Google drives Nasdaq to all-time high ahead of election
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Google-owner Alphabet helped drive the Nasdaq to an all-time high on Tuesday despite investor uncertainty surrounding the looming US election.
The tech-heavy index hit 18,712.75, after rising 0.8pc and gaining more than a quarter since the start of the year.
It came as shares in Alphabet, one of the so-called Magnificent Seven tech giants, rose 4pc in after-hours trading as posted a surge in sales and profits, both of which surpassed analyst expectations.
The company posted a 15pc rise in revenues to $88.3bn (￡67.9bn) during the third quarter compared with a year ago. The biggest contributor was advertising revenue, which rose by 10pc to $65.9bn.
Ad sales were boosted by increased political spending ahead of the US presidential election, as well as big-ticket events such as the 2024 Paris Olympics which ended in August.
Profits jumped 34pc from a year ago to $26.3bn. This was despite major investment in building up its AI arsenal in a tech arms race that includes other industry heavyweights such as Microsoft, Amazon and OpenAI.
The AI investments are the primary reason Alphabet’s capital expenditures in the past quarter soared 62pc from the same time last year to $13.1bn. However, investors were reassured that cloud revenues rose 35pc to $11.4bn.
Sundar Pichai, Alphabet’s chief executive, said: “The momentum across the company is extraordinary. Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off with consumers and partners benefiting from our AI tools.”
The company, however, faces a threat from a competition case brought by the US Department of Justice. Earlier this month, the Justice Department suggested it might seek to break up the tech giant after a court found that it had crushed its competition in online search. Google has said such measures “risk hurting consumers, businesses, and developers”.
Read the latest updates below.
06:45 PM GMT
Signing off...
Thanks for joining us today. Tomorrow, we will be live blogging the Budget and its aftermath.
In the meantime, I’ll leave you with our latest business story: Hong Kong’s richest man mulls Thames Water investment
06:45 PM GMT
Treasury holds urgent talks amid risk of car finance credit crunch
Ministers and City regulators are scrambling to contain the fallout from a shock court judgement which threatens a credit crunch in the motor finance sector.
Officials from the Treasury, the Financial Conduct Authority and the Finance & Leasing Association, which represents lenders, are understood to have held urgent talks on Tuesday to assess the damage from the court judgement.
The Court of Appeal on Friday ruled that commission payments made to car dealers by banks were unlawful unless they were disclosed to the customer beforehand.
The decision has sent shockwaves through the industry, effectively ruling that a practice common across the sector is unlawful.
Lenders such as Lloyds Bank and Close Brothers saw shares slide in the days following the verdict due to investor fears about compensation claims.
However there are wider fears about the availability of credit to buy vehicles.
Millions of people rely on car loans to purchase vehicles and there are concern the ruling will curtail the availability of finance to purchase cars.
On Tuesday S&U, a lender, became the latest to issue a warning as well as flagging “urgent discussions” taking place between the authorities.
Gary Greenwood, a bank analyst at Shore Capital, said
We very much welcome the fact that industry bodies, regulators and the Government are taking this matter as seriously as it deserves, given the very real risk that the industry comes to a grinding halt with lenders scared to supply credit to customers and investors scared to provide them with the growth capital to do so.
06:22 PM GMT
Signing off...
Thanks for joining us today. Tomorrow, we will be live blogging the Budget and its aftermath.
In the meantime, I’ll leave you with our latest business story: Hong Kong’s richest man mulls Thames Water investment
06:18 PM GMT
Global stocks edge up ahead of Big Tech results
World shares edged up today, with the MSCI World index up 0.1pc.
In America, the S&P 500 rose 0.2pc and the Nasdaq rose 0.7pc, but the Dow Jones fell 0.2pc.
Google owner Alphabet rose 1.7pc ahead of its quarterly results, out after 9pc tonight.#
Meta and Microsoft are expected to report on Wednesday, followed by Apple and Amazon on Thursday.
06:00 PM GMT
Hospitality industry attacks ‘unsustainable’ raid on the high street
Rachel Reeves is hiking the minimum wage by 6.7pc to ￡12.21 from April, and giving the youngest workers a ￡2,500 pay rise.
Kate Nicholls, chief executive of UKHospitality, said:
These wage rises are well above expectations ... It’s an added ￡1.9bn to the hospitality wage bill, on top of the cost of the Employment Rights Bill and, if rumours about the Budget are true, employer NICs and business rate rises.
05:43 PM GMT
Santander cutting more than 1,400 UK jobs
Santander is cutting more than 1,400 jobs across its UK business this year amid ongoing efforts to reduce costs.
The Spanish bank’s chief executive Hector Grisi told a press conference today that the company is cutting 1,425 jobs in the UK as it pushes forward with efforts to automate more parts of its operations.
It is understood that the job cuts are largely completed and expected to finish by the end of 2024.
The company had 21,812 workers in the UK at the end of September, according to its latest financial report.
It came as Santander’s UK division has delayed the publication of its latest financial results to consider the impact of a major court decision on car finance commission.
The delayed announcement comes as the wider Madrid-based bank revealed its profit increased by more than a tenth in recent months.
It reported a pre-tax profit of €4.9bn (￡4.1bn) between July and September, 11pc higher than the same period last year.
05:28 PM GMT
Nasdaq rises ahead of results from Google owner
Nasdaq is up 0.7pc this afternoon as investors await results Google owner Alphabet.
The earnings report will come out after the market closes this evening and many investors are awaiting to hear what it has to say before taking any bets.
Patrick O’Hare, an analyst at Briefing.com, said:
When a mega-cap stock reports earnings, the stock market pays extra attention not only to the report itself, but also to any guidance.
In total, five of the Magnificent Seven US tech giants will report over the next three days, including Amazon, Apple, Facebook-parent Meta, and Microsoft.
05:05 PM GMT
Stocks drop as investors brace for Budget
The stock market fell today as investors braced for a major tax raid in tomorrow’s Budget.
The benchmark FTSE 100 dropped 0.8pc, while the mid-cap FTSE 250 fell 1pc.
The market was also pushed lower by a falling oil price, hitting heavyweight BP, which fell 5pc.
Many investors were concerned on the likely outcome of the Budget. The Chancellor, Rachel Reeves, will set out her first tax and spending plans, following months of speculation and a row over the definition of “working people”.
Madsen Pirie, president of the Adam Smith Institute, told The Telegraph that tomorrow’s Budget “will come to be viewed as the most disastrous budget since the days of Clem Attlee pushed the UK into decades of decline.”
He added: “Raising the minimum wage will fall hardest on small business and the hospitality industry, already struggling to survive.
“Coupled with an increase in the so-called employer’s contribution to National Insurance, this is a budget guaranteed to cost jobs. It will be a job destroying budget just when we need to create jobs rather than cutting them.”
Labour had indicated that it would not raise taxes on “working people”, but last Friday Ms Reeves admitted that some working people will face tax rises in her Budget. She said that she could only commit to not raising “key” taxes on workers.
It came after Labour politicians had difficulties defining “working people”.
04:58 PM GMT
London stocks down as energy shares slide and investors await the Budget
The benchmark FTSE 100 fell today due to falls in the energy sector, while investors kept their focus on the upcoming Budget.
The blue-chip FTSE 100 fell 0.8pc, while the mid-cap FTSE 250 index fell 1pc, notching its lowest close in over one month.
One of the biggest contributors to overall losses was the energy sector, pulled down by a fall in oil prices and a 5pc drop in heavyweight BP’s shares.
In contrast, HSBC Holdings jumped 3.1pc after the lender posted a better-than-expected third-quarter profit on rising wealth and wholesale banking revenue, lifting the banking sector, up 0.8pc.
Investors were squarely focussed on the new government’s budget tomorrow, where Chancellor Rachel Reeves will set out her first tax and spending plans, which must address a difficult fiscal picture without raising major taxes on workers.
04:47 PM GMT
EU to impose new duties on EVs from China from Thursday
The European Union will impose new duties on imports of electric vehicles from China from Thursday after talks between Brussels and Beijing failed to find an amicable solution to their trade dispute.
Electric vehicles have become a major flashpoint in a broader trade dispute over the influence of Chinese government subsidies on European markets and Beijing’s burgeoning exports of green technology to the bloc.
According to the European Commission, sales of Chinese-built electric cars jumped from 3.9pc of the EV market in 2020 to 25cc by Sept 2023, in part by unfairly undercutting EU industry prices.
The EU said that the duties would stay in force for a period of five years, but he said that the EU and China continue to negotiate on a solution.
The duties on Chinese manufacturers are expected to be 17pc on cars made by BYD, 18.8pc on those from Geely and 35.3pc for vehicles exported by China’s state-owned SAIC. Geely has brands including Polestar and Sweden’s Volvo, while SAIC owns Britain’s MG, one of Europe’s bestselling EV brands.
Other EV manufacturers in China, including Western companies such as Volkswagen and BMW, would be subject to duties of 20.7pc. The commission has an “individually calculated” rate for Tesla of 7.8pc.
The head of Germany’s car industry association, VDA, said the imposition of the tariffs is “a setback for free global trade and so for prosperity, the preservation of jobs and Europe’s growth.”
04:38 PM GMT
Google owner’s shares have ‘a lot of risk’ but seem cheap
Alphabet results are due this evening after 8pm, and the market has been trying to assess the risks the company faces amid antitrust action in the US and its attempts to capitalise on AI.
Earlier this month, The Telegraph’s Questor column noted that the shares seem cheap compared with the S&P 500 average. IT said that “Google has been slow in rolling out its artificial intelligence (AI) technology in its search engine, and could lose market share to the likes of ChatGPT and Meta who are very much on the front foot in this area.”
George Cipolloni, a portfolio manager at Penn Mutual Asset Management, told Bloomberg:
It clearly looks cheap compared to the other Magnificent Seven, but you’re being paid to take a lot of risk, relatively.
Alphabet shares are, however, up 1.2pc today.
04:30 PM GMT
Honest Burgers targets expansion despite battling costs
Honest Burgers has revealed a jump in sales this year as the burger chain unveiled ambitious growth plans, despite battling higher costs.
The company, which runs 39 restaurants in England and Wales, said it generated ￡30m in revenues over the first half of the year.
This was about 11pc higher than the same period last year on a like-for-like basis, which strips out the impact of new restaurant openings on sales comparisons.
Furthermore, newly filed accounts for the company showed its sales surged by a fifth in the year to the end of January, compared with the prior year.
This was driven both by people dining in and ordering takeaways, according to the group.
Honest Burgers was founded in 2009 and now operates in cities including Brighton, Liverpool, London and Cardiff.
The firm said it raised nearly ￡3m through crowdfunding last year to finance the expansion.
Matt Brandon, the chief executive of Honest Burgers, said it marked “the start of our ambition to quadruple the size of our business by 2030”.
Meanwhile, the group revealed that it was squeezed by utilities inflation over the latest year, with many companies across the country grappling with higher electricity prices following the energy crisis.
04:20 PM GMT
Wall Street struggles for direction ahead of Alphabet earnings
Wall Street’s main indexes were mixed in choppy trading this afternoon as investors assessed a host of corporate results and awaited Google-parent Alphabet’s earnings later in the day.
Magnificent Seven member Alphabet’s shares gained 1.1pc ahead of its results due after market close.
This week marks the busiest period for S&P 500 earnings, with eyes on five of the Magnificent Seven group of stocks that are reporting quarterly results.
The group’s results will be crucial to determining whether Wall Street can sustain the optimism around technology and artificial intelligence that has lifted indexes to record highs this year.
David Morrison, senior market analyst at Trade Nation, said:
The S&P 500 appears to be consolidating, with investors unwilling to take on additional risk until they have a clearer picture over the state of the tech giants.
The S&P 500 rose 0.2pc, the Dow fell 0.1pc and the Nasdaq gained 0.5pc.
04:18 PM GMT
Oat milk maker Rude Health sold to Finnish rival
Plant-based food and drink firm Rude Health has been snapped up by Finnish firm Oddlygood.
Oddlygood, which is a plant-based subsidiary of dairy giant Valio, said the move is a step towards its ambition to become one of the sector’s leading companies in the UK.
The firms did not disclose the value of the deal.
Camilla Barnard, who co-founded the business with her ex-husband, told The Times that she expects to make a “seven figure” sum from the deal and stressed it was fortunate timing to close the deal before an expected increase in capital gains tax in Wednesday’s budget.
The two founded the business in 2005 before expanding it to become one of the UK’s largest plant-based milk manufacturers, as well as selling a raft of other products including granola.
Rude Health reported sales of ￡23.8m in the latest financial year and said it is on track to deliver ￡28 million in revenues this year.
Ms Barnard said:
We created Rude Health at our kitchen table, to make healthy eating a celebration, not a sacrifice.
04:12 PM GMT
Tobacco giant Philip Morris to close German factories
Marlboro-maker Philip Morris is to close down its two production sites in Germany in a further blow for German manufacturing jobs.
“In recent years, demand for cigarettes in Europe has fallen significantly,” the company said, adding that it saw the same trend for roll-your-own tobacco.
“This trend is expected to continue in the coming years,” it said.
Many smokers have been shifting to e-cigarettes, or vapes, and heated-tobacco devices.
Philip Morris employs 372 workers at its factories in Berlin and Dresden. Both sites are scheduled for closure next year.
The announcement comes as Germany’s manufacturing sector is experiencing a prolonged period of weakness, bogged down by high energy costs, weak demand at home and abroad and increased foreign competition.
The downturn has fuelled concern about Germany’s attractiveness as an industrial location.
04:01 PM GMT
McDonald’s UK customers not ‘lovin’ it’ as sales lump
McDonald’s sales have fallen for the second consecutive quarter, as the fast food giant struggled with weak demand in the UK, France and other international markets.
The company said global comparable sales slid 1.5pc for the third quarter of 2024, despite sales in the key American market nudging up.
The uptick in US sales was a positive for the chain, which has been trying to lure customers back to burgers and fries after steep price rises in recent years spurred by inflation.
McDonald’s said “effective value and marketing campaigns featuring the core menu” had helped boost revenues in the US.
But, in its international operated markets sales fell 2.1pc, “impacted by negative comparable sales across a number of markets, driven by France and the UK”.
Revenue across the company rose 3pc to $6.9bn (￡5.3bn), while net profit fell 3pc to $2.3bn.
Chris Kempczinski, chairman, said:
We will stay laser-focused on providing an unparalleled experience with simple, everyday value and affordability that our consumers can count on as they continue to be mindful about their spending.
Sales also dipped in China and in the Middle East, where business was dampened by the impact of wars in the region.
Derren Nathan, head of equity research, Hargreaves Lansdown, said:
McDonald’s comparable restaurant takings have fallen for a second consecutive quarter in a row suggesting that the golden arches’ recent focus on value offerings hasn’t yet delivered the intended uplift in volumes.
03:53 PM GMT
Stocks rally stalls amid weak data
Stock markets are a mixed picture today after weaker-than-expected US job stats and disappointing company earnings. Axel Rudolph, senior technical analyst at online trading platform IG, said:
US job openings at their lowest level in over three years, house prices rising the least in ten months and the goods trade deficit rising to over two-year highs dampened investors spirits, as did corporate earnings.
The FTSE 100 is down 0.8pc, Germany’s Dax is down 0.2pc, France’s Cac 40 is down 0.6pc and the S&P 500 is up 0.1pc.
03:45 PM GMT
Pfizer boss says turnaround is underway as it faces activist pressure
Pfizer chief Albert Bourla, under pressure from activist hedge fund Starboard Value, made his case to Wall Street this afternoon that the drugmaker’s turnaround is succeeding. It came after the company reported a higher-than-expected profit due to strong sales of Covid-19 treatment Paxlovid.
Still, investors said the company had work to do to show it can improve its prospects, and Pfizer shares dropped 1.4pc.
Mr Bourla said Pfizer has been taking steps for some time to cut costs and has made changes to its management. The company plans to name a new head of research and development soon, he added.
Activist hedge fund Starboard Value has argued that Pfizer’s board needs to hold management accountable for the company’s underperformance, particularly questioning its record for producing profitable new drugs from internal research and development or acquisition.
Mr Bourla said:
We plan to engage with shareholders, including Starboard, and consider any good ideas to create long-term shareholder value. But I don’t think that the statement ‘Something needs to change,’ is really pragmatic, because it’s coming 15 months late.
The New York-based drugmaker has struggled with a sharp fall in sales of its Covid vaccine and antiviral Paxlovid from pandemic highs, prompting it to launch a cost-cutting program last year and focus on deals to bolster its business.
On Tuesday, the company said the better-than-expected rise in Paxlovid sales reflected higher infection rates during the quarter and strong commercial execution.
Pfizer shares are trading at roughly half of their pandemic peaks. Investors and analysts have said they want to see improved profitability from the cost cuts as well as revenue growth powered by its recent deals.
03:40 PM GMT
Starbucks threatens to fire staff who shirk from home
Starbucks has told around 3,500 head office staff that they could lose their jobs if they work from home more than two days a week.
Bloomberg reported that Starbucks will hold employees accountable “up to, and including, separation” if they do not follow the rule to come into the office three days a week.
“We are continuing to support our leaders as they hold their teams accountable to our existing hybrid work policy,” the company said.
The Telegraph has approached Starbucks for further comment.
Starbucks stock dropped 0.7pc today, while the S&P 500 index rose 0.1pc.
03:31 PM GMT
Reeves pledges to ‘deliver change’ in Budget
The Chancellor is building the anticipation for the Budget, which will finally be announced tomorrow.
No mention in this tweet of the expected tax rises as part of her ￡40bn plan to shore up the public finances.
At this point, I will head off and to make my own preparations for the Budget and will leave you in the capable hands of Alex Singleton for the rest of the day.
03:18 PM GMT
Oil stablises amid hopes for Gaza truce talks
Oil prices have been stable today after tumbling by the most in more than two years on Monday after Israel signalled it would be open to a truce in Gaza.
Brent crude was up 0.3pc at more than $71 a barrel, with US-produced West Texas Intermediate below $68.
The international benchmark plunged by 6.1pc on Monday after Israel signalled it might do a deal in exchange for the release of hostages.
It launched a retaliatory strike on Iran at the weekend which did not target oil infrastructure.
Israeli forces have also made their deepest advance into Lebanon since the start of the ground invasion on October 1, Lebanese media has said.
Oil prices are also being held lower amid predictions from the World Bank that there will be “a glut” of supplies next year, which will drive the cost of Brent lower.
03:00 PM GMT
US job vacancies hit three-year low
US job openings tumbled last month to their lowest level since January 2021 in a sign that the labour market is losing some momentum.
The Labor Department said the number of job openings dropped to 7.4m in September from 7.9m in August. Economists had expected the level of openings to be virtually unchanged.
The number of layoffs also rose, while the number of Americans who quit their jobs fell below 3.1m, the lowest level since August 2020.
02:38 PM GMT
Wall Street edges higher as consumer confidence rises
US stock markets rose at the opening bell as American consumer confidence recorded its largest monthly gain in over three-and-a-half years.
The Nasdaq Composite rose 0.3pc to 18,624.70 while the broad-based S&P 500 gained 0.1pc to 5,829.33 as the Conference Board’s consumer confidence index jumped more sharply than expected to 108.7 in October, despite the impending US election.
The Dow Jones Industrial Average was little changed at 42,395.73.
02:14 PM GMT
Germany ‘to lose 190,000 jobs’ in electric car switch
Germany’s car industry could lose nearly 190,000 jobs as manufacturers switch towards electric vehicles, a new study has warned.
The electrification of the sector will mean there are 186,000 fewer people employed by automotive companies in Europe’s largest economy by 2035 when compared to 2019, according to the industry body VDA.
It said about a quarter of these positions - around 46,000 - have been lost already as car manufacturers plan to make “only a few purely battery-electric vehicles”.
It comes a day after workers at Volkswagen said the company plans to shut at least three factories in Germany and lay off tens of thousands of staff as it tries to embark on a huge cost-cutting turnaround.
VDA president Hildegard Müller said the transformation of the industry “is a mammoth task”.
He said: “One thing is clear - our study shows this once again - that the shift towards electromobility will lead to job losses.
“The lower employment is first and foremost not an expression of a crisis, but a part of the transformation.
“What is crucial, however, is that the political framework supports and accompanies this change.”
01:49 PM GMT
Petrol and food prices to fall over next two years, says World Bank
Petrol and food prices will fall over the next two years amid a slump in the price of oil, a report by the World Bank has said, offering hope to consumers bracing for tax rises in the Budget.
Global commodity prices are projected to plummet by nearly 10pc over the period to 2026, the US-based institution said, as falling demand from China and increased production leads to a “glut” of crude supplies.
The global oil supply is expected to exceed demand by an average of 1.2m barrels per day, a level exceeded only twice before during the pandemic lockdowns of 2020 and the 1998 oil-price collapse.
Assuming the conflict in the Middle East does not intensify, the World Bank predicted in its commodity markets outlook that the annual average price of Brent crude would fall to a four-year low of $73 in 2025 and $72 in 2026, down from $80 a barrel this year.
This would help food prices drop 9pc this year and 4pc next year before levelling off, while energy prices are expected to drop by 6pc in 2025 and an additional 2pc in 2026.
World Bank Group’s chief economist Indermit Gill said: “Falling commodity prices and better supply conditions can provide a buffer against geopolitical shocks.”
It comes as Chancellor Rachel Reeves is thought to be considering axing the freeze on fuel duty for the first time in 13 years, which could rise by as much as 7p.
Edmund King, the AA president, preivously said: “Increasing fuel duty would hit everyone, not just drivers. Everything from the price of food in supermarkets to the delivery of social care within our communities is impacted by pump prices, and an unnecessary hike in fuel duty could make things worse.”
01:21 PM GMT
Hosts of Gary Lineker’s history podcast making almost ￡1m each annually
The hosts of hit podcast series The Rest is History are making almost ￡1m each a year as millions of listeners flock to their show.
Historians Tom Holland and Dominic Sandbrook have shot to stardom since launching the podcast during the pandemic in 2020.
The series, which is made by Gary Lineker’s production company Goalhanger, now has 11m downloads per month and 1.2m monthly YouTube views, as well as 45,000 paying subscribers.
Read how the pair are pocketing ￡77,000 a month as The Rest is History has gained a loyal following.
01:04 PM GMT
FTSE 100 falls ahead of Budget
The FTSE 100 has fallen lower ahead of the Budget and a series of major US company earnings.
Britain’s blue-chip stock index was down 0.3pc, with the domestically-focused FTSE 250 down 1pc as investors wait to see what tax-raising measures are announced in the Chancellor’s speech on Wednesday.
Google-parent Alphabet reveals its earnings later today and was up 0.4pc in premarket trading ahead of its results due after market close, where it is expected to post its slowest revenue growth in four quarters.
This week marks the busiest period for S&P 500 earnings, with eyes on five of the “Magnificent Seven” group of stocks that are reporting quarterly results.
The group’s results will be crucial to determining whether Wall Street can sustain the optimism around technology and artificial intelligence that has lifted indexes to record highs this year.
However, rate-sensitive stocks were under pressure as bond yields continued to rise, with the benchmark US 10-year Treasury yield breaching the 4.3pc level for the first time since early July.
Kim Forrest, chief investment officer at Bokeh Capital Partners, said: “It does look like the curve is normalising, but I do think (yields) will move down at the end of the election and whenever we get more data showing the Fed’s view of inflation versus jobs is correct.”
Other megacap stocks were lower, with Nvidia and Apple both down 0.5pc.
12:40 PM GMT
US stocks on track to fall as company results disappoint
Wall Street is expected to open lower after a series of disappointing company results - with more on the way.
Shares of McDonald’s fell 2.3pc despite beating Wall Street sales and profit targets as its $5 value meals helped lure inflation-weary customers.
It remains to be seen how a recent e.coli outbreak will impact the burger chain’s sales in the current quarter.
McDonald’s had to pull Quarter Pounders off the menu at 900 stores after the US Food and Drug Administration determined that the burger’s slivered raw onions were the likely cause of e.coli contamination.
The outbreak has killed one person and left at least 75 others ill across 13 states.
DR Horton sank 9.6pc and it dragged own other homebuilders as well after its fourth quarter sales and profit declined and it failed to meet the expectations of industry analysts.
Ford slid 5.5pc overnight after thecarmaker reported a big decline in profit late Monday as it took a $1bn charge for a cancelled three-row electric SUV.
Shares of Trump Media & Technology Group jumped 20pc early Tuesday with one week remaining before Election Day.
In premarket trading, the Dow Jones Industrial Average was down 0.4pc, the S&P 500 had fallen 0.2pc and the Nasdaq 100 was down about 0.1pc.
12:04 PM GMT
Hunt attempts to block ‘highly political’ OBR report
Jeremy Hunt has launched a last-ditch attempt to block a “highly-political” report by the Office for Budget Responsibility (OBR) due to be released on the day of the Budget.
The shadow chancellor said it would be “deeply problematic for perceptions of the impartiality of the Civil Service” for the OBR to release its assessment of his preparations for his own fiscal statement in March on the same day Rachel Reeves delivers her speech.
He has written a letter to the Cabinet Secretary urging him to look again at whether the review should be published when it could be used as a “political weapon” by the Chancellor:
11:43 AM GMT
Hargreaves Lansdown brings in ￡100m less new business ahead of Budget
Hargreaves Lansdown suffered a more than 16pc drop in new business last quarter as investors prepare for a tax raid in the Budget.
The London-listed company said it brought in ￡500m in net new business in the three months to September 30, compared with ￡600m in the previous quarter.
Asset retention, a measure of whether customers are selling off their assets on Hargreaves’ platform, fell slightly to 88.6pc from 89pc in the first quarter.
Julian Roberts, an analyst at investment bank Jefferies, said this could be to do with fears about tax increases in Wednesday’s Budget.
Labour is expected to increase capital gains tax, a levy on profits made on investments such as selling shares or property, as part of a bid to fund public spending.
Shares rose 0.2pc as assets under administration finished the quarter in line with analyst expectations at ￡157.3bn, helped by positive market movement of ￡1.5bn.
The company welcomed 18,000 new clients, up from 8,000 previously, driven mainly by its pensions and savings products.
Earlier in October, Hargreaves Lansdown shareholders agreed to a takeover by a private equity consortium including buyout giant CVC Capital Partners and the Abu Dhabi wealth fund.
11:18 AM GMT
Windfall tax to have ‘very, very small’ impact as BP profits fall
BP has revealed its lowest quarterly profit since the pandemic as the oil and gas industry braces for a tax raid in the Budget.
The oil giant’s underlying profits fell from $2.8bn (￡2.2bn) in the second quarter to $2.3bn (￡1.8bn) in the third quarter amid weak oil trading and a slump in refining margins.
Although the profits were better than analysts expected, earnings were down 30pc from the $3.3bn (￡2.5bn) reported this time last year.
The slide in margins comes partly as a result of a more general downturn in global demand for oil recently. Brent crude has fallen from a high of around $91 a barrel in March to $71 today.
John Moore, senior investment manager at RBC Brewin Dolphin, said: “Against a backdrop of difficult trading conditions, this last quarter has not been plain sailing for BP and profit is considerably lower than it was this time last year.
“Oil price conditions, combined with the costs associated with simplification of the business has put BP on the back foot.”
The downturn comes as BP and the rest of the UK oil industry braces for a tax raid in the budget.
Chancellor Rachel Reeves is expected to announce an increase in windfall taxes on energy giants and confirm the removal of investment allowances for oil and gas companies from November.
Ashley Kelty, an analyst at Panmure Liberum, said: “The actual impact of the windfall tax is likely to be very, very small” on BP, given its limited operations in the North Sea.
He said: “The bigger issue is going to be the removal of investment allowances, which is going to bring forward decommissioning by about two years across the board.
“That is more likely to make an impact on BP because obviously the decommissioning costs [mean] their capital expenditure will go up.”
He pointed to research from Rystad Energy, which showed that the removal of investment allowances will mean the North Sea will shut down at least two years earlier than it otherwise would have.
“The windfall tax will end up costing UK plc more than it will generate because of the increased decommissioning,” said Mr Kelty.
The Treasury offers tax relief on decommissioning, with the cost to the state from the decline of the North Sea expected to run into the tens of billions of pounds.
11:10 AM GMT
Gender pay gap narrows in Britain
The gender pay gap for UK workers reduced slightly over the past year, according to new data.
The Office for National Statistics (ONS) recorded a gap of 7pc between male and female earners in April 2024.
It said this declined from 7.5pc from 2023 and means the overall gap has reduced by around a quarter over the past 10 years.
The data showed that men had full-time median earnings, excluding overtime, of ￡19.24 an hour, compared with ￡17.88 for women.
10:54 AM GMT
Mortgage approvals hit two-year high as buyers rush to beat stamp duty rise
Mortgage approvals have raced to the highest level in more than two years, as falling interest rates and pent-up demand trigger a rush of buyers back to the market.
Lenders approved a net figure of 65,600 mortgages for house purchases in September, with the market recovering to levels last seen before Liz Truss’s fateful mini-Budget.
Last time this many mortgages were approved in a single month was in August 2022.
The buoyant figure is the latest in a series of upbeat temperature checks of the housing market, with agreed sales surging to the highest level since autumn 2020 according to Zoopla.
Analysts said falling mortgage rates and growing real incomes have helped breathe life back into the market, as borrowing costs climb down from a 16-year-high.
Peter Stimson at MPowered Mortgages said: “The surge in new mortgage approvals seen in September is the result of accelerating demand from borrowers and intense competition between lenders.”
The Bank of England is widely expected to cut interest rates from 5pc to 4.75pc next week.
Another possible factor is first-time buyers rushing to complete before a widely expected increase in stamp duty thresholds from April.
Rachel Reeves is expected to let the planned rise go ahead in her maiden Budget tomorrow.
However experts said the effect of the increase was more likely to become apparent in subsequent months, as many buyers may not realise until after the Budget that they could get caught out by it.
They also warned that volatile mortgage rates risked scuppering the recovery despite cuts from rate-setters at the Bank of England.
Matt Swannell, chief economic advisor to the EY ITEM Club, said: ““Both two and five-year swap rates have risen by around 20bps over the past month, largely reflecting international developments as markets take a more hawkish view of the US interest rate outlook.”
10:43 AM GMT
Ford workers to go on strike in pay row
More than 1,000 Ford workers will go on strike on the day of the Budget in a row over pay.
Staff at the car maker’s sites in Dunton, Stratford, Dagenham, Daventry and Halewood will walk out amid attempts to change its sick pay policy.
The union Unite announced the strikes today, saying Ford has not offered workers a permanent pay rise and instead offered office workers a one-off payment for this year.
It said the company also wants to impose 100pc performance related pay from 2025 for all staff.
The workers began industrial action short of strike action on August 22 will walk out for 24 hours on Wednesday, the same day that Rachel Reeves will announce her plans aimed at improving the lives of “working people” in the Budget.
Unite general secretary Sharon Graham said: “Despite its huge wealth, Ford has launched a direct attack on its office workers’ pay and terms and conditions. The only reason for this is corporate greed.
“The company’s appalling treatment of our members has simply made them more determined to fight against these cruel and unnecessary changes and for a fair pay rise. They have Unite’s total and unflinching support as they strike for a better deal.”
10:26 AM GMT
Adidas scores with demand for retro football shirts
Strong demand for retro football shirts helped boost sales at German sportswear giant Adidas, as it revealed profits jumped by almost €200m (￡167m) in its third quarter.
Adidas said clothing sales were lifted by double-digit growth in football kits and shirts.
The retailer said this came after it released retro-inspired third jerseys and a range of other products featuring the Trefoil logo for its major European clubs.
Adidas chief executive Bj?rn Gulden said it had been a “very strong” period for the company, with “numbers that we are very happy with”.
Operating profits came in at €598m for the three month period compared to €409m a year earlier.
Mr Gulden said this was “proof that we are moving in the right direction”.
It follows a major drive to try to revive the company after it was struck by the collapse of its lucrative partnership with Mr West, who now goes by the name Ye.
Earlier this year, it posted its first annual loss in more than 30 years following the discontinuation of the deal.
It has since been focusing more on sales of its classic styles including its Samba and Gazelle shoes.
In the latest three month period, revenues were up by double digits in most geographies, stripping out currency effects.
09:59 AM GMT
YouGov suffers ￡1.8m blow after cyber attack
YouGov has taken a ￡1.8m loss after suffering a cyber attack in which hackers made a fraudulent payment.
The pollster said it was the victim of a “social engineering event” in which scammers deployed impersonation technology to authorise the transfer.
YouGov said there was no breach of its systems and no data was compromised.
It added: “We believe we have taken the necessary actions, and sufficiently increased control measures and employee awareness, to prevent future incidents of this nature.”
It came as YouGov’s sales were slightly ahead of expectations for the full year, though growth was still down sharply on the previous year.
Revenues were up 30pc to ￡335m thanks to better-than-expected trading for its Consumer Panel Services (CPS) business, which the company bought from GfK in a €315m deal earlier this year.
However, revenues were only up 3pc on an underlying basis, down from 9pc growth the previous year.
Pre-tax profits slumped from ￡45m to just ￡4m due to costs linked to the acquisition, as well as provisions for its upcoming cost-cutting plan.
YouGov is expected to start cutting jobs after outlining plans to slash ￡20m in costs. Bosses said they had taken initial action on around ￡17m.
Shares jumped 11pc following the update, but remain down by two thirds in the year so far.
09:51 AM GMT
Santander shares slump as it scrambles to assess car finance court ruling
Santander shares dropped today after the UK arm of the Spanish bank delayed its third quarter results as it assesses the impact of a landmark court ruling about the historical “mis-selling” of motor finance loans.
The Madrid-based lender’s London-listed shares were down as much as 3.1pc, potentially wiping nearly ￡1.9bn off its market valuation, after the decision to postpone its UK results.
Santander said it “disagrees with the conclusions” reached by the Court of Appeal, which ruled on Friday that motor finance brokers must fully inform customers about commission received from arranging car loans.
The outcome wiped more than ￡3bn off the market valuation of Lloyds Bank on Friday amid concerns that the UK banking industry could be on the hook for billions of pounds in customer compensation.
Santander said: “It is not practicable to reliably estimate at this point in time the extent of any potential financial impact.
“However, Santander UK Group is taking time to consider the judgment and the potential exposure it creates for the Santander UK Group.”
09:30 AM GMT
Lufthansa hit by plane delivery delays
German airline Lufthansa reported a drop in earnings as delayed jet deliveries and air traffic control disruption took the sheen off surging summer sales.
Operating profit fell 9pc to €1.3bn (￡1.1bn) in the three months through September, even as Lufthansa posted record quarterly revenue and its highest-ever August occupancy levels.
Boss Carsten Spohr said: “Delayed aircraft deliveries, punctuality issues at our hubs in Germany and regulatory disadvantages are impacting our core brand.”
Lufthansa, the first major European carrier to report earnings for the vital summer season, has also been hit by costs from diversions around Russia and a weak recovery in some of its long-haul corporate travel markets after Covid, with fares to Asia slumping 14pc.
At the same time, leisure demand soared over the peak holiday months, when European airlines traditionally make most of their profits, including the strongest-ever August.
Forward bookings remain strong, it said, with far fewer seats left unoccupied in November and December than last year, especially in the business- and first-class cabins.
Lufthana’s figures will be closely watched in the industry, with four other airlines among Europe’s top six due to report next week.
They include Ryanair, which has suffered disruption from delayed aircraft deliveries from Boeing, and British Airways parent, IAG, which recently hit out at delays it blamed on UK air traffic control provider NATS.
09:11 AM GMT
FTSE 100 rises as HSBC announces $3bn share buyback
The FTSE 100 stock index rose after HSBC third-quarter profit beat estimates and it launched a $3bn buyback plan.
The blue-chip index rose 0.3pc, while the midcap FTSE 250 index fell 0.4pc ahead of the Budget.
HSBC jumped as much as 4.9pc after the lender turned in a better-than-expected third-quarter profit amid rising wealth and wholesale banking revenue.
It lifted the banking sector up as much as 2.8pc, with peers Standard Chartered and Prudential also climbing as much as 2.6pc and 3pc, respectively.
The oil and gas sector fell as much as 0.4pc as BP dropped by as much as 1.3pc after it reported a 30pc drop in third-quarter profit to $2.3bn (￡1.8bn), the lowest in almost four years.
Pearson was up 3.8pc after the British education company reported a 5pc growth in underlying sales in its third quarter, boosted by stronger performance in assessment and qualifications.
08:57 AM GMT
Pearson sales rise as AI boosts study tools
Pearson has posted a rise in sales as the education publisher was boosted by its rollout of artificial intelligence (AI) study tools.
The London-listed company reported a 5pc rise in underlying sales in the third quarter thanks to growth across its division.
Higher education returned to growth over the quarter, with sales up 4pc. Bosses said the company had recorded over 5m student interactions with its AI tools in the nine months to September.
Shares rose 2.3pc in early trading as Pearson also reported strong growth in its English language learning tests, as well as for its workplace skills qualifications.
The company said it was on track to meet expectations for the full year.
Omar Abbosh, Pearson chief executive, said: “We are accelerating our AI capabilities across the business and starting to see the commercial benefit.”
08:39 AM GMT
Pound volatility rises ahead of Budget
A measure of volatility in the trading of the pound has moved higher ahead of Rachel Reeves’ new Budget on Wednesday.
So-called overnight implied options volatility rose to its highest for sterling since October 9.
The pound itself has edged higher by 0.1pc against the dollar today to $1.298, and is on course for its first monthly loss since September 2023, down around 3pc.
Ms Reeves will deliver the first Labour budget in 14 years on Wednesday, two years after then-Prime Minister Liz Truss’ tax-cutting plans sparked a crisis in the bond market.
She plans around ￡40bn worth of fiscal measures, mostly from tax increases plus cuts to some public services, to meet her pledge to cover day-to-day spending without borrowing.
ING strategist Francesco Pesole said: “Sterling continues to look vulnerable ahead of tomorrow’s budget event and next week’s U.S. election, and risks remain skewed to a move to $1.2800-1.2850.”
08:09 AM GMT
UK markets edge up at the open
The FTSE 100 has opened higher as investors gear up for the Budget.
The UK’s blue-chip stock index was up 0.2pc to 8,305.08 while the midcap FTSE 250 was little changed at 20,835.63.
08:04 AM GMT
Budget leaks necessary to avoid shocking markets, says Streeting
Disclosing parts of the Budget ahead of time is necessary to avoid shocking the markets, Health Secretary Wes Streeting has said.
Commons Speaker Lindsay Hoyle had complained that it is “unacceptable to go around the world telling everybody” about “major” new policy announcements rather than giving the information first to MPs.
“Look, I can firstly confirm for the benefit of Mr Speaker, in case he’s listening, certainly, what I’m announcing today is the delivery of Labour’s manifesto, so we are honouring our commitments,” Mr Streeting told Times Radio.
“So, you know, I hope I don’t find myself on the wrong side of the Speaker and, look, there’s a serious point here, which is it was important for the Chancellor when she was in Washington last week to explain the context in which she’s making some big reforms to our economy and the way that she handles investment in our national infrastructure.
“That was important to make sure that this Budget lands in the right context with the financial markets.
“We saw what happened with Liz Truss and Kwasi Kwarteng when they ignored the Office for Budget Responsibility and sidelined them, when they took the markets by surprise, they ended up tanking the economy, and we are still paying the price for it.
“But we do take the speaker seriously. We take Parliament seriously. We are members of Parliament first and foremost, and we’ve all heard very, very clearly and plainly what Mr Speaker said yesterday, and we will certainly be taking that into account in terms of our conduct in the coming days, weeks and months.”
07:47 AM GMT
German consumer morale ‘extremely low’
The mood of German consumers is improving as they head into November but remains “extremely low” amid war in Europe and corporate crises at home, a key survey showed.
A survey of around 2,000 people showed that consumer morale was up for a second month in a row, said pollsters GfK and the Nuremberg Institute for Market Decisions.
However, NIM consumer expert Rolf Buerkl said “despite this increase, the level of consumer sentiment remains extremely low”.
The forward-looking indicator rose 2.7 points to minus 18.3 points for November, they said in a statement that also revised the October data.
This is the highest level since April 2022, when the mood plummeted after Russia launched its full-scale invasion of Ukraine.
Mr Buerkl added: “The anxiety caused by crises, wars and rising prices is currently still very pronounced.”
This trend, he said, is “preventing positive factors, such as noticable rises in real income, from having a full impact”.
07:32 AM GMT
HSBC not about to be split up, insists boss
The new boss of HSBC said he is not about to break up the banking giant as it increased pre-tax profits by $800m (￡600m) to $7.7bn (￡5.9bn) for the third quarter.
Georges Elhedery unveiled a sweeping overhaul of the British universal bank last week by splitting it into East and West, raising fears the move could lead to less scrutiny of its operations in China and Hong Kong.
However, he insisted the change in strategy “does not signal intention to split the group” as the bank revealed its latest increase in profits, which was primarily driven by foreign exchange, equities, global markets, as well as revenue growth in wealth and personal banking.
The bank’s net interest income of $7.6bn (￡5.8bn) fell by $1.6bn (￡1.2bn), compared with the same time last year.
The decreased result was credited to higher business disposals, increased interest expense on liabilities, and a loss on the early redemption of legacy securities.
However, the bank also announced a fresh share buyback of up to $3bn.
Mr Elhedery said: “HSBC is a highly connected, global business and the plans we set out last week aim to increase our leadership and market share in areas where we have competitive advantage, deliver best-in-class products and service excellence to our customers, and create a simpler, more dynamic, more agile organisation with clearer lines of accountability and faster decision-making.”
He added: “We will begin to implement these plans immediately and will share further details as part of a business update alongside our full-year results in February.”
07:20 AM GMT
BP to return $1.75bn to shareholders despite fall in profits
BP’s boss insisted the company is making progress on his plans to make the business “higher value” for shareholders as profits dipped in the third quarter amid weak oil trading.
Underlying profits fell from $2.8bn (￡2.2bn) in the second quarter to $2.3bn (￡1.8bn).
However, it maintained its plans to boost returns to shareholders, announcing a further $1.75bn in share buybacks.
Chief executive Murray Auchincloss is under pressure from investors to boost returns amid a slump in BP’s share price, which has fallen by almost 25pc over the past year.
He is reportedly planning to abandon the company’s target to cut oil and gas production by 2030 as he seeks to boost returns to investors.
Mr Auchincloss said: “We have made significant progress since we laid out our six priorities earlier this year to make BP simpler, more focused and higher value.
“In oil and gas, we see the potential to grow through the decade with a focus on value over volume.
“We also have a deep belief in the opportunity afforded by the energy transition - we have established a number of leading positions and will continue high-grading our investments to ensure they compete with the rest of our business.”
06:50 AM GMT
Shop prices fall at fastest pace in three years
Prices in the shops this month were down by 0.8pc on average compared to October of last year, according to the BRC, marking the sharpest fall in costs since August 2021, just before inflation accelerated steeply.
Food costs 1.9pc more now than it did a year ago, the industry group said. That is the slowest pace of inflation for food since March 2021.
Ms Dickinson said price pressures have eased particularly for meat, fish, tea, chocolate and sweets.
At the same time non-food products cost 2.1pc less than they did 12 months ago.
Discounting for mobile phones and for furniture helped pull down costs, she said, though clothes prices increased for the first time since January as stores cut back on fashion offers.
06:47 AM GMT
Reeves risks stoking shop inflation in Budget, retailers warn
Households risk a fresh surge in shop prices unless Rachel Reeves provides businesses with a ￡1.8bn tax break, retail bosses have warned.
Shoppers are benefitting from some lower prices, offering relief from the cost of living crisis, but Helen Dickinson, chief executive of the British Retail Consortium, said the threat of mounting tax puts this at risk.
She said: “Households will welcome the continued easing of price inflation, but this downward trajectory is vulnerable to ongoing geopolitical tensions, the impact of climate change on food supplies, and costs from planned and trailed Government regulation.
“Retail is already paying more than its fair share of taxes compared to other industries. The Chancellor using tomorrow’s Budget to introduce a Retail Rates Corrector, a 20pc downwards adjustment, to the business rates bills of all retail properties will allow retailers to continue to offer the best possible prices to customers while also opening shops, protecting jobs and unlocking investment.”
The retail, leisure and hospitality industries currently benefit from a tax break worth up to 75pc of their business rates bill.
Much of the ￡2.4bn benefit goes to smaller companies as the amount of relief is capped at ￡110,000 per business.
The tax break is set to expire in the spring, so the BRC wants a permanent replacement to the scheme in the form of a lowering of rates across the board.
Businesses also face the prospect of a higher tax charge on their wage bill if Ms Reeves increases employers’ national insurance in Wednesday’s Budget. The BRC estimates that every extra percentage point on the tax, which is currently levied at 13.8pc, costs retailers another ￡500m.
On top of that comes the proposed changes to workers’ rights, which will further add to the costs of running a labour-intensive business such as retail.
A Treasury spokesman said: “We do not comment on speculation around tax changes outside of fiscal events.”
06:42 AM GMT
Good morning
Thanks for joining me. We start off with a warning from retailers about the risk of shop price inflation unless the Chancellor maintains a ￡1.8bn tax break for the sector.
The boss of the British Retail Consortium said the downward trajectory of inflation is “vulnerable” unless Rachel Reeves extends a tax break worth up to 75pc of retailers’ business rates bill beyond the spring.
5 things to start your day
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Reeves to hand workers pay rises of more than triple rate of inflation | Chancellor expected to increase minimum wage from ￡11.44 to ￡12.10
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Covid handouts are to blame for male worklessness, says former Trump secretary | Interview: Wilbur Ross on a welfare payments ‘disease’ and dwindling work ethics
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How Britain turned nasty – and left workers to pay the price | Escalation in violence is forcing retailers to ramp up their efforts to protect staff
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China to create TV shows and films that promote ‘childbearing culture’ | Beijing launches drive for ‘fertility-friendly’ content to tackle plunging birth rate
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Andrew Orlowski: How ‘big tech’ barons are plotting to steal Britain’s creativity | Starmer is about to hand our copyright ‘crown jewels’ over to AI
What happened overnight
Asian equities climbed as traders prepared for the US election and key economic data that will set the stage for the next Federal Reserve decision.
Shares gained in Hong Kong, Tokyo and Australia while equities in China fluctuated. US futures edged lower after most major groups in the S&P 500 gained at the start of the busiest week for corporate earnings. Treasury yields slipped.
In currency markets, the yen strengthened after Japanese Prime Minister Shigeru Ishiba promised to restore political stability in a bid to maintain power, following his ruling coalition’s failure to win a majority in the lower house.
Separately, data showed investors yanked money out of exchange-traded funds that buy Chinese stocks last week, halting a streak of inflows as the latest stimulus measures failed to impress investors.
In commodities, oil steadied after tumbling about 6pc on Monday, the biggest decline in more than two years, as the market focused on the prospect for easing hostilities in the Middle East and upcoming US economic data. Gold edged higher.
On Wall Street on Monday, the Dow Jones Industrial Average rose 0.7pc, to 42,387.57, the S&P 500 rose 0.3pc, to 5,823.52 and the Nasdaq Composite rose 0.3pc, to 18,567.19.
Benchmark 10-year US Treasury yields hit a three-month high ahead of this week’s data and the election. They were 4.29pc last night, up from 4.28pc late on Friday.