Britain is at least five years away from setting up a central bank digital currency, according to the Bank of England and the City minister.
The Bank and the Treasury are planning to launch a consultation on the idea – dubbed ‘Britcoin’ – next year, which could potentially lead to a multi-year plan to develop and test a digital version of the pound. It would not be launched before the second half of the decade.
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Officials think it could reduce transaction costs and cut delays in payments, but also fear it could undermine the commercial banking system in a recession if businesses and households come to see a central bank-backed digital currency as safer than normal cash in the bank.
Sir Jon Cunliffe, Deputy Governor for financial stability at the Bank, said the plan for a consultation was a “crucial step in our policy development, especially as we further our thinking on the pressing issues at hand”.
06:08 PM
Wrapping up
That's all from us for today. Thank you for following and we'll be back again tomorrow!
06:06 PM
Pushback on asthma tech takeover was 'a bit of a surprise', says Philip Morris boss
Philip Morris - Toby Talbot/AP
The chief executive of Marlboro owner Philip Morris was speaking today at the Financial Times Global Dealmaking Summit, and told the audience the backlash against its takeover of Vectura was "a bit of a surprise”.
Jacek Olczak said the acquisition of London-listed Vectura, which designs tech used in inhalers, provided Philip Morris with “that missing capability in order to develop products that have nothing to do with nicotine”.
He said PMI was focused on a push into “pharmaceutical and therapeutic" areas and would not be reviving any takeover talks with Altria, which sells Marlboro cigarettes in the US. PMI sells them in the rest of the world.
05:43 PM
BioNTech hikes forecasts as booster roll-out gathers pace
German jab maker BioNTech lifted its forecasts for vaccine sales to as much as €17bn (£14.5bn) as more countries push through booster roll-outs.
BioNTech said nations had ordered 2.5bn doses of the Covid-19 vaccine it developed with Pfizer this year, meaning it now expected to surpass its earlier forecasts for vaccine sales to come in at €15.9bn. More appetite for jabs is set to come over the winter months, as governments seek to stave off further waves.
The increase in its estimates sent shares in BioNTech up by 12pc. However, they later dropped back, and were down 6.4pc in afternoon trading in New York.
BioNTech has seen its share price drift lower in recent weeks as rivals Pfizer and Merck have announced successes in alternative Covid-19 treatments. Merck's pill, for example, has been shown in clinical trials to dramatically reduce the rate of hospitalisation for people with mild to moderate Covid symtoms.
BioNTech chief executive Uğur Şahin said: “We continue to work diligently to respond to global vaccine needs with a commitment to ensure equitable vaccine access."
05:23 PM
Holiday letting firm Travel Chapter halts London float plans
Torquay - P A Thompson
The British travel letting agency which runs Holidaycottages.co.uk has postponed a planned initial public offering, citing "market volatility" which it said meant a debut would "not be in the best interests of the group and its stakeholders".
Travel Chapter had said last month that it was plotting a London float, expected to value the company at around £350m.
The business manages more than 8,000 properties across the UK, making it the third largest holiday rental agency in Britain and responsible for a tenth of the UK's agency-managed holiday properties.
It operates 33 regional and lifestyle brands.
Travel Chapter said it had received "considerable institutional investor support" for its business model, growth strategy and management team. However, it said it would press pause on the float.
It follows similar moves from others including BrewDog, Pure Gym and Hawksmoor, amid cautiousness among investors.
05:01 PM
AstraZeneca creates separate division to focus on Covid vaccine and antibody treatments
Pharmaceutical giant AstraZeneca is creating a new division for its Covid-19 vaccine and treatments, in a sign doubts over its coronavirus work have not deterred bosses.
AstraZeneca confirmed it was setting up a new vaccines and immune therapies unit, which will be led by Iskra Reić. She currently acts as executive vice-president for the Europe and Canada region.
A spokesman said: “The team will be dedicated to our Covid-19 vaccine, our long-acting antibody combination and our developmental vaccine addressing multiple variants of concern, as well as to our existing portfolio for respiratory viral disease."
It follows a review earlier this year into whether the company should spin off its vaccine work - an area in which AstraZeneca has previously been a smaller player, dwarfed by the likes of GlaxoSmithKline and Sanofi.
News of the creation of the new division was first reported by the Financial Times.
AstraZeneca faced heat over its vaccine work earlier this year, finding itself at the centre of a row with the EU over supply of the jabs and fielding questions over safety after concerns emerged over blood clots in a very small number of cases.
The vaccine, which was developed with the University of Oxford, was, however, widely used in the UK for those aged over 40.
04:37 PM
Handing over
That's all from me today - thanks for following along! I'm handing over now to my colleague Hannah Boland.
04:35 PM
Michael Burry tweet fuels Tesla fall
There's a bit more detail coming out about what could be causing Tesla's continued sell-off today.
The electric vehicle giant began its decline on Monday after a majority of voters in Elon Musk's Twitter poll said he should sell a 10pc stake in the company. Shares are down a further 8pc this afternoon.
The slide could be in part due to a tweet from Michael Burry – the investor made famous in the hit film The Big Short – in which he suggested the Tesla founder may want to sell some of his shares to cover his personal debts.
Separately, a filing revealed Mr Musk’s brother Kimbal sold 88,500 Tesla shares a day before the Twitter poll.
Tim Cook: Apple Pay won't adopt crypto any time soon
Apple chief executive Tim Cook Apple Pay cryptocurrencies - BROOKS KRAFT/Apple Inc./AFP via Getty Images
Apple chief executive Tim Cook has said the company is looking at cryptocurrency features, but said there were no immediate plans to launch this functionality in Apple Pay.
Speaking at a conference in New York, Mr Cook said that while he personally invests in cryptocurrency, he had no plans to invest Apple's cash in the asset. “I don’t think people buy Apple stock to get exposure to crypto,” he said.
The Apple boss also said his company had no immediate plans to accept cryptocurrency for its products, while describing NFTs — non-fungible tokens – as an “interesting” part of the cryptocurrency world.
04:15 PM
Ofcom launches bid to save Britain's phoneboxes
Phonebox UK Ofcom BT - David Wall / Alamy Stock Photo
Ofcom has outlined plans to save thousands of public telephone boxes from closure, despite almost the entire population owning a mobile phone.
Around 96pc of UK adults now own a mobile, while coverage across the country has improved.
But the telecoms regulator said that as BT considers which phoneboxes to decommission, some that are needed by local communities risk being withdrawn.
Ofcom called for "clearer, stronger" rules were needed, adding that some 5,000 phone boxes would be protected from removal if they are deemed vital to local communities where mobile network coverage is poor.
Other criteria include if they are at an accident or suicide hotspot, if at least 52 calls have been made in the last year or if they have been used to call helpline numbers.
City watchdogs given post-Brexit 'competitiveness' brief
City regulators will be tasked with considering how the UK's financial services sector can grow and compete internationally when setting out rules to crack down on bad practices.
The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) will take on the new powers as the UK moves away from EU rules after Brexit.
The Treasury said: "The plans would require the FCA and the PRA to consider both the implications for growth and international competitiveness of their regulations, as well as their existing objectives of maintaining market integrity, consumer protection and a sound financial system."
In a consultation document the government said it would keep the two regulators as separate entities and supports reforms that were brought in to the Bank of England, including the creation of its Financial Policy Committee.
But it hinted at some reigning in of their independence by giving Parliament and the Treasury "strengthened scrutiny and oversight over the FCA and PRA, appropriate to the increased rule-making powers received by the regulators".
Chancellor Rishi Sunak said:
Today's proposals will support the future strength of the UK as a global financial centre, ensuring an agile and dynamic approach to regulation that supports the growth of the UK economy, without diverging from our continued commitment to high international standards.
03:56 PM
China property crash risks $1 trillion hit to global growth
A Chinese property slump threatens to spark a contagion that could wipe $1 trillion off global growth, economists have warned.
Russell Lynch has more details:
UBS has estimated that a slowdown in China’s property market is likely to wipe 0.5 percentage points off the growth rate of the $95 trillion global economy, which the IMF predicts will advance by 4.9pc next year.
In the bank’s more severe downturn scenario, that figure could double, its economists Tao Wang and Arend Kapteyn said.
The warning from the investment bank’s latest global outlook comes as the woes of debt-laden Chinese developer Evergrande and a government crackdown on borrowing shake sentiment and spark concerns from regulators around the world.
Construction and property has been a key driver of Chinese growth and accounts for around a quarter of the world’s second largest economy.
The Tesla sell-off following Elon Musk's Twitter poll has continued into Tuesday afternoon, with shares sliding a further 10pc.
The decline follows losses on Monday and marks the biggest intraday fall in eight months.
It began over the weekend, when the outspoken founder launched a Twitter poll to ask whether he should sell 10pc of his shares in Tesla – stock worth around $21bn. The poll received 3.5m votes, with 58pc backing the move.
03:00 PM
Babcock wins £100m Royal Navy contract
Royal Navy destroyer Babcock missiles - REUTERS/Sergey Smolentsev
A partnership of defence firms led by Babcock has been handed a £100m contract to bolster the Royal Navy's electronic warfare capabilities.
The 13-year contract covers the development of new, upgraded radar systems for a range of military uses including anti-ship missile defences.
Babcock is the prime contractor within the partnership, alongside Elbit Systems and QinetiQ. The deal is expected to create around 170 jobs, mainly in the south west of England.
Defence Secretary Ben Wallace said:
In a world of rapidly evolving threats, these enhancements will upgrade the Royal Navy with pioneering radar detection capabilities maintaining the UK’s operational advantage at sea.
The £100m investment with key industry partners will underpin vital defence outputs whilst supporting jobs and investment in the South-West of England.
02:36 PM
Wall Street falters after inflation data
Wall Street opened mixed this afternoon after data showed a rise in producer prices in October, while General Electric jumped on its plans to split into three business.
The S&P 500 and Nasdaq opened 0.1pc and 0.3pc higher respectively. However, the Dow Jones fell by 0.08pc at the open.
02:28 PM
End French and German dominance of UK railways, watchdog demands
France and Germany’s stranglehold on the delivery of almost £1bn in British railway upgrades could be broken after regulators demanded an end to their duopoly, writes Oliver Gill.
The Office of Rail and Road (ORR), the industry regulator, has told public sector body Network Rail to reduce its dependency on French firm Alstom and Germany conglomerate Siemens.
The two firms account for 90pc of the taxpayer spend on upgrading signalling. A total of 26,000 signals need to be upgraded over the next 15 years, meaning the pair are in line to share between £800m-£900m annually unless Network Rail changes its procurement processes.
Siemens ranks among one of Germany’s biggest companies, with a market value of €125bn, and provides a raft of engineering services for the British Railways. Alstom, worth €11.7bn, also owns Bombardier’s rail business.
The ORR said Network Rail should be “rewarding pro-competitive behaviour”.
US producer prices climb as inflation worries linger
US producer prices climbed in October due to higher goods costs, fuelling fears about inflationary pressures in the economy.
The producer price index rose 0.6pc on the previous month and 8.6pc from a year earlier, Labor Department figures showed. The annual rise is the largest in more than a decade.
Excluding the volatile food and energy components, the so-called core PPI rose 0.4pc and was up 6.8pc from a year ago.
The figures, which were in line with expectations, highlight the impact of supply bottlenecks, material shortages and rising labour costs on prices.
Ongoing higher prices raise the prospect that producers will pass on increased costs to consumers by hiking prices. Data on US consumer prices, due to be released on Wednesday, could confirm this trend.
🇺🇸Producer prices (PPI) +0.6% in October, as expected ▶️Core +0.4%
🟢Services +0.2% (broad-based margins ⬆️ led by autos & transp)
🟡Goods +1.2% (led by gasoline) Energy +4.8% Core +0.5% Food -0.1%
British Airways to hire 4,000 staff as it reverses Covid cuts
British Airways jobs 4,000 - Chris Ratcliffe/Bloomberg
British Airways is planning to add around 4,000 employees to its depleted workforce by next summer as it prepares for a wider recovery in travel.
The airline will recruit for pilots, cabin crew, ground staff and back-office roles. BA currently employees around 30,000 people, so it marks a 15pc increase on headcount.
Chief executive Sean Doyle told Bloomberg: “We’re actively recruiting. It’s exciting to be rebuilding the airline and to be creating opportunities again after two years where we haven’t been able to fly much.”
BA slashed around 10,000 jobs during the pandemic, but it's now facing a tighter labour market as it seeks to rebuild its workforce and cash in on rebounding demand.
The airline will relaunch short-haul flights from Gatwick after reaching an agreement with unions. It's also poised to ramp up transatlantic flights from Heathrow after the US travel corridor reopened this week.
02:00 PM
Barclays appoints new investment bank chief in reshuffle
Barclays chief executive CS Venkatakrishnan
Barclays is pressing on with an executive reshuffle following the departure of former boss Jes Staley.
The British bank is set to name Paul Compton, an Australian who previously worked with Staley at JP Morgan, as the new boss of its investment banking arm, according to the Financial Times.
It is the first big appointment under new boss CS Venkatakrishnan (pictured above) who took over when Staley resigned at the beginning of this month over his links to late paedophile Jeffrey Epstein.
Venkatakrishnan and Compton had previously been rival contenders to replace Staley. But the bank's board said it had settled on Venkatakrishnan as the "preferred candidate" about a year ago.
01:01 PM
Brewer Shepherd Neame cheers easing of supply crunch
Pub and brewing group Shepherd Neame has said supply chain pressures are "easing" as it reported a rebound in demand.
The group, which owns more than 300 pubs in London and the South East, said it was "greatly encouraged" by how many punters were flocking back to its boozers following the easing of restrictions in April.
The group said sales since the start of the new financial year in July have been particularly promising, with this month seeing a particular increase in demand for food and accommodation.
Meanwhile, drinks trade been boosted by the return of office workers in September, with a particular uptick in post-work drinking on Tuesdays, Wednesdays and Thursdays.
It came as Shepherd Neame reported a pre-tax operating loss of £4.2m for the year to June, compared to a £1.5m profit last year.
Chief executive Jonathan Neame said:
We are greatly encouraged by the customer response since re-opening and are confident that beer and pubs remain every bit as core to British life as pre-pandemic.
12:38 PM
Virgin Media O2 'close to completing' superfast broadband rollout
Virgin Media O2 - Nick Ansell/PA Wire
Virgin Media O2 has said it's close to reaching its aim to rolling out hyperfast gigabit broadband to its entire network of 15.5m homes by the end of the year.
The newly-merged telecoms group said it's hit 90pc of this target, meaning more than 14m homes can access faster internet speeds.
The latest switch-on has added a further 1.6m homes to the firm's gigabit-ready network, with Bath, Fife, Huddersfield, Ipswich, Lancaster, Lincoln, Salisbury and Slough among the areas to be connected.
The update will pile the pressure on BT's Openreach, which is leading the rollout. It's aiming to reach 25m homes by 2026, but is currently lagging below 6m.
Lutz Schuler, chief executive of Virgin Media O2, said:
We're making great strides ahead in upgrading the UK and are within touching distance of bringing the benefits of future-proof gigabit broadband to everyone on our network.
With our gigabit rollout progressing at an unmatched pace, we're building the next-generation broadband network that's ready for the technology of tomorrow.
12:26 PM
US futures hold steady ahead of inflation data
Despite big moves for GE, it's a subdued day for US stocks more widely, with futures flat ahead of key inflation data.
Futures tracking the benchmark S&P 500 and Dow Jones are little changed. The tech-heavy Nasdaq is up 0.2pc.
Investors are focusing on US producer prices later today, before Wednesday's data on consumer prices gives a more complete picture of inflation.
12:14 PM
General Electric to break up into three companies
General Electric break-up divisions conglomerate - REUTERS/Jim Young/File Photo
There's some major news coming in from the US, where General Electric has announced plans to split into three distinct public companies.
The company's era as a mammoth conglomerate will come to an end, with its business spun out into healthcare, power and aviation units.
The healthcare division will be spun off in early 2023, the company said. GE will combine its renewable energy, power equipment and digital businesses into a separate unit that will then be spun off in 2024.
The remaining business will consist of GE Aviation, the company’s engine-manufacturing operation.
It marks the biggest overhaul since chief executive Larry Culp took the helm in 2019. Shares jumped as much as 17pc in pre-market trading.
11:58 AM
Pandemic job losses hit Westminster hardest
Westminster job losses pandemic ONS - AP Photo/Lefteris Pitarakis
Westminster suffered the largest number of job losses during the pandemic of any region in the UK, new figures have revealed.
The latest data from the Office for National Statistics (ONS) shows the number of employees in the central London local authority tumbled by 32,500. London as a whole saw the largest number of job losses, with employee numbers down by 130,600 – or 2.5pc.
Ranked by percentage decline, the North East saw the largest fall in job numbers, down 2.8pc. This was followed by the North West at 2.7pc.
The figures give the clearest indication to date of which areas were hardest hit by job losses during the pandemic, with Westminster heavily reliant of its retail and leisure sectors.
The number of employees in the UK fell from 30.9 million in September 2019 to 30.3 million in September 2020.
This was mainly driven by private sector employees (down 685,400) whereas public sector employees were up 114,600 https://t.co/FF0odkl4LF
The Government is reportedly preparing to mothball some of its proposed changes to corporate governance rules following a backlash from businesses.
Officials are close to finalising the biggest overhaul of British audit and corporate governance rules in decades following a number of high-profile scandals at firms such as BHS and Carillion.
But some of the more contentious reforms will be scaled back, including legislation that would force directors to take greater responsibility for company accounts, the Financial Times reports.
The requirement will instead be shifted to a new corporate governance code, which will carry less weight and be harder to enforce.
Nissan has tripled its profit outlook for the full year, signalling it remains on track to climb out of the black despite the global shortage of semiconductors.
The Japanese carmaker now forecasts net profit of 180bn yen (£117m) in the year to March 2022, up from an earlier estimate of 60bn yen.
It comes after the firm booked a net profit of 54.1bn yen in the three months to September, reversing a net loss of 44.4bn yen in the same period last year.
Nissan's last yearly net profit in the black was in 2018-19. Alongside the impact of Covid, it's been struggling with the fallout from the arrest of former boss Carlos Ghosn, who's now a fugitive in Lebanon.
Makoto Uchida, chief executive of Nissan, said:
Our strong results are the outcome of diligent financial management, improved quality of sales and continuing product offensive. This has helped us withstand several headwinds.
11:14 AM
Bitcoin hits new record high as crypto boom continues
Bitcoin has surged to another new record high as a broader rally in the cryptocurrency market continues to gather pace.
The world's largest digital token jumped as much as 3.6pc to $68,513 (£50,424). Ether – the second largest cryptocurrency – also hit a record high of around $4,840.
The latest rally for notoriously volatile digital currencies has taken the total value of the global crypto market to above $3 trillion.
The driving forces behind the rally are hard to pin down, but theories range from appetite for assets that aren't vulnerable to inflation to bullish comments from Elon Musk, the world's richest man.
It came as officials said digital currencies planned by major central banks will probably become legal tender in their jurisdictions.
European Central Bank Executive Board member Fabio Panetta today said this was "likely" in the eurozone.
10:55 AM
Gas prices fall as Gazprom says it's kicking off supply push
Gas prices slid on Tuesday as Russian energy giant Gazprom said it's kicking off its plan to increase supplies to Europe this month, making good on a promise made by President Vladimir Putin.
Gazprom said it will send gas to five storage facilities across the continent in November. “The volumes and gas-transportation routes have been determined,” it said, without providing further details.
Two weeks ago President Putin ordered the state energy company to focus on refilling inventories in Europe from 8 Nov, after its domestic supplies had been refilled.
A lack of increase to supplies yesterday sparked fears that Russia wouldn't follow through on its promise.
But Gazprom's statement calmed jitters this morning. UK gas prices slid as much as 3.2pc to 196.50 pence a therm, while the benchmark Dutch equivalent fell 3.1pc.
10:44 AM
Gatwick and Wizz Air call for return of pre-Covid slot rules
Wizz Air Gatwick aiport landing slots - Cristi Croitoru
Gatwick Airport and Wizz Air have teamed up to demand a return to pre-Covid rules that force airlines to use or lose their valuable take-off and landing slots.
The airport and budget carrier have written to Transport Secretary Grant Shapps urging him to back a return to rules that require airlines to hand back slots if they're not used at least 80pc of the time.
Regulations for the current winter schedule, which were brought in to shield airlines from the downturn in travel during the pandemic, allow incumbents to temporarily return any operating slots they don’t need and pick them up the following year, and to use only 50pc of those that remain.
Gatwick says the rules have left its runway underused, with the likes of British Airways and Virgin Atlantic slashing routes.
Wizz Air wants to establish a major hub at Gatwick to compete with EasyJet, but says it won’t do so only to be stripped of slots later.
“The continued use of the waiver would result in most airlines continuing to under-deliver on capacity, while deliberately hoarding slots to protect their market position,” reads the letter, which was also signed by the heads of Edinburgh and Belfast International airport.
“This would significantly harm competition by acting as an intentional barrier preventing other carriers, including new market entrants, from flying these slots instead.”
10:31 AM
German investor confidence gets unexpected boost
Confidence among German investors has improved unexpectedly amid hopes the country will benefit from recoveries across the globe once supply chain issues ease.
The ZEW institute's closely-watched gauge rose to 31.7 in November from 22.3 the previous month – the first improvement in six months.
The outlook for the wider eurozone also improved, while a measure of current conditions deteriorated.
Germany's economy, which is heavily reliant on manufacturing, has been badly hit by supply shortages and long delivery times around the world. The government has already cut growth forecasts, with the recovery now expected to be pushed back to 2022.
ZEW president Achim Wambach said: “Experts assume that the supply bottlenecks for raw materials and intermediate products as well as the high inflation rate will have a negative impact on the economic development in the current quarter. For the first quarter of 2022, they expect growth to pick up again.”
A separate survey from Germany's Ifo Institute revealed that more than 70pc of companies reported shortages in October, with many expecting issues to persist well into next year.
09:59 AM
Rolls-Royce flies on nuclear funding
Meanwhile, Rolls-Royce has jumped to the top of the FTSE 100 after it confirmed it's secured £450m in funding for its small nuclear reactor project.
The funding, half of which comes from the government, will allow the jet engine maker to kick off plans for smaller modular reactors across the UK to help boost the country's nuclear energy provisions.
Rolls-Royce surged as much as 5.7pc this morning to its highest level since March 2020. Shares are now trading up around 4.7pc.
Australia bets on EV chargers but shuns sales targets
Australia electric vehicle charger Scott Morrison - AP Photo/Mark Baker
Meanwhile, Australia is taking its own approach to the shift to greener transport.
The government has pledged AU$178m (£97m) to rolling out hydrogen refuelling and charging stations for electric vehicles, but refused to offer EV rebates or set sales targets.
Prime Minister Scott Morrison said the move marked an "Australian approach" to lower transport emissions, reiterating a slogan he's using to describe the country's middle ground on climate change.
He said: "We will not be forcing Australians out of the car they want to drive or penalising those who can least afford it through bans or taxes. Instead, the strategy will work to drive down the cost of low and zero emission vehicles."
The extra investment, which adds to an existing AU$72 million commitment and will be spent by the end of June 2025, will also aid purchases of electric cars and buses for government and business fleets.
However, Mr Morrison is facing criticism from campaigners who say rebates and tax breaks are essential to encourage Australians to buy cleaner cars.
09:41 AM
Expert reaction: Finite supply holding back used car sales
James Fairclough, chief executive of AA Cars, says the used car market couldn't sustain momentum after a record second quarter.
While the used market is not affected directly by the semiconductor shortage that is constraining the production of new cars, the supply of second-hand cars can only be so elastic.
Despite strong demand from buyers, finite supply is pegging back used car sales figures - albeit to a lesser extent than the decline seen in new car sales.
With car factories in the UK and elsewhere churning out fewer vehicles than usual, the second-hand market’s trump card is availability - especially of hugely popular electric and plug-in hybrid models.
09:38 AM
Used car market loses steam despite EV boom
The used car market declined in the third quarter as it struggled to keep up momentum amid a materials crunch that's hit production of new models.
Used car sales dropped 6.2pc with just over 2m vehicles changing hands. This was down 134,257 on the same period in 2020 when the re-opening of showrooms and easing of lockdown measures saw the market bounce back strongly.
The used car market had more than doubled in the second quarter as booming demand coincided with a slowdown in new car output due to chip shortages.
Still, demand for used electric vehicles and plug-in hybrids continues to surge. Battery electric vehicle demand jumped 56.4pc with 14,182 cars changing hands – the highest quarterly level ever recorded.
Mike Hawes, chief executive of SMMT, said:
Despite the used car market declining in the third quarter, record sales earlier in the year, particularly in the second quarter, means the market remains up year to date.
Given the circumstances, with the global pandemic causing a shortage of semiconductors needed to produce new vehicles, undermining the new car market, used transactions were always going to suffer too. This is particularly worrying as fleet renewal – of both new and used – is essential if we are to address air quality and carbon emissions concerns.
The UK’s used car market falls -6.2% in the third quarter of 2021.
2,034,342 vehicles changed hands, 134,257 less than in Q3 2020 when the re-opening of showrooms and easing of lockdown measures saw the market bounce back strongly.https://t.co/L5E1duqhZJpic.twitter.com/32lvmnBqoI
It's not all good news from Primark's owner, however, with ABF warning Britain will be lucky to keep food price inflation under 5pc.
George Weston, chief executive of ABF, warned rising energy, commodity and labour costs meant the 5pc level was likely to be breached.
He told Bloomberg: “It is not just energy prices rising, it is everything: commodities, raw materials, transport and labor costs.
“We have to pass through these cost increases to customers as we don’t have the same margin nor the same ability to reduce costs that we have in other parts of the business.”
Mr Weston said rising energy costs were a particular concern, saying ABF would have faced tripling bills if it didn't have hedges in place.
But he reiterated the group's insistence that it won't pass higher costs onto consumers.
09:21 AM
Primark chief pledges not to raise prices
Primark’s chief financial officer has insisted the retailer is well stocked for Christmas and won’t raise prices despite inflationary pressures.
John Bason said: “We’re basically saying that we’ve got good stock cover for Christmas, our stores will be full.”
He told Reuters there would be limited stock cover on a small number of Primark lines which customers “may struggle to even see”.
Mr Bason also pledged that Primark's prices for autumn/winter stock would be flat compared to last year.
Primark has insisted it can mitigate increased costs through transaction currency gains arising from the weaker dollar, improved store labour efficiency and lower operating costs.
09:07 AM
Watches of Switzerland jumps as sales tick up
Shares in Watches of Switzerland are flying high this morning as investors welcomed the retailer’s sales upgraded guidance for the full year.
In a timely update this morning, Watches of Switzerland lifted its full-year revenue guidance to between £1.15bn and £1.2bn.
It also said profit margin would come in at between 1pc and 1.5pc, up from previous guidance of flat to 0.5pc.
Shares rose as much as 10pc, pushing the retailer to the top of the FTSE 250.
There are signs the lockdown boom enjoyed by supermarkets is starting to fade as shoppers return to more normal habits.
Grocery sales dropped by 1.9pc in the 12 weeks to the end of October, according to new data from Kantar, which said shopping habits were beginning to stabilise at a "new baseline".
Tesco was the only supermarket to post year on year growth, with sales edging up by 0.3pc over the period. Nearly three-quarter of Britons made a trip to Tesco in the last three months, pushing the grocer to its 10th consecutive month of market share growth.
Meanwhile, sales at Sainsbury's, Asda, Morrison, Lidl, Aldi and Ocado all fell.
Kantar said the general trend towards bigger, less frequent trips to the supermarket "seems set to stay", while digital sales levelled out at 12.4pc of the total market.
Fraser McKevitt at Kantar said:
Grocery prices are rising and this month inflation hit its highest rate since August 2020, when retailers were still cutting promotions to maintain stock on the shelves.
As prices increase in certain categories, we can expect shoppers to continue to visit several supermarkets and shop around to find the best deals.
08:24 AM
FTSE risers and fallers
After starting on the back foot, the FTSE 100 has now eased back marginally into the green.
Providing the biggest boost this morning is Primark owner ABF, which has jumped more than 6pc after it announced a special dividend and a major store expansion plan.
Telecoms giant BT is up 2pc after an upgrade by analysts at Berenberg, while Rolls-Royce has gained 2.8pc after it announced funding for its small nuclear reactor project.
However, gains are being capped by losses for major mining and oil stocks, as well as banks HSBC and Lloyds.
The FTSE 250 is up 0.2pc, with Watches of Switzerland leading the risers after a positive sales update.
08:17 AM
Estate agents and housebuilders cash in on housing boom
As house prices continue to break new records, estate agents and housebuilders are cashing in.
In a trading update this morning Savills said demand in the prime residential market had exceeded its expectations, with the boom expected to last into next year. It also reported strong trading for commercial properties such as offices.
As a result, the estate agent said its profits will be "materially" ahead of 2019.
Meanwhile, housebuilders Persimmon and Vistry both reported strong trading despite the end of the stamp duty holiday, with the Bank of England's decision to leave interest rates on hold set to provide a further boost.
Persimmon said housebuyer demand remained "healthy", with completions set to grow around 10pc this year.
Vistry said it was seeing signs of improvement in the supply chain, though it warned building costs were set to rise by between 4pc and 5pc over the next year as labour shortages continue.
08:03 AM
FTSE opens lower
The FTSE 100 has fallen at the open after a subdued start to the week.
The blue-chip index opened 0.2pc lower at 7,289 points.
07:54 AM
Retail sales given pre-Christmas boost
UK retail sales October BRC KPMG - Jason Alden/Bloomberg
Looking beyond Primark, there are some upbeat figures for the UK retail sector more widely this morning.
The latest sales monitor from the British Retail Consortium (BRC) and KPMG showed sales growth picked up pace in October, despite a hit to consumer electronics from supply chain issues and chip shortages.
Total retail sales rose 1.3pc year on year last month, following a 0.6pc rise in September. The decline in like-for-like sales eased to 0.2pc from 0.6pc the previous month.
Trading was boosted by busier social calendars after lockdown, as well as Halloween and half term. Some people also began their Christmas hopping early amid concerns about shortages over the festive period.
This helped to offset a decline in furniture and electrical sales, which were held back by global logistical issues and microchip shortages.
Helen Dickinson, chief executive of BRC, said:
Customer demand is getting back on track ahead of Christmas as sales grew at a faster rate than the month prior, and well above its pre-pandemic levels.
As social calendars started filling up with festivities, clothing and footwear sales performed well.
07:45 AM
ABF boss hails 'resilient' performance
George Weston, chief executive of Associated British Foods, said:
Our financial performance this year more than ever demonstrates the resilience of the group. This comes from the strength of our brands, the diversity of our products and markets, our geographic spread, conservative financing and an organisation design that permits fast and flexible decision-taking [...]
Primark delivered a good performance in the face of continued disruption to trading caused by the pandemic. It also unveiled its wide-reaching sustainability strategy with the aim of making more sustainable fashion affordable for all.
Although the possibility of further trading restrictions cannot be ruled out, we expect Primark to deliver a much improved margin and profit next year. We are now intent on expanding our new store pipeline and investing in technology and digital capabilities to continue improving the performance of the business.
07:42 AM
ABF warns on rising costs
Supply chain troubles have been a key point of concern for investors, with bottlenecks hitting stocks and surging costs eating away at profit margins.
The Primark owner appears to have shrugged off these worries. It says while it's not immune to the challenges, it expects the impact to be "broadly mitigated by the transaction currency gain arising from the weaker US dollar, improved store labour efficiency and lower operating costs".
That said, ABF acknowledged it was seeing "significant cost increases in energy, logistics and commodities in addition to the impact of widely reported port congestion and road freight limitations".
As a result, it warned it could implement price increases in its food business.
07:38 AM
ABF food sales offset retail dip
ABF has long been driven by strong trading at Primark, but unusually it's the group's food business that did the heavy lifting over the last year.
Food revenue rose 5pc, while adjusted operating profit jumped 10pc to £760. ABF's sugar division was a particularly strong performer, with profit surging 75pc.
This helped to offset a 5pc fall in sales at Primark, which has suffered from store closures during lockdown. They remain 12pc below pre-pandemic levels.
However, ABF said it had seen strong profit margin recovery – a vital metric for the discount chain. Profit margin in the second half stood at 10.6pc.
07:28 AM
Primark owner boosts payout
Good morning.
Primark owner ABF has released a bullish set of full-year results, forecasting "significant progress" at both the half and full year.
In a welcome boost to shareholders, the company has proposed a special dividend of 13.8p per share. Combined with its final dividend, that takes the total payout for the year to 40.5p per share.
ABF also said it will expand its Primark store estate. It aims to take its total portfolio from 398 at the year end to 530 in five years' time, with a particular focus on the US, France, Italy and Iberia.
5 things to start your day
1)French oil dynasty throws support behind Rolls-Royce The Perrodo family is one of two backers providing £195m of cash to Rolls-Royce to help fund the development of a new generation of smaller, cheaper nuclear reactors that it is claimed will help Britain achieve its green ambitions and reduce dependence on imported energy.
2) Inmarsat snapped up in $7.3bn deal The British satellite operator is to be sold on to a US rival only two years after it was taken private by buyout firms on hopes of a boom in sales of broadband connections to air travellers.
3) ITV chairman under pressure from shareholders Sir Peter Bazalgette is facing an investor rebellion over his role at an obscure investment trust amid claims that he and other directors have presided over a corporate governance fiasco.
4) Wall Street raider threatens to gatecrash online fashion world The activist investor Dan Loeb has stoked expectations of a shake-up in the world of high-end fashion online, after it emerged he has built a stake in Richemont, owner of the loss-making retailer Yoox Net-a-Porter (YNAP).
Asian shares followed Wall Street higher in early trade on Tuesday as the passage of a US infrastructure bill boosted sentiment while oil prices gained on the outlook for energy demand in an expansive global economy.
Early in the Asian trading day, MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3pc.
Japan's Nikkei stock index rose 0.06pc while Australian shares were down 0.12pc.
China's blue-chip CSI300 index was 0.33pc higher in early trade. Hong Kong's Hang Seng index opened up 0.65pc.
On Monday, Wall Street's benchmark S&P 500 index and the Nasdaq extended their run of all-time closing highs to eight straight sessions, while the blue-chip Dow notched its second consecutive record closing high.
Coming up today
Corporate: Associated British Foods (full year results); 3i Infrastructure, DCC, Land Securities, Oxford Instruments (interims); Direct Line, Persimmon, Watches of Switzerland, Grafton Group (trading updates)
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