Trump ‘to deal ￡20bn blow to British economy’
In This Article:
Donald Trump’s plans to impose tariffs on goods entering the US will deal a ￡20bn blow to Britain’s economy, analysts have warned.
The President-elect’s plans to impose levies of 60pc on Chinese products sold to American businesses, as well as 20pc tariffs on all other imports “pose challenges” for the Government, according to the Centre for Economics and Business Research (CEBR).
It said such a plan, without retaliation, could reduce UK gross domestic product (GDP) by 0.9pc by the end of the Trump administration. That is equivalent to about a ￡20bn blow at the end of his term, based on 2023 figures on the size of the British economy.
Meanwhile, estimates from the National Institute of Economic and Social Research (NIESR) suggest that 10pc tariffs could cut UK economic growth by 0.7 percentage points.
The CEBR said the clearest way to avoid the blow would be to agree a free-trade deal with the US, but it acknowledged that issues over food standards were unlikely to make this possible.
Instead, it urged ministers to “bolster [the UK’s] position as a leader in green technology” to counteract Trump’s likely rollback of Joe Biden’s flagship Inflation Reduction Act (IRA).
Economist Sara Pineros said: “The Chancellor faces a pivotal period to act on her pro-growth agenda and position the UK as a competitive destination for investment.
“Ultimately, while US tariffs and rising protectionism pose challenges, other proposals under a new Trump administration also present opportunities for the UK to adapt and thrive.
“Without strengthening its approach, the UK risks taking all the pain associated with a Trump presidency without realising the potential gain.”
Read the latest updates below.
06:25 PM GMT
Signing off...
Thanks for joining us today.
The Markets blog will be back tomorrow before the London markets reopen. In the meantime, I will leave you with some of our latest commentary:
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Ben Marlow: Gap-year Keir’s kowtowing to Xi will make a deal with Trump even harder
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Roger Bootle: Trump is backing tariffs in the fight against America’s trade deficit
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Matthew Lynn: Reeves knows what Britain’s problem is, but she has no idea how to fix it
06:07 PM GMT
S&P 500 and Nasdaq gain as Tesla jumps
The S&P 500 and the Nasdaq rebounded on Monday, as Tesla jumped as much as 8.7pc on the prospect of favourable policy changes from the incoming Trump administration.
Earnings from Nvidia, which reports third-quarter earnings on Wednesday, will be crucial this week as investors assess if the euphoria around AI, which drove much of markets’ rally this year, can be sustained.
The chip designer, which powered 20pc of the S&P 500’s return over the past year, dipped 1.7pc today.
Jay Woods, chief global strategist, Freedom Capital Markets
What we got last week was a hangover from the post-election rally. We’ve been able to rally back a little [after the sell-off], but it’s kind of slow.
If we see anything that leads to downward pressure price wise [from Nvidia], it could drag the whole semiconductor index and that doesn’t bode well.
The S&P 500 rose 0.5pc, the Nasdaq gained 0.7pc, while the Dow Jones was roughly flat.
Rising expectations that the Federal Reserve will slow the pace of rate cuts, along with uncertainty over the impact of Trump’s cabinet appointments, led to the S&P 500 and the Nasdaq logging their worst weekly losses in more than two months last week.
05:51 PM GMT
Port pays companies to use freight trains under net zero push
Britain’s biggest port operator is paying customers not to transport goods by road in an effort to meet green targets.
DP World is providing a ￡70 subsidy for every shipping container taken by rail, rather than road, from Southampton, the UK’s third-busiest port. Support applies for onward transport within 140 miles of the port.
The sweetener is being permanently adopted after a year-long trial, which helped lift the proportion of containers leaving by freight train from 21pc to more than 30pc. The increase is estimated to have led to 64,000 fewer truck journeys on Britain’s roads and cut carbon emissions by 17,000 tons.
DP World said it will extend the scheme with the aim of increasing rail usage to 40pc by 2026.
The need for a cash incentive to wean importers off road haulage highlights the challenge facing Labour. Ministers have pledged to make growth in train freight a central plank of railway nationalisation, but DP World’s experience suggests it may need to offer subsidies to achieve this aim.
05:34 PM GMT
European shares stall as property stocks pull indexes down
European shares kicked off the week on a dour note, weighed down by declines in real estate stocks.
The pan-European Stoxx 600 index closed 0.1pc lower.
But the FTSE 100 gained 0.5pc, outperforming its continental peers.
The Stoxx 600 posted its first four-week losing streak in two and a half years on Friday, hit by disappointing earnings, a jump in Treasury yields and concerns about the impact of US president-elect Donald Trump’s policies.
Rate-sensitive real estate stocks led sectoral declines on Monday, while European tech shares dipped 0.4pc ahead of AI bellwether Nvidia’s quarterly results on Wednesday.
05:28 PM GMT
EU must stop individual countries holding up free trade deals, says Scholz
German chancellor Olaf Scholz urged the EU today to conclude a trade deal with South America’s Mercosur bloc and to prevent single countries from putting the brakes on such agreements in the future.
He told reporters in Rio de Janeiro:
We must abandon the principle of how free trade agreements have been negotiated up to now.
05:24 PM GMT
Profits jump at self-storage business Big Yellow
Big Yellow, the self-storage company, promised to continue buying more land as it unveiled boosted profits this afternoon.
Pre-tax profits rose 22pc to ￡145.8m for the six months to the end of September, while turnover rose 3pc to ￡103m.
Adam Vettese, market analyst at eToro, said:
It’s been a struggle on many fronts for Big Yellow over the last couple of years, with higher rates causing borrowing costs to skyrocket, property devaluation weighing on their portfolio as well as input costs soaring.
05:17 PM GMT
‘Go for gold’ to hedge Trump inflation risks, investors told
Donald Trump’s election victory means investors should “go for gold” to protect themselves against the risk of a fresh wave of inflation, analysts at Goldman Sachs have said.
The president-elect’s plans for extra taxes on imports, mass deportations of illegal immigrants and heavy government borrowing all risk driving up prices, the investment bank said.
Mr Trump may also undermine the Federal Reserve’s independence, the analysts warned, making it harder for the central bank to keep a lid on inflation.
In a note to clients, Goldman Sachs said uncertainty surrounding Mr Trump’s policies meant investors should turn to gold and oil to offset any potential risks.
The analysts said: “The unusually wide range of potential US policy shifts in 2025 strengthens the diversifying role of commodities in portfolios.
“In particular, long gold and oil positions can act as critical inflation and geopolitical hedges in tail scenarios, including tariff escalation (gold), geopolitical oil supply disruptions (oil and likely gold), and debt fears (gold).”
05:12 PM GMT
Oil jumps as Biden approves use of long-range missiles by Ukraine
Oil prices rose today, after US president Joe Biden decided to allow Ukraine to fire US-supplied missiles at targets inside Russia.
Industry benchmark Brent Crude gained as much as 3.2pc. It is currently up 2.8pc at $73.03 a barrel.
Rebecca Babin, senior energy trader at CIBC Private Wealth Group, told Bloomberg:
The concern with these headlines is that they could draw the US more directly into the conflict, potentially put Russian energy assets back at risk, and increase the likelihood of North Korea becoming more directly involved.
04:55 PM GMT
FTSE 100 closes up
The FTSE 100 closed up 0.6pc today, buttressed by gains in precious metal miners as bullion prices rebounded.
Aerospace manufacturing company Melrose Industries was the biggest riser, gaining 7.6pc, while Irish conglomate DCC added 3.6pc.
At the other end of the index, retailer B&M fell 8.1pc, while housebuilder Vistry lost 5.6pc.
Meanwhile, the mid-cap FTSE 250 fell 0.4pc
The top riser was North Sea engineering business John Wood, up 5.5pc, followed by PayPoint, up 3.7pc.
However, tech investor IP Group led the fallers, losing 8.7pc and City firm Close Brothers lost 6.5pc.
04:32 PM GMT
China can evade Trump tariffs, says Beijing adviser
Chinese companies would seek to evade Donald Trump’s proposed tariffs by selling products through other countries, a leading Beijing adviser has suggested.
The FT has reported comments by Ding Yifan, a researcher at a think-tank affiliated with China’s cabinet, the State Council.
Mr Ding said:
If they double the tariff, Chinese enterprises have their own ways to evade this, to avoid the risks.
He warned that attempts to prevent Chinese imports into the US would cause “chaos”. He said:
Downstream American companies will not be able to find substitute products in a very short period of time if Chinese companies are not able to provide them with the products.
04:28 PM GMT
Pound gains against the yen as Japanese central bank talks of ‘uncertainties’
The pound and the dollar rose against the yen today after Japan’s top central bank official signalled further monetary policy tightening was likely, but was vague on the timing of any such hike.
Bank of Japan governor Kazuo Ueda said that the economy was progressing toward sustained wages-driven inflation and warned against keeping borrowing costs too low, leaving open the chance of another interest rate increase as early as next month.
But Ueda offered no hints as whether a hike would come in December, as there were various “uncertainties” that needed to be examined.
Marc Chandler, chief market strategist at Bannockburn Global Forex in New York, said:
Because of the chaos caused in July, the market is anticipating that BoJ would better prepare the market for the next move and the Bank of Japan governor didn’t do that today, and so I think the yen weakened.
The BOJ had unexpectedly raised short-term interest rates at its July meeting.
The pound rose 0.4pc against the yen, while the dollar rose 0.2pc.
03:59 PM GMT
French farmers back on the streets as Mercosur trade talks stir fury
Farmers staged protests across France on Monday at the prospect of a trade deal between the EU and South America’s Mercosur bloc, which will further intensify competition for the French agriculture sector.
The EU and four Mercosur members - Argentina, Brazil, Paraguay and Uruguay - are pushing to conclude long-running trade negotiations by the end of the year.
Monday’s protests were the biggest since French farmers held weeks of large-scale demonstrations last winter over cheaper imports, burdensome regulations and meagre incomes.
The protests were mostly peaceful on Monday but tractors briefly blocked part of a highway near Paris in the morning, while others dumped manure in front of government buildings.
This year French farmers have had to contend with rain-hit harvests, livestock disease outbreaks and a parliamentary election that delayed measures promised to defuse the previous protests.
A Mercosur deal would represent a bitter “cherry on the cake”, Arnaud Rousseau, head of France’s main farmers’ union, the FNSEA, said.
Tens of thousands of farms in France, the EU’s biggest agricultural producer, were in financial trouble, he said.
03:55 PM GMT
Telecoms cable linking Finland and Germany likely severed, owner says
A fibre optic communications cable linking Finland and Germany along the seabed has stopped working and may have been severed by an outside force, Finnish state-controlled cyber security and telecoms network company Cinia said today.
The 745-mile C-Lion1 cable running through the Baltic Sea from Finland’s capital Helsinki to the German port of Rostock malfunctioned just after 2am, the company said.
The sudden outage implied that the cable was completely severed by an outside force, although a physical inspection has not yet been conducted, Cinia’s chief executive Ari-Jussi Knaapila told a press conference.
The damage occurred near the southern tip of Sweden’s Oland island and could typically take between five and 15 days to repair, he added.
Cinia said it was working with authorities to investigate the incident.
03:52 PM GMT
Asos boss enjoys pay deal jump despite company’s heavy losses
The boss of Asos has seen his pay deal jump by almost 44pc for the past year, despite widening losses at the online fashion giant.
The latest annual report for the London-listed retailer showed that chief executive José Antonio Ramos Calamonte was boosted by a bonus payment for the past year.
Mr Ramos Calamonte received a pay package worth ￡1.17m for the year to Sept 1.
Earlier this month, Asos told shareholders that it slumped deeper into the red with pre-tax losses of ￡379.3m for the year to Sept 1, against losses of ￡296.7m the previous year.
However, the chief executive said it was seeing “green shoots” start to appear from its overhaul process.
A spokesman for Asos said:
All employee remuneration is approved by the board and based on industry benchmarks and achieving strategically important objectives.
03:41 PM GMT
Mixed picture on Wall Street as traders await Nvidia’s results
Wall Street’s main indexes provide a mixed picture this afternoon.
The S&P 500 is up 0.4pc, the Dow Jones Industrial Average of 30 leading US companies is down 0.1pc and the tech-heavy Nasdaq is up 0.9pc.
Investors are looking ahead to earnings from AI-chip leader Nvidia following declines to its share price on apprehensions about Donald Trump’s cabinet appointments and the central bank’s policy path.
Results from Nvidia, which reports third-quarter earnings on Wednesday, will be crucial as investors assess if the euphoria around AI, responsible for much of markets’ tech-driven rally this year, can be sustained. Its stock has nearly tripled in value this year.
Nvidia’s shares are down 1.1pc today.
Robert Pavlik, senior portfolio manager at Dakota Wealth, said:
I’m optimistic that they’re going to continue to beat, but ... optimism has been so high on that particular name that you can’t help but see some potential for a bit of a sell-off.
03:35 PM GMT
Huel profits jump as products hit more stores
Meal replacement firm Huel has revealed a sharp jump in profits as more of its products hit UK supermarkets.
The food, drink and nutrition business reported a pre-tax profit of ￡13.8m for the year to July, up 194pc on the previous year.
This came as revenues lifted by 16pc to ￡214m for the year, boosted by continued growth online and the expansion of its retail presence.
James McMaster, chief executive of Huel, said the company is taking a “firmly omnichannel” approach in order to keep growing sales.
He stressed that the vast majority of UK food and drink sales are still through grocery stores and the brand therefore needs to be where those customers are.
The firm first launched into supermarkets five years ago, but has rapidly grown in bricks-and-mortar retail recently.
It said its products are now available in 25,650 stores globally, more than doubling its presence from a year earlier.
03:32 PM GMT
Musk criticises Biden for allowing Ukraine to use American long-range missiles in Russia
Donald Trump’s allies have accused Joe Biden of escalating the war in Ukraine by authorising the use of long-range American missiles for strikes inside Russia.
Elon Musk said it was “true” that lifting restrictions on the use of Atacms showed that “Libs love war,” in reply to a post on X by Mike Lee, a Republican senator from Utah.
It comes as German chancellor Olaf Scholz has faced renewed pressure to send German-made cruise missiles to Ukraine after the US decision.
Mr Scholz has faced criticism for holding a phone call with Vladimir Putin in an attempt to lay the groundwork for peace talks.
Today, the German army took delivery of the first of up to 82 H145M multi-role helicopters from Airbus, pictured below.
With that, I will leave you for the day. Alex Singleton will keep you up to speed with the latest markets news from here.
03:16 PM GMT
Great British Nuclear to put ￡1.8bn worth of mini-nuke contracts up for grabs
Nearly ￡2bn worth of construction contracts for Britain’s first mini-nuclear power plants will be up for grabs next year as officials prepare sites for the pioneering energy projects.
Great British Nuclear (GBN), the government body tasked with spearheading the development of small modular reactors (SMRs), expects to put the work out for tender between February and July 2025, according to official documents.
The biggest jobs available will be at least two ￡800m “delivery partner” contracts to manage the construction of the SMRs over a period of 10 years.
Read how the approach represents a major break from the model used for Hinkley Point C, in Somerset.
02:55 PM GMT
Russian gas still reaching Europe despite imports row
Russian gas appeared to still be reaching Austria despite Gazprom cutting off flows to importer OMV over the weekend due to a contractual dispute, data showed today.
Slovakia is a transit route mostly for Russian gas flowing through Ukraine to Austria and the Czech Republic.
Flows from Slovakia to Austria were around 27m cubic metres (mcm) per day before Gazprom supplies to OMV were stopped on Saturday and then fell by around 17pc to around 22.6mcm/day on Sunday, according to preliminary data from the Slovakian transmission system operator Eustream.
Nominations for planned shipments are for 22.3mcm for Monday from Slovakia into Austria, data form Eustream showed.
Partial preliminary data showed around a third of that amount had already gone through since the morning.
Austria’s OMV had been receiving about 17mcm/day from Gazprom before the cut-off, and those volumes are now finding new buyers or middlemen in Europe who stepped in to snap up unsold gas, companies and Reuters sources said.
European wholesale gas prices remained lower on the day at about €46 per megawatt hour.
02:36 PM GMT
Tesla surges amid reports Trump will change self-driving rules
Tesla surged after it was reported Donald Trump is on the verge of easing the rules around self-driving cars.
The electric car-maker jumped 6.9pc on Wall Street - adding about $69bn to its market valuation - after members of the president-elect’s transition team told advisers to make plans for a federal framework for fully autonomous vehicles, according to Bloomberg News.
Tesla’s chief executive Elon Musk has bet the company’s future on self-driving vehicles and artificial intelligence (AI), but current federal rules pose significant roadblocks.
He was appointed by Mr Trump last week to lead a new Department of Government Efficiency tasked with removing bureaucracy.
He said his appointment to the role “will send shockwaves through the system, and anyone involved in Government waste, which is a lot of people”.
Mr Trump hailed the new department as “potentially the Manhattan Project of our time” and insisted DOGE would “drive large scale structural reform, and create an “entrepreneurial approach to government never seen before”.
Tesla shares have climbed by about 30pc since Mr Trump was elected as the 47th President of the United States.
02:32 PM GMT
US stocks mixed at the open ahead of Nvidia results
Wall Street lacked direction at the opening bell as investors held back ahead of Nvidia’s latest earnings later this week.
The Dow Jones Industrial Average, of which the semiconductor giant is a member, was down 0.1pc to 43,382.37.
The broad-based S&P 500 was fractionally lower at 5,868.39 while the tech-heavy Nasdaq Composite rose 0.1pc to 18,695.38.
02:08 PM GMT
Police clear Tesla protesters from camps near gigafactory
Police have begun clearing a camp of protesters in a forest near Tesla’s gigafactory in Germany as the electric car maker prepares to press ahead with expansion plans.
Tesla was given the green light to expand its Berlin gigafactory in May despite environmental activists taking part in huge protests at the plant.
A forest camp has remained in place woodland earmarked to be destroyed as part of the scaled-back plans to expand the manufacturing base in Grünheide. The approved plan is roughly half the size of Tesla’s original proposal to clear around 250 acres of forest.
Protesters said police have moved in today and begun evicting activists from the site.
The group, operating under the banner Tesla den Hahn abdrehen - roughly translated to Turn off Tesla’s Tap - said it “condemns the ongoing eviction the peaceful forest occupation”.
Spokesman Karolina Drzewo said: “We call on all residents not to accept this! Come to Grünheide and show your protest with us.”
The local police force has been contacted for comment.
01:43 PM GMT
Bitcoin rises back above $90,000
The price of bitcoin rose back above $90,000 today as excitement remained over Donald Trump’s potential plans for deregulation of the digital asset industry.
The world’s largest cryptocurrency surged above $92,000 at one point having fallen by nearly 3pc over the weekend. It was last worth about $89,785.
David Morrison, senior market analyst at Trade Nation, said: “Bitcoin is yet another market that is consolidating after an impressive rally.
“So far, speculators seem unwilling to book profits in great numbers, as they are convinced that the upcoming Trump administration will be unambiguously positive for cryptos in general.
“This could prove to be a triumph of hope over experience.”
01:25 PM GMT
Revolut to offer UK and EU stock trading from next year
Revolut will allow customers to trade UK and EU-listed stocks from next year as the Government looks at ways it can encourage investors to back British stocks.
It has been given permission by the Financial Conduct Authority (FCA) to operate as an investment business, it revealed today.
It means it will take on competitors like Trading 212 and Freetrade as well as established platforms like Hargreaves Lansdown and AJ Bell.
The FCA overhauled its listings rules in July in an effort to make UK markets more attractive.
Meanwhile, the Government is looking at ways to reform Britain’s pensions systems in an effort to stimulate investment in the UK.
01:06 PM GMT
‘Trump’s philosophy is America first, the rest of the world second’
Donald Trump’s trade policies might make a UK-US trade deal a necessity, according to Telegraph readers.
Here are a selection of comments from your fellow readers and you can join the debate here:
12:42 PM GMT
No 10 defends Reeves after accusations she lied about job history
The Prime Minister believes Rachel Reeves has been “straight with the public” about important financial matters, Downing Street said, amid claims the Chancellor has made changes to her CV.
The Telegraph reported how the Chancellor has been accused of lying about her job history after quietly editing her online CV.
The Chancellor updated her profile on LinkedIn to remove a claim she worked as an economist at the Bank of Scotland between 2006 and 2009.
Ms Reeves’ also claimed in a magazine interview that she had “spent a decade” at the Bank of England, when her Linkedin described it as a six-year period between 2000 and 2006.
Asked about this, a No 10 spokesman said: “With regard to the Chancellor, the Prime Minister is very clear that the Chancellor has restored financial stability.
“This is someone who on coming into office looked under the bonnet and exposed a ￡22bn black hole in the public finances, and has been straight with the public about what is necessary to balance the books and restore financial stability in the face of that.”
Pressed about whether Sir Keir Starmer thought his Chancellor had been clear with the public on her work history, the No 10 spokesan added: “He is very clear that this is a Chancellor that has been straight with the public about the state of the public finances and what is necessary to restore financial stability. That is most important.”
12:22 PM GMT
France and Germany back rival to Elon Musk’s SpaceX
France and Germany are backing a European rival to Elon Musk’s SpaceX as EU politicians fear falling behind in the space race.
Funds backed by the two states are part of a $160m (￡127m) investment in The Exploration Company (TEC), a Franco-German start-up developing a capsule that can take astronauts and cargo to space stations.
It is the largest ever funding round involving a European space company, which is seeking to position itself as a champion that can take on rivals in the US, Russia and China.
Read how the European space start-up plans to compete.
12:02 PM GMT
UK stocks mixed amid caution over inflation
Britain’s main stock indexes lacked direction as caution prevailed ahead of inflation figures due later in the week.
In a quiet start to the week, the FTSE 100 index inched up 0.1pc amid gains in precious metal miners as gold prices rebounded.
Melrose Industries hit three-month highs and was last up 5.9pc after the owner of aerospace parts maker GKN Aerospace reported a jump in revenue over the past four months and said it expects to deliver a surge in free cash flow in 2025.
The midcap FTSE 250 that houses more domestically exposed companies dipped 0.5pc, ahead of October’s inflation data, out on Wednesday.
Money markets indicate there is an 85pc chance that the Bank of England will leave interest rates unchanged at its last meeting for the year in December, despite signs of the economy slowing down.
Meanwhile, Cerillion added 2.8pc after strong annual results at the billing, charging and customer relationship management software solutions provider.
IQE was down 3.9pc after the British semiconductor wafer maker said it would start a strategic review of its assets.
It warned that revenue would not grow this year due to a slower-than-expected recovery and weak consumer demand in end markets.
11:48 AM GMT
Trump tax cuts could ‘create concerns in markets’, says ECB rate setter
The vice president of the European Central Bank has warned that Donald Trump’s spending plans risked inflating the US government’s budget deficit and could spread worries on markets.
Luis de Guindos said at a banking conference in Frankfurt that the US already has a public debt ratio close to 100pc of GDP, and a spending deficit close to 7pc.
He said: “The elected president (Trump) has promised to reduce taxes and perhaps not to cut down on public spending.”
The plan could lead the deficit to grow and “create concerns in markets”, he said.
US Treasury bond yields - considered an indicator of government borrowing costs - have risen in recent months amid concerns about Mr Trump’s potentially inflationary policies.
The benchmark 10-year bond yield has from about 3.41pc in September to more than 4.3pc this week, jumping from about 4.1pc before Mr Trump’s victory was announced.
11:29 AM GMT
Wall Street lacks direction ahead of opening bell
US stock indexes were mixed in premarket trading ahead of Nvidia’s latest results, which will set the tone for whether an AI-fuelled rally in shares this year will continue.
AI-chip heavyweight Nvidia reports third-quarter earnings on Wednesday and it fell 2.4pc in premarket trading.
Its revenue is forecast to jump more than 80pc to $33bn, according to LSEG data, and the company is expected to post a net income of $18.4bn.
Meanwhile, Tesla was 7.9pc higher amid speculation Donald Trump will relax rules on self-driving cars.
Its chief executive Elon Musk has been appointed by the US president-elect as the co-leader of a newly-created department to find efficiencies in US government.
The impact of Mr Trump’s cabinet appointments saw US stock indexes slump on Friday, with the S&P 500 and the Nasdaq pulling back from record highs as they suffered their worst weekly losses in more than two months.
In premarket trading, the Dow Jones Industrial Average was down 0.2pc, the S&P 500 had risen 0.1pc and the Nasdaq 100 had gained 0.4pc.
11:07 AM GMT
Spirit Airlines files for bankruptcy amid mounting debts
US discount carrier Spirit Airlines filed for bankruptcy after struggling to compete with bigger rivals amid mounting debts.
Miami-based Spirit, which made the Chapter 11 filing in New York, had struggled since a federal judge blocked its $3.8bn (￡3bn) acquisition by JetBlue in January, saying the deal would harm competition and drive up prices.
On its own, the company, the seventh-largest airline in the US last year, lacks the size and resources to withstand increased pressure from larger carriers as they cut prices.
Spirit, the biggest US budget airline, has lost more than $2.5bn since the start of 2020 and faces looming debt payments totalling more than $1bn over the next year.
Spirit said it expects to operate as normal during the bankruptcy process.
10:49 AM GMT
Oil price remains weak amid China demand woes
The price of oil remained near its lowest level in a month amid doubts about demand from China.
Brent crude edged up 1pc towards $72 a barrel after tumbling 3.8pc last week. US-produced West Texas Intermediate was still below $68.
It comes after the International Energy Agency predicted a glut in supplies next year, amid weak consumption in China.
Jun Rong Yeap, a market strategist with IG, said: “Market participants continue to fret over the prospects for higher supplies from the US and Opec+.
“There’s not much of a bullish catalyst for oil prices to ride on.”
10:27 AM GMT
The five things Rachel Reeves must do if she is serious about reviving the City
Rachel Reeves says she believes the City of London is the “crown jewel” of Britain’s economy.
The Chancellor wants finance to do more to help drive growth and says she is willing to remove red tape and regulation that gets in the way.
Speaking at the annual Mansion House dinner on Thursday, Reeves said post-crisis regulation had “resulted in a system which sought to eliminate risk-taking. That has gone too far and, in places, it has had unintended consequences which we must now address.”
Read the five things the Chancellor must do to deliver growth.
10:11 AM GMT
Pound languishes near six-month low
The pound is still languishing near a six-month low against the dollar after the election of Donald Trump.
Sterling was last up 0.1pc to $1.262 as the president-elect’s top team takes shape, although the positions of Treasury Secretary and Trade Representative are yet to be filled.
Deutsche Bank head of global economics Jim Reid said: “It should be a quieter week as the recent relentless wave of US macro and political news flow in theory slows down with the main story on this front being on potential political appointments for the new Trump administration.”
The dollar has strengthened since the election of Mr Trump’s, whose tariff and tax-cutting policies are expected to push inflation higher, thus forcing the Federal Reserve to keep interest rates higher for longer.
US Treasury yields held near multi-month highs, having been bolstered by bets of less aggressive Fed rate cuts down the line.
The benchmark 10-year yield steadied at 4.45pc, while the two-year yield last stood at 4.3pc. The yield on 10-year UK gilts was up slighltly to 4.48pc, while the two-year yield rose to 4.43pc.
09:50 AM GMT
Gas prices fall as Russian supplies flow
Wholesale gas prices have fallen as pipelines from Russia continued to send the fuel despite a warning last week that supplies were under threat.
Dutch front-month futures, the benchmark contract for Europe, were down as much as 3.8pc below €45 per megawatt hour as natural gas was sent to the Continent at normal levels.
Last week, Austrian supplier OMV had warned Gazprom might withhold supplies over its plans to deduct €230m (￡190m) awarded by an arbitration council from invoices sent by the Kremlin-backed producer.
The fall in prices comes even as a cold snap heads towards Europe, increasing demand for heating.
The UK’s equivalent gas contract was down as much as 3.3pc to 113p per therm.
09:31 AM GMT
US will not cut interest rates next month, say lenders
The US Federal Reserve will not cut interest rates next month, the lender Nomura has said, in a stark turnaround since the election of Donald Trump.
Nomura has become the first global brokerage to signal it expects a pause in the central bank’s interest rate cuts in the wake of the president-elect’s impending return to the White House.
It now expects the Fed to deliver only two quarter of a percentage points cuts next year at its March and June meetings.
The Fed’s benchmark overnight interest rate is currently in the 4.5pc to 4.75pc range. It has cut rates by three quarters of a percentage point so far in 2024.
Other global brokerages, including Goldman Sachs and JP Morgan, anticipate a quarter of a percentage point cut from the US central bank next month.
Money markets indicate there is a 65pc chance of a rate cut next month, down from 81pc before Mr Trump won the US presidential race.
Nomura said: “We currently expect tariffs will drive realised inflation higher by the summer, and risks are skewed towards an earlier and more prolonged pause.”
09:18 AM GMT
UK markets edge up ahead of inflation figures
The FTSE 100 was slightly higher as investors wait to see if inflation figures can end a run of four weeks of declines in Britain’s flagship stock index.
The blue-chip market was up 0.2pc, with the FTSE 250 up 0.1pc ahead of consumer prices index data on Wednesday.
Melrose Industries rose as much as 9.1pc to lead the FTSE 100 after the owner of aerospace parts maker GKN Aerospace reported a 7pc rise in revenue for the four-month period ended October 31. It reiterated its profit guidance for the year.
Meanwhile, B&M sank as much as 3.3pc to the bottom of the index after it reported sales and profits that were below analyst expectations on Friday.
Insolvency specialist Begbies Traynor rose 0.2pc after it said it was confident of meeting full-year profit expectations as rising taxes and higher interest rates put pressure on companies.
09:03 AM GMT
Children’s care homes face clampdown on ‘excessive profits’
New rules are being announced to stop profiteering in children’s social care as part of reforms aimed at ending years of what the Government described as neglect of the system.
The watchdog Ofsted is to be empowered to crack down on exploitative providers, while companies will be made to set out their finances in a bid to increase transparency across the sector in England.
Spending by local authorities on looked-after children has more than doubled in just over a decade, from ￡3.1bn in 2009/10 to ￡7 billion in 2022/23, the Department for Education said.
The biggest 15 private providers make an average of 23pc profit, according to analysis by the Local Government Association, which said there are more than 1,500 children in placements each costing the equivalent of half a million pounds every year.
The new measures, to be set out in Parliament, are aimed at empowering social workers and others who work with children to take action against providers delivering “subpar standards of care at sky-high costs to councils”, the department said.
It added that a longstanding challenge in the system is some private providers “siphoning off money that should be going towards vulnerable children, making excessive profits or running unregistered homes that don’t meet the right standards of care”.
The Government has pledged a “backstop” law, which will limit the profit providers can make - to be brought in if providers do not voluntarily put an end to profiteering, it said.
Ofsted will be given powers to investigate multiple homes being run by the same company, in response to recommendations made following abuse uncovered at the Hesley group of children’s homes.
08:37 AM GMT
Households to be hit with unexpected jump in energy bills, warn analysts
Household energy bills are expected to rise at the start of next year, analysts have predicted ahead of the announcement of the next Ofgem price cap.
Energy consultancy Cornwall Insight said it expects the regulator to reveal on Friday that the typical household’s energy bill will rise by 1pc from January 1.
This will raise average bills by ￡19 a year on average to ￡1,736. The price cap is currently set at ￡1,717.
Cornwall Insight had previously predicted a 1pc fall to ￡1,697, but said this was now no longer the case, coming as a blow after prices rose by 10pc in October.
Millions of pensioners are also facing a winter with less support, after the new Government decided to scrap winter fuel payments for those who do not receive pension credits or other benefits.
About 10 million pensioners will miss out on the payments of up to ￡300 this year.
Cornwall Insight said: “Given the price cap rise in October, many will have been hoping to see a fall in the cap for January.
“Unfortunately, forecasts show that prices will be staying relatively high for the remainder of winter.”
08:23 AM GMT
HSBC to sack hundreds of top bankers in scramble to cut costs
HSBC is poised to sack hundreds of its top bankers as its new boss looks for ways to cut costs.
Managing directors and other senior bankers at the London-based lender, which employs roughly 215,100 staff worldwide, will be dismissed in the coming weeks, according to Bloomberg.
Hundreds of managers will be asked to reapply for their jobs in its newly formed corporate and institutional banking division, it was reported.
Chief executive Georges Elhedery, who took over in September, unveiled a sweeping overhaul of the bank last month by splitting it into East and West divisions, although he denied it was a precursor to a break-up of the lender.
HSBC has been contacted for comment.
08:08 AM GMT
UK stocks open higher ahead of Nvidia results
Stock markets in London have begun the week on the front foot ahead of inflation figures and Nvidia’s results.
The FTSE 100 was up 0.2pc to 8,079.19 while the midcap FTSE 250 gained 0.2pc to 20,510.45, with Britain’s latest consumer prices index published on Wednesday after inflation fell to 1.7pc in September.
Deutsche Bank analyst Jim Reid said investors around the world would be watching $3.48 trillion tech giant Nvidia’s earnings.
He said: “For context, the entire FTSE, DAX and CAC have a market cap of ￡2.08tn, €1.71tn and €2.31tn, respectively.
“So it’s like a whole G7 country’s stock markets reporting at exactly the same time.”
08:04 AM GMT
Britain faces more insolvencies after Budget tax blow, says Begbies Traynor
More businesses will fall into insolvency over a longer period, a corporate recovery specialist has warned, as bosses grapple with elevated interest rates and impending higher taxes.
Begbies Traynor said the Chancellor’s ￡25bn increase in employer National Insurance contributions (Nics) will “likely to extend the period of elevated insolvency levels” as bosses also face interest rates that could stay “higher for longer”.
The insolvency adviser said the rise in Nics announced in the Budget from 13.8pc to 15pc, as well as the lowering of the payment threshold, will deliver a ￡1.25m blow to its finances each year.
In a trading update, it said revenue and adjusted profit before tax increased by about 16pc, adding it was confident it would hit its full-year earnings expectations, as it announced a ￡1.5m share buyback.
Begbies Traynor executive chairman Ric Traynor said: “We have made a very good start to the year with double digit growth in revenue and profits driven by positive momentum across the group. This gives us confidence that we will deliver market expectations for the year as a whole.
“Additional headwinds for UK business from increased employment costs and the prospect of higher for longer interest rates are likely to extend the period of elevated insolvency levels, increasing the need for advice and support from our insolvency and business recovery professionals.”
07:43 AM GMT
UK commercial property tie-up collapses
Segro has confirmed its planned takeover of warehouse investor Tritax Eurobox has collapsed.
The commercial property group was outbid in its attempt to buy Tritax by Canadian asset manager Brookfield.
Brookfield said last week that it will nevertheless sell around €470m (￡392.5m) of former Tritax property assets to Segro.
Today, Segro said that its all-share takeover deal for Tritax, which it agreed in early September, “has lapsed”.
07:41 AM GMT
Trump tariffs would ‘deal ￡20bn blow to UK economy’
Donald Trump’s plans to impose tariffs on goods entering the US will deal a ￡20bn blow to Britain’s economy, economists have warned.
The President-elect’s plans to impose levies of 60pc on Chinese products sold to American businesses, as well as 20pc tariffs on all other imports “pose challenges” for the Government, according to the Centre for Economics and Business Research (CEBR).
It said such a plan, without retaliation, could reduce UK gross domestic product (GDP) by 0.9pc by the end of the Trump administration. That is equivalent to about a ￡20bn blow based on 2023 figures on the size of the British economy.
Meanwhile, estimates from the National Institute of Economic and Social Research (NIESR) suggest that 10pc tariffs could cut UK economic growth by 0.7 percentage points.
The CEBR said the clearest way to avoid the blow would be to agree a free-trade deal with the US, but it acknowledged that issues over food standards were unlikely to make this possible.
Instead, it urged ministers to “bolster [the UK’s] position as a leader in green technology” to counteract Trump’s likely rollback of Joe Biden’s flagship Inflation Reduction Act (IRA).
Economist Sara Pineros said: “The Chancellor faces a pivotal period to act on her pro-growth agenda and position the UK as a competitive destination for investment.
Ultimately, while US tariffs and rising protectionism pose challenges, other proposals under a new Trump administration also present opportunities for the UK to adapt and thrive.
“Without strengthening its approach, the UK risks taking all the pain associated with a Trump presidency without realising the potential gain.”
07:25 AM GMT
Good morning
Thanks for joining me. We begin the day with a warning that tariffs from Donald Trump’s impending administration could deliver a ￡20bn blow to the UK economy.
The CEBR said the president-elect’s plans for 60pc tariffs on Chinese goods and 20pc on the rest of the world, without retaliation, would deliver a 0.9pc blow to UK GDP.
5 things to start your day
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Thousands more join lawsuit against Hargreaves Lansdown over Neil Woodford fund | RGL Management seeks to double number of participants to 5,000 as it expects claim to total ￡200m
British pensioners to get boost from Trump’s election win | President-elect to boost returns for retirement funds investing in US assets, says pension boss
Lucy Burton: Worklessness isn’t a slur – it’s a crisis crippling Britain | Many are desperate for help – not gleeful at being off work or wondering if ‘economically inactive’ is rude
What happened overnight
Asian stocks dipped early as traders reined in expectations of Federal Reserve interest rate cuts following fresh signs of US economic resilience.
Japanese and Australian shares fell. South Korea’s benchmark bucked the trend, led by Samsung’s rally after it announced a stock buyback plan.
Shane Oliver, chief economist at AMP said: “Another Fed cut is still likely in December but it’s now a close call. A slower pace of easing is likely next year, particularly given that Trump’s policies regarding tariffs and more tax cuts provide some upside threats to inflation on a one-to-three year view.”
The dollar was slightly weaker after climbing 1.4pc last week, a seventh straight weekly gain as Treasury yields surged on reduced expectations for Fed policy.
The moves, coupled with concerns over Chinese growth, have ravaged everything from the Australian dollar to emerging market bonds. Asian stocks slumped 3.9pc last week, their worst sell-off in about six months.
In commodities, oil held a weekly decline on concerns over plentiful supply and weaker demand from top crude importer China. Ukraine’s allies are pushing Volodymyr Zelenskiy to consider new ways to end the war with Russia as the US mulls a final decision to lift some restrictions of western-made weapons to strike limited military targets in Russia.