Latest News

Businesses demand end to ‘flip-flopping’ as Rishi Sunak named PM – live updates

0

Rishi Sunak prime minister economy pound businesses recession inflation – Jason Alden/Bloomberg

Businesses have demanded an end to “flip-flopping” in Government after Rishi Sunak was named as the new prime minister.

Shevaun Haviland, director general of the British Chambers of Commerce, said the political and economic uncertainty of recent months had been “hugely damaging” and “must now come to an end”.

She said: “The new Prime Minister must be a steady hand on the tiller to see the economy through the challenging conditions ahead.

“We cannot afford to see any more flip-flopping on policies – the UK’s businesses need a sustainable, long-term economic plan they can believe in.”

The BCC said it would write to the Prime Minister to urge him to set out fully-costed plans to tackle the major issues facing businesses.

It called for further clarity on energy support for companies, a solution to the “extremely tight” labour market and a strategy to boost Britain’s international trade and exports.

Follow the latest updates below.

02:18 PM

Make UK: We have a PM who understands manufacturing

Stephen Phipson, chief executive of manufacturing industry body Make UK, says:

We look forward to welcoming the new leader of the Conservative party to Downing Street. We have had a longstanding constructive relationship with Rishi Sunak during his time as Chancellor where we worked together on support for manufacturers during the pandemic and the important investment initiatives such as Super Deduction.

We will now have a Prime Minister who understands the critical importance of manufacturing, a sector that delivers millions of highly skilled jobs.

Britain’s manufacturers are an example of a growing success story, contributing billions of pounds to GDP every year playing a vital part in implementing the Government’s levelling up agenda, creating well-paid jobs where they are most needed around the whole of the country.

It is now vital that the new Prime Minister moves quickly through the gears to develop a plan that fires up the economy, provides stability and restores confidence. Manufacturing can and must be at the heart of this thinking.

02:10 PM

Pound steady and bonds hold gains as Sunak named PM

The pound is steady while gilts have held their gains after Rishi Sunak was confirmed as the new prime minister.

Sterling is trading at around $1.129 – broadly flat on the day. The yield on 10-year bonds was down 24 basis points at 3.82pc.

Rishi Sunak is due to address MPs at 2.30pm.

02:03 PM

Rishi Sunak named next Prime Minister

Rishi Sunak will be the UK’s next prime minister after Penny Mordaunt conceded the contest at the last minute.

Ms Mordaunt tweeted a statement saying Mr Sunak has her full support. That was just two minutes before an announcement on whether the candidates had the support of 100 MPs was due.

This content is not available due to your privacy preferences.

Update your settings here to see it.

01:56 PM

Oil dips as China fears hit markets

Oil declined as lacklustre economic figures from China and a tightening of Xi Jinping’s control dented sentiment across global markets.

Benchmark Brent crude fell below $92 a barrel, while West Texas Intermediate slipped near $83 as investors digested a raft of delayed Chinese economic data that showed a mixed recovery during the third quarter.

A stronger dollar also added to headwinds, making commodities priced in the currency less attractive, while European economic figures pointed to contraction, boosting the likelihood of recession in the region.

01:24 PM

Stocks plunge on fears for Chinese economy as Xi surrounds himself with zero-Covid acolytes

Chinese stocks plunged on Monday as Xi Jinping tightened his grip on power and official data signalled the economy would expand far less than expected amid a zero-Covid policy that has crippled growth.

Szu Ping Chan has more:

The benchmark Shanghai Composite Index fell 2pc, while Hong Kong’s Hang Seng Index slumped more than 6pc to its lowest level since the depths of the Great Recession in 2009 after China’s president appointed loyalists to Communist Party’s top ranks.

It came as fresh figures showed the economy grew by 3.9pc in the third quarter compared with a year ago. While this was stronger than the 3.3pc predicted by analysts, it leaves the economy far short of a 5.5pc annual growth target.

Mr Xi’s choice of officials including Li Qiang, who oversaw a grinding two-month lockdown in Shanghai this year, suggests the world’s second largest economy will continue to be hampered by repeated lockdowns.

The International Monetary Fund (IMF) warned this month that the Chinese economy would expand by just 3.2pc this year amid strict Covid controls and an ongoing property crisis that has triggered a wave of debt defaults.

Read Szu’s full story here

12:46 PM

Soaring costs bring back 1970s shopping habits

UK 1970s cost-of-living crisis – PA Wire

Consumers across Europe are resorting to shopping habits not since since the 1970s and 80s as they grapple with surging costs.

A wave of “inflation fatigue” across the continent is forcing a range of “coping behaviors” including missing meals, switching to discount grocery chains, buying private-label items and reduced products, as well as out-of-date goods.

That’s according to to market research firm IRI, which found that nearly three-quarters of European consumers are cutting back spending on everyday items, including food, to make ends meet amid a worsening cost-of-living crisis.

A new survey shows that 71pc of consumers across six key markets in Europe have already made significant changes to how they shop as they battle to cope with inflation that is reaching levels not seen in four decades.

The report by also revealed that 58pc of consumers have already cut down on essentials, with 35pc dipping into their personal savings and taking out loans to pay bills.

Ananda Roy at IRI said: “It’s evident that consumers’ willingness to spend is suffering and the direction of travel is likely to worsen – with the likelihood of further sharp price rises given high input costs and volatile energy price.”

12:14 PM

Wall Street set to slide as China worries sour mood

Wall Street looks set to start the week in the red as worries about China’s economy hurt sentiment around the globe.

US-listed shares of Chinese companies such as Alibaba and Baidu led the losses in pre-market trading, down 12.5pc and 11.7pc respectively.

It comes after President Xi Jinping handed key economic posts to loyalists who back his zero-Covid strategy, fuelling fears that growth will be sacrificed for ideology-driven policies.

Futures tracking the S&P 500 fell 0.7pc, while the Dow Jones was down 0.6pc. The tech-heavy Nasdaq fell 0.8pc.

11:52 AM

Capital Economics: New PM will have to fix public finances

Ruth Gregory, senior UK economist at Capital Economics, warns the new PM is facing a tough time ahead:

Whichever way events unfold over the next few days, it seems clear the next Prime Minister (Rishi Sunak or Penny Mordaunt) will have to work hard to restore credibility in the eyes of the markets by revealing measures to fill the hole in the public finances.

That leaves the risks to our forecast that the economy will enter a recession involving a peak-to-trough fall in GDP of around 2pc skewed to the downside.

11:40 AM

Paris dims the lights as blackouts threaten disaster for Macron

Paris Macron lights energy – Benjamin Girette/Bloomberg

The City of Light’s twinkle has dimmed a little ahead of a perilous winter for the French economy, writes Tom Rees.

Paris is turning off the Eiffel Tower’s flashing lightshow one hour earlier than normal as the city scrambles to cut energy consumption. The mayor is also lowering the lighting at other public monuments at 10pm, and the thermostat is being turned down in public buildings and swimming pools.

As a chilly snap heralds the arrival of autumn in the French capital, the mood among energy suppliers and politicians is one of deepening concern – and regret at years wasted. Some experts believe this winter even risks being more troubling for Paris than Berlin.

Read Tom’s full report from Paris here.

11:08 AM

China’s exports to Russia jump by more than a fifth

China’s exports to Russia surged at a double-digit pace for the third consecutive month in September, showing Beijing is strengthening its ties with the Kremlin even as the rest of the world turns its back.

Shipments of Chinese goods to Russia rose 21.2pc from a year earlier in dollar terms, slowing from a 26.5% increase in August yet outperforming China’s overall export growth of 5.7pc by a large margin, Reuters calculations show.

Western countries are cutting trade with Russia in the aftermath of its invasion of Ukraine, while demand for Chinese goods in major economies is weakening amid an economic slowdown.

Top Chinese exports to Russia included smartphones, generator sets, excavators and containers.

Imports from Russia jumped 55.2pc, partly driven by a 22pc annual rise in oil imports, customs data showed. Oil supplies from Russia totalled 7.46m tonnes, equivalent to 1.82m barrels per day.

10:49 AM

Stanlow oil refinery workers staged unofficial walkout

Workers at the Stanlow oil refinery are said to have staged an unofficial walkout on Friday as industrial action continues to spread across the country.

The strike was among contractors, who returned this morning and are seeking a resolution, Bloomberg reports.

Stanlow, which is operated by Essar Oil, produces around a sixth of Britain’s road fuel. It came close to collapse last year as it struggled to repay a huge tax bill that was deferred during the pandemic.

Contractors are currently on the site while a key petrol-making unit, known as an FCC, undergoes planned maintenance.

10:23 AM

Surging inflation triggers biggest wave of profit warnings since financial crisis

There’s more data highlighting the economic doom and gloom. Hannah Boland has the details:

The cost-of-living surge is inflicting the greatest pain on businesses since the financial crisis after the number of companies warning about their profits jumped to a 14-year high.

New figures from EY-Parthenon show there were 86 profit warnings at UK-listed companies in the three months to the end of September, up more than two thirds from last summer and the highest level for the period since 2008.

The data suggests that 28 listed companies are in the “danger zone”, having warned over profits three times in the past year.

Typically, a fifth of businesses which issue three profit warnings either collapse into administration or are snapped up within a year of the third warning.

A separate survey by Deloitte revealed that consumer confidence has dropped to the lowest level since records began in 2011, falling for a fifth consecutive quarter to -20pc. Consumers said they are spending less, are more worried about debt, and are almost as concerned about the wider economic outlook as at the start of the Covid pandemic.

A fifth of people said they are selling second-hand items to raise cash.

Meanwhile, another survey by the accountant BDO found that a fifth of medium-sized companies believe the present crisis will be more challenging than the Covid pandemic, Brexit or the 2008 banking crash.

Read Hannah’s full story here

09:59 AM

Reaction: UK definitely in recession

Simon Harvey at Monex Europe echoes S&P Global’s warnings that the UK is all but guaranteed to be in recession already.

This content is not available due to your privacy preferences.

Update your settings here to see it.

09:50 AM

Reaction: UK PMIs are ‘dreadful’

FX analyst Viraj Patel has branded the latest economic data “dreadful” and wished Rishi Sunak good luck as he inherits an economy heading for recession.

This content is not available due to your privacy preferences.

Update your settings here to see it.

09:45 AM

UK heading for recession as downturn deepens

The UK is almost certainly in recession after new data showed the economic downturn deepened in October.

Private sector output declined for the third month running, with new orders decreasing at the sharpest pace since January 2021.

Companies also reported a steep fall in business expectations for the year ahead, with optimism at its lowest since the early days of the pandemic in April 2020.

Intense inflationary pressures, escalating political uncertainty and rising interest rates were the most commonly cited reasons for downbeat sentiment in October.

S&P Global’s Composite PMI fell to 47.2, down from 49.1 the previous month.

Chris Williamson, chief business economist at S&P Global, said:

October’s flash PMI data showed the pace of economic decline gathering momentum after the recent political and financial market upheavals.

The heightened political and economic uncertainty has caused business activity to fall at a rate not seen since the global financial crisis in 2009 if pandemic lockdown months are excluded.

GDP therefore looks certain to fall in the fourth quarter after a likely third quarter contraction, meaning the UK is in recession

09:17 AM

Mike Ashley lifts stake in Hugo Boss

Hugo Boss Mike Ashley – REUTERS/Valentyn Ogirenko/File Photo

Mike Ashley is continuing his strategy of taking bets on rivals as he increased his stake in fashion brand Hugo Boss.

The tycoon’s Frasers Group said it now holds a stake of 32.8pc in the German luxury brand, which is valued at €960m (£833m).

It comes after the Sunday Telegraph revealed that Mr Ashley also raised his position in Asos to more than 5pc, making it one of the top five investors in the troubled online retailer.

Shares in Asos surged nearly 7pc in early trading, while Hugo Boss was up slightly.

Read more on this story: Mike Ashley snaps up stake in struggling Asos

08:38 AM

FTSE risers and fallers

After inching higher at the open, the FTSE 100 has now slid firmly into the red as a stronger pound and weaker oil prices weighed.

The blue-chip index fell 0.5pc as the pound jumped and bond yields slid as Rishi Sunak looks set to become the next prime minister.

Energy and mining stocks including Shell, Glencore and Rio Tinto lost ground as commodity prices fell back. Financial stocks including Prudential and HSBC also fell sharply as traders scaled back bets on interest rate rises.

The domestically-focused FTSE 250 gained 0.5pc as investors took comfort from the political developments.

08:25 AM

Guy Hands: Britain ‘doomed’ unless we renegotiate Brexit

Guy Hands Terra Firma Tory Brexit – Jason Alden/Bloomberg

Guy Hands, private equity tycoon and Tory party supporter, has launched a blistering attack on the Government over its handling of the economy.

He told BBC Radio 4’s Today programme that the Government had put the UK on the path of becoming the “sick man of Europe”.

He urged ministers to renegotiate the Brexit deal, warning that failing to do so would mean the economy is “frankly doomed”.

Pushed on what this would mean, he warned of “steadily increasing taxes, steadily reducing benefits and social services, higher interest rates and eventually the need for a bailout from the IMF”.

08:15 AM

Bond yields slide as Sunak emerges as frontrunner

UK bonds surged at the open after Boris Johnson pulled out of the race to become prime minister, leaving Rishi Sunak as the clear frontrunner.

Short-dated bonds led the rally, with the yield on the two-year note falling as much as 34 basis points to 3.46pc. The yield on the 10-year gilt fell to 3.81pc.

Traders and also slashing bets on interest rate rises by the Bank of England.

08:02 AM

FTSE 100 opens higher

The FTSE 100 has inched higher at the open as traders eye a potential end to political uncertainty with Rishi Sunak closing in on No 10.

The blue-chip index ticked up marginally to 6,973 points.

08:00 AM

Gas prices drop as mild weather spreads across Europe

Gas prices have dropped to €100 per megawatt-hour for the first time since June as mild weather and arrivals of liquefied natural gas cargoes eased concerns about winter shortages.

Benchmark European prices slumped as much as 13.6pc, though they’re still trading around three times higher than the normal price for this time of year.

The EU is working on a plan to calm the crisis that includes a cap on gas prices. The bloc also wants to take steps to avoid extreme price spikes and use its joint purchasing power in negotiations with sellers.

The EU’s energy ministers will meet this week to continue to has out the details, with traders keen to see more details about the design of a potential price cap.

07:43 AM

Pearson boosted by strong English language demand

Publisher Pearson has reported a 7pc rise in sales in the first nine months of the year as it confirmed it’s on track to hit £100m of cost savings by 2023.

The FTSE 100 education group said sales growth had been driven by a post-pandemic resurgence in English language learning, as well as a return to normal exam timetables.

Pearson said its English language learning sales surged 28pc compared to the same period last year as “global mobility continues to improve with border reopenings”.

Andy Bird, chief executive of Pearson, said:

This has been another good quarter for Pearson and I am pleased with the continuing momentum the business is demonstrating through our sharp focus on delivery.

We are executing well on our plan for accelerated margin improvement.

07:30 AM

Liverpool dock workers begin two-week strike

Hundreds of dock workers at one of Britain’s biggest container ports are kicking off a fresh two-week strike, threatening further disruption to supply chains.

Nearly 600 members of the Unite union at the Port of Liverpool will strike again from today after the union said talks to end a long-running dispute over pay ended in “chaos”.

United accused operator Peel Ports of intervening to block a deal, which it said had been agreed in principle.

Sharon Graham, Unite’s general secretary, said: “The talks ended in farce, with the deal agreed between Unite and senior management being pulled by the board. Strike action by our members and with the full support of Unite will go ahead.”

Peel Ports said it was “hugely disappointing” that workers had rejected its improved offer of an 11pc pay rise.

07:12 AM

Mike Ashley snaps up stake in struggling Asos

ICYMI – Mike Ashley has seized on Asos’s bombed-out share price to build a stake of more than 5pc in the online fashion retailer, The Telegraph can reveal.

Business editor Christopher Williams has the story:

Market sources said that Frasers Group, the billionaire’s listed holding company, notified Asos late on Friday that it had become a significant shareholder. The move came days after Asos announced an emergency cost-cutting plan alongside a pre-tax loss of £32m.

Frasers has acquired its stake for roughly a tenth of what it would have cost just 18 months ago, when Asos was riding high on the pandemic online shopping boom.

Its valuation has collapsed from more than £5bn in March last year to little over £500m on Friday, making a 5pc stake worth roughly £25m. It makes Frasers the fourth-biggest shareholder in Asos, ahead of Schroders but far behind its top investor, the Danish billionaire Anders Holch Povlsen on 26pc.

Read the full story here

06:58 AM

Hong Kong stocks plunge as Xi Jinping tightens grip

China Xi Jinping Hang Seng – AP Photo/Andy Wong, File

Hong Kong stocks have plunged to a 13-year low as investors were spooked by Chinese President Xi Jinping’s decision to hand key economic posts to loyalists who back his zero-Covid strategy.

The benchmark Hang Seng Index tumbled 5pc by the break – its weakest level since the height of the global financial crisis in 2009.

The Shanghai Composite Index fell 0.9pc, while the Shenzhen Composite Index on China’s second exchange lost 0.4pc.

Xi’s decision to pack his leadership with supporters as he tightens his grip on power suggests Beijing is unlikely to shift from its strategy of fighting Covid outbreaks with lockdowns and other strict measures.

The fears offset better-than-expected GDP figures for the third quarter, as traders remained on edge about the outlook for the world’s second-largest economy.

06:44 AM

Shell invests $1.5bn in Qatari LNG project

Shell Qatar LNG – REUTERS/Thilo Schmuelgen/File Photo

Shell is pumping about $1.5bn into Qatar’s latest gas project, just months are investing into another of the Gulf nation’s developments.

The energy giant will take a 9.4pc stake in North Field South, which will expand Qatar’s liquefied natural gas output capacity by 16m tonnes a year.

French firm TotalEnergies joined the project in September with a holding the same size as Shell’s. Qatar is selling 25pc of the project, leaving at least one more partner to be announced.

The country is ramping up its production and liquefaction capacity amid a global surge in demand for gas.

Ben van Beurden, Shell chief executive, said the EU’s plan to cap gas prices would be complicated, adding that the bloc will have to reduce industrial demand for gas.

He said: “I’m sure this will settle in an appropriate and responsible way that will really benefit both markets and consumers in Europe.”

06:17 AM

Surging inflation triggers wave of profit warnings

The cost-of-living surge is inflicting the greatest pain on businesses since the financial crisis after the number of companies warning about their profits jumped to a 14-year high.

New figures from EY-Parthenon show there were 86 profit warnings at UK-listed companies in the three months to the end of September, up more than two thirds from last summer and the highest level for the period since 2008.

The data suggests that 28 listed companies are in the “danger zone”, having warned over profits three times in the past year.

Typically, a fifth of businesses which issue three profit warnings either collapse into administration or are snapped up within a year of the third warning.

Read more: Surging inflation triggers biggest wave of profit warnings since financial crisis

05:32 AM

Avon shocked by pound’s plunge

The boss of global beauty giant Avon has said the pound’s plunge in the wake of the mini-budget market turmoil was the group’s biggest shock of the past year as she likened the sterling sell-off to the Turkish lira crisis.

Angela Cretu, global chief executive of Avon International, told the PA news agency that sterling’s dramatic fall had caused challenges for the group, which reports in US dollars.

She said the volatility of the pound would likely be reflected in its figures, although she stressed the group was well hedged against currency fluctuations.

“The pound going down – that was the biggest surprise. I thought the UK was the least of our worries,” said Ms Cretu, having previously faced currency issues in a raft of its other global markets, including Turkey, which suffered a meltdown of the Turkish lira in 2021.

“I never would’ve thought that… I’d be talking about the pound as I would the Turkish lira.”

The group – which is owned by Brazilian beauty group Natura – reports its third quarter figures on November 11 as it gears up for the crucial Christmas season.

Ms Cretu said the group had responded to rampant cost rises by making savings across the group, cutting US$100 million (£90.2 million) in costs by stripping out layers of management and overhauling its systems in a bid to protect prices.

05:23 AM

Good morning.

The US dollar weathered another suspected blast of Japanese intervention to push higher on the yen on Monday, while most share markets rallied on just the hint of an eventual slowdown in US rate hikes.

The dollar started in a bullish mood with an early rush to 149.70 yen, before taking a sudden spill as far as 145.28 in a matter of minutes. Yet speculators seemed undaunted and took the dollar back up to 148.90 in choppy trading.

5 things to start your day

1) Post-Brexit overhaul of red tape will allow London tech to thrive, says IBM chief – Britain will remain a leading player in the industry despite mini-Budget chaos, according to head of company’s UK arm

2) Anger in Germany’s industrial heartlands as Putin cuts off the gas – Pressure is piling on Olaf Scholz as manufacturing industry pays the price for energy shortages

3) Britain locked in two-horse race to crack nuclear fusion, says Japanese start-up – UK or US will be first to develop reactors capable of generating vast amounts of clean power, says executive at Kyoto Fusioneering

4) Activists seek to block Christmas displays of alcohol in the supermarket – Campaigners fighting to prevent prominent wine and beer promotions after advent calendars and biscuits relegated in anti-obesity drive

5) Liam Halligan: The new PM must break Britain out of its low-growth doom loopYes, our budgetary position is precarious, but we still need to go for growth

What happened overnight

A slump in Chinese stocks took the shine off a rally in equities in other major Asian markets on Monday while Treasury yields slipped from multi-year highs.

Hong Kong’s benchmark share index opened about 2pc lower as investors contended with the delayed release of China’s economic growth data and the conclusion of the party congress in Beijing.

Equities were higher in Japan, South Korea and Australia while US futures advanced after stocks on Wall Street had their best week since June.

Trading in major currencies was choppy, with the yen swinging between gains and losses amid signs of a second intervention from Japanese authorities in two sessions. Volatility is set to continue, with the Government’s efforts to curb rapid depreciation running counter to the Bank of Japan’s ultra-loose monetary policy.

Hong Kong Stocks Dive After China Party Meeting

Previous article

Tesla Cuts Prices In China. Bears Are Likely to See Demand Problems.

Next article

You may also like

Comments

Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News