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What to Watch: Ted Baker's £25m error, Earl's Court sold, and markets buoyed by China data

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Ted Baker store in Knightsbridge, London. Photo: Keith Mayhew/SOPA Images/LightRocket via Getty

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Ted Baker’s £25m error

Shares in fashion brand Ted Baker (TED.L) crashed 15% on Monday after the retailer admitted it has overstated the value of its inventory by as much as £25m.

Law firm Freshfields Bruckhaus Deringer has been appointed to lead a “comprehensive review”. Ted Baker said the issues relate to prior years and are not expected to have a cash impact. Ted Baker said it wouldn’t comment further while the review was ongoing.

The inventory issues add to a dreadful year for Ted Baker, which changed chief executives earlier this year after founder Ray Kelvin left over allegations about his conduct. The retailer also put out a profit warning in October and shares are down 75% so far this year.

“The implosion of this brand has been nothing short of spectacular in the last two years,” said Michale Hewson, chief market analyst at CMC Markets.

Earl’s Court sold

The development site of former concert venue Earl’s Court has been sold between property developers for £425m.

Developer Capital & Counties (CAPC.L) said the site has been sold to investment firms APG and Delancey.

The joint venture involving APG and Delancey snapped up the site ahead of retail tycoon Nick Candy, who had been in early talks with Saudi Arabia’s Public Investment Fund regarding a joint offer.

Jamie Ritblat, founder and chief executive of Delancey, said: “We are excited to have secured the opportunity to take this vital central London initiative forward and are proud to have been approved as a worthy custodian by the public sector partners already engaged.”

Markets buoyed by China data

European markets were rallying on Monday after strong Chinese manufacturing data.

Data from China overnight pointed to a surprise pick-up in manufacturing activity in November.

The FTSE 100 (^FTSE), Germany’s DAX (^GDAXI), France’s CAC 40 (^FCHI), and the Euronext 100 (^N100) were all up 0.6%.

“The catalyst this morning is a strong set of manufacturing figures from China which beat expectations,” said Russ Mould, investment director at stockbroker AJ Bell.

“The Chinese data is one of a series of global PMI releases due this week which will provide insight into the health of the world economy heading into 2020.”

Overnight in Asia, Japan’s Nikkei (^N225) closed down 0.1%, the Hong Kong Hang Seng Index (^HSI) was down by 0.2%, and China’s Shanghai Composite (000001.SS) was down by 0.4%.

Google's $2.6bn deal probed

The UK’s competition watchdog said on Monday that it had launched an investigation into Google’s $2.6bn acquisition of big-data analytics company Looker.

Google, a division of Alphabet (GOOG), said in June that it was buying the Santa Cruz-based company in order to broaden its cloud services portfolio.

The Competition and Markets Authority said that it was considering whether the e-commerce giant’s investment might constitute a merger, and whether there could be “a substantial lessening of competition” within the United Kingdom as a result.

The authority has set a 20 December deadline for receiving comments from relevant parties.

Businesses expect UK economy to slow further in 2020

Businesses expect UK economic growth to slow further next year as the US-China trade war and Brexit uncertainty continue to weigh on industry.

The Confederation of British Industry (CBI), which represents 190,000 businesses, said on Monday it expects UK GDP to grow by just 1.2% in 2020, down from the expected 1.3% growth rate this year.

The CBI blamed Brexit for the weak economic picture, along with the US-China trade war which is hurting global growth rates.

“Should these dual headwinds subside, we expect a gradual pick-up in activity,” said Rain Newton-Smith, CBI’s chief economist.

“But the bigger picture is one of fairly modest growth over the next couple of years – growth that should be far better, given the UK’s relative strengths.”

Special report: What the general election could mean for the pound

December’s general election could prove decisive to Brexit — but what will it mean for the pound?

Brexit has been the key driver of the UK exchange rate ever since the 2016 referendum and investors are closely watching the 12 December vote for cues.

“We’re waiting for the election to get some sort of a game plan for the next few years,” UBS strategist Lefteris Farmakis told Yahoo Finance UK.

Read the full story now.

What to expect in the US

US stocks futures point to a higher open. S&P500 futures (ES=F) were up 0.4%, Dow Jones futures (YM=F) were up 0.4%, and Nasdaq futures (NQ=F) were up 0.4%.

20 companies are reporting in the US later today.