The British Beer and Pub Association (BBPA) said that pubs were responsible for 1 in 10 of all under 25-year-olds in employment. But it warned that the Budget would mean pubs would damage the employment prospects of young people.

The trade body said:

Prior to the Budget, the National Insurance contributions for 350,000 under 25-year-olds was equal to approximately £82m. With the new NICs announced in the Budget, this will now cost a staggering £153m to maintain the same amount of under 25-year-old workers...

The Times reported that the association had said that brewers’ profits could be “wiped out” by the Budget’s extra costs.

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05:48 PM GMT

Wall Street rises on signs of robust US economy

The S&P 500 and the Dow Jones hovered at levels seen more than a week ago on Friday, as investors took comfort from data pointing to robust economic activity in the world’s biggest economy.

The domestically focused small-cap Russell 2000 index outperformed large-cap indexes with a 1.6pc rise. The index hit a more than one-week high and was set for weekly advances of around 4pc.

A measure of business activity raced to a 31-month high in November, boosted by hopes for lower interest rates and more business-friendly policies from President-elect Donald Trump’s administration next year.

“It’s the excitement about the deregulation and the Trump activity that will boost economic action, because executives start making moves ahead of things,” said Eric Schiffer, chief executive officer at The Patriarch Organization.

However, Mr Schiffer said strong economic data could make the Fed consider a slower pace of monetary policy easing.

The S&P 500 rose 0.3pc, the Dow Jones rose 0.7pc and the tech-heavy Nasdaq rose 0.1pc.

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05:19 PM GMT

Weaker pound takes FTSE 100 to best week in six months

The FTSE 100 recorded its biggest weekly gain in more than six months on Friday as a slide in sterling supported dollar earners, while banks came under pressure from weak business activity data.

The blue-chip FTSE 100 ended the day 1.4pc higher, and logged a 2.5pc weekly rise, its best since May 7.

The pound tumbled 0.6pc to $1.25105 per dollar, its weakest since May, after data showed British business output in November shrank for the first time in more than a year, and retail sales also fell by much more than expected in October.

The currency’s decline helped lift shares of UK-listed international firms such as AstraZeneca, Unilever and Reckitt Benckiser, which draw a major portion of their revenue overseas.

Rachel Reeves, the chancellor, announced a budget in late October which raised taxes on business and the wealthy, contributing to the first contraction in private sector activity in over a year.

“So, all this points to uncertainty and sort of a fragile outlook for the UK as a whole,” said Daniel Coatsworth​​​​, investment analyst at AJ Bell.

“But overall, it’s a strange situation where you have lots of negative economic data points that’s weakened the pound, but is really good for the large amount of overseas focus companies that are listed in London.”

However, banks including Barclays, HSBC and Lloyds Banking Group dropped between 0.3pc and 2.1pc, weighed down by the gloomy data.

Traders expect the Bank of England to hold interest rates next month, but see more cuts coming next year. They now expect about 0.72 percentage points worth of cuts next year, compared with 0.67 percentage points before the release of the data.

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05:08 PM GMT

Unilever to slim down food business in quest for better returns

Unilever is to “prune” its food brands, its chief executive has said, as the company seeks to deliver “higher performance with market-making, unmissably superior brands”.

Hein Schumacher, chief executive, told the Financial Times: “I believe in fewer, bigger, better ... and that is what we choose to execute on.”

The British company, which plans to dispose of its ice-cream division next year, has delivered a relatively stagnant share price since 2017. This prompted criticism that its had focused too much on “social purpose” rather than business performance.

Investment manager Terry Smith of Fundsmith said: “A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot.

Unilever subsequently changed course under new leadership, with Mr Schumacher saying the company would stop “force fitting” ideas about social purpose to all its brands.

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04:52 PM GMT

FTSE 100 closes up, helped by slide in sterling

The FTSE 100 jumped 1.4pc today, as a slide in sterling supported companies earning in dollars, while banks came under pressure from weak business activity data.

The pound is down by more than 0.5pc today and by around 0.8pc since Monday.

The top riser in the index was the conglomerate Diploma, which rose 5.8pc, followed by engineering business Spirax, up 4.3pc.

At the other end of the index, NatWest lost 2.5pc, while Barclays fell 2.1pc.

Meanwhile, the mid-cap FTSE 250 rose 1.1pc, with Games Warehouse the highest riser, gaining 17.3pc, and shipping company Clarkson adding 9.3pc.

City firm CMC Markets was the largest faller, down 8.5pc, followed by Close Brothers, which lost 6.5pc.

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04:43 PM GMT

Thales denies wrongdoing as bribery investigation hits shares

A key supplier to the Armed Forces has said it denies unspecified allegations after the Serious Fraud Office announced an investigation into suspected bribery and corruption.

Thales, which is Europe’s largest defence technology firm, confirmed that the investigation, jointly by the SFO and France’s PNF financial prosecutor, concerned a contract in Asia. It said the case focused on four entities in France and the UK, without giving further details.

“Thales denies the allegations brought to its knowledge,” the company said.

It did not give any further details of the allegations.

Shares in the company, which is partly owned by the French state, fell as much as 7pc.

A Thales spokesperson said the company was cooperating with the authorities in an investigation related to four of its entities in France and Britain. It said it always complied with national and international laws.

A French judicial source told Reuters that the investigation related to an arms contract in Asia, centring on possible charges of bribery of a foreign public official, influence trafficking, handling stolen goods, and money laundering.

“At this point, the related contract under investigation remains unknown, making any potential assessment of the risk challenging,” Jefferies analysts said in a note.

Thales’ military and civil products range from sub-hunting sonars to biometric identity systems for banks, and from satellites to seat-back entertainment systems for airlines.

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04:39 PM GMT

EU ready to react if new US trade frictions emerge, says ambassador

The European Union is ready to respond if new trade tensions emerge with Washington, the EU ambassador to the United States said today, two months before Donald Trump takes office.

While the bloc is looking into areas of cooperation, if there are trade frictions “the European Union will be ready, actually, to react,” Jovita Neliupsiene told reporters in Washington.

She called the United States a “credible partner” and pointed to both sides’ historical record of cooperation.

“Even when we had tensions, be it in trade or in some other areas, we always manage to find a way out,” she said.

On the campaign trail, Trump floated across-the-board tariffs of at least 10 percent on imports, in a move that could stoke tensions with allies in Europe.

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04:23 PM GMT

Readers respond to warning signs of a recession

Rachel Reeves’s plan to increase taxes on businesses contributed to the first contraction in private sector activity in over a year.

Here are some of your comments so far - do add your thoughts on what’s going on in the economy using the facility on this page.

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04:03 PM GMT

Gold jumps after Russia fires newly developed weapon

Gold is headed for a strong weekly gain after worries about the Russia-Ukraine conflict escalated.

The moves came after the US and UK permitted Kyiv to use their weapons to strike Russian territory and Moscow responded on Thursday by firing what Washington described as a newly developed hypersonic ballistic missile into Dnipro in Ukraine.

Axel Rudolph, Senior Technical Analyst at online trading platform IG, said:

Escalating tensions between Russia and Ukraine, which triggered safe haven gold inflows, pushed the precious metal price to new all-time highs in euros and the pound sterling. In US dollars, the gold price saw its largest weekly gain in eight months and rose by close to 5pc.

Gold is currently at $2,704.80 an ounce, up 1.2pc today. It started the week at $2,568.50, a rise of 5.3pc.

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03:53 PM GMT

Britain can learn from US on economy, says think tank

Rachel Reeves’s Budget is already harming the economy but Britain could learn from some of Donald Trump’s policies, according to a leading free-market economist.

Madsen Pirie, president of the Adam Smith Institute, told The Telegraph:

The warning could not be more clear for the UK economy. In the US, business optimism is going like the clappers after Trump won the presidential election. People eagerly await tax cuts and a friendlier regulatory environment and are leaping to take business opportunities.

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03:43 PM GMT

Bosch to cut 5,500 jobs in further sign of car industry woes

German industrial giant Bosch plans to reduce its automotive division workforce by up to 5,500 jobs in another sign of the headwinds hitting the German and global automotive industries.

The company pointed to stagnating global car sales, too much factory capacity in the car industry compared to sales prospects and a slower than expected transition to electric-powered, software-controlled vehicles.

Some 3,500 of the proposed job reductions will come before the end of 2027 and hit the part of the company that develops advanced driver assistance and automated driving technologies, the company said. About half those job reductions would be at locations in Germany.

The reductions are still in the planning stage. A jobs pact that promised no redundancies in Germany until 2027 for many division employees and until 2029 in some circumstances will remain in effect.

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03:36 PM GMT

UK watchdog accuses Apple of stifling web browser innovation

The competition watchdog has accused Apple of stifling innovation with its control over web browser technology on iPhones.

The Competition and Markets Authority (CMA) said that Apple and Google’s policies on iPhones and Android phones respectively are restricting competitors.

A CMA panel recommended that the regulator prioritise investigations into the pair when it assumes new powers in January.

Apple allows rivals to its web browser on the iPhone, but they must use its underlying WebKit software, which rivals say holds them back from making speed and security improvements.

While Google allows alternative engines on Android, it ensures that its Chrome browser is the default. The CMA said it was most concerned with Apple’s conduct.

“Markets work best when rival businesses are able to develop and bring innovative options to consumers,” the CMA’s Margot Daly said.

“Through our investigation, we have provisionally found that competition between different mobile browsers is not working well and this is holding back innovation in the UK.”

In the EU, Apple has been ordered to allow other browser engines and offer users a choice when they sign up.

Apple said: “We disagree with the findings in the report regarding Safari, WebKit, and in-app browsing on iOS. We are concerned that the interventions discussed in the report for future consideration under the Digital Markets, Competition, and Consumers Act would undermine user privacy and security and hinder our ability to make the kind of technology that sets Apple apart.”

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03:30 PM GMT

FTSE 100 poised for best week in six months

The FTSE 100 was on track for its strongest week in six months as its stocks were boosted by the falling pound.

The UK’s blue-chip stock index was up as 2.3pc higher so far this week, which would be its best performance since May.

It comes as the pound slumped 0.8pc since Monday and was down about 4pc since the election of Donald Trump on November 5.

The dollar has surged since the US election amid expectations that the president-elect’s policies will be inflationary, forcing the Federal Reserve to keep interest rates higher.

The FTSE 100 benefits from a strong dollar as most of its companies report their results in the US currency.

The pound was last down 0.6pc to $1.252 against the dollar, its weakest since May.

With that, let me thank you for following today’s live updates from the markets so far, and I will leave you in the good hands of Alex Singleton.

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03:23 PM GMT

Oil market choppy amid uncertainty over output

Oil prices are experiencing choppy trading today amid uncertainty about the future direction of Brent Crude prices.

Expectations of a glut, amid difficult times for the Chinese economy, are weighing down on oil prices. But a planned increase in output by the Opec+ oil cartel, which was planned for January, could be put on ice.

A Bloomberg survey says that nearly 80pc of traders and analysts believe that the planned increase could be postponed.

Brent crude was risen as much as 0.9pc and lost as much as 1.1pc today, and is currently up 0.5pc. Prices have fallen 8.8pc in the past six months.

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03:08 PM GMT

US yields jump after strong figures for the private sector

The yield on two-year US Treasury notes jumped this afternoon on the news that growth in business activity among American companies has increased.

The two-year bonds rose to 4.369pc, up from 4.328pc earlier today.

The US Federal Reserve has a dual mandate to promote both stable prices and promote maximum employment. Stronger growth from businesses gives the bank more latitude to keep interest rates higher for longer.

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02:52 PM GMT

Trump boosts US private sector businesses

The US has reached a two-and-a-half year high in the growth in its business activity, boosted by positivity from the election of Donald Trump as the next president.

The latest flash US purchasing managers’ index (PMI) data, produced by S&P Global, rose rose to 55.3 in November, up from 54.1 a month earlier.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said:

The prospect of lower interest rates and a more pro-business approach from the incoming administration has fueled greater optimism, in turn helping drive output and order book inflows higher in November.

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02:38 PM GMT

US stocks edge higher ahead of private sector data

Wall Street’s main indexes had a subdued start as investors awaited a business activity survey and monitored geopolitical tensions between Ukraine and Russia.

The Dow Jones Industrial Average rose 1.3 points at the open to 43,871.63.

The S&P 500 fell 4.4 points, or 0.1pc, to 5,944.36​, while the Nasdaq Composite dropped 6.1 points, or less than 0.1pc, to 18,966.32.

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02:28 PM GMT

Euro hits two-year low as private sector output shrinks

The euro slumped to its lowest point in two years as traders bet on aggressive interest rate cuts next year.

The single currency fell more than 1pc against the dollar to as low as $1.034 at one stage amid expectations the European Central Bank will cut borrowing costs to boost the eurozone’s struggling economy.

Closely watched PMI data showed that business activity in the bloc contracted for the second time in three months in November.

The market-implied odds of a half-a-percentage-point rate cut - also known as 50 basis points - next month jumped to more than 50pc, up from about 15pc on Thursday.

Matthew Landon, global market strategist at JP Morgan Private Bank, said: “This report truly puts a 50 basis point cut on the table.”

The euro was little changed against the pound as Britain’s economy also suffered a contraction in private sector output. The single currency is worth about 83.3p.

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02:15 PM GMT

Markets ‘worried growth will disappoint’

Luke Bartholomew, deputy chief economist at Abrdn, said: “Markets are betting on stagnation and more rate cuts coming.”

The PMI figures have also raised the possibility that Britain could be heading for “stagflation”, a scenario in which economic growth grinds to a halt despite higher inflation, Mr Bartholomew added.

Andrew Wishart, senior UK economist at Berenberg, said: “The market reaction shows that there are worries that growth is going to disappoint.”

Markets are not yet pricing in a recession, however, as interest rates are currently high and sluggish growth would give the Bank of England more scope to cut interest rates which would act as a stimulus, Mr Wishart said.

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02:01 PM GMT

Britain faces ‘more underlying weakness than we had thought’

Paul Dales, chief UK economist at Capital Economics, said: “There are good reasons why both the retail sales data and the PMIs may be overstating the weakness.

“The late timing this year meant the school half-term didn’t provide the usual support to retail sales in October. And the PMIs don’t fully capture the recent increases in government spending (they focus on private sector activity).

“Even so, there appears to be more underlying weakness than we had thought. Some of this may be due to the policies announced in the Budget. But since the PMIs in Europe have followed a similar trajectory as in the UK, that’s not the whole story.

“Our forecasts assume that economic growth improves a bit in Q4 and strengthens further next year, partly due to the rises in government spending announced in the Budget.

“But 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.

“Any recession, though, would presumably be short and small as the drag on the economy from higher interest rates should now be fading.”

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01:59 PM GMT

Recession warning as Britain reels from Reeves’s Budget

Economists have sounded the alarm over a UK recession after data showed Britain’s economy was reeling from the effects of Rachel Reeves’s tax-raising Budget.

Britain is now “close to stagnation” after closely watched PMI figures showed activity among the UK’s private sector companies shrank for the first time in more than a year in November.

Sterling dropped to its lowest against the dollar since May and banking stocks plunged on Friday. Economists said they were “more worried” that Britain’s performance might not be as good as previous forecasts.

Chris Williamson, chief business economist at S&P Global Market Intelligence said: “Companies are giving a clear ‘thumbs down’ to the policies announced in the Budget, especially the planned increase in employers’ National Insurance contributions.”

The warning came as:

• Retail sales slumped by more than expected in October as uncertainty about the Budget held back consumer spending

• Traders bet that the Bank of England will cut interest rates at least three times next year, up from a prediction of at least two on Thursday

• Bank stocks sank to the bottom of the FTSE 100 amid expectations of lower rates

• Bond yields fell as traders raced to buy up government debt ahead of the expected rate cuts.

While most economists said they do not think the UK is heading for recession, they were clear that the latest data raised the risks of Britain’s economy contracting.

Paul Dales, chief UK economist at Capital Economics, said: “Our forecasts assume that economic growth improves a bit in Q4 and strengthens further next year, partly due to the rises in government spending announced in the Budget.

“But 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.

“Any recession, though, would presumably be short and small as the drag on the economy from higher interest rates should now be fading.”

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01:49 PM GMT

DFS sales grow despite retail downturn

Retail sales slumped further than expected in October but one retailer appeared to buck the downward trend.

DFS has said sales have improved in recent months, as it also hired a new interim finance boss.

The sofa specialist had suffered a sales slump in late 2023 and earlier this year as shoppers pulled back spending on big ticket items.

Revenues had dropped by almost a tenth in the year to June amid pressure from Red Sea shipping delays and pressure from high interest rates on household finances.

However, it had reported an uptick in performance from July as customer sentiment rebounded.

The London-listed business said today this has continued, with it reporting a growth in orders year-on-year for the 20 weeks since the start of July.

It said this order growth is in line with previous expectations.

DFS said it has also continued to make progress on reducing its cost base. The company has previously laid out plans to secure at least £50m in cost savings by 2026.

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01:31 PM GMT

US stocks muted ahead of private sector growth figures

Wall Street lacked direction ahead of the opening bell ahead of the latest survey of US private sector activity.

The benchmark S&P 500 and blue-chip Dow Jones Industrial Average closed higher on Thursday, with AI bellwether Nvidia managing modest gains after its quarterly results.

Investor attention is now focused on a the S&P Global business activity survey, with forecasts pointing to services activity still in expansion territory, while manufacturing is expected to remain in contraction.

Wall Street’s main indexes are on track to end the week higher amid hopes Donald Trump’s tax and tariff policies will boost corporate profits after his win in the presidential election.

In premarket trading, the Dow Jones Industrial Average was up 0.1pc and the S&P 500 and Nasdaq 100 were down 0.1pc.

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01:14 PM GMT

Economy ‘close to stagnation’ as private sector output shrinks

Rob Wood, chief UK economist at Pantheon Macroeconomics, said: Britain’s economy has certainly slowed. The economy is close to stagnation.

“UK growth certainly slowed over the summer and we have had a couple of disappointing months. We were close to stalling in October.

“We will probably rebound in November. Consumer confidence has picked up.

“I don’t think there is a serious risk of a major recession here but growth has slowed to a crawl.”

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12:35 PM GMT

Borrowing costs slump amid rate cut bets

The cost of government borrowing has fallen amid expectations that the Bank of England will cut interest rates more sharply next year.

The yield on 10-year UK gilts - the return the government promises to buyers of its debt - fell more than five basis points to 4.38pc as traders raced to snap up bonds.

The rally in bond markets comes after weak retail sales figures and PMI data sounded the alarm on the health of the UK economy.

European debt costs were also falling after weak PMI data for the eurozone, potentially pushing central banks to cut interest rates at a faster pace to support growth.

Kathleen Brooks, research director at XTB, said the UK PMI figures were “dismal”.

She said: “UK bond yields are lower across the curve, although European bond yields are leading the charge.”

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12:00 PM GMT

Ryanair and Easyjet fined over £100m for ‘abusive’ baggage fees

Five budget airlines have been fined €179m (£149m) by the Spanish government for “abusive practices” such as charging passengers for hand luggage.

Ryanair has pledged to appeal the “illegal” penalties issued over the Irish carrier’s baggage policies, which it said had been approved in multiple Spanish and EU court hearings.

Its rival EastJet, Spanish airlines Volotea and Vueling, and Norwegian Air were also fined for charging passengers to reserve adjacent seats for children and other dependents.

Spain’s consumer rights ministry said the penalties had also been applied for not accepting cash when selling tickets at airports.

Ryanair, which was the first to start charging extra for hand luggage in November 2018, was slapped with the biggest fine of €107.8m (£89.7m).

EasyJet was fined €29.1m (£24.2m).

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11:33 AM GMT

Banks slump amid rising rate cut bets

UK bank stocks have slumped after Britain’s private sector activity shrank for the first time in a year following the Budget.

Banks were down 1.6pc across the FTSE 100 and FTSE 250 as the weak economic data increased bets on interest rate cuts.

Barclays was down 3.5pc, Standard Chartered fell 2.8pc, NatWest dropped 2.3pc and Lloyds Banking Group fell 1.9pc.

HSBC was down 0.9pc as money markets indicate the Bank of England will cut interest rates at least three times next year, sending the pound to its lowest level since May.

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11:08 AM GMT

February interest rate cut ‘slam dunk’ as activity shrinks

The contraction in Britain’s private sector economy makes an interest rate cut in February a “slam dunk” according to economists.

Money markets indicate there is a 89pc chance that the Bank of England will reduce borrowing costs at its first meeting next year, up from a litter under 80pc on Thursday, after business activity slumped for the first time in a year following the Budget.

Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, said: “In isolation, the sharp drop in the headline index of the flash composite PMI for November would substantially raise the probability of the MPC cutting interest rates in December.

“But the PMI captures only part of the story. The tax hikes hitting private sector sentiment will be recycled by Chancellor Reeves into stronger government spending which is mostly not measured by the PMI, although government investment plans should support the construction PMI more elevated.

“What’s more, sticky price pressures signalled by the PMI, signs that the headline survey balance may have overshot in November, now rising CPI inflation, and the risks from election of Mr Trump in the US leaves only a low chance of another rate cut in December.

“Signs of weaker growth, however, make a February rate cut a slam dunk we think.

“Accordingly, the market repriced closer to our call after the PMI release, now pricing three rate cuts over the next 12 months. We expect the same, with the MPC cutting in February, May and November.”

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10:38 AM GMT

Pound drops after private sector activity shrinks

The value of the pound has dropped sharply after a closely watched survey showed Britain’s private sector activity shrank for the first time in more than a year after the Budget.

Sterling was down as much as 0.9pc against the dollar to less than $1.25 - its lowest level since May - after preliminary PMI data showed business output declined in November.

It was the first contraction in activity since October last year and comes after Rachel Reeves raised taxes by £40bn in the Budget, including a £25bn increase in employer National Insurance contributions.

The pound was also down 0.1pc against the euro, which is worth 83.3p.

Deutsche Bank’s chief UK economist Sanjay Raja said: “Today’s PMI data were the first real test of the Chancellor’s Budget – alongside businesses reaction to unfolding geopolitical events.

“Underneath the hood, we are seeing stress on hiring plans. Both the manufacturing and services sectors reported falls in hiring plans. And (input) prices – particularly for services – have started to firm – as businesses digest the Budget tax implications.

“For policymakers, the key question now will be to assess whether the potential inflationary hit from higher taxes offsets the potential demand hit from weaker private demand. With prices likely to pick up in the first half of 2025, we expect the [Bank of England] to be more cautious than ever, treading a fine line between removing policy restraint too quickly, or indeed, keeping policy too restrictive in the face of heightened uncertainty.”

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10:21 AM GMT

More job losses to come following Budget tax raid, say economists

Bosses are growing more concerned about having to make job cuts after a downturn in output since the Budget, economists have said.

The closely watched S&P Global Flash UK PMI said both Britain’s manufacturing and service sectors reduced their headcounts in November.

It said private sector firms had widely commented about hiring freezes and avoiding replacing voluntary leavers.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said “the downturns in output and hiring represent marked contrasts to the robust growth rates seen back in the summer and are accompanied by deepening concern about prospects for the year ahead”.

He said: “The November PMI is indicative of the economy slipping into a modest decline, with GDP dropping at a 0.1pc quarterly rate, but the loss of confidence hints at worse to come – including further job losses – unless sentiment revives.”

Elias Hilmer, assistant economist at Capital Economics, added: “The fall in the Composite PMI suggests that tax hikes announced in the Budget seem to have restrained some private sector activity. Equally so, the prospect of new tariffs imposed by the incoming Trump administration may have weighed on activity too.”

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10:01 AM GMT

Bosses cut back on staff as optimism drops

Britain’s private sector unexpectedly slumped as bosses began to cut back on staff and gave a “thumbs down” to the Budget, PMI data showed.

The contraction in output to 49.9 was lower than the expectations of economists, who had pencilled in a reading of 51.8 for the latest S&P Global survey.

Concerns about the business outlook, as well as stronger input price inflation, “impacted negatively on workforce numbers in November”, the preliminary PMI data indicated.

It said: “Survey respondents typically commented on subdued customer demand.

“Some firms noted delayed investment decisions, as well as cutbacks to new projects in response to worsening domestic business conditions and geopolitical uncertainty.”

Chris Williamson, chief business economist at S&P Global Market Intelligence said: “Business optimism has slumped sharply since the General Election, dropping further in November to hit the lowest since late 2022.

“Companies are giving a clear ‘thumbs down’ to the policies announced in the Budget, especially the planned increase in employers’ National Insurance contributions.”

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09:41 AM GMT

Private sector shrinks after Reeves’s tax-raising Budget

Britain’s private sector suffered a slump in output for the first time in a year after Rachel Reeves’s tax-raising Budget, according to a closely watched survey.

The S&P Global Flash UK PMI - a gauge of activity in the UK economy - has fallen to 49.9 in November.

It is the first time the PMI reading has dropped below the 50 mark separating growth from contraction since October last year, and is the first major reading of Britain’s economic growth covering the period after the Budget, when taxes were increased by £40bn.

Chris Williamson, chief business economist at S&P Global Market Intelligence said: “The first survey on the health of the economy after the Budget makes for gloomy reading.

“Businesses have reported falling output for the first time in just over a year while employment has now been cut for two consecutive months.

“Although only marginal, the downturns in output and hiring represent marked contrasts to the robust growth rates seen back in the summer and are accompanied by deepening concern about prospects for the year ahead.”

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09:20 AM GMT

Eurozone private sector slumps amid ‘political mess’

Business activity in the eurozone contracted for the second time in three months in November, as weak demand saw companies facing challenges securing orders, a closely watched survey showed.

The HCOB Flash Eurozone purchasing managers’ index (PMI) published by S&P Global registered a figure of 48.1 compared to 50.0 in October. Any reading above 50 indicates growth, while a figure below 50 shows contraction.

Dr Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said: “Things could hardly have turned out much worse.

“The eurozone’s manufacturing sector is sinking deeper into recession, and now the services sector is starting to struggle after two months of marginal growth.

“It is no surprise really, given the political mess in the biggest eurozone economies lately – France’s government is on shaky ground, and Germany’s heading for early elections.

“Throw in the election of Donald Trump as US president, and it is no wonder the economy is facing challenges. Businesses are just navigating by sight.”

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09:10 AM GMT

Electric car battery maker files for bankruptcy

The boss of electric car battery maker Northvolt has quit hours after the company filed for bankruptcy.

The beleaguered Swedish renewable energy company said chief executive Peter Carlsson will “step aside” but remain a member of the board of directors.

Northvolt said the search is underway for a successor to Mr Carlsson, who has led the company since its inception in 2016.

Overnight, the company filed for US Chapter 11 bankruptcy protection while it reorganises its business.

Mr Carlsson said: “The Chapter 11 filing allows a period during which the company can be reorganised, ramp up operations while honouring customer and supplier commitments, and ultimately position itself for the long-term.”

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08:51 AM GMT

Half-term timing held back retail sales, say economists

The timing of half-term hit retail sales last month, said economists who expect a rebound in the run-up to Christmas.

Ashley Webb, UK economist at Capital Economics, acknowledged that the retail sector got off to a “shaky start” in the fourth quarter but said the second faces a “possible boost to seasonally adjusted sales in November if the timing of the school half term held back sales in October”.

He added a “rebound in consumer confidence in November and growing real incomes in Q4 all bode well for the golden quarter”.

He said: “And despite the tax rises announced in the Budget, we still expect the retail sector to support above-consensus consumption growth of 0.8pc in 2024, 1.3pc in 2025 and 1.8pc in 2026.”

Other economists also pointed to a rising trend in retail sales:

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08:36 AM GMT

Yorkshire Post faces £56m takeover bid

The owner of the Yorkshire Post is the focus of a £56.2m takeover offer from one of its shareholders.

Media Concierge, which runs a raft of newspapers in Ireland as well as direct mail and advertising operations, put forward a potential offer for 21p per share for National World.

This represents a 40pc premium against the company’s share price at the close of trading on Thursday.

The suitor, which owns a 28pc stake in National World, said it believes this “provides a highly attractive and deliverable opportunity for National World shareholders to realise their investment at a substantial premium in cash”.

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08:13 AM GMT

UK markets open higher amid optimism

The FTSE 100 has begun the day higher after Nvidia’s results and a surge in bitcoin fuelled optimism.

The UK’s blue-chip index was up 0.7pc to 8,205.69 while the midcap FTSE 250 gained 0.4pc to 20,422.51.

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07:56 AM GMT

Government must reconsider taxes timeline, say retailers

As retail sales fell by more than expected last month, the British Retail Consortium’s director of insight Kris Hamer said:

While October produced a positive start to the ‘golden quarter’, with year-on-year growth for the fourth month in a row, there was a monthly decline due to pre-Budget jitters from households.

Fashion took the brunt of this hit, especially as the milder weather last month put off winter purchases.

Meanwhile, electricals performed well as people continued to upgrade their tech with the latest models. Health and beauty had yet another strong month of sales growth, especially with the popularity of beauty advent calendars which went on sale.

This additional revenue is essential as retailers face over £7bn of additional costs in 2025 alone, as changes to employers’ National Insurance contributions, the increase in minimum wage, and new packaging taxes come into effect.

“These changes will pile pressure onto an industry that already pays far more than its fair share in business taxes, and will make job losses and store closures inevitable.

“To avoid a cliff edge of costs in April 2025, Government must reconsider the existing timelines for the new packaging levy, while ensuring any changes to business rates offer a meaningful reduction for all retailers as early as possible.”

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07:49 AM GMT

Mild weather hits clothing sales at start of ‘Golden Quarter’

Clothing stores had a particularly weak month, with industry data suggesting that mild October weather may have caused shoppers to hold off buying more warm winter clothing.

Jacqui Baker, head of retail at RSM UK, said it was a “concerning start to the Golden Quarter” in the run-up to Christmas when retailers typically make most of their annual sales.

She said: “With half-term falling later this year and relatively mild weather, consumers have put off buying their winter coats and boots.

“This has made it difficult for retailers to shift stock, particularly as many have held off spending to take advantage of Black Friday deals.”

Asif Aziz, retail director at EE added: “October has been a quiet month on the high street with shoppers clearly keeping their powder dry ahead of Black Friday sales.

“Uncertainty around the Budget will have also fostered a save now, spend tomorrow mindset, as consumers start to factor in increased expenditure in the run-up to Christmas.”

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07:32 AM GMT

Shoppers ‘held back on spending ahead of the Budget’, says ONS

ONS senior statistician Hannah Finselbach said:

Retail sales fell back in October following three months of growth.

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07:31 AM GMT

Budget blamed as retail sales slump

Retail sales slumped last month, official figures show, as shoppers held back spending ahead of Rachel Reeves’s Budget.

Sales volumes fell 0.7pc in October compared to the previous month, according to the Office for National Statistics (ONS).

The figure was down from a rise of 0.1pc in September, which was revised down from a previous estimate of 0.3pc growth.

It was also worse than analyst estimates for a fall of 0.3pc.

ONS senior statistician Hannah Finselbach said: “The fall was driven by a notably poor month for clothing stores, but retailers across the board reported consumers held back on spending ahead of the Budget.”

It comes after dozens of Britain’s biggest retailers this week warned the Chancellor that her plans to hike National Insurance will cause staff to be laid off and shops to be shut.

Major companies including Tesco, M&S, Boots and B&Q wrote to Ms Reeves saying that job losses were now “inevitable”, as a result of the “sheer scale” of the new costs on business.

In a letter from over 70 companies, Ms Reeves was told that the sector faces £7bn in increased costs as a result of changes to employers’ National Insurance, a higher minimum wage rise and levies on packaging.

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07:29 AM GMT

Good morning

Thanks for joining me. Retail sales fell more sharply than expected last month as Budget uncertainty gripped shoppers.

Sales volumes fell 0.7pc in October compared to a downwardly-revised rise of 0.1pc in September as consumers held back on spending ahead of Rachel Reeves’s tax raising speech.

5 things to start your day

Energy price cap rises as Starmer pulls winter fuel payments | Household energy bills will jump by £21 from January

Why Reeves’s public sector pay binge means even higher taxes are on the way | The Chancellor is running out of options to pay for her largesse in spending, economists say

Royal Navy sonar maker under investigation over bribery claims | Key defence contractor Thales faces ‘serious allegations’ of bribery and corruption

Italy, Abu Dhabi and Cyprus woo Britain’s rich after non-dom crackdown | Foreign countries encourage wealthy UK residents to move abroad after Labour’s Budget

Ben Marlow: Big business is cynically exploiting Reeves’s tax bombshell | Royal Mail won’t be the only one to use the Budget as cover to pick customers’ pockets

What happened overnight

Asian equities rose, with semiconductor companies rallying as investors shook off initial concerns over Nvidia’s revenue outlook. Gold jumped.

Shares in Australia, Japan and South Korea rose. The MSCI Asia Pacific index climbed as much as 0.7pc, as technology stocks in the region rebounded from Thursday’s selloff, encouraged by Nvidia’s gain in the US.

Shares in Hong Kong and China fell, extending losses into midday, after an index of US-listed Chinese stocks dropped 1% Thursday.

Asian equities are on pace for their first back-to-back monthly losses this year amid strength in the dollar and lingering concerns over the Chinese economy. Still, the region’s more favourable valuations versus the US market are aiding recovery in some assets as US bond yields surge.

The yen fluctuated after edging higher early Friday following inflation data that held above the central bank’s target as expected.

Elsewhere in Asia, investors will be monitoring the fallout from a US indictment against Gautam Adani over allegations of bribery. Shares of Adani Group units tumbled and the conglomerate scrapped a $600 million dollar bond sale. The company denied the allegations.

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