French borrowing costs exceed Greece’s for first time
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French borrowing costs have exceeded those of Greece for the first time, as Michel Barnier’s government teetered on the brink of collapse.
Hard-Right and Leftist opposition parties have been threatening to bring down Barnier’s government over its budget that includes €60bn (£47bn) in tax hikes and spending cuts.
Bond investors worry that the collapse of the government would mean any effort to cut borrowing is jettisoned.
The change in borrowing costs underline a dramatic shift in how lenders view the creditworthiness of euro zone members.
Michiel Tukker, senior European rates strategist at lender ING, said: “A no-confidence vote would reset the progress made with the current budget proposal and trigger a new period of political limbo.”
In the middle of the euro zone sovereign crisis in 2012, Greece’s borrowing costs, as measured by its 10-year bond yield, shot to more than 37 percentage points above those in France, as Greece looked destined to default on its debts.
This afternoon, however, the yield on 10-year Greek bonds was 2.979pc, while French debt yielded 2.953pc.
France’s rising debt levels - currently at 112pc of GDP - have been slowly eroding its advantages in the bond market for years.
Meanwhile, the countries once at the centre of the 2012 crisis and labelled the Pigs - Portugal, Italy, Greece and Spain - have cut their debt levels and become more attractive to bond investors.
“Even if the government did achieve its planned consolidation, France would still have a pretty elevated budget deficit,” said Max Kitson, rates strategist at Barclays.
“If you look at Greece’s debt-to-GDP profile, you have a downwards trajectory which contrasts with France’s upwards trajectory.”
Friday evening will prove a test, when S&P Global Ratings will update its assessment of France, after Fitch and Moody’s downgraded their outlooks on the country last month.
Read the latest updates below.
06:14 PM GMT
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06:10 PM GMT
Czech billionaire ‘will be free to put up stamp prices’ after Royal Mail deal
The Czech billionaire gearing up for a £3.6bn takeover of Royal Mail will be free to push up stamp prices further, insiders have warned. Melissa Lawford and James Warrington report:
Daniel Křetínský, nicknamed the “Czech sphinx”, has been under pressure from ministers and union bosses to rule out further increases to first-class stamp prices as part of his takeover.
06:05 PM GMT
Mexican president says tariff war with the US can be averted
The Mexican president has said she is confident that a tariff war with the US can be averted.
Claudia Sheinbaum said this afternoon that she and Donald Trump had agreed to maintain a good relationship in a friendly phone call that appeared to ease tensions between the top trading partners amid tariff threats.
Ms Sheinbaum struck a more conciliatory tone a day after saying Mexico would retaliate if Mr Trump carries out his pledge to impose a 25pc tariff on Mexican and Canadian imports.
“There will be no potential tariff war,” she said.
On Wednesday, Mr Trump wrote that Ms Sheinbaum had agreed to stop unauthorised migration across the border into the United States. She wrote on her social media accounts the same day that “migrants and caravans are taken care of before they reach the border”.
05:42 PM GMT
Dr Martens shares surge despite ‘brutal’ results
Shares in Dr Martens surged 13.6pc today despite telling investors that sales had fallen 18pc to £324.6m.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Dr Martens has pulled itself up by its bootstraps and there are tentative signs its turnaround is lacing together. The iconic footwear company has found it hard going stomping new fashion ground overseas, with the US, its biggest market, proving particularly tough.
“The headline figures still made for some pretty brutal reading, with the company plunging to a loss of £28.7m in the 26 weeks ending Sept 29, from a profit of £25.8m in the first six months of last year.
“However, the revenue decline of 18pc wasn’t quite as high as the company had previously flagged. The increased investment in marketing across the United States, is showing signs of paying off with new styles winning fans in the key Autumn/Winter season.
“The update of its flagship 1460 boot with soft leather has proved popular, but faux fur additions to other products and new ranges like the Anistone biker boots are also selling well. This shows how important it is to get balance right between heritage models and new innovations in the consumer market. So, there is more optimism that Dr Martens can kick off a more sustained recovery.”
05:25 PM GMT
Direct Line soars after takeover offer
Direct Line soared by 41.4pc today after it rebuffed a £3.4bn approach from rival Aviva.
Aviva announced after the market closed yesterday that it had put forward a possible cash-and-shares bid - worth 250p a share - to buy Direct Line last week, but saw the move rejected.
“I think the expectation is that there will be more than just that first offer and clearly it does suggest that there is interest in this space,” said Danni Hewson, head of financial analysis at AJ Bell.
The approach helped spark a jump in the value of Direct Line and other insurance firms, but caused Aviva shares to slip by 2pc.
Chris Beauchamp, chief market analyst at IG, said: “The prospect of more M&A activity in the insurance sector has failed to spark a substantial rally for the FTSE 100, but in the short term the upside for the index looks limited given the near-300 point gain in two weeks.
“Aviva’s bid for Direct Line might signal the beginning of a more activist phase for undervalued UK stocks, helped along by the renewed weakness in sterling versus the dollar.”
04:54 PM GMT
FTSE closes up
The FTSE 100 closed up 0.1pc today. Spirax was the biggest riser, up 3.8pc, followed by Sainsbury’s, which rose 3.1pc.
At the other end of the index, housebuilder Vistry jumped 3.9pc, followed by Land Securities, up 2.6pc.
The mid-cap FTSE 250 also rose, by 0.7pc, with Direct Line boosting the index after rejecting Aviva’s £3.4bn takeover bid. It rose 41.4pc. Waste management company Renewi was the biggest riser, gaining 46.8pc.
04:41 PM GMT
Housebuilding falls to eight-year low in challenge to Rayner’s planning shake-up
Housebuilding in Britain has fallen to its lowest level in eight years outside the pandemic, in a challenge ahead for Angela Rayner’s ambitions to kickstart a planning revolution.
The number of new homes added to Britain’s housing supply slipped by 5.6pc to 221,070 in the year to April when compared with the previous year, according to the latest data from the Ministry of Housing, Communities and Local Government.
The total is the lowest since 2016, excluding the pandemic, when housebuilding halted in line with lockdown rules. This year’s total has dropped by 11.1pc from levels seen in 2019/2020.
The figures underline the challenge facing Ms Rayner, the Housing Secretary, who has pledged to build 1.5m homes over the next five years.
04:32 PM GMT
Aviva ‘playing hard to get’, says analyst, after rebuffing offer
Direct Line “is playing hard to get”, an stockbroker Hargreaves Lansdown has said, after it rejected a £3.4bn takeover offer from rival Aviva.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Direct Line is playing hard to get, again, as the board rejects a tentative takeover offer from Aviva on the grounds that the 250p per share on the table significantly undervalues the company.
“It’s not a clean offer; the 250p would be split half as cash and half as Aviva shares, which always makes things a little more complicated.
“Direct Line is no stranger to takeover offers, having rejected multiple attempts from Belgian insurer Ageas earlier in the year.
“There’s a case to be made that Aviva is a better suitor, given it already shares markets with Direct Line in the UK, but it’ll need to up its game - and its offer - if it wants Direct Line to take the proposal seriously.”
Direct Line’s shares are up 41pc today.
04:22 PM GMT
Biden says he hopes Trump rethinks tariffs on Mexico and Canada
US president Joe Biden said this afternoon that he hoped Donald Trump would rethink his plan for tariffs on Mexico and Canada.
“I hope he rethinks it. I think it’s a counterproductive thing to do,” he told reporters in Nantucket.
“We’re surrounded by the Pacific Ocean, the Atlantic Ocean, and two allies: Mexico and Canada. The last thing we need to do is begin to screw up those relationships.”
04:21 PM GMT
French PM scraps electricity tax hike
French prime minister Michel Barnier has announced a major concession in a bid to end a standoff with the opposition over the budget, which has caused jitters on financial markets and risks bringing down his minority government.
In a u-turn, Mr Barnier told the Le Figaro newspaper that a previously planned increase for an electricity tax would no longer be included in the budget.
04:07 PM GMT
French borrowing costs exceed Greece’s for first time
French borrowing costs have exceeded those of Greece for the first time, as Michel Barnier’s government teetered on the brink of collapse.
Hard-Right and Leftist opposition parties have been threatening to bring down Barnier’s government over its budget that includes €60bn (£47bn) in tax hikes and spending cuts.
Bond investors worry that the collapse of the government would mean any effort to cut borrowing is jettisoned.
The change in borrowing costs underline a dramatic shift in how lenders view the creditworthiness of euro zone members.
Michiel Tukker, senior European rates strategist at lender ING, said: “A no-confidence vote would reset the progress made with the current budget proposal and trigger a new period of political limbo.”
In the middle of the euro zone sovereign crisis in 2012, Greece’s borrowing costs, as measured by its 10-year bond yield, shot to more than 37 percentage points above those in France, as Greece looked destined to default on its debts.
This afternoon, however, the yield on 10-year Greek bonds was 2.979pc, while French debt yielded 2.953pc.
France’s rising debt levels - currently at 112pc of GDP - have been slowly eroding its advantages in the bond market for years.
Meanwhile, the countries once at the centre of the 2012 crisis and labelled the Pigs - Portugal, Italy, Greece and Spain - have cut their debt levels and become more attractive to bond investors.
“Even if the government did achieve its planned consolidation, France would still have a pretty elevated budget deficit,” said Max Kitson, rates strategist at Barclays.
“If you look at Greece’s debt-to-GDP profile, you have a downwards trajectory which contrasts with France’s upwards trajectory.”
Friday evening will prove a test, when S&P Global Ratings will update its assessment of France, after Fitch and Moody’s downgraded their outlooks on the country last month.
03:58 PM GMT
European stocks rise as US celebrates Thanksgiving
All the major stock indexes across Europe are in positive territory this afternoon, with the pan-European Stoxx 600 up 0.5pc. US markets are closed for Thanksgiving.
Chris Beauchamp, chief market analyst at online trading platform IG, said:
It is getting to the point where European markets only make gains when the US is out of the picture. Europeans always seem to take over some of America’s positive outlook on life on days like today, with indices moving modestly higher.
03:53 PM GMT
City watchdog’s plans risk growth, says CityUK
A watered down version of plans by the City watchdog to “name and shame” companies under investigation has been criticised for not going far enough.
The Financial Conduct Authority today tweaked plans to disclose the name of companies facing investigation following a backlash over the summer.
Under the revised proposals, companies would be given 10 days’ notice ahead of any announcement being made. The potential for the announcement to “seriously disrupt public confidence in the financial system or the market” would also be taken into account before deciding whether to publish the name.
However Miles Celic, chief executive of CityUK, said: “Ultimately, the FCA’s approach would leave the UK as a global outlier. These proposals also risk running counter to the FCA’s secondary competitiveness and growth objective.”
UK Finance, the bank industry group, was more conciliatory, welcoming “the fact the FCA has listened and taken on board industry feedback”.
The FCA is running a consultation on the new plans.
03:30 PM GMT
Vapes maker in talks over Typhoo Tea takeover
Vapes and batteries maker Supreme has said it is in talks over a potential deal to buy Typhoo Tea out of administration.
It said that talks are at “an advanced stage” but it is not certain an acquisition deal will be completed.
It comes after the historic tea maker hired administrators on Wednesday, putting almost 100 workers at risk.
That’s all from me. Alex Singleton is stepping in now to send you updates from the markets for the rest of the day.
03:08 PM GMT
Profits fired up at Royal Mail suitor’s power plant
The Czech billionaire planning to buy Royal Mail saw a second year of large profit from his gas-fired power stations in England, after a period of soaring energy prices caused by Russia’s invasion of Ukraine.
Daniel Křetínský’s gas power plant near Hull brought in £141m of pre-tax profit last year, following a period of “exceptionally high” commodity prices caused by the war, according to accounts filed this month.
South Humber Bank (SHB) power station, which is owned by Mr Křetínský’s EP UK Investments, is capable of powering about 1.2m homes when running at full capacity, roughly equivalent to the size of Greater Manchester.
The power station also made £143m in 2022, compared with a £26m loss in 2021, before the conflict caused gas and electricity prices to skyrocket.
Mr Křetínský built his fortune in the energy industry, and has assets spanning the Czech Republic, Germany, Italy, Slovakia, the Netherlands and the UK.
Power generators have come under increasing levels of scrutiny for making outsized profits while household energy prices spiked in recent years.
Gas-fired power stations were not targeted by a windfall tax introduced in 2022 designed to offset the cost of rising bills because they needed to buy gas in advance while prices were rising.
Nonetheless, many have announced large increases in revenue and profit in the years since.
02:44 PM GMT
Brics banking payments plan is ‘major threat’, says Lord Lamont
A plan by Brics countries to create a separate banking payments system could render international sanctions useless, a former chancellor of the Exchequer has warned.
Brics, an alliance of major developing countries, includes Russia, China, India and Brazil as founding members, and now also South Africa, Iran, Egypt, the United Arab Emirates (UAE) and Ethiopia.
Lord Lamont of Lerwick warned that a rival payments system would be a “major threat to the Western-led financial system” if it ever came to pass.
His comments came after Russian President Vladimir Putin announced his plan to de-dollarise the world economy at the latest Brics summit last month.
Lord Lamont told the House of Lords: “While the idea of a Brics payments system, which was announced by Mr Putin at the Kazan Brics conference, may seem rather fanciful and a long way off, nevertheless it needs to be taken seriously.
“If it ever happened, it would be a major threat to the Western-led financial system, but above all it would make it impossible for the West to impose sanctions on countries like Russia, China or Iran or other malign countries.”
He added that Chinese state media reported that the new payments system would be based on technology from the Bank for International Settlements, which has been developing a cross-border payments platform called Project mBridge.
Financial Secretary to the Treasury Lord Livermore said: “The Government believes an integrated global financial system is the best way to achieve global prosperity and financial stability.
02:27 PM GMT
Putin insists ‘no reason to panic’ after rouble slumps
Vladimir Putin said there was no need to panic about the swift fall in the value of the Russian rouble in recent days.
Putin said the currency’s sometimes sharp fluctuations were related to budget payments and seasonal shifts.
The rouble was rebounding on Thursday from a more than 7pc slide against the US dollar to around the 115 mark on Wednesday after the central bank said it would stop buying foreign currency to stabilise financial markets.
Putin was speaking in Astana, Kazakhstan, following a summit with leaders of a security alliance of ex-Soviet countries.
He said: “The situation is under control. There are certainly no reasons for panic.”
The rouble plunged 7.7pc against the pound on Wednesday to be worth 0.7p. Russian currency has rebounded by 4.6pc today.
02:08 PM GMT
Co-operative Bank’s £780m takeover given green light
Coventry Building Society’s £780m deal to take over the Co-operative Bank will go through in the new year after regulators gave it the green light.
The Co-op Bank will officially become a subsidiary of Coventry Building Society on January 1 2025, the lenders said.
The tie-up, announced in May, will create a banking giant with millions of customers and about £89bn worth of assets.
It will return Co-op Bank to a mutual structure, meaning it is owned by individual members rather than shareholders and investors like most UK banks.
Officials at the Financial Conduct Authority and the Prudential Regulation Authority, which regulates banks, have now approved the deal.
Co-op Bank was part of the wider Co-op Group more than 10 years ago, before splintering off when it fell into deep financial difficulty.
It was rescued by American hedge funds and is currently owned by a group of private equity investors.
Fully joining up the two businesses is set to take several years, and there will “inevitably be change over time”, the pair said when the deal was agreed.
01:49 PM GMT
Renewi surges to top of FTSE 250
Waste management group Renewi shares surged at their fastest pace in 15 years as it said it had reached a takeover agreement with an Australian investment giant.
Renewi said it is “minded to recommend” the 870p per share offer from Macquarie Asset Management, worth about £701.
The company surged by 45pc to the top of the FTSE 250 as it agreed to give Macquarie access to confirmatory due diligence information.
Macquarie’s latest move on Renewi came after its last offer was turned down about a year ago.
01:26 PM GMT
EasyJet to cut domestic flights after Reeves’s tax raid
EasyJet plans to follow Ryanair in cutting domestic flights following the Government’s move to increase air passenger duty (APD).
The budget airline is scaling back its UK schedule to meet an anticipated slump in demand on domestic routes, with fares set to rise after the Chancellor’s latest tax raid.
Kenton Jarvis, the airline’s finance chief, said services linking London airports with Scotland and Northern Ireland would be worst hit.
It is not the first airline to cut back on routes after the changes in the Budget.
01:12 PM GMT
German inflation rises in run-up to snap election
German inflation rose slightly in November, climbing back above the European Central Bank’s 2pc target, according to preliminary data.
The annual inflation rate in Europe’s biggest economy increased to 2.2pc, up from 2pc in October, figures from federal statistics agency Destatis showed.
The jump comes as voters prepare to go to the polls for a snap election after the collapse of Olaf Scholz’s coalition government earlier this month.
One of the key focuses of the campaign is Germany’s debt brake, a strict legal limit on borrowing introduced by Angela Merkel in 2009, which parties are calling to be overhauled to help boost its struggling economy.
12:53 PM GMT
Financial watchdog waters down rules on ‘naming and shaming’ firms
The UK’s financial watchdog has agreed to water down proposals to “name and shame” firms it is investigating, after facing pressure from the City.
The Financial Conduct Authority (FCA) said it is making changes, having “heard the strength of feedback” on its original plans.
Companies will now be given 10 days’ notice before any announcement is made, rather than the one day previously suggested.
The FCA will also consider whether publicising an investigation has a “potential negative impact” on the business in question.
The proposals, unveiled earlier this year, involved the regulator announcing when it has opened enforcement investigations into financial firms, which it currently only does in very limited cases.
It would mean “naming and shaming” the companies being probed, regardless of whether or not it decides there has been misconduct or a breach of rules.
The move prompted a widespread backlash earlier this year, including from former chancellor Jeremy Hunt, who warned the watchdog to reconsider its plans over fears it could damage the UK’s standing internationally.
Several trade bodies, including the City of London Corporation and Pimfa (the Personal Investment Management & Financial Advice Association), also raised concerns that making investigations public could have a damaging effect on firms, their staff and customers, before any conclusions are reached.
12:23 PM GMT
Zuckerberg dines with Trump – four years after banning him from Facebook
Mark Zuckerberg has dined with Donald Trump almost four years after the president-elect was banned from Facebook for disputing the outcome of the 2020 presidential election.
The Facebook billionaire attended a private dinner at Mar-a-Lago where he lent his backing to the president-elect’s plans for “national renewal”, according to an adviser to Mr Trump.
The support suggests a thawing of relations after years of barbs from Mr Trump towards the Facebook boss. The Republican threatened to jail Mr Zuckerberg if Facebook influenced the US election.
Read why the tech mogul has praised Mr Trump.
12:10 PM GMT
Richest households hit by highest rate of inflation
Britain’s richest households suffered the highest rates of inflation as they grappled with rising mortgage costs, official figures show.
Top earners faced inflation of 2.5pc in the year to September, according to the Office for National Statistics (ONS), while the UK’s poorest homes saw prices rise at the slowest pace at 1.4pc.
Poorer households benefited most from declining energy and fuel prices, the ONS said.
Mortgage holders saw household costs rise by 2.6pc, although renters were the worst hit with a jump of 3pc.
For those who own their homes outright, inflation rose by just 1pc.
The ONS said: “Higher inflation for high income households was a result of higher contributions from mortgage interest payments, 0.6 percentage points more than low-income households.
“Falling gas, electricity and other fuel prices reduced the annual inflation rate more for low-income households, by minus 1.6 percentage points, compared with minus 0.9 for high-income households.”
11:50 AM GMT
Pound slips on slow trading day
Sterling edged lower against the dollar in a quiet trading session due to the Thanksgiving break in the US.
The pound retreated 0.1pc at $1.267 but was still headed for its best week in 11.
Investors were also preparing to close the books on a volatile month that pushed up the dollar to over four-month highs after the election of Donald Trump.
The pound’s losses this month, however, have been shallower than the euro’s helped by bets that the Bank of England will be slower to cut interest rates, with the looming US tariff threat poses a risk to the eurozone economy.
Sterling was flat against the euro at 83.3p.
Nick Rees, currency analyst at Monex Europe said: “No news is seemingly good news for sterling at present.
“We are biased to think that another day of sterling outperformance is likely, absent any surprises.”
11:34 AM GMT
Typhoo tea plunges into administration
Typhoo Tea, one of Britain’s oldest tea companies, has been dunked into administration after years of setbacks including a costly break-in at its Wirral factory.
The brand filed a notice on Wednesday that said it had appointed administrators after two weeks of efforts to find creditors to try to pay back its debts.
The company, which previously ran adverts starring Nigella Lawson and Ben Fogle, filed a notice to appoint administrators earlier this month.
However, having previously lined up administrators from EY, the company decided instead to appoint its own administrators Kroll.
Law firm Addleshaw Goddard said it had acted with Typhoo until Wednesday “managing the situation and trying to get the best result for creditors”.
11:03 AM GMT
Pay still below 2008 levels as Britain lags behind rich world
Workers in Britain are worse off than they were in 2008 as the country lags behind the rest of the rich world, the International Labour Organisation (ILO) has warned.
The financial crisis, Covid pandemic and the cost of living squeeze have combined with dire productivity and weak economic growth to give British workers one of the worst blows to living standards.
Among advanced economies in the G20, only workers in Japan and Italy have suffered on a similar scale over the past decade and a half, according to the ILO.
Read how low productivity and weak growth pose challenge to Sir Keir Starmer’s economic ambitions.
10:47 AM GMT
Oil prices rise as Opec delays key meeting
Oil prices edged up as Opec delayed a crucial meeting when it is expected to announce a ramp up in production.
Brent crude, the international benchmark, was up 0.6pc to more than $73 a barrel on a thin day of trading with US markets closed for Thanksgiving.
It comes as the Opec+ alliance of oil-producing countries has postponed its next meeting on output policy to December 5 from December 1 to avoid a conflict with another event.
A summit of Gulf Arab countries is due to be held in Kuwait City on December 1 which several Opec+ ministers plan to attend.
Opec+, which comprises Opec and allies led by Russia, pumps about half the world’s oil. The group aims to gradually unwind oil production cuts through 2025 which it introduced to help support prices.
However, a slowdown in Chinese and global demand and rising output outside the group pose hurdles to that plan.
Saudi energy minister Prince Abdulaziz bin Salman, the de facto head of Opec, on Wednesday had a phone call with Russian deputy prime minister Alexander Novak and Kazakh energy minister Almasadam Satkaliyev while in Kazakhstan on an official visit.
Iraq, Saudi Arabia and Russia held talks in Baghdad on Tuesday.
10:30 AM GMT
Morrisons quits deliveries from Ocado warehouse in cost-cutting drive
Morrisons will stop making deliveries from Ocado’s warehouse in Erith, south-east England, as the supermarket pushes ahead with cost-saving efforts.
Ocado said Morrisons would gradually stop using the warehouse and instead will be increasing its deliveries from the other Ocado warehouse which it uses in Dordon, Warwickshire.
Morrisons will also start using its stores more for online orders, with groceries picked and packed from its supermarkets. It said these changes would have no impact on customers.
It will, however, be seen as part of a push within Morrisons to make the supermarket chain more efficient. Rami Baitiéh, its chief executive, has been steering a turnaround drive at the supermarket. It has cut more than £450m in costs since the start of last year.
Ocado said it was in talks with Ocado Retail, the online grocer which it jointly owns with Marks & Spencer, over taking up the extra warehouse space in the near term. It said Ocado Retail was approaching full capacity in its current network and “continues to grow robustly”.
The warehouse owner said it expects the cash impact from the warehouse change to be broadly neutral, subject to talks with online grocer Ocado Retail.
10:20 AM GMT
UK fossil fuel power hits record low
The amount of electricity generated from fossil fuels in the UK has plunged to a record low after the closure of Britain’s last coal-fired power station.
Less than 5GW of power was generated from the fuels in August as the monthly average fell to its lowest level ever during the third quarter, according to Drax Electric Insights.
It came as the Ratcliffe-on-Soar power station was closed last month, making the UK the first major economy to phase out coal power completely.
However, Dr Iain Staffell of Imperial College London, who authored the Drax report, warned the “phasing out natural gas at speed will be much more difficult than coal”.
European gas prices are trading close to their highest level this year amid an uptick in demand over winter and after a so-called dunkelflaute weather event sent wind and solar power generation plummeting.
Dr Staffell said: “Gas offers the grid a flexible supply that is difficult to replace, and one that is essential to energy security right now.
“If we continue to reduce our dependence on gas by prioritising wind and solar, they will need support from other technologies like long-duration energy storage (LDES) and dispatchable thermal power, and government will need a bold approach to rapidly upgrade our transmission grid.”
Dutch front-month futures, the European gas benchmark, were last down 1.2pc today to about €46 per MWh.
09:46 AM GMT
Investment giant prepares takeover bid for London-listed waste collection company
An Australian investment giant will make a fresh takeover bid for a London-listed waste management company a year after an offer was rejected, it has been reported.
Macquarie Asset Management is working on a potential deal for the Renewi, according to Bloomberg News.
It had a bid rejected in September last year which Renewi said “fundamentally undervalued” the company, but its share price has fallen 13pc so far this year, giving it a market value of £450m.
The FTSE 250-listed waste collection business’s shares surged by 21pc in the wake of the report.
Representatives of the two companies declined to comment.
09:30 AM GMT
Trump’s tariffs will not solve American problems, says China
Beijing said Thursday that Donald Trump’s threat to impose new tariffs on Chinese products “will not solve” the country’s problems, after the US president-elect blamed China and other countries for the fentanyl crisis.
The United States is facing an epidemic of deaths caused by fentanyl, a synthetic opioid 50 times more potent than heroin and much easier and cheaper to produce.
Washington has long accused Beijing of failing to crack down on the production of chemical components that are typically exported to Mexico and made into fentanyl before being transported into the US.
Mr Trump this week said he would slap a further 10pc tariff on Chinese imports, saying not enough was being done to stem the flow of drugs into the US.
Asked about the prospective tariffs on Thursday, a spokesman for China’s commerce ministry said that the country’s “position of opposing the unilateral imposition of tariffs is consistent”.
“Imposing tariffs at will on trading partners will not solve the United States’ own problems,” spokesman He Yadong said at a press conference.
“The United States should abide by WTO rules and work with China in accordance with the principles of mutual respect, peaceful coexistence and win-win cooperation to jointly promote the stable and sustainable development of China-US economic and trade relations.”
09:16 AM GMT
Spanish inflation rises at fastest pace in three months
Spanish inflation rose at the fastest rate since August amid higher fuel and electricity prices, official figures showed.
Consumer prices rose 2.4pc in November, up from 1.8pc in October, national statistics office INE said.
It said: “This development is mainly due to the increase in electricity and fuel prices, compared with the decrease in November last year.”
Inflation had slowed to 1.5pc in September after reaching 2.3pc in August.
Spanish inflation hit 10.8pc in July 2022, its highest level since 1985 as Russia’s invasion of Ukraine sent consumer prices soaring.
European Central Bank (ECB) vice president Luis de Guindos, a former Spanish economy minister, said last month that inflation was on the “right track” in Spain and the rest of the eurozone.
But he warned during a speech in Madrid that “the outlook, however, is surrounded by substantial risks”.
He said: “The geopolitical situation, especially the conflict in the Middle East and Russia’s war against Ukraine, poses a particular upside risk to inflation.
“Heightened geopolitical tensions could push energy prices and freight costs higher in the near term and disrupt global trade.”
09:01 AM GMT
French stocks rebound amid budget hopes
Europe’s main stock indexes amid signs of a potential return to political stability in France.
The Cac 40 in Paris rose 0.7pc after the French finance minister indicated the government was prepared to make concessions on its budget to avoid a debt crisis.
The stock index had slumped to its lowest level since August and French bond yields had surged above Greek debt, which until last year had still been in junk territory, amid concerns that the budget would be blocked.
The Continent-wide Stoxx 600 index was up 0.6pc amid a 1.9pc jump in tech shares after Bloomberg reported that restrictions on China chips by the US could be less severe than expected.
08:40 AM GMT
UK stocks rise amid potential insurance mega-merger
UK markets rose in early trading as investors eyed a potential tie-up that would create one of Britain’s largest car insurers.
The FTSE 100 was up 0.2pc and the FTSE 250 gained 0.6pc ahead of one of the biggest takeover battles between listed London businesses for years.
Direct Line shares surged by 36pc to the top of the FTSE 250 after it rejected a £3.4bn takeover bid from Aviva, saying the offer “was highly opportunistic and substantially undervalued the company”.
Fellow insurer Admiral rose as much as 3.5pc to lead gains on the FTSE 100 as brokers across the London Stock Exchange’s two largest share indexes rose as much as 1.9pc collectively.
By contrast, Aviva shares were down 1.7pc near the bottom of the UK’s blue-chip index.
Elsewhere, Dr Martens surged by as much as 21pc to make its steepest gain in two years despite announcing it had swung to a first half loss.
A decline in revenue in the first half of the year was not as bad as feared and analysts at RBC Capital Markets said the results indicated its turnaround plan had made a “step in the right direction”.
08:27 AM GMT
France ready to make budget concessions as debt costs soar
The French government is ready to make concessions over its budget, its finance minister has said, amid deepening debt turmoil in Europe’s second-largest economy.
Finance Minister Antoine Armand said changes would be made to the tax and spending plans amid widespread opposition from both far-left and far-right politicians.
It comes as benchmark French bonds yields - a measure of government borrowing costs - rose to the same level as Greece for the first time on record.
“We are ready to make measured concessions in all areas,” Mr Armand told BFM TV, warning of the risks of an ensuing “storm” that could hit financial markets if the budget was blocked.
08:09 AM GMT
UK markets rise after American inflation figures
The FTSE 100 edged higher after closely watched US figures indicated the push to bring inflation back to the Federal Reserve’s 2pc target was stalling.
The UK’s blue-chip stock index rose 0.2pc to 8,290.49 as the PCE price index rose to 2.3pc, helping to strengthen the dollar.
A stronger dollar boosts the FTSE 100, as many of its companies measure their profits in dollars.
The midcap FTSE 250 was up 0.8pc to 20,722.90 at the start of a thin trading day, with US markets to remain closed for Thanksgiving.
07:59 AM GMT
Majestic Wines backer to take over Loungers
Hospitality group Loungers has agreed to be acquired by Fortress Investment Group in a deal which values it at about £340m.
Fortress, which has previously invested in firms including Majestic Wines and Peach Pubs & Co, offered 310p for each Loungers share.
This represents a premium of about 30pc to its closing price on Wednesday.
Domnall Tait, the managing director of Fortress, said Loungers has a “strong and differentiated position” having grown its locations and sales in recent years “in spite of the recent challenges faced by the wider hospitality sector”.
Loungers, which operates the Lounge, Cosy Club and Brightside brands, opened its first site in Bristol in 2002.
07:54 AM GMT
French borrowing costs match Greece for first time
French borrowing costs have soared further amid political turmoil and mounting debts, with its benchmark bond yield matching Greece’s for the first time.
The yield on 10-year French bonds - the return the government offers to buyers of its debt - rose to 3.03pc, making it comparable with Greek debt for the first time on record.
French debt has long been considered one of the safest in the eurozone but the bonds are being dumped by investors as Marine Le Pen’s far-Right National Rally party threatens to bring down the government in a row over the budget.
Michel Barnier, the prime minister, is trying to raise taxes and restrain spending with the aim of reducing borrowing to 5pc of GDP next year.
Greek bonds were still classified as junk by major credit ratings agencies last year in the wake of its sovereign debt crisis after the global financial crash in 2008.
07:45 AM GMT
Dr Martens slumps to loss despite cost-cutting drive
Dr Martens has revealed it swung to a half-year loss after seeing sales slump, but said it had taken “swift action” to slash costs and was seeing turnaround actions start to bear fruit.
The bootmaker reported pre-tax losses of £28.7m for the six months to September 29 against profits of £25.8m the previous year.
Revenues fell 18pc to £324.6m.
The group said cost cutting measures put in place to turn around its fortunes were now expected to see savings in the new financial year at the top end of the previously guided range of £20m to £25m.
It added: “Trading since the start of the autumn/winter season has been encouraging, with all three regions positive, albeit the peak weeks of trading remain ahead of us.
“Encouragingly, trading has been driven by good direct-to-consumer sales of new products supported by our new product-led marketing approach.”
07:34 AM GMT
Car production slumps for eighth consecutive month
The number of cars produced in Britain has fallen for the eighth consecutive month, new figures from the Society of Motor Manufacturers and Traders (SMMT) show.
The trade association found UK factories made 15.3pc fewer cars in October this year than October 2023.
It found 670,346 units were produced in the UK between January and October 2024, 10.8pc lower than during the same period in 2023.
The drop was primarily due to a fall in exports, the SMMT said.
It added that the current market for new cars is weak in the UK and European Union, with the EU market rising by just 0.7pc between January and October this year.
The number of cars produced for domestic use rose by 5.3pc but fell by 14.8pc for exports in the first 10 months of 2024 versus last year - equivalent to 89,095 fewer cars being shipped overseas.
The trade association said its new figures came as plants continued “their retooling to enable production of the next generation of zero emission vehicles”.
Around a third of the cars made in Britain in October this year were battery electric, plug-in hybrid and hybrid electric, it added.
07:27 AM GMT
Czech billionaire closing in on deal to buy Royal Mail
The Czech billionaire trying to buy the Royal Mail is said to be closing in on a deal, with an agreement as little as a fortnight away.
Daniel Křetínský, known as the “Czech sphinx”, has agreed to make concessions to secure the takeover, according to the BBC.
Earlier this month, the Telegraph reported that Mr Křetínský was under pressure to rule out further increases to first-class stamp prices as part of his £3.6bn takeover.
The swoop by Mr Křetínský, who is bidding through his company EP Group, has sparked concern, largely because the deal would see the postal service pass into private hands – and foreign ownership – for the first time in its 500-year history.
Unions have been meeting with Mr Křetínský‘s advisors this week, with the Communication Workers Union (CWU) calling the meetings “constructive”.
Mr Kretinsky’s EP Group declined to comment to the BBC.
07:15 AM GMT
Europe must buy US goods to avoid Trump trade war, says Lagarde
Christine Lagarde has urged European leaders to buy more American goods to avoid a sharp blow to the global economy as Donald Trump threatens to impose tariffs on his closest trading partners.
The European Central Bank president said the EU needed “not to retaliate, but to negotiate” with the president-elect, who said he would impose 25pc levies on Mexican and Canadian goods on his first day in office amid concerns over illegal immigration and illicit drugs.
European stock markets have slumped in the wake of Mr Trump’s tariff warnings amid fears he will impose similar measures on the EU, with which the US has a trade deficit.
Ms Lagarde said a global trade war was “in nobody’s interest” and would lead to “a global reduction of GDP”.
Ms Lagarde said Europe needed “to buy certain things from the United States”.
“This is a better scenario than a pure retaliation strategy, which can lead to a tit-for-tat process where no one is really a winner,” she told the Financial Times.
07:09 AM GMT
Budget hits consumer confidence in run-up to Christmas
Households are becoming more concerned about the state of the economy, new data shows, after Rachel Reeves’s Budget sparked warnings over the risk of a UK recession.
The BRC-Opinium tracker of consumer confidence revealed that people’s expectations over the state of the economy worsened between October and November, with the proportion of those feeling positive for the next three months down at 19pc from 21pc.
Meanwhile 38pc of people surveyed said they thought the economy would get worse in the next three months and 36pc said it would stay the same.
Helen Dickinson, chief executive of the British Retail Consortium (BRC), said this was a sign that “many were worried about the economy in the lead up to Christmas”.
It follows a warning shot from economists over a UK recession in the wake of the Budget.
Closely watched PMI figures earlier this month showed activity among the UK’s private sector companies shrank for the first time in more than a year in November.
Business leaders have been warning that the higher costs from the Chancellor’s tax raid meant job losses were now “inevitable”.
Economists have said the latest data raises the risk of Britain’s economy contracting, although most have said they do not think the UK is heading for recession.
Rob Wood, chief UK economist at Pantheon Macroeconomics, said Britain was now close to “stagnation”.
He said: “UK growth certainly slowed over the summer and we have had a couple of disappointing months. We were close to stalling in October.”
Paul Dales, chief UK economist at Capital Economics, said: “I am now more worried that economic growth will be weaker than our forecasts. And at this stage, it would no longer be a surprise if the economy contracted in Q4.”
06:54 AM GMT
Good morning
Thanks for joining us. We begin the day with findings from the British Retail Consortium showing households are worried about the economy in the wake of the Budget.
The proportion of consumers feeling confident about the economy over the next three months - including the crucial run-up to Christmas, declined from 21pc to 19pc, it said.
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What happened overnight
Shares were mixed in Asia after stocks on Wall Street retreated amid losses for technology shares.
Tokyo’s Nikkei 225 index gained 0.6pc to 38,358.68 and Australia’s S&P/ASX 200 advanced 0.5pc to 8,444.30.
South Korea’s Kospi was little changed at 2,503.91 after the central bank cut its benchmark interest rate to relieve pressure on the economy.
The Bank of Korea cut its key rate by a quarter percentage point to 3pc and lowered its outlook for the country’s economic growth from to 2.2pc from 2.4pc for this year and to 1.9pc from 2.1pc for 2025.
Chinese shares fell as investors sold to lock in profits from recent gains.
Hong Kong’s Hang Seng index lost 1.3pc to 19,345.02 and the Shanghai Composite index fell 0.4pc to 3,295.41.
US markets will be closed today for Thanksgiving, and will reopen for a half day on Friday.
On Wall Street on Wednesday, the Dow Jones Industrial Average fell 0.3pc, to 44,722.06, the S&P 500 fell 0.4pc, to 5,998.74, and the Nasdaq Composite fell 0.6pc, to 19,060.48.
In Treasuries, the yield on benchmark US 10-year notes fell to 4.248pc from 4.302pc late on Tuesday.