Budget risks causing job cuts, says Bailey
In This Article:
The Governor of the Bank of England has warned Rachel Reeves’s tax-raising Budget has put jobs at risk.
Andrew Bailey said retailers were “right” to warn of potential job cuts as a result of the £40bn of tax rises in the Chancellor’s speech last month, referring to an industry-wide letter published today.
Dozens of Britain’s biggest retailers have warned Ms Reeves that her plans to hike employer National Insurance contributions (Nics) will cause staff to be laid off and shops to be shut.
Speaking to the Treasury Select Committee, Mr Bailey said: “I saw the BRC’s (British Retail Consortium’s) letter and I think they’re right to say, I think there is a risk here that the reduction in employment could be more. Yes, I think that’s a risk.”
Mr Bailey added that companies would feel more pressure on margins from the tax rises in the short term, before the effect eases.
He said: “Probably, initially, there will be more pressure on firms’ margins because it takes them longer to adjust and then they’ll probably rebuild those profit margins over time. I would expect that.”
He added that the Bank of England will be forced to cut interest rates at a “gradual” pace as it assesses the impact of the Budget.
Mr Bailey said: “There are different ways in which the increase in employer National Insurance Contributions announced in the Autumn Budget could play out in the economy.”
He added: “A gradual approach to removing monetary policy restraint will help us to observe how this plays out, along with other risks to the inflation outlook.”
Read the latest updates below.
06:27 PM GMT
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06:11 PM GMT
Family behind Ann Summers steps in after further losses
The family owners of sex toy and lingerie chain Ann Summers have stepped in with millions of pounds in crucial funding after it racked up further losses.
Vanessa Gold, who was appointed chairman last year following the death of sister and retail pioneer Jacqueline Gold, spearheaded a £5m cash call as the business reeled from the economic downturn.
The loan was provided by Green Street Holdings, a Gold family-controlled entity, in August, following another year in which it failed to make a profit. Though turnover increased slightly from £101m to £104m in the year to July 2023, accounts for Ann Summers’ parent company reveal it posted another £3.9m of losses on the back of spiralling costs.
The company blamed its latest challenges on a cocktail of external factors including inflationary spikes, higher taxes and store rents and the cost of living crisis.
The Gold family, which has owned Ann Summers for nearly half a century, also lamented the impact of its own misfortune. The death of Jacqueline came just months after the passing of family patriarch David, forcing the remaining members of the Gold dynasty into a rapid review of their business interests.
05:53 PM GMT
Hennessy staff strike over plan to bottle cognac in China
Staff at Hennessy, the cognac maker owned by French luxury giant LVMH, will continue their strike on Wednesday, a union representative said, to protest what he said was a plan to potentially bottle the brandy in China to avoid tariffs.
About 500 workers, or half the workforce at the company’s bottling plant in Cognac in southwest France, had stopped work on Tuesday, the union said.
Beijing imposed duties of more than 30pc on imports of bottled brandy from the EU in October, hitting Hennessy as well as other French companies such as Remy Cointreau and Pernod Ricard.
China is the second-largest export market for cognac after the US and the industry’s most profitable territory, accounting for $1.7bn in exports last year. Difficult economic conditions in China and the US, however, have prompted a sharp decline in cognac sales. The industry is also suffering from a bad 2024 harvest.
A plan to ship cognac in containers and bottle it in China rather than France was discussed last week by industry body Le Syndicat des Maisons de Cognac (SMC), according to Michael Lablanche, a regional representative for the CGT labour union.
Bottling in China rather than France would allow companies to circumvent the tariffs but would be a “disaster” for workers, Mr Lablanche said.
The Telegraph has approached Hennessy and SMC for comment.
05:47 PM GMT
European stocks sink as investors flock to safety amid geopolitical jitters
Europe’s main stock index touched its lowest level in three months on Tuesday, as escalating geopolitical tensions with Russia spurred investors to head to safer havens.
The pan-European Stoxx 600 closed 0.4pc lower, after falling 1pc to its lowest point since Aug 8 earlier in the day. It logged a third straight day of losses.
Poland, which borders Ukraine, saw its blue-chip index, WIG20 slide more than 3pc, falling the most among national indexes in Europe.
Safe-haven assets such as gold and the US dollar were on the rise.
The Kremlin said the aim of an updated nuclear doctrine was to make potential enemies understand the inevitability of Russian retaliation for an attack.
Daniela Hathorn, senior market analyst at Capital.com, said:
Every nation wants to avoid a nuclear war, but the fact that we’ve seen Putin makes steps towards that possibility has led to a risk-off or a safe haven move.
05:40 PM GMT
Jaguar scraps historic cat badge from new electric cars
Jaguar has scrapped its historic growling cat logo as the British car manufacturer gears up for the shift to electric vehicles.
The luxury car maker unveiled a rebrand on Tuesday to accompany the launch of three electric models in 2026.
The company described its new logo, which is written as JaGUar, as a “powerful celebration of modernism” that “seamlessly blends upper and lowercase characters in visual harmony”.
It also unveiled a new “leaper” cat design on a lined brass background, as well as a monogram that will be used as a “flourish or finishing touch”.
However, Jaguar is dropping its distinctive “growler” cat, which has been used for decades as the main badge on grilles and bonnets.
Jaguar, whose parent company Jaguar Land Rover is owned by Indian car giant Tata Motors, said the rebrand captured the ethos of founder Sir William Lyons, who believed the marque should be a “copy of nothing”.
05:29 PM GMT
Guardian staff vote in favour of strike action over Observer sale
The Guardian is braced for strike action after journalists voted overwhelmingly in favour of a walkout in protest over plans to sell The Observer to a loss-making startup.
Almost 93pc of members voted in favour of industrial action in a ballot of more than 600 staff members organised by the National Union of Journalists (NUJ). Roughly 96pc voted in favour of action short of a strike.
The vote means The Guardian is now facing the prospect of a mass walkout that could force it to shut down its print operations.
The NUJ must give two weeks’ notice of industrial action, meaning the first strike could take place in early December. The union will meet on Wednesday to decide what action to take.
The outcome underscores high levels of discontent among staff at Guardian Media Group (GMG) after the company revealed it was in exclusive talks to sell The Observer to Tortoise Media, a news startup founded by former BBC News boss James Harding.
04:57 PM GMT
Banks could face £30bn compensation bill for motor finance scandal, says Moody’s
UK banks could be on the hook for a £30bn compensation bill over the motor finance scandal, an influential ratings agency said.
Moody’s said a possible redress scheme to compensate customers who could have been mis-sold loans to buy cars could rise to £30bn.
The estimate is the largest figure yet and underlines growing fears about how much the scandal could cost the UK bank sector.
A Court of Appeal judgement last month increased concerns about the number of customers that banks may have to compensate.
Before the decision, the Financial Conduct Authority had been exploring plans for a compensation scheme for bonuses paid to car dealers.
The more recent court judgement has raised the prospect that more customers could claim some form of compensation.
Moody’s said large lenders exposed to the issue like Lloyds Bank and Santander could withstand the problem but smaller banks like Close Brothers and Aldermore could take more strain.
04:53 PM GMT
FTSE closes down
The FTSE 100 closed down 0.1pc, showing the least drop of the major European stock markets today.
The biggest riser was BT, gaining 3.5pc, followed by tobacco giant Imperial Brands 3.1pc.
At the other end of the index, distribution group Diploma fell 8pc, followed by aerospace giant Melrose Industries, down 2.8pc.
Meanwhile, the mid-cap FTSE 250 rose 0.2pc
The top riser was manufacturing business Bodycote, up 8pc, followed by molten metal flow engineering group Vesuvius, up about the same percentage.
Burberry was the biggest faller, down 5.1pc, followed by self-storage company Big Yellow, down 4.9pc.
04:43 PM GMT
Stocks edge higher as markets eye Russia-Ukraine tensions
Global stocks edged higher in choppy trading on Tuesday, amid rising tensions between Russia and the West over Ukraine.
Investors are eyeing president-elect Donald Trump’s pick for Treasury secretary, while mulling potential tariffs and tax cuts from the incoming Trump administration that could lead to higher inflation and to fewer interest rate cuts.
George Young, portfolio manager at Villere & Co in New Orleans, said:
I think it’s all the unknown; we’ve had the big unknown, which is how the election was going to go, now that’s known. But the next set of questions is what’s going to happen with Congress and with the White House.
The S&P 500 and the Nasdaq were trading higher, with gains in technology stocks outweighing losses in materials, energy and healthcare equities. Artificial intelligence chipmaker Nvidia is scheduled to report earnings on Wednesday.
The S&P 500 rose 0.2pc, the Nasdaq rose 0.5pc and the Dow Jones Industrial Average fell 0.3pc.
A measure of global stocks, the MSCI World index, rose 0.2pc.
04:34 PM GMT
Xi asks Germany’s Scholz to help resolve issue of EU tariffs on Chinese EVs
Chinese president Xi Jinping reportedly told German chancellor Olaf Scholz today that he hoped Germany could help the EU and China to resolve the issue of tariffs on Chinese electric vehicles quickly.
According to Chinese state broadcaster CCTV, Mr Xi said China was ready to work with Germany to “consolidate” an overall strategic partnership, before raising the issue of EU tariffs on Chinese-made EVs, which has increased the prospects of a trade war between Beijing and the bloc.
Chinese state news agency Xinhua reported that Mr X said:
It is hoped that Europe and China will resolve the issue of electric vehicles through dialogue and negotiation as soon as possible, and the German side is willing to make active efforts in this regard.
04:28 PM GMT
V&A museum security vote on whether to strike in pay row
Museum security guards are voting on whether to strike in a dispute over pay.
Members of the United Voices of the World (UVW) based at the Victoria and Albert Museum in London will decide in the next few weeks if they want to launch a campaign of industrial action.
The union said it is the first time the security guards, who are employed by a private contractor, are taking part in a strike ballot.
Security guards at the Natural History and Science Museums in London have already walked out for six days during the school half-term and Halloween, also over pay.
Petros Elia, general secretary of the UVW, said: “With the Victoria and Albert Museum security guards joining their colleagues from the Natural History and Science Museums, the dispute is escalating significantly and shows no signs of abating.”
The Telegraph has approached the V&A for comment.
04:14 PM GMT
British Airways flight chaos ‘fixed faster after £750m IT investment’
British Airways has claimed it was able to fix an IT meltdown more quickly because of a £750m investment under Sean Doyle, its chief executive.
The carrier said that computer upgrades prevented chaos from spiralling after dozens of services were affected by technical issues shortly after 5pm on Monday.
However, experts said the airline would none the less face a battle to reassure travellers flying over Christmas.
While this week’s problem was fixed within hours and no flights were cancelled, the airline was not able to say what had caused it. Inquiries are understood to focus on the loading of digital flight plans used by pilots.
The meltdown impacted departures from Heathrow and delayed return flights from other cities, while BA’s website and app were also unusable. Its secondary base at Gatwick was unaffected, most likely because it has fewer evening services. Shares of parent company IAG fell as much as 4pc when they began trading Tuesday.
04:06 PM GMT
Stock market volatility index jumps on Russian tensions
American, European and British stock indexes have mostly dropped today on heightened tensions between Russia and the West.
The Vix - a measure of volatility in the Wall Street’s S&P 500 benchmark - jumped by 3.3pc.
Chris Beauchamp, chief market analyst at online trading platform IG, said:
Today’s surge in the aptly nicknamed “Fear Index” comes thanks to geopolitical tensions.
03:59 PM GMT
Inflation to rise above target, says Barclays
New inflation figures, out tomorrow from the Office for National Statistics, will show an increase, according to Barclays.
Julien Lafargue, chief market strategist at Barclays Private Bank, said:
An increase in household energy bills could trigger a well-telegraphed sequential increase in inflation in October.
A month ago, we reported that inflation had dropped to its lowest level in more than three years, at 1.7pc.
03:50 PM GMT
Mulberry axes head office jobs in ‘rebuild’ after sales plunge
Handbag maker Mulberry has cut dozens of head office jobs as part of a major “rebuild” after revealing that sales had plunged.
This morning we reported that sales had fallen by almost a fifth over the past half-year to £56.1m.
The new boss of the fashion firm said he is simplifying the business in order to make it “leaner” as part of a strategic overhaul and help drive a return to profit.
Andrea Baldo, who was appointed chief executive, said that the business has cut 85 roles as part of the shake-up.
The cuts, which impact about a quarter of its 350-strong workforce, have predominantly impacted its London design headquarters, as well as some Somerset office workers.
It is part of a strategic review, due to conclude next month, which will also see a shift in the company’s pricing and distribution strategies.
Mr Baldo said he hopes to “reinvigorate” the brand by focusing on its “affordable luxury” price position and said it will seek to return to growth in the UK, a market he said the business had “underappreciated” in its previous strategy.
The Somerset company, which was recently the target of takeover efforts by shareholder Frasers Group, is among firms to have been hit hard by a sharp slowdown in luxury spending.
03:41 PM GMT
Wall Street continues to struggle after escalation in Russia-Ukraine war
US stocks are continuing to struggle this afternoon amid escalations in the Russia-Ukraine war.
The three main indexes, which all opened down, have regained some of their earlier losses.
The S&P 500, is down 0.2pc and the Dow is down 0.6pc. However, the Nasdaq - which was down 0.5pc earlier - is now up 0.2pc.
Investors moved into Treasury bonds today and other investments traditionally seen as safer during times of trouble.
The losses were more severe in European stock markets, where France’s Cac 40 index is down 1.3pc and Germany’s Dax is down 1.4pc. They sank after Russia said Ukraine fired six US-made ATACMS missiles at it. Earlier in the day, Russian president Vladimir Putin formally lowered the threshold for Russia’s use of its nuclear weapons.
Prices rose for US Treasury bonds, which are seen as some of the world’s safest investments. That in turn lowered their yields, and the 10-year Treasury yield fell to 4.38pc from 4.41pc late on Monday. Gold also rose 0.5pc and recovered some of the losses it sustained following Donald Trump’s victory in the US presidential election.
03:30 PM GMT
Canada inflation rises to 2pc
Canada’s inflation rate rose to 2pc in October, the country’s statistics agency said, but is still likely to set up another interest rate cut.
Data from Statistics Canada showed inflation had nudged higher compared to September, when it was 1.6pc.
The October data, which was consistent with analyst expectations, is in line with the Bank of Canada’s 2pc target.
Analysts remained confident the Bank of Canada would press on with rate cuts when its governors meet on December 11.
Canada had held its benchmark rate steady for almost a year at 5pc, the highest level in two decades, before initiating cuts in early June.
I’ll head off at this point and hand you over to Alex Singleton, who will keep the updates coming from the markets.
03:11 PM GMT
Budget made ‘no impact on the payslip of working people’, says Starmer
The Prime Minister has insisted that the Budget has not impacted working people’s payslips, after warnings from retailers about the impact of hiking National Insurance in the Budget.
Asked about the warnings of redundancies, Sir Keir Starmer told ITV: “What we did in the Budget was balance the books and make sure we reintroduce stability into our economy after 14 dreadful years.
“We ensured that there was no impact on the payslip of working people.”
Pushed again on the idea that people will see an impact, Sir Keir claimed the Budget had been “welcomed across the board”.
He said: “We invested in our NHS, we’ve invested in our schools, we’ve invested in the housing that people desperately need, and that’s why the Budget has been welcomed across the board.”
Asked if he was blaming retailers, the Prime Minister said: “We have a £22bn black hole to fix left by the last government.
“We’re determined to fix the foundations and that means that we’ve had to take difficult decisions, but we’ve taken those decisions without impacting on working people in their payslips.”
02:53 PM GMT
‘Inflation is the main outcome from the Budget’
Rachel Reeves’s Budget risks the “whole retail environment going into stagnation”, Telegraph readers have warned, as the Governor of the Bank of England said retailers were “right” to say it had put jobs at risk.
Here are a selection of views from your fellow readers and you can join the debate in our comments section below:
02:36 PM GMT
Wall Street slumps as US missiles fired into Russia
US stocks fell at the opening bell after Moscow said Ukraine fired six American long-range missiles at a border region in Russia overnight.
The Dow Jones Industrial Average was down 0.8pc to 43,068.30 amid the heightened tensions, which saw Vladimir Putin widen the scope of Russia’s nuclear doctrine.
The S&P 500 was down 0.5pc to 5,863.37 while the tech-heavy Nasdaq Composite fell 0.4pc to 18,708.76.
02:14 PM GMT
Gas prices fall despite Putin raising nuclear stakes
Gas prices were lower despite heightened geopolitical tensions as Vladimir Putin signed a law allowing a nuclear response to long-range missile attacks on Russian soil.
Dutch front-month futures, the European benchmark, fell 0.7pc to less than €47 per megawatt hour after closing at their highest level in a year on Monday.
There had been concerns that Kremlin-backed Gazprom might without supplies through Ukraine in response to an arbitration ruling in favour of Austrian supplier OMV earlier this month.
However, supplies have continued and prices have also been unaffected by Putin’s decision to change Russia’s official nuclear doctrine allowing a nuclear strike in response to an attack with long-range missiles.
01:54 PM GMT
Oil prices stay higher after North Sea power outage
Oil was little changed today after a power outage at Europe’s largest oilfield pushed prices higher.
Brent crude, the international benchmark, traded near $73 a barrel as Equinor gradually restarted production at the Johan Sverdrup oil field in the North Sea.
Crude had surged 3.2pc on Monday as the dollar weakened, making commodities more attractive to investors.
Prices remain elevated amid the growing tensions in Ukraine after Russia updated its nuclear doctrine.
Meanwhile, the International Energy Agency has forecast a potential surplus of more than 1 million barrels a day next year amid faltering Chinese demand.
01:25 PM GMT
Google tie-up with Anthropic cleared by regulators
Google’s partnership with AI start-up Anthropic will not face further investigation by the UK’s competition regulator, it has been confirmed.
The Competition and Markets Authority (CMA) said its provisional examination of the link-up between the firms had found that it does not qualify for investigation under the merger provisions of UK competition law.
The CMA has previously raised concerns it had around tech giants investing heavily in emerging AI companies and entering into AI-based partnerships with them, warning the process was a way for the biggest companies to consolidate power and resources within the growing sector.
Earlier this year, the regulator highlighted more than 90 partnerships and strategic investments between a handful of the same tech giants and AI start-ups in what it called an “interconnected web” - and has since launched investigations into a number of these deals, including those involving Apple, Google, Microsoft, Amazon, and ChatGPT maker OpenAI.
On its examination of Google and Anthropic, the maker of generative AI chatbot Claude, the CMA said it had found that Google had not acquired the ability to materially influence Anthropic’s commercial policy and therefore the partnership did not meet the threshold for UK merger control to apply.
01:02 PM GMT
Pound drops against safe haven currencies after Russia nuclear warning
The pound dropped against the yen and the Swiss Franc as investors rushed into safe-haven assets after a warning from Russia over its updated nuclear doctrine.
Vladimir Putin issued a warning to the United States as he lowered the threshold for a nuclear strike just days after Joe Biden’s administration allowed Ukraine to fire American missiles deep into Russia.
Investors bought into safe-haven currencies after Putin’s warning, with analysts arguing markets had been too complacent about geopolitical risks.
They perceive sterling as a risky currency, while the so-called safe-haven assets are seen as stable and reliable stores of value when markets are experiencing instability.
The pound dropped nearly 1pc versus yen to 194.18, its lowest level in a month, and fell as much as 0.5pc against the Swiss Franc to 1.114.
Barring geopolitical turmoil, several analysts expect the pound to strengthen against the euro as the UK is unlikely to be the focal point for the incoming Trump administration.
12:37 PM GMT
Wall Street slips amid Russia-Ukraine fears
US stock indexes fell in premarket trading amid worries about escalating tensions between Russia and Ukraine.
President Vladimir Putin said Russia could consider using nuclear weapons if it was attacked with long-range missilesthat were supported by a nuclear power.
It comes after the United States allowed Ukraine to fire American-made long-range weapons deep into Russia.
Investors rushed to safe-haven assets including government bonds, gold and the Japanese yen.
The CBOE Volatility index - known as Wall Street’s fear gauge - briefly jumped to its highest since the US election.
In premarket trading, the Dow Jones Industrial Average was down 0.5pc, the S&P 500 had fallen 0.3pc and the Nasdaq 100 slipped 0.1pc.
Credit: Telegram / Astra / Exilenova+
12:18 PM GMT
US demands Google sells world’s most popular browser
Google is facing demands from the US government to sell Chrome, the world’s most popular web browser, as part of a landmark attempt to break up the company.
In an escalation of tensions between the Department of Justice (DoJ) and Google, US officials are expected to request the forced sale in a legal filing later this week.
Chrome, first released in 2008, has two-thirds of the global web browser market and is seen as one of Google’s most successful products, boosting its advertising business and propping up its search engine dominance.
Read how being forced to sell the browser would reshape the tech industry.
11:49 AM GMT
Retailers ‘right’ to warn of job cuts in wake of Budget, says Bailey
The Governor of the Bank of England has said retailers were “right” to warn of potential job cuts as a result of tax rises in the Budget, referring to an industry-wide letter published today.
Andrew Bailey said: “I saw the BRC’s (British Retail Consortium’s) letter and I think they’re right to say, I think there is a risk here that the reduction in employment could be more. Yes, I think that’s a risk.”
Speaking to the Treasury Select Committee, Mr Bailey added that companies would feel more pressure on margins from the tax rises in the short term, before the effect eases.
He said: “Probably, initially, there will be more pressure on firms’ margins because it takes them longer to adjust and then they’ll probably rebuild those profit margins over time. I would expect that.”
11:45 AM GMT
UK needs ‘active dialogue’ with Trump amid tariff fears, says Bailey
The Governor of the Bank of England has called for an “active dialogue” with the US amid speculation that Donald Trump will impose trade tariffs on other countries.
Andrew Bailey said: “I would be very clear, fragmenting the world economy is not a good thing.”
However, Mr Bailey added that he does not want to “jump to conclusions” on the effect of particular tariffs on UK policy.
“I don’t think we can make that judgment today because we literally do not know what their intentions are.”
He said policymakers should, therefore, “be in an active dialogue with the Trump administration on those policies as they affect the UK”.
11:36 AM GMT
Reeves’s jobs tax raid will mean slower rate cuts, says Bailey
The Bank of England will be forced to cut interest rates at a “gradual” pace as it assesses the impact of the Chancellor’s £40bn Budget tax raid, Andrew Bailey has said.
The Governor of the Bank said there could be a number of different outcomes from the £25bn increase in employer National Insurance contributions (Nics) and the rise in the minimum wage coming into effect from April.
He said businesses could raise prices causing higher inflation, there could be lower wage increases, a reduction in employment, a squeeze in profit margins or an increase in productivity.
Mr Bailey said: “There are different ways in which the increase in employer National Insurance Contributions announced in the Autumn Budget could play out in the economy.”
He added: “A gradual approach to removing monetary policy restraint will help us to observe how this plays out, along with other risks to the inflation outlook.”
11:18 AM GMT
I don’t understand pursuit of ‘hostile’ Brexit, says Bailey
Andrew Bailey said he does not understand advocates for carrying out Brexit “in the most hostile fashion possible” as the UK prepares for a potential global trade war.
The Governor of the Bank of England was asked about the potential impact of tariffs on Britain’s economy with the return of Donald Trump to the White House.
He said Britain should pursue an “active dialogue with the Trump administration” and “likewise, we should be in an active dialogue with the EU as well”.
He said the outcomes of Britain’s departure from the European Union had been “better than we feared they would be back in 2016”, which he said was a result of “open dialogue and open relations” with Europe.
He said “they have to trust us with financial services”, adding “I think we’ve done that. We’ve put a lot of effort into that”.
He said: “And I, you know, I find it hard to understand people who seem to say that we should implement Brexit in the most hostile fashion possible.
“And I take no position on Brexit. I never have, but I’ve always said it’s my job to get on and do it. And I think talking, you know, having a relationship with the European Union is the better way to do it.”
11:03 AM GMT
Budget and US election pushed up mortgage costs, says Bailey
The Budget pushed up the cost of mortgages, Andrew Bailey has told MPs, after the Chancellor announced £70bn of annual spending increases over the next five years.
The Governor of the Bank of England said the cost of mortgages were also pushed higher by the uncertainty caused by the US election, which sent the cost of government borrowing higher following the election of Donald Trump.
Mortgage rates have risen in recent weeks despite the Bank of England cutting interest rates for the second time this year last week, after announcing a first reduction in the Bank Rate in August.
Mr Bailey told the Treasury Select Committee that “the curve rose”, referring to the various UK mortgage borrowing rates.
He said: “I would say, really, we’ve had a lot of event at risk recently, and there were two things that have moved the curve around.
“One, one, there was a reaction to the UK budget. And secondly, there’s been quite a reaction to the US presidential election. So we have seen some rise in the curve.”
10:27 AM GMT
Bailey sounds warning on services inflation
The Governor of the Bank of England is appearing in front of the Treasury Select Committee today, where he has said policymakers are putting emphasis on a “gradual” reduction on interest rates.
Andrew Bailey said that services inflation remains incompatible with the Bank’s 2pc inflation target.
Fellow policymaker Catherine Mann, who was the only member of the Monetary Policy Committee to vote against cutting interest rates last week, said she is concerned about inflation lasting for longer.
She said she took into account two aspects of the Budget, which she said was front-loaded on demand and “geographically dispersed”, which offers the opportunity for companies to “realise” price increases.
10:17 AM GMT
Farmers consider strike over tax blow
A fourth-generation family farmer said there is a possibility he and other farmers will strike if changes to agricultural property relief are not reversed.
Richard Wainwright, 58, from Halifax, West Yorkshire, was at Church House Conference Centre in central London on Tuesday morning ahead of a meeting with the National Farmers’ Union (NFU).
Mr Wainwright, whose grandfather began farming with a few cows and delivered milk to the surrounding area, said: “We are talking about possibly striking.
“I hope it doesn’t come to that because that’s seriously going to impact the food chain.”
On the impact on his farm, he said: “We’ve got to possibly sell a 20pc share of the farmland to be able to cover the tax bill. For us it’s around £600,000 we are going to have to pay.
“It’s like I’m going to have to buy my own farm back.”
10:00 AM GMT
Pound edges lower as investors watch Trump appointments
The pound has fallen as investors closely watch US President-elect Donald Trump’s search for a Treasury Secretary.
Sterling was down 0.4pc against the dollar to $1.263, near its lowest since June, as traders wait to see what the chosen candidate will mean for the US economy.
Mr Trump is thought to be considering Apollo Global Management chief executive Marc Rowan and former Federal Reserve Governor Kevin Warsh.
Chris Turner, head of forex strategy at ING, said: “The relevance of the pick for financial markets will probably be how the US Treasury market reacts.”
The pound was flat against the euro, which is worth 83.6p.
09:39 AM GMT
Revolution Beauty profits wiped as it casts off old stock
Cosmetics brand Revolution Beauty has swung to a first-half loss as sales slumped and it wrote-off old stock under its revamp plan.
The group reported pre-tax losses of £10.9m for its half-year to August 31 compared to profits of £400,000 a year earlier.
It follows a tough first half for the company, with sales plunging by 20pc to £72.4m as it simplified its product offering and ramped up clearance promotions to shift old stock.
The business was also sent tumbling into the red after being hit by a £10.2m write-off on old stock as it continues the shake-up.
But Revolution Beauty, which sells make-up, skincare, hair and body products online and through concessions, insisted it was making “encouraging progress with existing and new retailers”.
New retail tie-ups also include the group expanding into 250 new Boots stores across the UK last month, while US retail giant Walmart will stock a full range of Revolution Beauty products in more than 1,800 stores from next January.
Lauren Brindley, group chief executive, said: “This is a year of transformation for Revolution Beauty, and our performance in the first half reflects the steps we have taken to position the group for long-term, profitable growth.”
09:30 AM GMT
Safe haven assets surge as Putin changes Russia’s nuclear doctrine
The price of gold and other safe-haven assets has bounced after Russia updated its nuclear doctrine allowing it to expand use of its deterrent.
Government bonds and the Japanese yen have also surged after Vladimir Putin’s approval on Tuesday of the updated nuclear doctrine.
Putin signed a decree allowing Russia to fire nuclear weapons in response to a massive conventional attack on its soil, including by drones.
Gold was up 0.7pc to $2,629 an ounce while government bond yields fell around the world.
09:12 AM GMT
FTSE 100 rises as retailers warn of Budget hit
The FTSE 100 edged higher in early trading despite a warning from retailers that the Budget would deliver a £7bn blow to thier finances.
The UK’s blue-chip index was up 0.2pc, while the midcap FTSE 250 was up 0.1pc.
Mulberry dropped 14.4pc after revealing widening losses amid a broad slowdown for the luxury sector.
Other fashion brands like Burberry were down 4.5pc after retailers wrote a letter to the Chancellor warning the sector faces £7bn in increased costs as a result of changes to employers’ national insurance, a higher minimum wage rise and levies on packaging.
Specialised products and service distributor Diploma slumped as much as 4.5pc to the bottom of the FTSE 100 after its stock was downgraded by Shore and Jefferies following the publication of its full-year results.
Investors are waiting to see the latest inflation figures for Britain, which will be published on Wednesday.
08:47 AM GMT
Vaping revenues surge at Imperial Brands
Cigarette maker Imperial Brands increased sales of products like vapes and nicotine pouches as profits rose.
Revenues from “next generation products” increased by 26pc to £335m, meaning the shift into tobacco alternatives now represents 8pc of net revenue in Europe.
Shares rose 1.9pc as operating profits rose 4.6pc on a constant currency basis to £3.9bn, with earnings per share up 10.9pc to 297p.
Chief executive Stefan Bomhard said: “In next generation products, we continue to build scale across our footprint with net revenues up 26.4pc at constant currency driven by growth from all three regions and market share growth in all three categories.
“Our partnership approach to product innovation has enabled us to launch new products across all three categories during the year. This included our successful entry to the fast-growing modern oral category in the US with our brand ‘Zone’.”
08:23 AM GMT
German industrial giant suffers £1.3bn loss
German industrial giant Thyssenkrupp suffered a massive annual loss for the second year running, as it battles challenges including a crisis in its historic steel division.
The conglomerate, whose products range from steel to submarines, booked a loss of €1.5bn (£1.3bn) for the 2023-24 financial year, after a loss of over €2bn the previous year.
Once a symbol of German industrial might, Thyssenkrupp has suffered as high manufacturing costs at home, falling prices for its products and fierce competition from Asian rivals hammered its traditional steel business.
Chief executive Miguel Lopez said “very challenging market conditions” had weighed on the Essen-based group but insisted that it had made “key progress” in pushing through a major restructuring.
Germany’s economy narrowly avoided a recession in the third quarter and its economy remains in turmoil as it prepares for a snap election called by chancellor Olaf Scholz.
The group, which runs its financial year from October to September, is predicting a return to profit in the next fiscal year of €100m to €500m.
08:14 AM GMT
Minister defends inheritance tax changes as farmers protest in Westminster
Policing minister Dame Diana has defended the changes to inheritance tax as farmers travelled to Westminster to campaign against the move.
Farmers have been told by the Chancellor that they must pay inheritance tax to fund the NHS, despite mass protests planned for today.
Rachel Reeves has refused to back down over her controversial plan to impose inheritance tax on farms in the face of warnings that it could threaten food security, end the tradition of family farms and create a mental health crisis.
Asked if she wanted to apologise to farmers, Ms Johnson told Times Radio: “I fully understand the strength of feeling that the farming community have and, of course, they have the right to come and protest and lobby Parliament, as we’re seeing happening already this morning.
“But the Labour government, when it came in in July, was having to face some very difficult decisions because of the economic mess that we inherited and the £22 billion black hole in the public finances.
“So, difficult decisions have had to be made. So, I think that that is the backdrop to this.
“I also want to recognise that there is money going into farming. There’s over £5bn over the next two years that the Government is putting into farming and the number of farms that will be affected by the changes are relatively small.”
08:07 AM GMT
UK markets open higher ahead of inflation figures
The FTSE 100 opened higher as investors await inflation figures this week.
The UK’s blue-chip index was up 0.4pc to 8,139.60 while the midcap FTSE 250 rose 0.3pc to 20,451.13.
08:00 AM GMT
KitKat to spin off water business in £2.2bn cost-cutting plan
KitKat maker Nestle has revealed plans to slash costs by at least another 2.5bn Swiss francs (£2.2bn) and spin off its premium water and drink business as part of an overhaul.
The plans, being led by new chief executive Laurent Freixe, will see the Swiss group make the mammoth savings by the end of 2027 - on top of an ongoing existing programme to trim costs by 1.2bn Swiss francs (£1.1bn).
It said work “has already begun on key initiatives across procurement, commercial investments and structural costs” as it looks to ramp up cost-cutting.
Mr Freixe said the group will instead channel spending into advertising and marketing, with investment in those areas being increased by up to 9pc of sales by the end of 2025.
Nestle added that its water and premium drinks arm - which includes brands like Maison Perrier and Acqua Panna - will become a separate global standalone business as of January 1 next year.
Its new management team will “evaluate the strategy for this business”, including possible partnership deals.
07:51 AM GMT
Mulberry losses deepen as China demand wanes
Handbag maker Mulberry suffered deepening losses in the first half of its financial year as sales in China plunged.
The boss of the luxury British brand said he needs to “rebuild the business” after sales plunged by almost a fifth over the past six months.
The Somerset company, which was recently the target of takeover efforts by shareholder Frasers Group, is among those hit hard by a sharp slowdown in luxury spending.
Mulberry told shareholders that group revenues fell by 19pc to £56.1m for the six months to September 28, with retail sales down 52pc in China and 29pc in South Korea.
Pre-tax losses widened to £15.7m for the period, compared with a £12.8m loss a year earlier.
Chief executive Andrea Baldo said: “In response to current market conditions, we have taken decisive steps to streamline operations, improve margins, reduce working capital, and strengthen our cash position.
“This has also meant reviewing our internal team structure to ensure we become a leaner, more agile organisation.
He added: “There is no question that our industry is facing a period of significant uncertainty, driven by a challenging and volatile macroeconomic environment that is impacting consumer confidence in several markets, particularly in our home country.”
07:50 AM GMT
Retailers face ‘no choices that lead to growth’ after Reeves’s Budget
Retailers have warned they have been left with choices that lead to “no growth” after Rachel Reeves’s Budget left the sector facing a £7bn bill.
Dozens of Britain’s biggest retailers have warned the Chancellor that her plans to hike National Insurance will cause staff to be laid off and shops to be shut.
Nick Stowe, chief executive of Monsoon and Accessorize, said retailers had been left with the choice of either protecting staff numbers of cancelling their investment plans.
He told BBC Radio 4’s Today programme: “We’re trying to protect that staff number and it’s about choices in how we protect it. For us it means passing on some of those cost increases in terms of increased prices.
“It also means we’re probably going to have to divert investment that we would have made in growing our store base into protecting the stores that we have and the employees that we have.
“It’s about making choices. None of those choices are a great path forward for us, none of them lead to growth.
“These are forcing us to do things that seem to be entirely counter to the Government’s agenda in terms of growing the economy and growing sectors like ours.”
07:42 AM GMT
Good morning
Thanks for joining us. Retailers have claimed Rachel Reeves’s Budget has left them facing choices that do not lead to growth.
Nick Stowe, chief executive of Monsoon, said the decisions bosses would have to make run “counter” to Sir Keir Starmer’s aims to get the economy growing.
Retailers said the Budget would leave them facing £7bn of cost increases.
5 things to start your day
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Retailers hit out at ‘sheer scale’ of Reeves’s tax hike | Employers are preparing to cut jobs as employment costs jump
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Andrew Bailey to give evidence in Jes Staley trial on Epstein ban | Bank of England Governor listed as witness as former Barclays boss challenges lifetime City ban
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Miliband’s wind turbine blitz will leave North Sea littered with ‘abandoned rigs’ | Plans to run down the North Sea threaten to deprive the industry of the funds for a clean up effort
What happened overnight
Asian shares advanced after most US stocks ticked higher to recover some of their swoon from last week.
Tokyo’s Nikkei 225 rose 0.4pc to 38,471.58 and the Kospi in Seoul climbed 0.2pc to 2,474.26.
Chinese shares have wavered under concern over potential tariff hikes on by President-elect Donald Trump’s future administration and worries that recently announced stimulus policies won’t have enough impact to break the economy out of the doldrums.
The Shanghai Composite index shed 0.9pc to 3,305.09, while Hong Kong’s Hang Seng dipped and then recovered slightly, edging less than 0.1pc higher 19,588.10.
On Wall Street, the benchmark S&P 500 and Nasdaq Composite finished higher, with energy, communication services, and consumer discretionary stocks driving gains. The Dow Jones Industrial Average was dragged down by materials stocks.
The Dow fell 0.1pc to 43,389.60, the S&P 500 rose 0.4pc to 5,892.62 and the Nasdaq rose 0.6pc to 18,791.81.