain higher for longer.
The Dow Jones Industrial Average fell 114.51 points, or 0.3pc, at the opening bell to 33,318.84.
The S&P 500 opened lower by 18.64 points, or 0.4pc, at 4,269.75, while the Nasdaq Composite dropped 78.09 points, or 0.6pc, to 13,229.68.
02:26 PM BST
Low cost airlines reveal rising passengers
Ryanair and Wizz Air have revealed growing passenger numbers as demand for cheap flights continues to recover after the pandemic.
Ryanair carried 17.9m passengers last month, an increase of 9pc on the previous year, the company revealed.
Europe’s largest low-cost airline ran 97,350 flights during the month.
Meanwhile, Hungarian carrier Wizz Air transported 5.5m passengers, representing a 21.1pc increase compared to the same month in 2022.
02:04 PM BST
Train and Tube strikes: Dates and services affected
Tube strikes may have been called off but there is still industrial action taking place on the railways this week.
01:52 PM BST
Stock markets slump as US bond yields surge
Stock markets have turned negative amid a growing march in bond yields.
The US 30-year yield rose to the highest level since 2007, deepening a bond sell-off driven by expectations the Federal Reserve will keep interest rates higher for longer.
It rose as much as seven basis points to 4.858pc, exceeding its 2010 high of 4.8559pc. Meanwhile, the 10-year Treasury yield has risen to a fresh 16-year high.
Why does this matter? As yields go up on bonds, which are backed by governments and thus considered safe in developed nations, then riskier stocks become less attractive.
The FTSE 100 has fallen 0.3pc on the day, while the FTSE 250 has dropped 1pc. The CAC 40 in Paris and the Dax in Frankfurt have both dropped about 0.8pc.
New day, same song: US 10y yields hit fresh 16y high w/all of the increase is due to a rise in real yields. US 10y nominal yields now at 4.73%, 10y real yields (nominal yields-10y inflation expectations) at 2.37%. pic.twitter.com/fyzoH4CXvf
— Holger Zschaepitz (@Schuldensuehner) October 3, 2023
01:24 PM BST
London Underground 'will continue to work closely with unions'
After Tube strikes were called off for Wednesday and Friday, London Underground’s director of customer operations Nick Dent said:
We are pleased that the RMT has withdrawn its planned industrial action this week and that the dispute on our change proposals in stations is now resolved.
This is good news for London and we will continue to work closely with our trade unions as we evolve London Underground to ensure we can continue to support the capital in the most effective way.
01:00 PM BST
Hunt says he would cut business taxes first
Chancellor Jeremy Hunt has said he would choose cutting taxes for businesses before any other area, but cautioned “at the moment, we are not in a position to have that discussion”.
Asked at a fringe event at the Tory Party conference, hosted by the Centre of Policy Studies, what tax cut he would choose first if he had spare money, Mr Hunt said:
If I was putting on my finance minister hat, my first priority - and I’ve said this many times - would be business tax cuts because, you know, the job of a Conservative Government is to make the economy competitive, to make money for the things we care about, for our public services and so on.
Obviously, in the run up to an election, I would love to do a tax cut that ordinary people felt to show people our values, and we believe that money is better when it stays in people’s pockets than when the State takes it away.
At the moment, we are not in a position to have that discussion or even, you know, have that sort of what-if kind of scenario in our minds, because any tax cut would be inflationary.
He insisted it “would be absolutely crazy to give people money with a tax cut in one hand and then for them to see all that money taken away by inflation going back up in the other, so it’s not a time we can discuss that”.
12:50 PM BST
RMT to seek concessions around pensions
The RMT said it was calling off the Tube strikes after settling key elements of its dispute over pay and changes to working practices - but said its dispute was not yet fully resolved.
RMT general secretary Mick Lynch said:
I congratulate all our members who were prepared to take strike action and our negotiations team for securing this victory in our tube dispute.
Without the unity and industrial power of our members, there is no way we would have been able to make the progress we have.
We still remain in dispute over outstanding issues around pensions and working agreements and will continue to pursue a negotiated settlement.
12:40 PM BST
Tube strikes called off
Two days of strikes across the London Underground have been called off at the eleventh hour after unions claimed to have won concessions.
Tube workers will no longer walk out on Wednesday and Friday in their dispute over pay and changes to working practices.
Bosses at the RMT said the union has managed to save key jobs, prevent detrimental changes to rosters and secure protection of earnings around changes to pay grading.
General secretary Mick Lynch said: “I congratulate all our members who were prepared to take strike action and our negotiations team for securing this victory in our tube dispute.
“Without the unity and industrial power of our members, there is no way we would have been able to make the progress we have.
“We still remain in dispute over outstanding issues around pensions and working agreements and will continue to pursue a negotiated settlement.”
🚇 #TubeStrike suspended after RMT win concessions:
Strike action on London Underground has been suspended following significant progress made by @RMTunion negotiators and London Underground Limited (LUL) representatives. 🧵 pic.twitter.com/zQWPyEfS3z
— RMT (@RMTunion) October 3, 2023
12:39 PM BST
Wall Street on track to fall as Carney predicts another US interest rate rise
US stock markets are poised to fall at the opening bell as the prospects of an extended restrictive monetary policy kept Treasury yields elevated.
The 30-year Treasury yield has surged to its highest level since 2007 at 4.856pc, putting pressure on stocks.
It comes after former Bank of England governor Mark Carney said he expects the US Federal Reserve will raise interest rates again before the end of the year to try and tame inflation.
He told Bloomberg: “I expect that there will be a bit more tightening by the Fed, probably an additional rate increase this year.”
Investors will also be awaiting the latest Job Openings and Labor Turnover Survey (JOLTS), due at 2pm UK time for an indication on how the economy is doing.
In premarket trading, the Dow Jones Industrial Average was down 0.3pc, the S&P 500 was down 0.4pc and the Nasdaq 100 was down 0.5pc.
12:13 PM BST
What Pret's sandwiches cost when you make them at home
Most of us are familiar with the sinking feeling that comes with picking up a high-street sandwich for lunch.
A stark reminder of the price of convenience came this week, with news of Pret’s recent price rises.
Off the back of the price hikes, that daily baguette looks increasingly hard to justify so Silvana Franco went into her kitchen to find out what they really cost.
12:00 PM BST
PM insists he is 'unashamedly pro-business' amid HS2 speculation
Rishi Sunak has tweeted a picture of himself meeting business leaders at the Conservative Party Conference in Manchester after he faced questions about whether he is about to scrap the northern leg of HS2.
I’m unashamedly pro-business.
So I enjoyed meeting small businesses at #CPC23 today.
I know the energy, effort and courage it takes to set up a business - nothing grows our economy quite like them.@Conservatives will always be the Party of enterprise and small business. pic.twitter.com/FhcgQjEr2M
— Rishi Sunak (@RishiSunak) October 3, 2023
11:45 AM BST
Oil prices hit by stronger dollar
Oil prices have fallen amid concerns that US interest rates will remain higher for longer, strengthening the dollar.
Brent crude, the international benchmark, has fallen by 0.4pc toward $90 a barrel while US-produced West Texas Intermediate has fallen 0.3pc near $88.
The dollar has strengthened amid a global rout in bonds and shares. A stronger dollar makes it more expensive to buy crude, which is priced in the US currency.
Brent has dropped around 7.7pc since hitting highs above $97 last week.
Warren Patterson, head of commodities strategy at ING, said:
Oil’s downward move has very little to do with fundamentals and all to do with rising Treasury yields and the stronger US dollar.
I still think oil has some room to move higher. Fundamentally, it is looking constructive.
11:28 AM BST
C-3PO's head from Star Wars expected to fetch up to £1m in auction of film props
The head of Star Wars droid C-3PO could fetch up to £1m in a major auction of film props and costumes next month.
Our reporter James Warrington has the details:
The light-up head, worn by actor Anthony Daniels to play C-3PO in Star Wars: A New Hope, is likely to be the most sought-after lot with an estimated sale price of between £500,000 and £1m.
A treasure trove of more than 1,800 items is being put up for sale by entertainment memorabilia auctioneer Propstore at its annual live auction.
It will include products from films including Titanic, James Bond and Indiana Jones.
Organisers hope the total take from the event, which will take place in London from November 9 to November 12, will be more than £12m.
11:10 AM BST
Inside the collapse of Sam Bankman-Fried’s crypto empire
Sam Bankman-Fried’s fraud trial kicks off today marking the culmination of a year-long legal saga stemming from the dramatic collapse of the FTX cryptocurrency exchange he founded.
It comes as Michael Lewis’s biography of the former FTX chief is released today, offering a riveting story full of oddballs and odder decisions.
Read Steven Poole’s review of Going Infinite by Michael Lewis. Jury selection for Mr Bankman-Fried’s trial begins at around 2.30pm UK time.
10:53 AM BST
Pound hits six and a half-month low as food inflation falls
The pound has slumped to its lowest level since March as figures showed food inflation falling in Britain.
Sterling has dropped as much as 0.4pc to head in the direction of $1.20 as data from the British Retail Consortium showed grocery prices dropped 0.1pc between August and September. It was last down less than 0.1pc.
The data adds to expectations that the Bank of England will not need to raise interest rates again to bring down inflation.
It comes as sterling was already under pressure from a strengthening dollar amid expectations that rates will need to stay higher for longer in the US.
10:37 AM BST
Severn Trent shares fall after gas explosion caused by lightning strike
Severn Trent shares have tumbled today after a large gas explosion at its recycling plant in Oxfordshire which was caused by a lightning strike.
Video and images shared on social media showed a fireball lighting the sky after the incident at the Severn Trent Green Power Plant at Cassington, north of Oxford.
The company’s shares have fallen 1.2pc today after bosses confirmed the fire had occurred when a digester tank was struck by lightning at around 7.20pm, causing gases within the tank to ignite.
10:24 AM BST
Work to be done to bring inflation down, warns ECB economist
The European Central Bank’s chief economist has indicated that interest rates on the continent may move past their already record levels of 4pc.
Philip Lane told a conference in Vilnius, Lithuania, that getting inflation from 4.3pc to the ECB’s 2pc target will take time.
Price increases are still well above 2pc, we are not at the inflation target yet and therefore there is still work to be done in terms of bringing inflation down.
We don’t expect the current low gas price to be maintained, we do expect to see gas prices go up from where they are now.
Energy has been such a volatile component, it’s going to be very important to us to keep an eye on energy in the coming months and years.
10:06 AM BST
FTSE 100 boosted by weaker pound
UK’s exporter-heavy FTSE 100 edged higher as a weaker pound boosted dollar earners, though shares of online fashion retailer Boohoo and food chain Greggs fell on disappointing earnings updates.
The FTSE 100 added 0.4pc, recovering from opening losses as the sterling fell to a new six and a half-month low against the dollar amid concerns about the economic outlook and expectations that the Bank of England might be done with interest rate rises.
Shares of international firms that draw a large part of their revenue in dollars, including HSBC, AstraZeneca and Unilever, rose in the range of 0.6pc and 1.8pc.
Broadly, global stocks have come under pressure as US Treasury yields stayed elevated and the dollar surged on expectations of higher US interest rates for longer period.
Giles Coghlan, chief market analyst at HYCM, said: “As soon as we start to see some negative economic data news, the dollars gains can retrace quite quickly, but for now it does look like more upside in the dollar.”
09:46 AM BST
Tortilla dips to loss amid 'uninspiring weather'
Tortilla Mexican Grill slipped to a loss for the past six months as it witnessed a “quiet” summer.
However, the fast-casual restaurant chain held firm on its trading guidance for the year as sales continued to grow.
The business, which has 85 restaurants including under the Chilango brand, revealed that its revenues increased by 22pc to £32.7m for the six months to July 2, compared with a year earlier.
Tortilla said its summer trading was “unsurprisingly quiet, as seen in the wider market”, which it linked to increased demand for overseas holidays, ongoing industrial action and “uninspiring weather”.
Despite recent growth, the company swung to a £600,000 pre-tax loss for the period, compared with a roughly £300,000 pre-tax profit a year earlier.
09:26 AM BST
Gas prices fall as temperature warms up
European gas prices have dropped as unusually warm weather hammers demand.
The contract for delivery in November declined as much as 6.7pc and has dropped more than 10pc over the past three sessions.
Temperatures are forecast to rise above 20C from London to Frankfurt to Paris by the weekend, according to Maxar Technologies.
It comes as storage sites keep adding the fuel, with stocks about 96pc full on average, according to data from Gas Infrastructure Europe.
Dutch front-month futures, the continent’s pricing benchmark, were last down 5.6pc to a little over €37 per megawatt hour.
09:06 AM BST
Turkish inflation increases at slower pace to 61.5pc
Turkey’s annual inflation rate held steady near 60pc last month, official data showed, offering the first evidence that President Recep Tayyip Erdogan’s economic policy U-turn was working.
The TUIK state statistics agency said consumer prices rose by 61.5 percent over a 12-month period ending in September.
The annual rate stood at 58.9 percent in August and 47.8 percent in July.
The month-on-month increase in prices also slowed to 4.8 percent from 9.1 percent in August and 9.5 percent in July.
The data suggest that Turkey’s inflation rate is starting to peak after Erdogan signed off on a series of sharp interest rate hikes that have taken the policy rate to 30 percent from 8.5 percent in four months.
Capital Economics analyst William Jackson said: “The small (by Turkey’s recent standards) rise in inflation to 61.5pc last month, from 58.9pc in August, provides the first signs that the inflation spike is close to levelling off.”.
Erdogan had been a lifelong supporter of the unorthodox economic theory that high interest rates cause - rather than cure - inflation.
— TRADING ECONOMICS (@tEconomics) October 3, 2023
08:51 AM BST
Rouble wobbles near 100 to the dollar
The Russian rouble weakened past the symbolic threshold of 100 to the dollar before recovering slightly in early trading as Moscow battles a shrinking current account surplus.
The rouble’s last tumble into triple digits in August led the Bank of Russia to make an emergency 350-basis-point rate hike to 12pc and authorities discussed reintroducing controls to buttress the currency.
The rouble was 0.2pc stronger against the dollar at 99.43, having hit 100.2550 in early trade, a more than seven-week low.
It was down 0.1pc against the pound at 120.10 and had gained 0.6pc to trade at 104.29 versus the euro.
Brent crude oil, a global benchmark for Russia’s main export, was down 0.8pc to touch $90 a barrel, its weakest in almost a month, but still well above its 2023 average.
The Russian currency tends to come under pressure at the start of each month, after losing the support of a favourable month-end tax period that usually sees exporters convert FX revenues to meet local liabilities.
08:30 AM BST
FTSE 100 weighed down by stronger dollar
UK-listed stocks opened lower as they were weighed down by energy and mining companies as prices of most commodities fell due to a stronger dollar.
The internationally-focused FTSE 100 was down 0.1pc as industrial metal miners slipped 0.4pc, while precious metal miners shed 1.1pc, tracking prices of metals, including copper and gold.
The heavyweight energy sector fell 0.1pc as oil prices retreated about 0.5pc.
The dollar reached fresh 11-month highs against major peers after the US government avoided a partial shutdown while improving manufacturing data fuelled expectations the Federal Reserve will keep rates higher for longer.
Boohoo dropped 10pc as the online fashion retailer said its revenue fell 17pc in the six months to August and warned of a similar decline for the full year due to a slower-than-expected recovery in sales volumes.
The more domestically-focussed FTSE 250 was down by 0.4pc.
08:15 AM BST
PM dodged my questions on HS2, says construction boss
The boss of one of the companies involved in building HS2 has claimed the Prime Minister dodged his question on whether the Birmingham to Manchester leg of the high-speed rail line will be scrapped.
Mark Reynolds, chief executive of Mace Group, which is building new stations in Birmingham and at London Euston, told BBC Radio 4’s Today programme:
When it comes to High Speed 2, quite frankly, we’re hearing nothing and everything, people are speaking about speculation that it’s going to be cancelled, seems to be true.
I have actually spoken to the Prime Minister and his adviser and he dodged the question and moved on very quickly.
On how he will feel if Rishi Sunak confirms that the leg between Birmingham and Manchester is scrapped, Mr Reynolds added: “It’s one of those biggest opportunities we’ve missed in a lifetime, but actually what it does do is undermine investment in the UK, and the talk at the conference is all about growth with foreign investment, but actually foreign investments are not going to come if we do not continue to invest in our infrastructure so that we can create those jobs, homes and places for people to live and work.”
08:06 AM BST
UK markets fall at the open
The FTSE 100 edged lower amid expectations that interest rates will remain higher for longer to battle inflation.
The UK’s blue chip index edged down less than 0.1pc to 7,507.51 while the midcap FTSE 250 slumped 0.5pc to 17,894.55.
It comes after Federal Reserve vice chairman Michael Barr said Monday the biggest question before central bankers was how long to leave rates elevated, while policymaker Michelle Bowman reiterated her call for multiple hikes.
08:00 AM BST
Costs of HS2 are 'enormous', says PM
Rishi Sunak said the costs of the HS2 high-speed railway project have escalated and are now “enormous”.
He has said he has not yet made a decision on whether the project should run to Manchester as had originally been expected.
He told Times Radio:
It’s clear that the costs of this programme has escalated far beyond what anyone thought at the beginning.
I know there’s lots of speculation on it, but what I would say is I’ll approach this in the same way I approach everything in this job, I will take the time to look at it properly, get across the detail and then decide what’s right for the country.
The sums involved are enormous and it’s right that the Prime Minister takes proper care over it.
It’s obviously not my money - it’s taxpayers’ money and we should make the right decisions on these things.
07:55 AM BST
AstraZeneca agrees £351m legal settlements over heartburn drugs
AstraZeneca has agreed to pay $425m (£351m) to settle product liability lawsuits in the US related to heartburn and stomach acid treatments Nexium and Prilosec, which some users said caused kidney damage.
The settlement resolves litigation in New Jersey and Delaware courts, the company said. A single case is still pending in Louisiana, with a trial set for next year.
Anglo-Swedish drug giant AstraZeneca said it continues to believe the claims are without merit and admits no wrongdoing. It said the settlement would avoid costly legal procedures.
Heartburn medications have been the subject of a range of concerns in recent years. GSK in June settled litigation with a man who claimed the drugmaker’s Zantac treatment caused his cancer.
07:47 AM BST
HS2 was 'ill-conceived' says former HS1 chairman
Rob Holden, who was chairman of the HS1 train line project and chief executive of Crossrail, has said the HS2 high-speed railway project “was ill-conceived”.
He told BBC Radio 4’s Today programme:
I think originally this this project was ill-conceived and in fact it was designed to operate at 400kmph (249mph) - kilometres per hour - albeit I now see it’s been reduced to 360kmph (224mph).
The cost of that relative to building a railway like HS1 at 300kph (186mph) - that’s most lines in continental Europe - is exponentially higher, simply because of the engineering, the environmental mitigations are very, very expensive.
On HS2’s ballooning costs, he added:
I mean that arises because of the extra commitments which are made during the process, very often the costs rise because the design of a mega project like HS2 is not as complete as it should be.
There’s no doubt that the costs have risen and that speaks for a lack of control.
But the overall cost of the railway should never have been as much as it was, as I say because it was designed to operate at a speed which is not appropriate for this country.
07:45 AM BST
PM refuses to confirm whether HS2 will be scrapped
Here is what Rishi Sunak told BBC Breakfast in Manchester for the Conservative Party conference:
I know there’s a lot of speculation on HS2.
All I would say is the way I approach this job, I take a look at the facts, I take my time to get the decision right on behalf of the country - whatever it might be - and that’s what I’ll do with this, as I do with everything else.
As you saw with my recent decision on net zero, when I make a decision that I think is important of course I go and explain that to everyone, explain why I’m doing what I’m doing, why I thought it was right to change direction there.
If that happens and is necessary, of course that’s what I’ll do.
07:39 AM BST
Sunak: I will look at the facts on HS2
Rishi Sunak has said he will look at the facts on HS2, insisting he will not be forced into a premature decision on the rail link.
The Telegraph understands that the Prime Minister has decided to scrap the rail line’s leg from Birmingham to Manchester.
Mr Sunak told the BBC he was “backing people in the Midlands and the North” and said he wanted to “save them money” with schemes like delaying the ban on new petrol car sales.
07:28 AM BST
Greggs sales jump as it adds more stores
Greggs has revealed that sales jumped by over a fifth in the latest quarter as it also reported cost inflation “has eased” across the business.
The high street bakery chain told shareholders that total sales increased by 20.8pc for the 13 weeks to September 30, compared with the same period last year.
The group said this came after like-for-like growth of 14.2pc for the quarter across its company-managed shops, as it also benefited from its continued expansion.
Greggs said it has seen 82 net store openings so far this year, taking it to 2,410 outlets by the end of September.
It added that it expects between 135 and 145 net openings for the whole of 2023.
07:15 AM BST
Boohoo cuts prices as demand wanes
Online fashion retailer Boohoo has cut its revenue forecasts as it said it was being forced to cut prices amid weakening consumer demand.
The company, which owns PrettyLittleThing and Karen Millen among its brands, reported revenues of £729.1m in the six months to the end of August, down 17pc compared to the previous year and down 19pc in the UK.
It warned that sales for the year will likely drop 12pc to 17pc. It is working on a plan to implement £125m of cost savings to boost profitability.
The group reported pre-tax losses widening to £26.4m from £15.2m a year ago.
06:46 AM BST
Food prices fall for first time in two years amid 'fierce' supermarket competition
Food prices have fallen for the first time in more than two years as fierce competition between supermarkets drives down shopping bills.
Prices dropped 0.1pc between August and September, according to the British Retail Consortium (BRC), marking the first monthly decline since July 2021.
Shoppers were able to spend less on dairy, fish and vegetables last month. The BRC said intense competition between supermarkets was behind the fall in prices.
Supermarkets have announced more than 30 rounds of price cuts since the start of summer across hundreds of products, according to Telegraph analysis.
Staples such as sausages, pasta and potatoes have been the target of cuts, while more luxurious items such as smoked salmon, avocados and kale have also been reduced.
While the cost of a typical shopping basket is falling on a monthly basis, prices are still higher than they were this time last year.
Food still cost 9.9pc more than it did 12 months ago on average, the BRC said, though this is down from 11.5pc in August.
Helen Dickinson, chief executive of the BRC, said: “Food prices dropped on the previous month for the first time in over two years because of fierce competition between retailers.”
Beyond supermarkets, general shop inflation eased to 4.4pc in September, down from 4.7pc in August, according to the British Retail Consortium (BRC).
Chief executive Helen Dickinson said: “We expect shop price inflation to continue to fall over the rest of the year, however there are still many risks to this trend – high interest rates, climbing oil prices, global shortages of sugar, as well as the supply chain disruption from the war in Ukraine.”
NielsenIQ, which compiled the figures with the BRC, said retailers were under pressure to continue cutting prices in the run-up to the crucial Christmas period.
Mike Watkins, at NielsenIQ, said:
Over half of households are still feeling that they are significantly impacted by the continued increases in cost of living.
So, it will be important for retail sales to keep momentum which means we can expect more price cuts and increased promotional activity across all retail channels.
06:40 AM BST
Thanks for joining us. Food prices have fallen compared to the previous month for the first time in two years, bringing grocery inflation down to single digits, according to industry figures.
Food inflation decelerated to 9.9pc in September, a significant drop from 11.5pc in August, according to the British Retail Consortium Shop Price Index. It is at its lowest point since August last year.
5 things to start your day
1) John Lewis considers part-time chairman role as Sharon White prepares to stand down | Partnership expected to change requirements of top role to help attract high-quality talent
2) Donald Trump offered to sit out presidential election for $5bn, book claims | Excerpts from new book claim crypto tycoon explored possibility of buying off former president
3) AI will let people live to 100 and work shorter weeks, says JP Morgan boss | Jamie Dimon highlights potential of new technology amid fears over existential threat
4) ‘John Lewis was our ‘go to’ store – not anymore’: Telegraph readers react to Sharon White’s decision to step down | Readers complain quality of service offered by the group has gone downhill
5) TalkTalk sells business division to shell company as it prepares to split in three | The deal comes amid a scramble to raise cash to pay down the group’s £1.1bn debt pile
What happened overnight
Asian markets declined following a mixed session on Wall Street, where buying was pressured by rising bond yields.
Hong Kong’s Hang Seng dropped more than 3pc as investors unloaded property shares. However, China Evergrande was up nearly 16pc as it resumed trading.
Its shares were suspended last week as the troubled real estate developer announced that its chairman was under investigation. Earlier in the session it’s shares soared more than 60pc.
By midday, the Hang Seng was down 3pc at 17,278.37. Markets in mainland China and South Korea remained closed for holidays.
Tokyo’s Nikkei 225 index fell 1.5pc to 31,282.32, while Australia’s S&P/ASX 200 skidded 1.1pc to 6,953.60. India’s Sensex declined 0.7pc to 65,408.18.
Bangkok’s SET was down 1.5pc and Taiwan’s Taiex fell 0.3pc.
Wall Street stocks ended lower on Monday amid trader concerns that the Federal Reserve will need to hold interest rates higher for longer.
The Dow Jones Industrial Average fell 74.15 points or 0.22pc to finish at 33,433.35.
The S&P 500 gained 0.34 points or 0.01pc to close at 4,288.39, while the Nasdaq Composite added 88.45 points or 0.67pc at 13,307.77.
The yield on the 10-year Treasury climbed again Monday, up to 4.67pc from 4.58pc late Friday, and is near its highest level since 2007.