More than £3.5bn was wiped off the value of car giants Ford and GM this afternoon after analysts warned that Western carmakers would struggle to keep up with Chinese rivals.

Shares in GM fell as much as 6.4pc, while Ford dropped as much as 5.1pc.

Investors sold after Morgan Stanley issued a warning that the carmakers would be among those to struggle to keep up with the Chinese in developing the artificial intelligence software needed for the next generation of cars.

The bank said that the capital required to compete in artificial intelligence will require carmakers to find “tens of billions … We question the financial ability of most auto companies to create proprietary AI models to augment their operations”.

Morgan Stanley warned that vast factory capacity in China meant the Asian giant would flood global markets. The analysts said that China is already manufacturing nearly 9m units more than it sells at home. The “China capacity ‘butterfly’ has emerged and is flapping its wings”, the investment bank warned.

“Tariffs will work for a bit but not for long, and there will likely be retaliation and indirect pressure. China-made EVs continue to expand into export markets, rivalling global peers with superior affordability, variety and (increasingly) quality,” the bank said.

Read the latest updates below.

06:15 PM BST

Signing off...

Thanks for joining us on the Markets blog today.

We will be back in the morning - but you can follow the latest business news and commentary from The Telegraph here.

05:40 PM BST

FTSE stocks falter despite OECD upgrading Britain’s growth outlook

London’s top stock indexes faltered on Wednesday, with financial firms dragging on the FTSE 100.

Asia-focused financial firms Prudential and Standard Chartered were among the biggest fallers of the day, as the dust settled following news of economic stimulus measures in China which boosted stocks on Tuesday.

Meanwhile, a new report from the Organisation for Economic Co-operation and Development (OECD) placed the UK joint-second in its economic growth forecasts for 2024.

The last time the OECD put out a forecast in May, the UK was at the bottom of the pile of G7 countries, but has since found that growth projections had risen this year.

The FTSE 100 dipped 0.2pc, while the FTSE 250 dropped 0.1pc.

05:34 PM BST

US company eliminated from race to build Britain’s first mini-nuclear plant

A US company has been knocked out of a competition to build the first mini-nuclear power plants in Britain, leaving four contenders in the running. Matt Oliver reports:

Read the full story...

05:31 PM BST

Rolls-Royce Motor Cars says bespoke vehicles can offset China slump

The boss of Rolls-Royce Motor Cars has said that “challenging times” selling in China is being helped by increasing demand for bespoke cars.

Chris Brownridge, chief executive of the BMW-owned carmaker, told Bloomberg Television that the luxury car market is “experiencing some more challenging times” in China.

But he said that there is growing demand for “bespoke and personal motor cars” in China. “Overall, we can balance our business really effectively,” he said.

Rolls-Royce’s latest accounts indicate it sold 6,032 cars in 2023. It generated sales of £984m and profits of £97m.

05:08 PM BST

Global stocks mixed after fresh China stimulus

Stock markets diverged and oil prices fell today as China’s latest measure to bolster its economy failed to sustain another global rally.

Shanghai closed up 1.2pc and Hong Kong advanced 0.7pc after both markets surged more than 4pc yesterday.

But European stocks broadly retreated while Wall Street’s main indexes moved in different directions, with the Dow falling back from a record high hit Tuesday on expectations of further US interest rate cuts.

The broad-based S&P500 also pared gains after Tuesday’s all-time highest close, while the tech-heavy Nasdaq edged higher.

France’s Cac 40 fell 0.5pc, Germany’s Dax dropped 0.3pc and the pan-European Stoxx 600 fell 0.1pc.

04:58 PM BST

FTSE closes down

The FTSE 100 closed down this afternoon by 0.2pc.

The top riser was Rentokil Initial, up 5.6pc, followed by mining company Fresnillo, up 3.4pc.

The biggest faller was Prudential, down 3.4pc, followed by BP, down 2.4pc.

04:22 PM BST

Ford and GM plunge after Morgan Stanley points to US ‘burden’

Shares in two American carmaking giants have dropped today after Morgan Stanley said that their cars were too expensive and that a price war with China will hit their profitability.

Adam Jonas, an analyst with Morgan Stanley, said:

GM shares are down 5.3pc, while Ford is down 3.4pc.

Rival Tesla, however, is up 0.2pc.

04:08 PM BST

Etihad to bring old planes out of storage amid global shortage

Abu Dhabi airline Etihad is bring a fleet of Boeing 777 aircraft out of storage as it seeks to offer more flights despite a global shortage of new jets.

Bloomberg reported that Etihad would refit them with new interors - but not immediately. Antonoaldo Neves, the airline’s boss, reportedly said that it plans to overhaul the planes in 2026, the earliest it can source aircraft seats from suppliers.

“Given the constraints that we have in the global aviation market, there are no planes available,” Mr Neves said, adding that the interiors are “a little bit dated” currently. Passengers travelling before the refitting would benefit from free wifi.

Etihad’s move comes amid major backlogs at Boeing and Airbus for new planes.

Etihad was approached for comment.

03:43 PM BST

Wall Street mixed as investors await more clues

Wall Street’s main indexes were mixed on Wednesday, with the S&P 500 hovering near record highs, as investors awaited more indicators on the state of the world’s largest economy.

The S&P 500 was flat, while the Dow Jones Industrial Average of 30 leading US companies fell 0.4pc. The tech-heavy Nasdaq index rose 0.4pc.

Adam Sarhan, chief executive of 50 Park Investments, said:

The S&P 500 and the Nasdaq are up about 20pc so far this year on rate cut expectations and optimism around artificial intelligence. However, S&P 500 stocks are trading at valuations high above long-term averages.

03:39 PM BST

Oil prices dip as market takes a pause

Oil prices have retreated today after strong gains yesterday.

Peter Cardillo, of Spartan Capital, said:

Brent crude, the global benchmark, is down 1.3pc to around $74 a barrel. It is down 5.6pc over the past month.

03:37 PM BST

US hedge fund in talks to buy Abrdn property trust

A US hedge fund is in talks to buy a property trust run by British asset manager Abrdn.

The UK investment company confirmed it is in discussions with GoldenTree Asset Management to sell its Abrdn Property Holdings arm.

It said: “Any sale would involve the disposal of the company’s entire investment property portfolio, with the exception of its interest in the land at Far Ralia.”

With that, I will hand over to Alex Singleton.

03:23 PM BST

Everyman cinemas expect boost from Gladiator II and Wicked movies

Cinema group Everyman has revealed stronger audiences over the first half of this year, which it hopes will be boosted by upcoming releases including Gladiator II and Wicked.

Shares in Everyman Media Group were 3.3pc higher after it told shareholders it is set to meet targets for the year.

The company said it “weathered” pressure on film release schedules from strike action by Hollywood writers and actors to deliver stronger sales.

It added that it has “confidence” in its outlook due to the pipeline of films still to hit cinemas this year.

The company said: “With the impact of the strikes beginning to ease, the group expects a strong second half weighting to the 2024 film slate, with a particularly strong pipeline of titles scheduled for Q4.

“These include Joker: Folie a Deux in October; Gladiator II; Paddington in Peru; Wicked and Moana 2 in November; and Mufasa: The Lion King in December.”

Everyman reported that revenues grew by 22.5pc to £46.9m for the six months to June 27, compared with a year earlier.

02:56 PM BST

Vauxhall owner enters electric car ‘price war’ with £16k hatchback

The owner of Vauxhall is to launch a Chinese-made electric vehicle for just under £16,000 in Britain, in a move that experts say could herald a price war.

Our industry editor Matt Oliver has the latest:

Read how Western brands are racing to launch their own more affordable EVs.

02:37 PM BST

US investors uninspired by China stimulus efforts

Wall Street had a subdued start as China’s efforts to stimulate its economy failed to trigger excitment among investors.

The Dow Jones Industrial Average rose 27.9 points, or 0.1pc, at the open to 42,236.09.

The S&P 500 was flat at the open at 5,733.65​, while the Nasdaq Composite dropped 24.2 points, or 0.1pc, to 18,050.35 at the opening bell.

02:20 PM BST

Google complains to EU over Microsoft cloud dominance

Google has filed a complaint to the European Commission alleging that Microsoft locks customers into its Azure cloud platform.

Google said Microsoft was exploiting its dominant Windows Server operating system to prevent competition.

Google Cloud Vice President Amit Zavery said Microsoft made customers pay a 400pc mark-up to keep running Windows Server on rival cloud computing operators.

This did not apply if they used Azure. Users of rival cloud systems would also get later and more limited security updates, Mr Zavery said.

Microsoft said it had settled amicably similar concerns raised by European cloud providers, adding that Google had hoped they would keep up their legal challenges.

A Microsoft spokesman said: “Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission.”

02:08 PM BST

Wall Street poised for lacklustre open

US stocks are on track for a subdued start to the day amid caution over the outlook for interest rate cuts.

The benchmark S&P 500 and the Dow Jones Industrial Average closed at record highs for the second day in a row on Tuesday, with most of the heavy lifting done by mining stocks after China unveiled a large stimulus package.

However, a weak consumer sentiment report sparked concerns about the health of the jobs market.

Investors are worried that the Federal Reserve’s decision to cut rates by a rare 50 basis points in the previous week was due to a sharp slowdown in the economy.

The odds that the central bank will lower borrowing costs by another 50 basis points at its November meeting have ticked up to 62pc. Traders see borrowing costs falling by about 75 basis points before the year ends.

In premarket trading, the Dow, S&P 500 and Nasdaq 100 were all down about 0.1pc.

01:42 PM BST

Rail workers vote to accept pay deal

Rail workers have voted overwhelmingly to accept pay offers from train companies and Network Rail, the RMT union has announced.

The backing by members of the Rail, Maritime and Transport union (RMT) means the national rail dispute which blighted the final years of the Conservative government has been brought to an end.

The union backed a one-year rise of 4.5pc at Network Rail (NR) and increases at train operators of 4.75pc for the last year and 4.5pc for 2024/25.

Read on for details.

01:38 PM BST

Michael Gove to be editor of The Spectator following takeover

Michael Gove has been appointed as editor of The Spectator magazine after its takeover by GB News co-owner Sir Paul Marshall, The Telegraph can reveal.

Our associate editor Gordon Rayner has the details:

Read how Mr Gove’s appointment suggests a shift in emphasis at the influential magazine.

01:25 PM BST

Flutter approves $5bn share buyback as US market grows

Betfair owner Flutter has revealed plans to buyback $5bn (£3.7bn) over the next three to four years, it has announced, months after shifting its primary listing from London to New York.

The gambling giant expects to launch the repurchase scheme in November, as it said it expects the US market to expand to about $63bn, which is around one and a half times its previous estimate.

It predicted the global addressable market would be worth $368bn, growing by about 8pc a year.

Flutter, formerly known as Paddy Power Betfair, has become the leading beneficiary of many US states choosing to make sports betting legal.

Chief executive Peter Jackson said: “I am very excited about Flutter’s strong trajectory and how well positioned we are to capitalise on a global regulated addressable market of nearly $370bn.

“With our unmatched scale, diversification, and our global differentiator, The Flutter Edge, we have clear sustainable global advantages that will continue to drive sustainable growth and power our financial model with operating leverage building over time.”

He added: “Our intention to deliver up to $5bn of share repurchases over the next three to four years reflects our confidence in Flutter’s future.”

01:11 PM BST

Rentokil shares hit top of FTSE 100 as Nelson Peltz’s Trian takes board seat

Rentokil shares have topped the FTSE 100 today after activist investor Nelson Peltz’s Trian Fund Management took a seat on the pest controller’s board.

Shares in the London-listed company have gained 3.6pc after it said Brian Baldwin would become a non-executive director from next week.

Mr Baldwin has been a Trian partner since 2013 and a member of Trian’s Investment Team since 2007, playing a key role in many of its investments.

Trian, which owns about 2.3pc of Rentokil’s shares, was founded a decade ago by Wall Street stalwart Mr Peltz, Ed Garden and Peter May with a remit to invest in quality but undervalued public companies, and to agitate for change intended to deliver returns to shareholders.

Billionaire investor Mr Peltz was earlier this year thwarted in his attempt to secure a seat on Disney’s board, having waged a fierce campaign against the media giant, arguing its performance was lagging behind rivals and taking aim at its bungled succession planning.

12:56 PM BST

Gas prices rise as colder weather on its way

The price of wholesale gas has risen today as the weather cools across Europe.

Dutch front-month futures, the benchmark for the continent, were up as much as 3.8pc towards €37 per megawatt hour.

Although it reversed declines on Tuesday, storage levels in Europe remain above the average for the time of year at 94pc full.

However, temperatures are forecast to drop as low as 5C in London and Paris at the weekend, ramping up heating demand.

The UK equivalent gas contract rose as much as 4.4pc towards 89p per therm.

12:37 PM BST

Sunak: Labour inherited fastest growing economy in the G7

Former prime minister Rishi Sunak is, unsurprisingly, giving Labour no credit for the OECD’s upwardly revised predictions for UK growth:

12:01 PM BST

PwC UK partners suffer £44,000 pay cut

PwC has slashed the pay packets of hundreds of UK partners by £44,000 as the accounting giant battles rising costs and a slowdown in deal-making.

Our business reporter Adam Mawardi has the latest:

Read why the Big Four – which includes PwC, KPMG, Deloitte and EY – have spent the past year cutting costs.

11:50 AM BST

Petrol prices hit three-year low

The price of a litre of petrol has fallen to its lowest level in three years, industry figures show, amid falling global demand for oil.

The average price of unleaded fell to 135.7p on Tuesday, lower than 135.87p on the same date in 2021, according to the RAC.

Fuel spokesman Simon Williams said:

11:27 AM BST

Sainsbury’s offloads cash machines as it pins hopes on groceries

Sainsbury’s has agreed to sell its ATM machines to operator NoteMachine, as the chain sharpens its focus on the retail business after offloading its main banking arm.

NoteMachine will take over the management of some 1,370 ATMs across the UK.

All the machines will stay open and in their current place, meaning people will still access the free-to-use cash service outside Sainsbury’s supermarkets and local stores.

The sale comes several months after Sainsbury’s struck a deal with NatWest to sell the bulk of its banking business, including personal loans, credit card balances and customer deposits.

Its banking arm now consists of its commission income businesses including insurance and cash money.

Sainsbury’s had revealed earlier this year that it was winding down its banking division in order to focus on its retail business - a decision echoed by rival Tesco which also offloaded most of its banking activities to Barclays.

NoteMachine, which has one of the largest cash machine networks across the UK, is set to take full ownership of the ATMs by May next year.

11:10 AM BST

AI ‘outperforms’ currency traders at ING

Artificial intelligence is replacing the work previously done by currency traders to price the market at a global financial group.

ING said it had employed AI to make pricing decisions to keep up with market volatility, a time-consuming job previously done by its trading team in London.

The Dutch lender said it was doing the work of “a whole person” as it tries to reduce expenses and be more competitive in the $7.5 trillion-a-day global currency market.

“It’s a full-time job monitoring the market, adjusting spreads and managing the risk, so it’s freed up basically a whole person,” said Simon Bevan, its global head of electronic trading, in an interview with Bloomberg.

“This model completely takes care of that and has performed way beyond our expectations, it has definitely outperformed a human.”

10:49 AM BST

Oil flat despite Lebanon conflict and China growth measures

Oil prices are little changed today following their biggest advance in more than a week amid war in the Middle East and China’s efforts to kick start demand in its economy.

Brent crude traded near $75 a barrel after rising 1.7pc on Tuesday, with West Texas Intermediate above $71. Both remain modestly lower this year.

Iran’s President Masoud Pezeshkian said that Israeli attacks in Lebanon “cannot go unanswered,” while also urging Western nations to come back to a nuclear accord and lift sanctions on his country.

Meanwhile, the People’s Bank of China’s followed up its stimulus measures on Tuesday with a cut to its medium-term lending facility, lowering the interest for one-year loans to financial institutions from 2.3pc to 2pc.

Vishnu Varathan, head of economics and strategy at Mizuho Bank, said: “Markets were clearly risk-on as euphoria about the People’s Bank of China’s ‘bazooka’ resonated through European and US hours.

“But an announcement bazooka runs the risk of being a peashooter in terms of execution or outcomes.”

10:33 AM BST

Reeves warned ‘not to relight fire’ of inflation in Budget

Rachel Reeves must be careful not to “relight the fire” of inflation when she delivers her Budget next month, one of Britain’s biggest asset managers has warned.

Abrdn said the UK “isn’t out of the woods yet” on inflation and told the Chancellor she must not announce anything which could force the Bank of England to keep interest rates higher for longer.

Investment director Matthew Amis said:

10:16 AM BST

Britain handed biggest growth upgrade in G7 as Reeves plots tax rises

Britain’s economic growth forecasts have been revised up sharply ahead of the Budget next month, potentially easing fiscal pressures on Chancellor Rachel Reeves.

Our economics reporter Melissa Lawford has the details:

Read why it will also raise questions over the Chancellor’s proposed tax hikes.

10:07 AM BST

OECD raises world growth forecast

The OECD slightly raised its world economic growth forecast for this year as inflation eases and central banks cut interest rates.

The Paris-based organisation said global gross domestic product (GDP) would expand by 3.2pc, compared to 3.1pc in its previous forecast.

It sharply raised the outlook for Britain, Brazil, Russia, Saudi Arabia and Spain.

10:00 AM BST

German economic growth downgraded as confidence ‘in freefall’

Germany had its economic growth outlook downgraded by the OECD today as confidence among its exporters goes into “freefall”.

Europe’s largest economy had its GDP predictions reduced by 0.1 percentage points for both 2024 and 2025 amid high savings rates and an industrial downturn.

The OECD said Germany’s economy would manage just 0.1pc growth this year, followed by 1pc next year.

By contrast, the UK’s growth outlook has been revised upwards by 0.7 percentage points to 1.1pc this year and by 0.2 percentage points to 1.2pc for 2025.

The OECD said growth had been “soft” in Germany, where it estimated inflation will stand at 2.4pc this year and 2pc next year.

Although it said the global economy “remained resilient” in the first half of this year, it said: “Nonetheless, there have been less favourable recent outcomes in some other advanced economies, notably Germany, where weak sentiment has contributed to elevated saving rates in both the household and corporate sectors and industrial activity has been weak.”

It comes as the latest Ifo export expectations index fell to its lowest level since February as the mood among bosses in the sector goes into “freefall”.

Klaus Wohlrabe, head of Ifo Surveys, said: “Industry is complaining about a lack of orders from abroad.

“The export industry is going through a weak phase.”

09:42 AM BST

Funding Circle co-founder to quit board

Funding Circle co-founder and former chief executive Samir Desai has said he will step down from the company’s board next month.

Mr Desai, who set up the small business lending platform in 2010, has been a non-executive at the group for the past three years - a role he took on after ending his tenure as chief executive and handing over the reins to Lisa Jacobs.

He said he would step down on October 25 when his three-year term comes to an end, but will remain a shareholder in the peer-to-peer lender.

Mr Desai - who was awarded a CBE in 2016 for his work in financial services - said: “As I come to the end of my three-year term, I am completing the transition and stepping down from the board.

“I am very supportive of the strategic changes Lisa and the team have made and am excited about Funding Circle’s future.

“I look forward to continuing to support the company as a shareholder and its biggest fan.”

The move comes just weeks after Funding Circle said it had returned to profit in the first half of 2024 and raised its full year outlook, sending shares soaring.

09:26 AM BST

Bank of England should be ‘cautious’ on cutting interest rates, says policymaker

The Bank of England should take a “steady-as-she goes approach” to cutting interest rates as wage growth could prove to be stronger than expected, a policymaker has said.

Megan Greene, a member of the Monetary Policy Committee which sets interest rates, voted to hold rates at 5pc at its most recent meeting this month.

She said in a speech at the British Chambers of Commerce in Newcastle: “I believe it is appropriate to take a gradual approach to removing restrictiveness.”

She said she would “be looking for incoming data to provide evidence” that a period of “economic slack is required to bring inflation sustainably to target” before voting to cut rates.

She said there is a risk that “structural changes in the economy that impact wage- and price-setting require monetary policy to remain tighter for longer”.

She added: “Until then, I believe a cautious, steady-as-she goes approach to monetary policy easing is appropriate.”

09:08 AM BST

UK stocks lack direction despite China rate cuts

UK markets lacked direction despite fresh measures from China to kick start growth in the world’s second largest economy.

The FTSE 100 was down 0.1pc even after the People’s Bank of China followed up stimulus measures on Tuesday with a reduction in its medium-term lending facility from 2.3pc to 2pc, the largest cut since they started using the tool to guide policy in 2016.

By contrast, the FTSE 250 was up 0.2pc as the pound strengthened to a two-and-a-half year high against the dollar amid signs that the UK economy is proving resilient after the inflation crisis.

Rentokil climbed 3.2pc to the top of the FTSE 100 after Fitch affirmed its credit rating on the pest-control company.

Prudential shares slipped 1.4pc to the bottom of the index as it pulled back from its biggest day of gains in four months on Tuesday.

08:51 AM BST

Sweden cuts interest rates to 3.25pc

Sweden’s central bank has cut interest rates and indicated it may do so again at its two remaining meetings this year.

Riksbank reduced borrowing costs by a quarter of a percentage point to 3.25pc and said a half a point reduction is possible at one of its final two meetings in 2024.

It comes as it predicts that inflation will fall from 2.7pc by the end of this year to 0.4pc in 2025.

Riksbank added:

08:34 AM BST

DFS swings to loss as consumers put off furniture purchases

Furniture retailer DFS has tumbled to a loss as consumers spent less and it was hit by Red Sea shipping delays and higher interest rates.

The sofa specialist said sales were significantly down year-on-year due to “exceptionally low market demand”.

It told shareholders that revenues dropped by 9.3pc to £987.1m for the year to June 30, compared with the previous year.

As a result, the group slid to a £1.7m pre-tax loss for the year, compared with a £29.7m pre-tax profit in the previous year.

Chief executive Tim Stacey said: “It is clear that the upholstery market has a long road to recovery given the 20pc decline on pre-pandemic levels that we have seen.

“Despite the challenges we have faced, we remain confident that the business is well positioned to capitalise on market recovery.”

08:20 AM BST

German exporters’ confidence ‘in freefall’

Germany’s export industry is “going through a weak phase” which has put the mood among bosses in the sector “in freefall”, survey data shows.

The Ifo export expectations index fell to minus 6.3 points in September, down from minus 5.2 points in August and its lowest since February.

The fall in confidence comes as the majority of companies expect to see a decline in overseas orders, with the metal and car industries bracing for “significant losses”.

Klaus Wohlrabe, head of Ifo Surveys said: “Industry is complaining about a lack of orders from abroad.

“The export industry is going through a weak phase.”

It comes a day after economists warned that Europe’s largest economy is in a “self-reinforcing vicious cycle of economic stagnation” as business confidence dropped for a fourth month in a row.

08:07 AM BST

FTSE 100 open lower as dollar weakens

The export-focused FTSE 100 slumped at the open as concerns about a downturn in the US weakened the dollar.

The UK’s blue chip stock index fell 0.4pc to 8,253.42 while the midcap FTSE 250 was flat at 20,762.37.

07:57 AM BST

Co-op takes £40m hit from shoplifting

The Co-operative Group has returned to a half-year profit despite a soaring wage bill and taking a near £40m hit from shoplifting across its retail stores.

The retail-to-funerals business reported pre-tax profits of £58m for the first six months of 2024, against losses of £33m a year ago.

Food sales rose 3.2pc across its retail stores, helping drive a 10pc increase in underlying earnings at the division, to £85 million.

But it said it took a hit of £39.5m from theft and fraud in its shops - up 19pc on a year earlier - even as it ramped up campaigning on the issue.

The group’s food arm also saw its wage costs jump £39m as it hiked pay to match April’s 9.8pc rise in the National Living Wage.

Shirine Khoury-Haq, chief executive of the Co-op, said: “Although the external environment remains challenging, it is testament to the underlying strength of our Co-op that we have outperformed in all our markets while significantly increasing our investments in our colleagues, pricing and in the growth of our businesses.

“While there is much more for us to achieve, we are on track to reach our goal of eight million Co-op member owners by 2030.”

07:49 AM BST

Traders quadruple bets on the pound drubbing the euro

Currency traders are ramping up bets on the pound outperforming the euro and other major currencies as Britain’s economy is expected to emerge strongly from the inflation crisis of recent years.

Options trading volumes for the pound against the euro surged to about 300pc above the five-day average on Monday, data compiled by Bloomberg shows.

It beat the average on the Depository Trust and Clearing Corporation again on Tuesday amid bets that the Bank of England will not rush to cut interest rates.

Andrew Bailey said this week that the UK will cut interest rates “gradually” and warned consumers not to expect them to return to “near zero” levels.

Meanwhile, traders have been ramping up bets on the European Central Bank cutting interest rates again next month as closely watched PMI data this week showed the eurozone economy weakening, particularly in Germany and France.

Money markets imply a roughly 60pc chance of a quarter-point reduction in October, up from around 20pc last week. Sterling is down 0.2pc this morning against the euro, which is worth 83.5p.

Overnight, the pound hit a two-and-a-half year high against the dollar as US consumer confidence unexpectedly fell in a sign that Americans are bracing for a potential downturn. It is down 0.1pc in early trading at $1.34.

Ray Attrill, head of FX strategy at National Australia Bank, said: “With the Bank of England lagging the developed market central bank easing cycle and the incoming UK data for the most part holding up quite well, at least on a relative basis, expressing a bearish dollar or euro view via sterling makes sense.”

07:36 AM BST

Murdoch’s real estate group lashes out as £6.1bn Rightmove bid rejected

Rupert Murdoch’s Australian property group has lashed out at the board of Rightmove after the property portal rejected its third takeover deal worth £6.1bn.

The Australian suitor, which is majority-owned by the tycoon’s News Corp, said it was “frustrated” that despite making its third approach for Rightmove on Monday it has “still had no substantive engagement” with the London-listed company.

Rightmove bosses unanimously rejected the latest approach, which they said “continues to be unattractive and materially undervalues the company and its future prospects”.

REA urged Rightmove shareholders to encourage the board “to engage in constructive discussions with REA to work towards a recommended transaction” ahead of a deadline on September 30.

07:35 AM BST

Electric car switch is a ‘grave crisis’ for Europe, Italy warns

Italy’s industry minister has warned that the EU’s impending ban on petrol cars has created a “grave crisis” for the continent’s vehicle manufacturers.

Adolfo Urso, a member of Prime Minister Giorgia Meloni’s Brothers of Italy party, said hundreds of thousands of jobs would be put at risk unless Brussels reviews its target to ban combustion engines by 2035.

He will hold meetings in Brussels this week to demand an urgent review of the emissions rules, which he said should be delayed and eased.

“The road map of the Green Deal, as it was designed, has already demonstrated its contradictions with the collapse of the European electric vehicle market and the grave crisis of European carmakers,” he told the Financial Times.

“The data speaks for itself. It’s already clear the road map . . . is not sustainable.”

Former prime minister Rishi Sunak last year pushed back Britain’s plans to ban petrol and diesel cars from 2030 to 2035.

07:24 AM BST

Good morning

Thanks for joining me. The EU’s target to ban sales of new petrol and diesel vehicles poses a “grave crisis” for European car makers, Italy’s industry minister has said.

Adolfo Urso said the path to the ban was “not sustainable” and called for an urgent review of the plan to ban sales by 2035.

5 things to start your day

1) Reeves prepares to rewrite debt rules to free up to £50bn in spending | Chancellor gives clearest signal yet over desire to relax rules ahead of maiden Budget

2) Sam Bankman-Fried’s ex-girlfriend gets two-year prison sentence for FTX fraud | Caroline Ellison had pleaded guilty to seven counts of fraud and conspiracy

3) Europe’s richest man goes to war with French journalists | Unions sign open letter after Bernard Arnault issues staff with formal block on speaking to press

4) Miliband sends armed police to guard gas terminals amid net zero protests | Civil Nuclear Constabulary to expand its presence as climate activists target fossil fuels

5) Jeremy Warner: We should be welcoming China’s electric car makers, not sanctioning them | Punishing mandates threaten a trade war with consequences well beyond the auto industry. Britain must resist them at all costs

What happened overnight

Chinese stocks jumped higher as a rally pushed into a second day after Beijing announced a flurry of measures aimed at reviving the housing market after a prolonged downturn.

The dollar dipped to a two-and-a-half-year low against the pound after weak US macroeconomic data overnight boosted the case for a second super-sized interest rate cut at the Federal Reserve’s next meeting. Gold renewed an all-time peak.

Mainland Chinese blue chips advanced 2.4pc, following a 4.3pc jump in the prior session. Hong Kong’s Hang Seng climbed 2pc, adding to Tuesday’s 4.1pc surge.

The strong start for Chinese stocks briefly invigorated other regional indexes, but those gains soon fizzled, with Australia’s benchmark last flat and South Korea’s Kospi declining 0.1pc.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.9pc higher.

Japan’s Nikkei shook off early weakness to rise 0.4pc, buoyed mainly by a stabilisation in the yen exchange rate and Wall Street’s rise to new record highs overnight.

The Dow Jones Industrial Average rose 0.2pc, to 42,208.22, the S&P 500 rose 0.3pc, to 5,732.93, and the Nasdaq Composite rose 0.6pc, to 18,074.52.

In the bond market, the yield on benchmark 10-year US Treasury notes was down at 3.73pc from 3.76pc late on Monday.

Broaden your horizons with award-winning British journalism. Try The Telegraph free for 3 months with unlimited access to our award-winning website, exclusive app, money-saving offers and more.