The pound (GBPUSD=X) was muted against the US dollar in early European trading on Wednesday, hovering around the $1.2600 mark as traders await a raft of US economic figures, including the personal consumption expenditures (PCE) price index.

Investors will focus on core PCE inflation data as it is the Federal Reserve’s preferred inflation measure for decision-making on interest rates. The inflation data will influence market expectations for the Fed's likely interest rate action in its December meeting.

"The highlight of today’s session will be the release of the US October core PCE deflator, expected at 0.3% MoM. Even though the market has largely moved on from the US inflation story, a sticky reading will add to doubts that the Fed needs to cut in December after all. Expect the dollar to largely hold recent gains, although month-end selling remains a risk," ING said.

According to the CME FedWatch tool, the probability for the Fed to cut interest rates by 25 basis points to 4.25%-4.50% in the December meeting has increased to 65% from 56% a week ago.

The pound has also found some support amid expectations that the UK won't be severely affected by Trump's tariffs as it only runs a small trade surplus with the US.

"These factors could help contain GBP depreciation if the trade conflict escalates in the new year although the risks remain skewed to the downside indirectly via weakening growth in the euro-zone and globally that would see GBP suffer," according to MUFG analysts.

Meanwhile, the pound remained largely unchanged against the euro (GBPEUR=X), trading at €1.1974.

Getting more time off without losing pay is something only many of us can dream of, but it’s now the reality for a thousand workers in the UK.

A second nationwide pilot of a four-day working week has just kicked off in Britain, which will see 17 businesses trial a shorter working week. The British Society for Immunology and Crate Brewery in London, are among the businesses to have joined the pilot, which is being led by the 4 Day Week Campaign.

Nearly 200 British businesses have switched to a four-day week permanently, according to the 4 Day Week Campaign, which launched in 2022. But despite the growing body of research outlining the benefits many organisations are still concerned about the challenges of a shorter working week. So how can businesses overcome them?

Read the full article here

Nationwide Building Society said it has gained £2.3bn since buying rival bank Virgin Money, but reported a drop in profits as the benefit of higher interest rates faded and it dished out cash to members.

The building society said the value of Virgin Money, which it acquired in October, was well above takeover price.

The tie-up marked the UK’s biggest banking merger since the financial crisis.

Nationwide’s chief executive Debbie Crosbie stressed that “future profits generated by Virgin Money can now be used for the benefit of customers, rather than being paid to external shareholders”.

Nevertheless, the building society reported a sharp drop in profits for the latest half-year period.

Its statutory pre-tax profit fell to £568m for the six months to the end of September, from £989m a year ago.

The economic outlook remains uncertain, and the interest rate outlook means we expect to have passed peak profitability

Here's what's been happening in equity markets this morning:

• Low-cost airline EasyJet (EZJ.L) flew higher as it reported a surge in full-year profit and boosted its dividend on strong summer demand and a narrowing of winter losses. The company posted a 34% rise in pre-tax profit to £610m. The dividend was lifted to 12.1p a share from 4.5p.

• BA and Iberia owner IAG (IAG.L) also rose.

• Auction Technology (ATG.L) surged on the back of well-received full-year results and an upbeat outlook.

• On the downside, Pets at Home (PETS.L) tumbled as it cut its full-year outlook, highlighting a "subdued" market.

• Johnson Matthey (JMAT.L) slumped as it reported a drop in sales and profits for the six months to September end, weighed down by the "challenging" macroeconomic backdrop.

• Aston Martin (AML.L) slid after the car maker raised £210m through share and private debt placings to support its growth and investment strategy and shore up its balance sheet, one day after announcing its second profit warning within two months.

• Pennon (PNN.L) was a little weaker as it said it swung to a loss in the first half as restructuring costs and investments weighed on the bottom line.

German consumers are more pessimistic heading into December amid growing uncertainty about jobs.

Morale has fallen sharply in the latest edition of the poll of around 2,000 people by GfK and the Nuremberg Institute for Market Decisions.

The index slipped 4.9 points to minus 23.3 points, a level last seen in late 2023, after rising for the two previous months.

The poll was conducted from late October to 11 November.

NIM consumer expert Rolf Buerkl said:

Supermarket loyalty cards do offer genuine savings, the UK's competition watchdog has found.

The Competition and Markets Authority (CMA) looked at 50,000 products on loyalty price promotions across Tesco (TSCO.L), Sainsbury's (SBRY.L), Morrisons, Co-op and Waitrose.

It found "very little evidence" that supermarkets were inflating their "usual" prices to make promotions look like a better deal.

However, it found that despite discounts being legitimate many shoppers still did not trust that the offers were cheaper.

European bank stocks have had a strong year but going into 2025 Deutsche Bank (DBK.DE) said it is being more selective with stock picks in the sector and highlighted which names stand out.

For a fourth year in a row, European banks are on track to have outperformed the broader regional market — barring a weak December — thanks to solid earnings per share upgrades, Deutsche Bank Research's team of analysts said in a note released on Monday.

European bank stocks have generated a total return of 29% year-to-date, versus nearly 10% from the pan-European STOXX 600 (^STOXX) index, according to data from Deutsche Bank.

The analysts said they expected 2025 to be the first "down year" for net interest income for banks for some time, due to interest rate cuts. Net interest income is a key metric that indicates a bank's financial health, as it measures the difference between how much interest they are earning on loans and other assets versus how they pay out on deposits.

In addition, they said that while profitability "remains very good by post-GFC (global financial crisis) standards...we expect the sector to lose earnings momentum".

"Hence, this is our first outlook in five years in which we are not positive on the overall sector," the analysts added.

Read the full article here

Ballot of Capita workers in Manchester, Plymouth and Glasgow opens today over refusal of company to conduct 2024 pay negotiations

Workers at Capita will vote on strike action in a dispute over their employers’ refusal to negotiate any pay award for 2024.

The workers, from Capita Life and Pensions regulated services, were due a 2024 pay award in April.

The employer postponed the annual pay talks with their union Unite with the assurance that these workers would be given a pay rise in October. This has not materialised despite this part of the business reporting profits and a healthy balance sheet.

The ballot will ask if staff wish to take strike action following the decision of their employer to deny them a pay increase.

Unite general secretary Sharon Graham said:

Aston Martin (AML.L) has issued its second profit warning in two months, now expecting a profit of up to £280m ($352m) in 2024, below last year's £305.9m.

The company said a "minor delay" in deliveries of its ultra-exclusive Valiant models caused the shortfall.

It had already warned over its profits in September, after a fall in demand in China, where a slowing economy has affected sales of high-end goods.

To bolster its finances, the car maker, famed for its links to the James Bond movie franchise, has said it will issue new shares and debt totalling £210m.

Shares dropped as low as 98.1p, before recovering slightly to 103.2. It is still more than 4% at the time of writing.

Lawrence Stroll, executive chairman of Aston Martin, insists the company can deliver “long-term value” to shareholders, as it enters 2025 with “a stronger and more resilient balance sheet”.

However shares are down roughly 97% since its stock market float in 2018.

The tax burden on Britain’s largest companies grew by 10% before Rachel Reeves announced her £40bn tax-raising budget, it has been revealed.

Figures from PwC showed that the UK’s 100 biggest firms paid £31.8bn in direct taxes in the financial year 2023-24, up 10.2% on the previous year.

The rise largely reflects a jump in corporation tax from 19% to 25% under the previous government.

Overall, these companies generated a record £93.3bn in taxes when factoring in levies they collected for the government such as pay-as-you-earn (PAYE) and VAT.

Andy Agg, who chairs the 100 Group tax committee which represents finance directors of FTSE 100 (^FTSE) and other large UK private companies, said:

Profits at easyJet (EZJ.L) came in at £610mfor the year to 30 September, an increase of £155m compared to the previous year.

The performance, which keeps the company on track to deliver its £1bn target, included a 56% rise for the holidays division to £190m, it said.

Finance director Kenton Jarvis, who is also the incoming chief executive, said travel remains a firm priority with consumers.

The low-cost carrier increased its dividend for shareholders to 12.1p from 4.5p the year before, amounting to £92m.

Shares rose around 2% to 551p in London on the back of the news.

Analysts at Jefferies have a price target of 680p, describing the strong growth in holidays as supportive to the investment case,

The bank added: “We see a re-rating opportunity as easyJet benefits from a growing package holiday business, fleet renewal and self help opportunities through optimising winter trading and ancillary revenues.

“The strong balance sheet and net cash position leaves room for upside to dividends in the next two years.”

The amount of money people can place on a single online slots bet will be restricted to £5 as part of a government overhaul to tackle gambling addiction.

The limit will apply to all adults aged 25 and over with a £2 per spin limit for 18- to 24-year-olds.

The Department for Culture, Media and Sport (DCMS) is also set to increase taxes on gambling companies to fund addiction treatment.

It said the measures would allow people to "gamble safely", but the betting industry's main lobby group warned that the government was "at risk of losing perspective".

Gambling minister Fiona Twycross said the aim of introducing stake limits for online slots was "to protect those at risk, with a particular focus on young adults".

"Gambling harm can ruin people’s finances, relationships, and ultimately lives," Baroness Twycross added.

She said the government would introduce "the first legally mandated" tax on the betting industry to fund gambling addiction treatment.

Just Eat Takeaway (JET.L) has dealt a blow to the City today, announcing plans to scrap its London listing, just two years after it decided to quit the Nasdaq (^IXIC) on Wall Street.

It said the move will “reduce the administrative burden, complexity and costs associated with the disclosure and regulatory requirements of maintaining the LSE listing”.

The company, which has the main listing of its shares (TKWY.AS) on Euronext Amsterdam, will cease London trading on 24 December.

Traders are awaiting the latest data on US inflation, due this afternoon, whilst also weighing up the threat of tariffs from president-elect Donald Trump.

The personal consumption expenditures (PCE) price index, which will be released this afternoon, is the Federal Reserve’s preferred measure of inflation in the American economy.

Trump rattled the financial markets yesterday by announcing he would impose 25% tariffs on Canada and Mexico, and an extra 10% on China, in a crackdown on immigration and drugs.

Economists at Deutsche Bank have calculated that if Trump’s threatened tariffs were fully implemented, US core PCE inflation for 2025 could increase from 2.6% to 3.7%. Before Trump’s victory the assumption was for 2.3% inflation in 2025.

Clare Lombardelli, a deputy governor at the Bank of England, also warned that the proposed trade tariff would pose a risk to economic growth in countries including the UK.

She said:

Shares were mixed in Asia overnight with the Nikkei (^N225) down 0.8% on the day in Japan, as the Japanese yen surged in value against the US dollar, while the Hang Seng (^HSI) soared 2.3% in Hong Kong.

The dollar fell to 152.31 yen from 153.08 yen. It had traded above 155 yen recently, but uncertainty over the future course of US trade policy has led investors to buy yen as a safe haven, analysts said.

The Shanghai Composite (000001.SS) was 1.5% higher by the end of the session.

Across the pond, US stocks rose to record highs despite Donald Trump’s latest talk about tariffs, which caused only ripples on Wall Street.

The Dow Jones (^DJI) rose 0.3% to 44,860.31; the S&P 500 (^GSPC) also advanced 0.6% to 6,021.63, and the Nasdaq Composite (^IXIC) climbed 0.6% to 19,174.30.

In the bond market, the yield on benchmark 10-year US Treasury notes rose to 4.293% from 4.263% late on Monday.

Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what's moving markets, and all that's happening across the global economy.

Here's a quick look at what's on the agenda for today:

• 7am: Trading updates: Pets at Home, Kingfisher, Mitchells & Butlers

• 9.30am: GfK survey of German consumer confidence

• 12pm: US weekly mortgage approvals data

• 1.30pm: US Q3 GDP report (second reading)

• 1.30pm: US durable goods orders for October

• 1.30pm: US weekly jobless claims data

• 1.30pm: US trade balance for October

• 3pm: US PCE inflation measure for October