What to Watch: Brexit cost revealed, Ikea profits dive, and Nissan audit

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

Brexit will cost at least £40bn

The estimated cost of Brexit is set to be revealed on Wednesday, as both the government and the Bank of England publish their economic impact assessments.

Sky News reports that the government’s analysis will say that Theresa May’s Brexit deal is forecast to cost the UK economy £40bn over the next 15 years. A no-deal Brexit would cost £150bn over the same period.

UK chancellor Philip Hammond told the BBC’s Today programme on Radio 4 on Wednesday morning that the economy will be “slightly smaller in the prime minister’s preferred” plan. However, he said “there will be a cost to leaving the European Union” and Theresa May’s draft Brexit deal “minimises those costs.”

The governments Brexit assessment is expected to be published by the Department for Exiting the EU at 11.30am on Wednesday. The Bank of England’s economic assessment of Brexit is set to be published at 4.30pm.

Ikea Group profits dive by 26%

Ikea Group’s operating profits dived by 26% in the year to August, Reuters reports.

The Swedish furniture giant had earnings of €2.25bn ($2.54bn) in the year, compared to €3.03bn in 2017. Retail sales rose 5% across the group.

The company blamed the profit slump on investment in overhauling its business model. The company spent €2.8bn on stores, distribution networks, e-commerce, renewable energy, and forestry.

Ikea stores worldwide are owned by 11 franchisees, of which Ikea Group, whose formal name is Ingka Group, is the biggest. It has 367 stores globally, Reuters reports.

Auditor questioned Nissan over Ghosn transactions

Nissan’s auditors questioned the transactions involving former CEO Carlos Ghosn, Reuters reported on Wednesday, citing sources.

Ghosn was ousted from Nissan as CEO after being arrested in Japan on allegations of financial misconduct. He is alleged to have under reported his pay and improperly used company funds.

Reuters reports that Ernst & Young ShinNiho, the auditor’s Japanese subsidiary, questioned Nissan over the purchase of luxury homes for Ghosn. Nissan reportedly said at the time that the purchases were appropriate.

Ghosn has denied reports that he passed on personal trading losses to Nissan, according to Bloomberg. Ghosn made the denial through his lawyer in his first comments on the case against him. He remains in custody.

European markets

European stock markets were slightly higher on Wednesday morning, following a solid session in Asia.

Britain’s FTSE 100 (^FTSE) was up by 0.06%, Germany’s DAX (^GDAXI) was up by 0.09%, France’s CAC 40 (^FCHI) was up by 0.18%, and the Euronext 100 (^N100) was 0.06% higher.

Japan’s Nikkei 225 (^N225) closed 1.02% higher, Hong Kong’s Hang Seng index (^HSI) ended 1.33% higher, China’s benchmark Shanghai Composite (000001.SS) closed up 1.05%, India’s Sensex (^BSESN) ended trade up 0.55%, and Australia’s ASX All Ordinaries (^AORD) was down 0.05%.

What to expect in the US

US stock futures were pointing to a slightly higher open. S&P 500 futures (ES=F) were 0.13% higher, Dow Jones Industrial Average futures (YM=F) were up by 0.21%, and Nasdaq futures (NQ=F) were up by 0.16%. The VIX volatility-tracking index (^VIX) was down by 0.26%.

Companies reporting in the US later today include:

• Tiffany and Co (TIF)

• Dick’s Sporting Goods (DKS)

• Sportsman’s Warehouse (SPWH)

• Weibo.com (WB)

• Burlington (BURL)

• Box (BOX)

With files from Reuters.