Russian rouble falls to 31-month low as fresh sanctions hammer currency
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The Russian rouble has fallen to its lowest level since the start of the war in Ukraine as a fresh round of sanctions hammer the currency.
It fell 1.4pc today, meaning a dollar buys 105.5 roubles. That is compared to more than 100 roubles last summer, at which point the central bank hiked interest rates in an emergency session to prop up the currency.
However, Russia’s finance minister brushed off concerns over the latest drop in the value of the rouble.
Anton Siluanov told a financial conference today in Moscow: “I am not saying whether the exchange rate is good or bad. I am just saying that today the exchange rate is very, very favourable for exporters.
“The key thing is that the exchange rate is more important for exports than the interest rate.”
The rouble slid through the symbolically important threshold of 100 against the US dollar last week after Washington announced sanctions on Gazprombank, a major Russian financial institution that handles payments for Russia’s energy exports.
Analysts said sanctions would disrupt transactions for Russian goods and knock the value of the currency.
A weaker currency means Russia’s exports are cheaper on the world market. But it also means Russians have to pay more for imports, threatening to further push up inflation at home.
The central bank has already raised rates to 21pc, their highest in more than two decades, to try to bring price rises under control.
Inflation was running at 8.5pc in October, according to official statistics - more than twice the state’s 4pc target.
Economists expect another increase in the key rate when the central bank meets next month.
The rouble hit a record low of 120 against the US dollar in March 2022, weeks after launching its full-scale offensive on Ukraine and amid a barrage of Western sanctions.
The Russian currency, seen by society as a bellwether for the country’s economic health, was at around 75-80 to the dollar before the start of the offensive.
Read the latest updates below.
06:41 PM GMT
Signing off...
Thanks for joining us today on the Markets blog.
Chris Price will be back in the morning from around 7am, but you can continue to follow the latest business news and analysis here.
06:14 PM GMT
Aston Martin plans £210m fundraise
Aston Martin plans has told investors that it wants to raise £210m to provide it with “increased financial resilience and strength” as it prepares to launch an new range of cars.
The company plans to issue £110m in shares and take out £100m in debt.
A group of existing shareholders, including Lawrence Stroll’s Yew Tree Consortium, has agreed to take up to £73.5m of the shares.
Adrian Hallmark, Aston Martin’s chief executive, said: “We are already taking decisive actions to better position the Group for the future including a more balanced production and delivery profile in the coming quarters.
“Coupled with a forensic approach to cost management and quality, these efforts will deliver enhanced operational and financial performance in 2025 and beyond, as we progress towards our mid-term targets.
“The financing we are undertaking supports our growth and provides the investment to continue with future product innovation.”
06:04 PM GMT
France’s debt costs hit 12-year premium above Germany’s
A key measure of France’s sovereign borrowing costs hit a 12-year high on Tuesday, indicating growing investor concern over the government’s stability following snap elections earlier this year.
The “spread” which measures the gap between yields on French 10-year state bonds and the benchmark German ones hit 0.86 percentage points, up from 0.72 on November 18.
Investors were demanding a yield of 3.05pc to buy French sovereign debt because of the higher risk, compared to only 2.18pc for German government-issued bonds.
The peak came with the government facing the threat of a no-confidence vote next month over its proposed 2025 budget, with €60bn (£50bn) in planned spending cuts and tax rises.
It faces tough resistance from rival parties after a snap election in June left President Emmanuel Macron without a workable majority in parliament.
Ratings agency S&P meanwhile prepared to publish a new evaluation of France’s public debt on Friday.
Raters Moody’s and Fitch each gave France a negative outlook in reports last month.
06:00 PM GMT
Mike Ashley ventures into Africa with sporting goods deal
Mike Ashley is expanding his retail empire into Africa with the takeover of a major sporting goods group.
Mr Ashley’s Frasers Group has agreed a deal to buy Holdsport, a South African retail company focused on the sports, outdoor, and recreation sectors.
Holdsport, which operates 88 stores across South Africa and Namibia, generated revenues of more than £130m in the year to February.
It owns chains including Sportsmans Warehouse and Outdoor Warehouse, as well as Shelflife, South Africa’s premium trainers and streetwear store.
Frasers said the acquisition would act as a platform to expand its UK sportswear retailer Sports Direct across Africa.
05:55 PM GMT
Canadian politicians blast Trump’s tariff threat and one calls Mexico comparison an insult
Canadian politicians on Tuesday blasted Donald’s Trump’s threat of sweeping tariffs, as the leader of the country’s most populous province called Mr Trump’s comparison of Canada to Mexico “insulting”.
Doug Ford, the premier of Ontario, said: “To compare us to Mexico is the most insulting thing I’ve ever heard from our friends and closest allies, the United States of America.
“I found his comments unfair. I found them insulting. It’s like a family member stabbing you right in the heart.”
Mr Ford said Canada will have no choice but to retaliate.
François-Philippe Champagne, the Canadian industry minister, said: “We shouldn’t confuse the Mexican border with the Canadian border.”
Prime Minister Justin Trudeau will convene an emergency meeting with provincial leaders on Wednesday.
Mr Trudeau said he spoke with Trump after his threat of tariffs.
“We talked about the intense and effective connections between our countries that flow back and forth. We talked about some of the challenges that we can work on together. It was a good call,” he added.
The Canadian dollar weakened sharply in foreign exchange markets.
05:38 PM GMT
Union hits out at Stellantis van plant closure
The Unite union has criticised Stellantis’s proposed closure of its Luton van plant.
It said: “The proposal that has been tabled today has been a complete slap in face for our members in Luton, where Vauxhall vehicles have been manufactured for 120 years. Whatever the positive benefits this plan may have for Ellesmere Port, that is not acceptable.
“We stand ready to support our members in doing whatever we can to ensure that historical vehicle manufacturing is maintained in Luton and we call on the government to do the same.”
Stellantis plans to shut the factory in April, putting more than 1,100 jobs at risk.
05:28 PM GMT
European stocks trip on Trump tariff hurdle
European stocks fell across the board, led by carmakers, as Donald Trump’s tariff threat on the United States’ largest trading partners prompted worries about another global trade war.
Chris Beauchamp, chief market analyst at IG Group, said: “We’ve seen this movie before and it’s going be negotiating tool, however we can’t dismiss it entirely because this time Trump has full support of both the houses [of the US Congress].
“Investors have learned something from before and jumping like a frightened cat at every Trump headline is not going to be the way to get through this.”
The pan-European STOXX 600 was down 0.5pc, snapping a three-day winning streak, with concerns over tariffs re-stoking global inflation and weighing on monetary-policy easing also dampening investors’ mood.
China-exposed stocks were the most affected on the index.
The automotive sector, expected to be among the worst hit under Trump tariffs, was down 1.6pc, with Stellantis and Volkswagen among the top losers, shedding 4.8pc and 2.4pc, respectively.
Retail and miners were some of the other badly hit sectors, down 1pc and 1.9pc respectively, with the latter taking a hit on weak metal prices.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: “European carmakers have seen clear weakness in their sales over the past few years and they have also been in the crossfire with the Chinese trade tensions... They are no longer in a position to afford additional tariffs.”
05:23 PM GMT
Markets ‘swung from one extreme to the other’, says analyst
Markets were taken by surprise today and the sentiment “swung from one extreme to the other”, an analyst has said.
Dan Coatsworth, an analyst at investment firm AJ Bell, said that Donald Trump’s new plans for tariffs “took the market by surprise”.
The plans prompted a sell-off in the Mexican peso and Canadian dollar.
At the end of the day in Europe, Frankfurt’s Dax index fell 0.5pc, while the Cac 40 in Paris fell 0.8pc.
In New York, the S&P 500 rose 0.3pc and the Nasdaq rose 0.4pc, but the blue-chip Dow Jones fell 0.2pc.
05:19 PM GMT
Poland joins France in opposing trade deal with South America
Poland opposes the EU-Mercosur free trade deal with South American countries in its current form, the country’s prime minister, Donald Tusk, has said.
Farmers oppose the agreement between the European Union the Mercosur bloc, which includes Brazil, Argentina, Bolivia, Paraguay and Uruguay. They say it will allow large imports of products that are not bound by the same strict regulation they face in the EU.
Mr Tusk said: “Poland does not accept, and we are not alone, we will not accept in this form the agreement with the countries of South America, that is the Mercosur group, on free trade.”
France welcomed Poland’s stance as it held a debate in parliament to try to placate French farmers who are staging a week-long protest against the deal.
France’s agriculture minister Annie Genevard, said: “It’s a wonderful signal that we too must help to send out.
“We can no longer allow farmers to feel that they are nothing more than an international bargaining chip.”
05:07 PM GMT
Readers respond to Trump’s latest plans for tariffs
After Donald Trump vowed to impose trade levies, European car makers fell as much as 5pc.
Readers in the comments argued, for example, that “Europeans complaining about protectionist trade policies is a bit rich”.
Join the conversation in the comments section and have your say.
05:04 PM GMT
FTSE closes down
The FTSE 100 closed down 0.4pc today.
The top riser was aerospace manufacturer Melrose Industries, up 7.7pc, followed by testing and inspection group Intertek, up 3.3pc.
At the other end of the market, Beazley, the insurer, fell 3.6pc, followed by Intermediate Capital Group, down 3.5pc.
Meanwhile, the FTSE 250 fell 0.9pc.
The top riser was food producer Bakkavor, which rose 3.5pc, followed by Burberry, up 2.8pc.
North Sea engineering business John Wood fell 4.8pc, while financial services company Just Group fell 4.6pc.
04:55 PM GMT
London’s Smithfield and Billingsgate markets set to close
London’s historic Smithfield and Billingsgate markets are set to close from 2028 after operating in the City for hundreds of years.
The City of London Corporation said its council has voted in favour of ending its operation of the markets and will provide financial compensation to market traders.
It had previously planned to relocate Smithfield meat market and Billingsgate fish market to a new £1bn development in Dagenham.
However, on Tuesday the corporation confirmed it has ended its interest in relocating the two sites.
It said traders will be able to continue their operations at the markets until at least 2028.
04:53 PM GMT
Jonathan Reynolds says electric car mandate is not working
Jonathan Reynolds, the Business Secretary, told MPs this afternoon that the Government will consult on changes to the zero-emission vehicles (Zev) mandate because it was not working as expected.
He said: “Myself and the Transport Secretary, who I work with very closely around this, are looking at that particular policy, that Zev mandate, to make sure it’s operating in such a way that allows British manufacturing to get to that destination.
“And there’ll be a consultation announced in due course - on an expedited timescale - that allows us to consider ‘is that policy currently operating as anyone expected it to’.
“I don’t think it is and I get the seriousness and the urgency of the situation.”
04:50 PM GMT
Mexican president warns Trump tariffs will worsen inflation and kill jobs
Mexican president Claudia Sheinbaum has warned Donald Trump of dire economic consequences for both countries from tariffs.
“One tariff will follow another and so on, until we put our common businesses at risk,” Ms Sheinbaum said in a letter to Mr Trump, warning that tariffs would cause inflation and job losses in both countries.
Ms Sheinbaum added she would also seek a call with Mr Trump and send a letter to Canadian prime minister Justin Trudeau.
Mr Trump said yesterday night that he would impose a 25pc tariff on imports from Canada and Mexico until they clamped down on drugs, particularly fentanyl, and migrants crossing the border.
Mexico is the United States’ top trade partner as of September, representing 15.8pc of total trade, followed by Canada at 13.9pc. The US is also Mexico’s top trade partner.
“What sense is there?” in escalating cross-border tariffs, Ms Sheinbaum added, underscoring that they would hit particularly hard US carmakers with plants in Mexico, such as General Motors and Ford.
Mexico’s automotive industry is the country’s most important manufacturing sector, accounting for over 35pc of manufactured exports by value. The United States is by far the dominant destination for vehicles made in Mexico, with up to 79pc of them heading north across the border
04:39 PM GMT
Iraq looks towards Vodafone for help with new 5G network
The government of Iraq is in discussions with British network giant Vodafone for help over a new 5G network.
A source told The Telegraph that the Government wants to run its own state-owned 5G network, but is turning to Vodafone for consultancy.
Vodafone’s partner markets division, which works in around 45 countries, sells advice on network design and the commercials of running networks.
A Vodafone spokesman said: “Vodafone’s partner markets division is in talks with the government of Iraq about a possible consultancy contract to advise on the design of a new 5G network planned by the government. Discussions are still ongoing, and we do not yet have an agreed contract.”
04:18 PM GMT
Scottish income tax levels not working, says financial services industry
The Scottish Government must recognise its tax policy is not working, the financial services industry has said.
Scottish Financial Enterprise (SFE) said rates should be brought more closely in line with those south of the border when the SNP’s Kate Forbes delivers her Budget proposals on Dec 4.
The industry group referred to a recent report from the Institute for Fiscal Studies which said Scotland’s top rate of income tax may have slightly reduced revenues rather than increasing them.
The SFE said the Government should resist calls for further income tax rises.
Chief executive Sandy Begbie said: “SFE has consistently stressed the risk of income tax divergence shrinking the Scottish tax base.
“We have pursued an evidence-based approach on this issue which has now been vindicated by the Institute for Fiscal Studies.
“It is essential that the Scottish Government resists calls for even further income tax rises. It may be inconvenient for some, but the data strongly suggests that further tax rises would be counterproductive.”
04:00 PM GMT
Global stocks drop amid Trump tariff threat
Global stock indexes are mostly down after Donald Trump last night ramped up the rhetoric on tariffs.
Axel Rudolph, senior technical analyst at online trading platform IG, said:
Donald Trump’s tariff threats as an early Thanksgiving present to his base have put a dampener on global stock markets.
03:55 PM GMT
Orange juice price soars by 150pc in two years as Florida hurricane hits supplies
Orange juice prices have surged close to record highs after Florida was hit by a hurricane branded among the “most destructive in a century”.
Extreme weather in both Florida and Brazil has pushed up the wholesale price of orange juice concentrate close to a record. It has risen by 150pc in two years and is expected to climb further in the coming months.
A future contract for a pound of frozen orange juice concentrate currently trades for $5.13 (£4.08), compared to $1.20 in 2021. Today’s price is close to the all-time high of $5.80 reached in September.
The surge has been blamed on devastating hurricanes in Florida and extreme droughts in Brazil, by far the two biggest producers of concentrate.
03:44 PM GMT
US consumer confidence rises after Trump win
Americans’ outlook on the economy improved modestly in November, lifted by expectations for lower inflation and more hiring.
The Conference Board, a business research group, said this afternoon that its consumer confidence index ticked up to 111.7 from 109.6 in October. The small increase followed a large gain in October.
The small increase comes after president-elect Donald Trump’s victory in the presidential election. The Conference Board does not break out its responses by party. However, another measure of consumer sentiment by the University of Michigan showed that optimism about the economy jumped among Republican after the election.
The proportion of Americans who anticipate a recession in the next 12 months fell to the lowest level since the group first began asking the question in July 2022.
03:43 PM GMT
Wall Street rises as investors shrug off extra Trump tariffs
Thanks for joining us this afternoon. I’m Alex Singleton and taking over now from Chris.
Two out of three of the main Wall Street indexes have risen as investors shrug off Donald Trump’s newly announced plans for tariffs against Canada, Mexico and China.
The S&P 500 is up 0.2pc, the Nasdaq is up 0.5pc, while the Dow Jones Industrial Average of 30 leading businesses is down 0.7pc.
Andrew Brenner at NatAlliance Securities in Austin, Texas, told Bloomberg: “We still see tariffs as more strategising and think the bark will be worse than the bite.”
03:35 PM GMT
Vauxhall to shut Luton van plant in shift to electric vehicles
Vauxhall has said it plans to shut its Luton van-making factory in a move that puts 1,100 jobs at risk, as net zero rules force it to curtail sales of petrol vehicles.
Stellantis, the car giant behind Vauxhall, Peugeot, Fiat and Citroën, said it would focus investments on its Ellesmere Port factory in Cheshire.
It said it was taking the decision “in the context of the ZEV mandate”, referring to electric car sales targets that carmakers have criticised as overly tough.
03:17 PM GMT
Budget will lead to rise in inflation, says Bank of England chief economist
The £25bn rise in National Insurance announced in Budget will increase inflation, according to the chief economist of the Bank of England.
Huw Pill said the rise would have a “small, positive” effect and said it would weigh on the jobs market “at the margin”.
Speaking on the House of Lords Economic Affairs Committee, Mr Pill said he did not want to overstate the impact of the Budget on inflation.
He said the overall view of monetary policy is “still governed by the unwinding of the effects of those very big macroeconomic shocks… we’ve faced in the last few years”.
03:07 PM GMT
Vauxhall owner to shut factory, putting 1,100 jobs at risk
Vauxhall owner Stellantis has announced plans to shut its Luton van-making factory, putting more than 1,100 jobs at risk, according to the PA news agency.
02:47 PM GMT
Trudeau holds ‘productive’ call with Trump
Justin Trudeau and Donald Trump held a “productive” call after the president-elect’s tariff announcement targeting the US’s northern neighbour.
A senior government source told AFP the two leaders had a “productive and constructive conversation focused on trade and border security” and pledged “to stay in touch.”
The call with the Canadian prime minister came after Mr Trump warned he would impose new tariffs of 25pc on goods from Canada and Mexico, while also unveiling new levies on products coming into the US from China.
02:35 PM GMT
Wall Street mixed at opening bell
The benchmark S&P 500 and the Nasdaq opened higher after Donald Trump’s tariff pledges.
The S&P 500 rose 12.7 points, or 0.2pc, at the open to 6,000.03​, while the Nasdaq Composite rose 54.2 points, or 0.3pc, to 19,109.08.
The Dow Jones Industrial Average fell 121.7 points, or 0.3pc, to 44,614.89.
02:22 PM GMT
Oil prices inch up despite tariffs fears
Oil prices have edged back up after initially being pushed down by Donald Trump’s threat of new tariffs.
Brent crude, the international benchmark, was up 0.6pc above $73 a barrel, having initially been weighed down by the surge in the dollar following Mr Trump’s announcement.
A stronger US currency hurts the price of commodities as it makes it more expensive for most buyers.
Oil had already slumped on Monday after Israel said it is close to a ceasefire agreement with Hezbollah.
Chris Weston, head of research for Pepperstone Group, said: “While the signs are looking constructive, a deal between Israel and Iran could still fail.”
02:05 PM GMT
Crypto faces regulations from 2026, says financial watchdog
The financial watchdog has launched plans for full regulatory rules on cryptocurrency from 2026, amid booming demand for highly volatile bitcoin.
The world’s biggest cryptocurrency has surged in value since Donald Trump won the US presidential election in early November.
However, bitcoin has also experienced huge losses in recent years. It was last worth $92,000, having tipped above $99,000 just last week.
Mr Trump has pledged to make the United States the crypto capital of the world through supportive regulations, pushing bitcoin towards the symbolic record $100,000 mark.
The Financial Conduct Authority (FCA) today announced a roadmap featuring consultations on crypto regulation ahead of “final rules” by the watchdog in 2026.
The FCA also plans by early next year rules on “stablecoins”, which are backed by a traditional currency, most often the dollar.
Cryptocurrency ownership has grown to 12pc of adults in the UK, according to data from the regulator.
“Currently, crypto remains largely unregulated in the UK and high-risk,” the FCA said.
01:47 PM GMT
Britain poised to water down electric vehicle rules
Rules governing the switch to electric vehicles (EVs) are poised to be watered down after a backlash from carmakers.
Jonathan Reynolds, the Business Secretary, will announce a fast-track consultation on potential policy changes to the phase-out of petrol engines at an industry gathering on Tuesday, it is understood.
The rethink comes after Mr Reynolds and Louise Haigh, the Transport Secretary, last week met executives from seven carmakers, trade groups and charging firms.
Ministers are expected to emphasise the flexibility open to companies as they seek to meet the zero-emission vehicles (ZEV) mandate, which requires an ever-greater percentage of their sales to be electric over the next six years.
01:16 PM GMT
Mike Ashley takes stake in Marks Electrical after AO World and Currys investments
Mike Ashley’s Frasers Group has snapped up a £3m stake in Marks Electrical in its latest investment deal.
Online white goods retailer Marks rose 2.5pc after it revealed that Frasers has bought 6.73m shares in the business.
The deal will give Frasers a 6.4pc stake in the Leicester-based company, which is still under the majority control of founder Mark Smithson, who had retained a stake of more than 70pc in the business.
Earlier this month, Marks Electrical revealed lower half-year profits after customers traded down to cheaper products amid pressure on their household budgets.
Adjusted earnings slipped to £2m for the six months to September 30, down from £2.3m over the same period a year earlier.
Last week, its shares dropped to their lowest level since floating in London in 2021.
The deal is the latest by Frasers in the electricals space, after building up a roughly 23pc stake in rival AO World in recent years.
Last month, it sold off its remaining holding in Currys, having previously built a stake of 11pc.
A spokesman for Marks Electrical said: “Their investment represents a vote of confidence and also demonstrates the significant upside potential in our business as we focus on building the UK’s leading premium electrical retailer and delivering long term value creation.”
12:57 PM GMT
Wall Street mixed after Trump tariff vow
US stock indexes were mixed in premarket trading after Donald Trump set out his plans to impose tariffs on America’s closest trading partners.
The president-elect said he would impose a 25pc conditional tariff on Canadian and Mexican imports that could violate a free-trade deal he negotiated during his previous term.
He also outlined “an additional 10pc tariff, above any additional tariffs” on imports from China.
Carmakers such as Ford and General Motors -that have highly integrated supply chains across Mexico, the US and Canada - lost 2.5pc and 3.3pc, respectively in premarket trading.
ING strategists said: “New tariffs from the US could intensify the global trade frictions and may impact the economic growth prospects in the longer term.”
Ahead of the opening bell, the Dow Jones Industrial Average was down 0.1pc but the S&P 500 was up 0.2pc and the Nasdaq 100 had gained 0.3pc.
12:39 PM GMT
Nearly £9bn wiped off Europe’s biggest car makers as Trump announces tariffs
More than €10bn (8.9bn) was wiped off Europe’s biggest car makers today after Donald Trump announced plans to impose tariffs on Canada, Mexico and China.
Europe’s major manufacturers jointly fell as much as 2.5pc in the wake of the president-elect’s vow to impose levies on goods entering the American economy on his first day in office.
Volvo’s market valuation dropped as much as €2.7bn (£2.3bn) while Vauxhall-maker Stellantis suffered a blow of as much as €2.3bn.
12:14 PM GMT
Prepare for Trump to hit us with tariffs, warns German minister
Europe must prepare for Donald Trump to impose hefty tariffs on its exports, Germany’s economy minister has said.
Robert Habeck said the continent must stick together to combat trade measures after Mr Trump said he intends to slap sweeping duties on goods from Mexico, Canada and China on his first day in office.
Mr Habeck, who is also Germany’s vice chancellor, said: “We have to be prepared for the fact that something similar could also happen to Europe or Germany.”
He told a business conference in Berlin that the president-elect’s announcement indicates that his threats should be taken seriously.
Mr Habeck said: “The EU must react to this in a united manner (and) speak together as Europe.”
He adding that the continent’s leaders should seek dialogue before thinking about retaliatory measures.
“It must be made clear that in the end everyone loses” from tariffs, including the United States, he said.
11:57 AM GMT
Ex-Bank of China chair handed suspended death sentence over ‘bribery’ claims
The former chairman of the Bank of China has been given a suspended death sentence over bribery allegations, according to state media.
Liu Liange was given a suspended sentence for two years, the reports said, meaning he will only be executed if he commits further crimes during the period.
If reprieved he would have a life sentence.
Mr Liu, born in 1961, had been working in banking and finance institutions, including in the People’s Bank of China central bank and the Export-Import Bank of China, before he was promoted to become chairman of the Bank of China in 2019.
However, in October last year, China’s ruling Communist Party expelled the former chairman, accusing him of illegal activities and taking bribes.
The court said that Liu took advantage of his position to seek promotions for many people and that the amount of bribes accepted was “particularly huge” at more than 121m yuan (£13m), state broadcaster CCTV said.
11:37 AM GMT
Pound holds steady in face of Trump tariff threat
The pound was relatively unscathed after a threat from Donald Trump to ramp up tariffs on Canada, Mexico and China, which sparked volatility in currency markets.
Sterling initially lost ground after the president elect’s comments, reflecting its position as a “risk-sensitive” currency that tends to fall at moments of economic uncertainty.
It was last 0.1pc higher against the dollar at $1.258, although it was down 0.1pc against the euro, which is worth 83.6p.
The dollar index climbed after Mr Trump’s announcement, although it later gave up its gains, while the Canadian dollar and Mexican peso slid around 1pc and 2pc respectively.
Derek Halpenny, currency strategist at Japanese bank MUFG, said Britain’s minor trade surplus with the United States meant it could escape Trump’s ire.
He said: “The UK 12 month surplus - US deficit - is very small at just £4.6bn and hence Trump is unlikely to focus greatly on the UK-US trade imbalance.
“These factors could help contain GBP (pound) depreciation if the trade conflict escalates in the new year, although the risks remain skewed to the downside indirectly via weakening growth in the eurozone and globally that would see the pound suffer.”
The pound on Friday fell to a six-month low of $1.247 in the wake of weak UK retail sales data, which raised the prospect of deeper Bank of England rate cuts.
11:16 AM GMT
Water companies need ‘tighter controls’ on debt, admits Ofwat boss
Ofwat chief executive David Black said the regulator “should have had tighter controls” on the amount of debt water companies have racked up.
He told MPs: “There are certainly lessons to be learned from the levels of debt that companies are taking on. At privatisation we weren’t established to stop companies going bust, but we do think that more preventative action would improve outcomes.”
When asked why preventative action did not happen, Mr Black said many companies used “high gearing” finance structures in the 2000s.
During this period, many regulators put “additional protections in place” like forcing companies to get so-called investment grade credit ratings from financial ratings firms.
“But they didn’t take more active steps than that,” he added.
Mr Black said: “I don’t think that model has been successful, I think we should have had tighter controls. That’s why we have changed the regime since we’ve got new powers to do so.”
He continued that ratings agencies have also been “quite slow” to downgrade water companies.
11:01 AM GMT
Ofwat boss defends regulator over Thames Water troubles
The head of Ofwat said the regulator’s role is not to stop water companies going bust as he was challenged by MPs on the situation at embattled utility company Thames Water.
Challenged by the Environment Committee on Ofwat’s role to ensure that water companies carry out their statutory functions, Ofwat chief executive David Black said: “Thames Water very clearly have issue with their financial structures.”
He told MPs: “We’ve taken action to ensure that customers don’t bare the consequences. At privatisation it was always expected that we might see companies fail that’s why the special administration regime was created.”
He continued: “It wasn’t Ofwat’s role to stop companies going bust. It is our role to ensure customers’ interests are protected when companies’ finances ... when they are unable to meet their obligations.
“The point is that the sector has raised finance. They’ve raised about £100bn of finance since privatisation and they’ve used that to finance about £240bn of investment.”
10:53 AM GMT
Fake trades leads to £13m fine for Macquarie Bank
The UK’s financial watchdog has fined Macquarie Bank £13m after “serious failings” allowed one of its employees to record more than 400 fake trades.
The Financial Conduct Authority (FCA) said Travis Klein, a Macquarie trader at its London metals and bulks trading desk, was able to record and take steps to conceal the fictitious trades in the bank’s internal systems between June 2020 and February 2022 to hide his trading losses.
The fake trades were not detected earlier because of “significant weaknesses” in the bank’s systems and controls, the regulator said.
Mr Klein has also been banned from the financial services industry by the FCA and it would have fined him £72,000 if his application for serious financial hardship had not been successful.
Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: “MBL’s ineffective systems and controls meant that one of its employees could, at least for a time, hide trading losses which cost the firm millions to unwind.
“This should serve as an example to those we regulate; risk can come from within. You need the right systems to identify it so it can be tackled early.”
A Macquarie spokesman said the Australian bank “takes these matters very seriously” and had “displayed a high level of co-operation throughout their investigation”.
The spokesman added: “We have focused significant resources on addressing learnings from the incident and implemented a series of improvements to our control environment in response to the incident.”
10:22 AM GMT
Bankers bonus rules poised to be relaxed
Senior bankers could receive their bonuses more quickly under plans to relax rules brought into force in the wake of the global financial crisis.
The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) have set out plans to loosen restrictions on the payments to top executives.
The regulators insisted they were not returning to the “very dangerous pay structures that were commonly in place before 2008”.
Excessive risk taking by bankers was blamed for the 2008 global financial crisis, which led to the collapse of Lehman Brothers and an economic downturn around the world.
Limits on bonuses and deferrals of payments were brought in to try and limit the temptation for risk-taking but rules have been relaxed in recent years.
An EU cap on the size of bankers bonus was scrapped last year in an effort to boost the City’s competitiveness.
The PRA and FCA has proposed reducing the bonus deferral period for the most senior bankers from eight years to five and reducing it to four years for less senior bankers.
They also suggested allowing part-payment of bonuses from year one, rather than year three as at present for some bankers.
Sam Woods, chief executive of the PRA said: “These proposals on bankers’ bonuses will support UK growth and competitiveness without undermining financial stability.
“We should not return to the very dangerous pay structures that were commonly in place before 2008, but these proposals will reduce bureaucracy and support responsible risk-taking.”
09:59 AM GMT
AO World boosts profit forecasts after wet summer spurs sales of tumble dryers
AO World increased its profits outlook after the wet summer unexpectedly boosted tumble dryer sales.
The online electricals retailer said underlying pre-tax profits jump 30pc to £17m in the first half of the year after revenues rose 6pc to £512m.
This came despite challenging weather over the summer, which saw a shift from the normal seasonal demand for fridges and air conditioning units towards tumble dryers.
Founder and chief executive John Roberts said: “We’ve had a Morecambe and Wise summer sales period - all the right volumes, just not in the right categories.
“The wet summer weather meant we sold fewer fridges and air conditioning units and more tumble dryers than we had planned.
“Overall, our team did a fantastic job to play this out as a satisfying score draw.”
Mr Roberts retailer became the latest retail boss to warn he is likely to have to raise rises to offset more than £8m in extra wage costs due to Budget measures.
AO World estimates its wage bill will go up by around £4m due to the increase in employers’ National Insurance contributions (Nics) and about another £4m with next April’s minimum wage rise.
09:43 AM GMT
Miners slump as Trump tariffs to hit Mexican sites
Mining stocks slumped in London after Donald Trump said he would place 25pc tariffs on Mexico on his first day in office.
Industrial metals companies fell as much as 1.4pc across the FTSE 100 and FTSE 250.
Glencore dropped as much as 1.9pc. The miner owns six businesses in Mexico.
09:23 AM GMT
Trump tariff threat is ‘opening move for negotiations’ with China
Donald Trump’s threat to impose additional 10pc tariffs on China was “an opening move for negotiations”, according to economists.
The president-elect had threatened during the election campaign to impose tariffs of 60pc on Chinese goods entering the American economy.
Jefferies chief Europe economist Mohit Kumar said: “Our view remains that tariffs will eventually not end up as bad as feared, but we will see increased uncertainty over the coming months.
“Waking up to check the tweets for any policy announcements could become the norm. Tariffs will further support the view of US over rest of the world from an investment perspective.”
09:05 AM GMT
FTSE 100 slumps as US tariffs loom
The FTSE 100 has fallen as Donald Trump’s tariff threat on the United States’ largest trading partners triggered fears of wider levies.
The UK’s blue-chip index was down 0.5pc, while the FTSE 250 was down 0.6pc amid a global sell-off in stocks.
The Cac 40 in Paris was down 0.9pc and the Dax in Frankfurt fell 0.8pc as car makers such as Stellantis and Volkswagen were hit hard by the potential impact to exports, falling 4.2pc and 2.3pc, respectively.
Other Mexico exposed stocks were also hit as the president-elect said he would impose 25pc tariffs on goods from the country on his first day back in office.
Beer maker AB InBev was down 2.6pc while Heineken fell 2.5pc, as both have Mexican brands.
In London, spirit maker Diageo was down 2.9pc.
By contrast, Melrose Industries rose to the top of the FTSE 100, gaining as much as 10.1pc, after JP Morgan upgraded its target prices on the aerospace company’s stock.
08:39 AM GMT
China stocks fall after Trump tariff vow
China stocks closed lower after Donald Trump’s fresh tariff vows against China, which were largely anticipated.
China’s blue-chip CSI300 Index and the Shanghai Composite Index fell 0.2pc and 0.1pc, respectively.
Meanwhile, Hong Kong’s benchmark Hang Seng index was up by less than 0.1pc.
Mr Trump said he would impose a 25pc tariff on all products from Mexico and Canada and an additional 10pc tariff on goods from China.
Although the threats triggered falls in Asian markets such as Japan, investors in China appeared unfazed and awaited more policy stimulus to lift the domestic economy.
Yang Tingwu, vice general manager of asset manager Tongheng Investment, said that an initial 10pc tariff hike against China “is milder than we expected, so the news is positive”.
During his election campaign, Trump had said he would impose tariffs of 60pc or more on goods from China.
08:19 AM GMT
China ‘open to dialogue’ with US as Trump vows tariffs
Beijing has said it remained “open to dialogue” with the United States, after Donald Trump vowed to impose sweeping tariffs on goods from China and elsewhere in response to illegal drug trade and immigration.
Asked if China had reached out to the president-elect’s team for talks, foreign ministry spokeswoman Mao Ning said: “As a principle, we are open to maintaining dialogue and communication.”
Meanwhile, Liu Pengyu, a spokesman for China’s embassy in the United States, said “no one will win a trade war”.
“China believes that China-US economic and trade cooperation is mutually beneficial in nature,” he told AFP.
08:15 AM GMT
Young people given ‘permission to withdraw’ from jobs market, says recruitment boss
Young people are left to languish on benefits because of a broken welfare system that has given them “permission to withdraw” and made tackling the worklessness crisis harder, one of Britain’s top recruiters has warned.
James Reed, the boss of Reed Recruitment, said many young people were being signed off work too readily by GPs and parked on sickness benefits.
He said: “It’s deeply concerning. I think something’s happened in our society in a way in which we’ve given permission to young people, almost to withdraw.
“It seems to me that in the old days it was sort of, get up, get on, get out and get going. Now, people have withdrawn from sort of working life in large numbers, and I think it’s important that we reconnect with those people.”
He also told BBC Radio 4 that the welfare system currently “encourage[s] people to be on sickness benefits over job seeking benefits, because you get more money and you get left alone.
“So the danger is they then roll along and they’re on those benefits for a long time and that’s not a good life for them and it’s not good for their future and it’s not good for the economy.”
Mr Reed added: “I think a lot of young people perhaps maybe present to their GP and say, I’m too anxious to go to work, and I worry that maybe the GP are not mental health experts or the wrong gatekeepers for this decision making.”
Mr Reed also described Labour’s package of an increase in the minimum wage, stronger workers’ rights and a £25bn national insurance hike as a “triple whammy” on business which would also hinder the government’s drive to tackle worklessness.
He told the Today programme: “This is a combination that has made companies nervous, and I suppose it will make them think more carefully about hiring more young people.”
08:03 AM GMT
UK markets fall as Trump raises trade war fears
The FTSE 100 fell as trading began amid concerns that Donald Trump’s tariff plans could cause a global trade war.
The UK’s blue-chip index dropped 0.3pc to 8,271.10 while the midcap FTSE 250 fell 0.4pc to 20,673.22.
08:00 AM GMT
Jobs recovery ‘didn’t happen in Britain’ after pandemic, says minister
Employment minister Alison McGovern has said that post-pandemic recovery in employment numbers “didn’t happen in Britain”.
She said that a “one-size fits all” approach to the issue will not help because “problems are so different depending on where you live”.
Ms McGovern told Times Radio : “If you look at those international statistics, what you see is that post-pandemic almost all of the countries around the world except us recovered in employment terms. The employment rate did increase, people did go back to work.
“That didn’t happen in Britain, something is different, and the level of sickness that we’re experiencing as a country is really high.”
She also said there are other issues such as “really bad” waiting lists in the NHS and “long-term differences in our economy depending on where you live”.
“Some places in our country just have significantly higher rates of inactivity and unemployment, and that’s why we know that we need to change the system, because one size fits all won’t help our country when our problems are so different, depending on where you live,” she added.
07:48 AM GMT
Halfords pleads with Reeves as wage bill to soar by £23m
Back in London, retailer Halfords has urged the Chancellor to offer support to help offset the hit from her Budget tax rises.
The bikes and car parts chain warned Rachel Reeves’s measures will send its wage bill soaring by around £23m.
The company said the cost implications of next April’s increase in employer National Insurance contributions (Nics) and the minimum wage increase were “acute” given its workforce of more than 12,000, while it also said the impact of Budget moves on consumers was “unclear”.
It is calling on the Government to help soften the blow by considering overhauling the Apprenticeship Levy.
Half-year results out today showed Halfords’ pre-tax profits fell 23.3pc to £17.8m in the six months to September 27 as revenues dropped 0.1pc.
Profits fell 1.4pc on an underlying basis, to £21m.
07:38 AM GMT
Pound nears six-month low amid Trump tariff plans
The value of the pound has dropped back close to a six-month low in the wake of Donald Trump’s tariff announcement, which has raised concerns it could start a global trade war.
Sterling was last down 0.2pc against the dollar to $1.255. It was little changed against the euro, which is worth 83.5p.
07:35 AM GMT
European markets poised to fall
The FTSE 100 is on track to fall at the open after Donald Trump announced his first tariffs plans against Mexico, Canada and China.
London’s flagship stock market is poised to fall 0.2pc while the Cac 40 in Paris is on course to drop 0.6pc.
The Dax in Frankfurt is down 0.4pc in premarket trading, while the FTSE MIB in Milan is down 0.5pc.
07:32 AM GMT
Huawei unveils phone aimed at challenging Apple iOS and Google Android
Chinese tech giant Huawei on Tuesday launched its Mate 70 smartphone series, the first to be powered by its fully homegrown operating system.
Richard Yu, executive director of Huawei’s Consumer Business Group, said: “Today, the long-awaited Mate 70, the most powerful one ever, is here.”
Huawei has launched its own operating system in a challenge to the dominance of Apple’s iOS and Google’s Android.
07:29 AM GMT
Trump triggers market turmoil as he announces tariff plan
Donald Trump sent markets into turmoil with the announcement of his plans for tariffs against Canada, Mexico and China.
The Canadian dollar hit a four-year low against the US dollar, while the Mexican peso fell to its weakest point since 2022 after the president-elect set out his plans in a post on his Truth Social platform.
He said that on his first day in office he would impose 25pc tariffs on all goods from the two nations entering the American economy over his concerns about illegal immigration and illicit drugs.
Asian stock markets declined as Mr Trump said he would impose an additional 10pc tariff on goods coming from China, saying officials had never followed through on a pledge to impose the death penalty on drug dealers, singling out fentanyl, which it is thought killed about 75,000 Americans last year.
Sean Callow, a senior FX analyst at ITC Markets, said: “It was just last month that Trump said that ‘the most beautiful word in the dictionary is tariff’, so there really should not have been a surprise in Trump’s intention, just in the timing of the comments.
“The fall in trade-sensitive currencies makes sense, and should persist near term.”
Japan’s Nikkei dropped 0.9pc while exporters like Toyota and Nissan tumbled 1pc and 3.6pc respectively.
Australia’s stock benchmark eased 0.7pc, a day after rising to a record high. Taiwan’s share index lost 1pc.
However, Hong Kong’s Hang Seng was flat, while mainland blue chips fell 0.2pc, after fluctuating between small gains and losses.
Gary Ng, senior economist at Natixis said: “It’s definitely a shock to the market and weighing on Chinese assets, especially the export sectors.
“But compared to what he imposed on Canada and Mexico, the magnitude (of the Chinese tariff) is not that big, so investors might still want to see what are the follow ups and when/if the 60pc promised will actually come through.”
07:16 AM GMT
Good morning
Thanks for joining me. The US dollar rose and Asian stocks slumped after Donald Trump said he would impose tariffs on products coming into the United States from Mexico, Canada and China.
Investors are bracing for polices that could set the stage for a trade war, with the dollar jumping more than 2pc against the Mexican peso and hitting a four-and-a-half-year high against its Canadian counterpart.
The US currency also rose to its highest level since July against China’s yuan, while stock markets declined as exporters suffered losses in Japan and Taiwan.
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What happened overnight
The dollar rallied sharply after Donald Trump pledged tariffs on all imports from Canada and Mexico, and additional tariffs on China.
It rose 1pc against the Canadian dollar and 2pc against the Mexican peso, while share markets in Asia fell.
Japan’s Nikkei dropped 0.9pc, giving back most of Monday’s gains, as investors contemplated the risks of tariffs on the nation’s many heavyweight exports, particularly auto-makers.
Australia’s stock benchmark eased 0.7pc, a day after rising to a record high. Taiwan’s share index lost 1pc.
Hong Kong’s Hang Seng was flat and mainland blue chips dropped 0.2pc.
On Wall Street, the Dow Jones Industrial Average rose 1pc, to 44,736.57, which was a record closing high. The S&P 500 rose 0.3pc, to 5,987.37, and the Nasdaq Composite rose a similar percentage, to 19,054.84.
In the bond market, the yield on 10-year US Treasury notes fell to to 4.269pc, from 4.354pc late on Friday.