Solar panel giant to axe a fifth of its workforce
One of Europe’s largest solar panel manufacturers has announced it will cut about 200 jobs as it battles to return to profitability amid stiff competition from China.
Meyer Burger said its chief executive is leaving the company as it announced plans to reduce its global workforce from about 1,050 to 850 by the end of 2025, predominantly in Europe, as it focuses operations on the US.
It said Gunter Erfurt would be replaced by executive chairman Franz Richter immediately, with chief financial officer Markus Nikles stepping down in September.
Meyer Burger reported a loss of 292m Swiss francs for 2023, which it blamed on “severe price undercutting in the European solar market”.
It comes amid a flood of Chinese products onto the European market.
Zürcher Kantonalbank analyst Bernd Laux said: “This drastic measure is sensible, but it comes too late.
“It remains to be seen whether it can prevent Meyer Burger’s slow demise.”
Read the latest updates below.
05:06 PM BST
Signing off...
Thanks for joining us today.
Please join us over on our live blog covering the Fed’s interest rate decision.
04:53 PM BST
FTSE closes down
The FTSE 100 closed down 0.7pc this afternoon.
The top riser was Durex maker Reckitt Benckiser, up 1.2pc, followed by Rightmove, up a similar amount.
The biggest faller was JD Sports, down 6pc, followed by Rentokil Initial, down 4.6pc.
Meanwhile, the mid-cap FTSE 250 fell 0.5pc.
The top riser was North Atlantic Smaller Companies, up 4.4pc, followed by Aston Martin, up 2.8pc.
At the other end of the index, Carex maker PZ Cussons fell 15.2pc, while JTC (Jersey Trust Company) fell 5.6pc.
04:47 PM BST
‘Subopimal’ use of gas turbines leaves Britain importing power
Britain’s gas turbines are being used in a “suboptimal” way, according to a solar energy data company, as Britain relies on imported energy.
Ben Watts, of Kilowatts.io, wrote on LinkedIn:
Working part-time might sound great, but for gas turbines, it’s a different story. Combined Cycle Gas Turbines are facing challenges from wind, solar, and cheap imports. The majority were designed for baseload, not flexibility.
In 2024, even during the most profitable hours, less than half of the CCGT capacity has been online. Surprisingly, over half of the time this year, only around 20pc of the CCGT capacity has been in operation...
It’s great to reduce overall emissions, but maintaining an efficient CCGT fleet with such low running hours feels subtopimal when we’re still installing gas boilers instead of heat pumps.
03:58 PM BST
Markets on edge ahead of Fed decision
World stock prices are generally down this afternoon, with the MSCI World index down 0.1pc as investors await news of US interest rates.
Chris Beauchamp, chief market analyst at online trading platform IG, said:
The tension is palpable across markets this afternoon, as they stand on the verge of the most unpredictable Fed meeting in recent memory, and one that seems to provide the most potential for volatility in some time.
So many questions need to be answered that Powell will have a high bar to clear if he and his committee are to avoid some fairly dramatic moves in volatility coming days.
03:54 PM BST
Starmer ditches plan to roll out ‘Not for EU’ stickers on British food items
Sir Keir Starmer has scrapped plans to put “Not for EU” stickers on milk, butter, meat and fish being sold in British supermarkets. Hannah Boland reports:
The Government is understood to have told UK food makers that it will indefinitely postpone new post-Brexit labelling rules, which had been drawn up by the previous Conservative government.
The rules were set to require all meat, fish and dairy products in Britain to carry labels denoting they could not be sent to the EU and were expected to come into force from next month.
The policy, part of the Windsor Framework to oversee the flow of imports between Northern Ireland and the Republic of Ireland, had been touted by Rishi Sunak as an effort to ensure that the same goods were on shelves across the entirety of the UK.
Meat and dairy products being sent from Britain to Northern Ireland already have to carry the stickers.
However, the Department for Environment, Food and Rural Affairs is understood to have told suppliers it has indefinitely delayed the need for all products to have stickers regardless of where they were being sent.
03:40 PM BST
Italy poised to regain wine crown from France
Italy is due to regain its spot as the world’s largest wine producer this year as France’s vineyards have been hit by unfavourable weather, according to figures from each country’s agricultural authorities.
After a disastrous 2023 harvest, Italy’s production will recover eight percent to between 41m and 42m hectolitres, the country’s main agricultural association Coldiretti said .
The French agriculture ministry had estimated earlier this month that French production will fall 18pc to 39.3m hectolitres.
Coldiretti noted that this year’s output in Italy still remains well under the average of recent years, as different parts of the country cope with either heavy rains or drought.
Since 2007, Italy has been the world’s top producer each year apart from 2011, 2014 and 2023, when it was pipped by France, according to the International Organisation of Vine and Wine (OIV).
Coldiretti said Italy is “divided in two” with the north hit by “intense rain and hail in spring and early summer”, while large parts of the south and Sicily have faced drought.
With that I will head off for the day and leave you in the hands of Alex Singleton, who is also running our live blog on the US Federal Reserve’s interest rate decision. Enjoy!
03:23 PM BST
Alaska Airlines boss hails ‘significant improvement’ at Boeing after mid-air blowout
The boss of Alaska Airlines said his company has seen “significant improvement” at troubled planemaker Boeing in recent months after the mid-air blowout on one of its flights that plunged the manufacturer into turmoil.
Alaska Airlines, which is getting its 12th airplane in 2024 from Boeing this week, has stepped up oversight of new planes and has its own staff at the factory auditing production.
A door plug missing key bolts blew off one of the carrier’s new 737 MAX 9 jets at 16,000 feet in January.
Alaska Airlines chief executive Ben Minicucci said: “We saw a lot of significant improvement in the last few months.”
Mr Minicucci also said he does not expect to receive 737 MAX 10 airplanes until at least mid-2026.
The Federal Aviation Administration has yet to certify either the MAX 7 or MAX 10 variants.
03:02 PM BST
Pound hits two-year high ahead of ‘pivotal’ US interest rate decision
The value of the pound has surged to its highest in two years ahead of the Federal Reserve’s next decision on interest rates.
Sterling has risen 0.6pc today against the dollar to $1.323, which it has not reached since March 2022.
It comes as policymakers in the US are expected to cut borrowing costs for the first time in four years.
Money markets indicating there is a 66pc chance that this will be by an outsized half a percentage point from the present range of 5.25pc to 5.5pc, where interest rates have stood since July last year.
Meanwhile, the Bank of England is widely expected to keep interest rates unchanged at 5pc on Thursday, after services inflation rose from 5.2pc to 5.6pc in August.
David Morrison, senior market analyst at Trade Nation, said the meeting is “likely to trigger some market turbulence”.
He said: “It’s extremely rare to go into a Fed meeting with this amount of uncertainty. This is extremely unfortunate given the pivotal nature of tonight’s decision.”
02:32 PM BST
Wall Street mixed ahead of Fed interest rate decision
US stock markets lacked direction ahead of a pivotal interest rate decision by the Federal Reserve which could see borrowing costs cut for the first time in four years.
The S&P 500 edged up 0.1pc to 5,640.88 as traders bet there is a 64pc chance that policymakers will reduce borrowing costs by half a percentage point, with at least a quarter of a point cut priced into money markets.
The Dow Jones Industrial Average fell 0.1pc to 41,554.11 while the tech-heavy Nasdaq Composite rose 0.2pc to 17,663.91.
02:26 PM BST
Carex soap maker PZ Cussons plunges amid Nigeria losses
PZ Cussons, the maker of Carex soaps, has seen shares plummet after last year’s 70pc devaluation of the Nigerian currency pushed it to a loss.
The FTSE 250 company’s shares suffered thier worst day since February as it swung to a £95.9m loss for the year ending May 2024, down from a £61.8m profit the year before.
Chief executive Jonathan Myers said that despite “strategic” progress, the devaluation of the naira had “significant implications on our reported financials”.
He added: “We have worked hard to mitigate the impact of this on the group, while continuing to serve Nigerian consumers who are facing unprecedented inflation and economic difficulties.”
Shares in the company fell as much as 17.6pc as it also slashed its annual dividend to shareholders by 44pc to 3.6p.
It comes after the company said it was exploring the sale of its entire African business earlier this year, and put its tanning business St Tropez up for sale, as part of a turnaround plan.
Mr Myers added: “We are progressing with our plans to sell St Tropez and have received a number of expressions of interest for our African business, recognising the potential of our brands and people, which could lead to a partial or full sale.”
02:06 PM BST
LadBible hails record readership as it expands in US
The owner of LadBible said it has brought in a record number of readers, viewers and listeners in the first half of 2024, with its content reaching 494m people.
LBG Media, which also owns the UniLad and SportBible brands, said it swung to a profit of £7.1m over the period, up from a £1.2m loss last year, while revenue grew 29pc to £42.3m.
The company said it has built market share in the US, with 141m of its audience members coming from the country.
Solly Solomou, chief executive of LBG Group, said the company is “going from strength to strength” in the US.
Part of that was by buying female-focused digital media group Betches Media for $24m (£18.19 million) last year.
Mr Solomou said: “In the complex digital media landscape, the detailed understanding we have of our audience and our propensity to be agile in such a dynamic market provide a strong foundation for long-term growth and the delivery of shareholder value.”
01:49 PM BST
British Steel losses surge above £400m with thousands of jobs at risk
British Steel plunged to a £400m loss amid growing concerns that the company’s financial woes will threaten thousands of jobs.
Our reporter James Warrington has the details:
The steelmaker, which is owned by Chinese conglomerate Jingye Group, made a pre-tax loss of £408m in 2022, an eight-fold increase on the £50m losses made in the prior year.
Bosses blamed a “highly volatile” trading environment amid surging energy and commodity prices as well as fluctuating demand.
The steelmaker is locked in talks with the Government about a £1.25bn decarbonisation plan as it attempts to transition from conventional furnaces to greener, electric equipment.
Bosses are hoping to secure public funding similar to the £500m package handed to rival Tata Steel last week.
But the state aid is yet to materialise and the company is reportedly planning to shut down the blast furnaces at its Scunthorpe site, putting 2,500 jobs at risk.
Such a move would also mark the end of UK steel production, with the roughly 3m tons of steel currently produced at the plant potentially replaced by imports from China.
British Steel was launched in 2017 after private equity firm Greybull Capital acquired a UK division from Tata Steel.
Greybull revived the historic “British Steel” name, which had been used for the UK’s nationalised steel industry until privatisation in the 1980s, and eventually sold the business to Jingye in 2020.
British Steel recorded a £203m impairment, which it said reflected the “deteriorating outlook” for its blast furnaces in Scunthorpe.
01:32 PM BST
TGI Fridays’ UK arm falls into administration
The UK operator of TGI Fridays has gone into administration as the hospitality company scrambles to sell its chain of 87 restaurants across the country.
Hostmore said it had appointed joint administrators from Teneo.
The company is in the process of trying to sell the UK restaurants to new owners, which it hopes to complete by the end of September.
This would keep the TGI Fridays brand alive on British high streets and save thousands of jobs.
But it said earlier this month that it was not expecting to “recover any meaningful value” from the sale of sites, meaning it would earn less from the sale than it owes to creditors and banks.
It is also not clear whether it will secure a buyer for the entire chain, or whether it will manage to sell some but not all of the restaurants.
The American-inspired restaurant chain is open as normal while the administration process starts.
01:23 PM BST
Train drivers accept pay deal as Starmer caves to union’s demands
Train drivers have voted to accept a multi-year pay deal, bringing an end to two years of strikes.
Aslef, the train drivers’ union, said 96 per cent of its members had in favour of a deal it said was worth 15 per cent over three years. The union said turnout was 84 per cent.
The offer was made by the Government within weeks of Labour winning the general election.
The ballot result ends what Aslef called “the longest train drivers’ strike in history”, during which drivers took 18 days of strike action.
The union had accused the previous Conservative government of “sitting on its hands” and refusing to negotiate.
Read what Aslef general secretary Mick Whelan said about the pay deal.
01:15 PM BST
US stock markets poised for subdued start ahead of Fed rate decision
US stock markets were subdued in premarket trading as skittish investors waited for the Federal Reserve to cut interest rates for the first time in more than four years.
Most traders are betting on a half-percentage-point reduction of borrowing costs that have stayed at their highest levels in over two decades since July 2023.
The central bank last hiked interest rates by 25 basis points to between 5.25pc and 5.5pc.
In premarket trading, the Dow Jones Industrial Average was up 0.1pc, the S&P 500 was flat and the Nasdaq 100 was up 0.1pc.
The Russell 2000 index, tracking small caps stocks, which tend to fare better in a lower interest-rate environment, were also flat.
12:29 PM BST
Why the Bank of England is preparing to ‘hit the pause button’ on interest rate cuts
Inflation held steady last month, keeping interest rates on track to fall this year in a boost for Sir Keir Starmer.
But our economics editor Szu Ping Chan outlines how one measure of price rises has alarmed economists:
Prices, as measured by the Consumer Prices Index (CPI), rose by 2.2pc in the year to August, according to the Office for National Statistics (ONS).
This was unchanged from July despite a big jump in European airfares as parents took their children away for the summer holidays.
The headline rate was also in line with economists’ expectations.
Read why the Bank is expected to keep rates on hold at 5pc.
12:11 PM BST
Solar panel giant to axe a fifth of its workforce
One of Europe’s largest solar panel manufacturers has announced it will cut about 200 jobs as it battles to return to profitability amid stiff competition from China.
Meyer Burger said its chief executive is leaving the company as it announced plans to reduce its global workforce from about 1,050 to 850 by the end of 2025, predominantly in Europe, as it focuses operations on the US.
It said Gunter Erfurt would be replaced by executive chairman Franz Richter immediately, with chief financial officer Markus Nikles stepping down in September.
Meyer Burger reported a loss of 292m Swiss francs for 2023, which it blamed on “severe price undercutting in the European solar market”.
It comes amid a flood of Chinese products onto the European market.
Zürcher Kantonalbank analyst Bernd Laux said:
This drastic measure is sensible, but it comes too late.
It remains to be seen whether it can prevent Meyer Burger’s slow demise.
11:55 AM BST
Post Office boss to quit as Horizon scandal inquiry rumbles on
Post Office boss Nick Read will step down from the role next year, the company has said.
Mr Read described it as a “great privilege” to have worked as chief executive in an “extraordinarily challenging time for the business and for postmasters”.
He had previously announced his intention to temporarily step back from the role to give his “entire attention” to the next stage of the Horizon IT inquiry.
Interim chief operating officer Neil Brocklehurst has been asked by the Post Office’s board to step up as acting chief executive while Mr Read prepares for the inquiry, the company said.
Mr Read took on the chief executive position in 2019, succeeding former boss Paula Vennells, who this year forfeited her CBE following public anger over her handling of the Horizon crisis.
His decision to step down in March next year comes during the continuing fallout from the Horizon scandal - which included MPs expressing a lack of confidence in his leadership at the business and trade committee in February.
11:39 AM BST
Reeves aims to end gender pay gap as first female Chancellor
Rachel Reeves has said she intends to use her position as the first female Chancellor to “improve life for women”, as she set out plans to support women in business.
Ms Reeves said it is a “huge responsibility” to head the Treasury and she is aiming to close the gender pay gap, strengthen rights at work and invest in childcare.
Announcing the Government’s support for the Invest in Women Taskforce, which aims to increase investment funding pools for female founders, the Chancellor vowed to improve the economic opportunities available to women.
The taskforce is aiming to create a funding pool of more than £250m for female-founded businesses through private capital, making it one of the world’s largest investment funding pools aimed solely at female founders.
The Rose Review, an independent review of female entrepreneurship led by Dame Alison Rose, found that if the UK were to have the same share of female entrepreneurs as similar countries, £200 billion of value would be added to the economy.
Ms Reeves is expected to take an active role in steering the taskforce’s priorities and objectives. She said:
It is a huge responsibility to sit in the Treasury as the first female Chancellor of the Exchequer and be able to use my position to improve life for women across the UK - one that I don’t take lightly.
That includes ending the gender pay gap, strengthening rights at work and investing in childcare.
11:22 AM BST
Gas prices fall as Europe expected to ride out winter
Gas prices have fallen as flows from Norway boost confidence that Europe has enough of the fossil fuel to see it through the winter.
Dutch front-month futures, the benchmark for the continent, slumped as much as 2.3pc to less than €35 per megawatt hour as pipeline exports from the Scandinavian country’s fields jumped nearly 13pc.
Maintenance work at Norway’s sites are coming to an end, just as Bloomberg analysts predict Europe will end the winter with stocks still 40pc full if temperatures stay at normal levels.
The UK’s equivalent gas contract was down as much as 2.5pc today to around 83p per therm.
10:59 AM BST
Oil prices fall ahead of Fed rate cuts
Oil prices have slipped following a two-day gain as traders assessed the scale of potential cuts to the Federal Reserve’s interest rates.
Global benchmark Brent fell 1.6pc below $73 a barrel, while West Texas Intermediate was down 1.8pc below $70.
It comes despite rising tensions in the Middle East, after Hezbollah accused Israel of orchestrating an attack involving pagers in Lebanon that left a number of people dead and wounded thousands.
However, traders expect the Federal Reserve to begin cutting interest rates today for the first time in four years, weakening the dollar and making commodities cheaper.
10:37 AM BST
IMF cancels talks with Russia amid outcry over Ukraine war
The International Monetary Fund has cancelled its first planned consultations with Russia since the start of Vladimir Putin’s war in Ukraine, amid criticism from the West.
IMF officials told Russia that the mission was being delayed for “technical” reasons, the Tass news service reported.
Europe is opposed to the IMF resuming talks with Moscow ahead of a planned visit, which would be its first since 2019.
Several EU nations have challenged the IMF’s decision to engage with Russia, arguing that it risked legitimising Kremlin efforts to evade Western sanctions imposed since the war began in February 2022.
10:11 AM BST
Eurozone inflation remains above target despite rate cuts
Inflation in the eurozone has fallen to a three-year low but remains above the European Central Bank’s target despite it cutting interest rates.
The consumer prices index in the single currency bloc dropped to 2.2pc in August, down from 2.6pc in July.
The European Central Bank, which has an inflation target of 2pc, began cutting interest rates from record highs of 4pc in June.
It cut rates for a second time last week to 3.5pc.
Euro area annual #inflation at 2.2% in August 2024 https://t.co/pfx1CxDhIt pic.twitter.com/WKyaY9aKbL
— EU_Eurostat (@EU_Eurostat) September 18, 2024
09:54 AM BST
House prices grow at slower pace ahead of rate cut decision
Average house prices rose at a slower pace across the UK in the year to July, official figures show, shortly before the Bank of England announced its first interest rate cut in four years.
Average UK house prices increased by 2.2pc to £290,000, the Office for National Statistics (ONS) said, which was down from 2.7pc in the 12 months to June 2024.
Meanwhile, average UK private rents increased by 8.4pc in the year to August, down from 8.6pc the previous month.
ONS head of housing market indices Aimee North said:
Annual house price growth slowed this month. The North East saw the highest annual growth while London was the only region to show annual price falls.
Rental prices continue to climb at a near-record rate, although the pace of the increase has slowed slightly. London again saw the fastest growth in rents, with the slowest rise in the South West of England.
Nick Leeming, chairman of estate agent Jackson-Stops, said: “For the first time, house prices are reflecting a cautiously positive afterglow from Labour’s election victory and showing a promising picture for the start of autumn.
“Post-election stability coupled with the first base rate cut in four years - which has steadied mortgage rates - have renewed buyers’ intent and underpinned stronger house price growth.”
09:36 AM BST
Asda chairman takes control of struggling supermarket as Mohsin Issa steps down
Asda has revealed that co-owner Mohsin Issa is to step down from his executive role at the supermarket as it continues to lose market share.
Asda said Mr Issa will this week leave his executive role to concentrate on his recently announced move to become sole chief executive of the petrol station forecourts business, EG Group.
He will hand over the reins to chairman Lord Stuart Rose but will remain co-owner of the chain, alongside private equity backer TDR Capital, and a non-executive on the board.
Asda said it will continue its hunt for a chief executive to lead the company and will update “in due course”.
It comes as Asda has lost market share and sales tumbled 6pc in the 12 weeks to Aug 4, according to Kantar.
Lord Rose will take on Mr Issa’s executive responsibilities at Asda, alongside TDR partner Rob Hattrell and the supermarket’s existing management team.
Mr Issa said: “I have decided now is the right time for me to step back from my oversight role at Asda to focus on EG Group as sole chief executive.
“It is a very exciting time for EG Group, and I am looking forward to focusing on the business while supporting Stuart, Rob and the leadership team in my capacity as a shareholder of Asda.”
09:16 AM BST
Google’s €1.5bn EU fine thrown out after court battle
Google has won a court challenge against a €1.5bn (£1.3bn) European Union fine over its online advertising business.
The European Union’s General Court said it was throwing out the 2019 penalty imposed by the European Commission.
“The General Court annuls the Commission’s decision in its entirety,” it said.
The commission’s ruling applied to a narrow portion of Google’s ad business: ads that the US tech giant sold next to Google search results on third-party websites.
Regulators had found that Google inserted exclusivity clauses in its contracts that barred these websites from running similarly placed ads sold by Google’s rivals.
The commission, the EU’s competition enforcer, said when it issued the penalty that Google’s behaviour resulted in advertisers and website owners having less choice and likely facing higher prices that would be passed on to consumers.
09:01 AM BST
FTSE 100 falls ahead of ‘uncertain’ Federal Reserve interest rate decision
British stock indexes retreated as investors awaited the highly anticipated yet uncertain Federal Reserve decision on interest rates this evening.
The blue-chip FTSE 100 was down 0.3pc while the FTSE 250 fell 0.2pc, having both closed at their highest since early September on Tuesday.
Consumer price index inflation was unchanged at 2.2pc in August but exporter came under pressure as the pound moved higher following a rise in services inflation - a figure closely watched by the Bank of England.
Globally, investors remain focused on the Federal Reserve, which is expected to cut interest rates later, although the size of the reduction is still not clear.
Pricing for a larger-than-usual 50-basis-point rate cut - equivalent to half a percentage point - has leapt to 68pc on money markets, up from around 18pc a week ago.
Deutsche Bank analyst Jim Reid said: “You’d have to go back over 15 years to find such an uncertain situation this close to the decision. A lot of money will be made and lost today.”
Across the FTSE 350, industrial miners lost 0.8pc as metal prices eased ahead of the Fed decision.
In corporate news, Reckitt Benckiser rose as much as 3.3pc to the top of the FTSE 100 after a media report that the company has launched early discussions with potential suitors for a sale of its homecare assets.
08:44 AM BST
L&G strikes £1.4bn deal to sell Cala Homes to US private equity giant
Insurance and asset management giant Legal & General (L&G) has agreed to sell its housebuilding subsidiary Cala back to its former owner in a £1.4bn deal.
Investment firms Sixth Street Partners and Patron Capital have formed a joint venture to buy Cala, which is among the UK’s 10 biggest housebuilders.
Patron Capital formerly part-owned Cala, holding a 46.5pc stake in the company alongside L&G. However, it offloaded its stake to L&G in 2018.
Founded in 1875 as the City of Aberdeen Land Association, Cala focuses on the premium end of the market, building homes in the south of England, the Cotswolds and Scotland.
It employs more than 1,300 people across 10 offices, and sold just under 3,000 homes last year.
The deal will see L&G get £1.2bn, with the rest coming from the buyers acquiring Cala’s net debt.
L&G shares fell 1.9pc despite it saying it could use some of the proceeds to return cash to shareholders via share buybacks.
Antonio Simoes, chief executive of L&G, said the deal is part of “simplifying our portfolio”.
Script
08:33 AM BST
Services inflation too high for rate cuts, say economists
Services inflation is too high for the Bank of England to cut interest rates this week, economists have warned.
The rate of price rises in services hit 5.6pc in August, up from 5.2pc in July, while core inflation, which strips out volatile food and energy prices, rose from 3.3pc to 3.6pc.
NIESR associate economist Monica George Michail said: “Given that inflation is set to gently rise towards the end of the year, and that underlying inflation remains elevated, this reduces chances of a rate cut tomorrow, and new developments will be closely monitored by the Monetary Policy Committee.”
Jake Finney, economist at PwC, said the “Taylor Swift effect” may be partly behind the more than doubling in cinemas, theatres and concerts price inflation, which jumped from 4.4pc to 9.2pc last month, with August seeing the last of her UK dates for the Eras tour.
He added the latest data overall “suggests that a September rate cut is unlikely”.
He said: “However, we expect that the latest inflation data will do little to dissuade the Bank from cutting in November, given that headline and services inflation are both tracking lower than their latest externally published forecasts.”
Sanjay Raja, chief UK economist at Deutsche Bank Research, added: “Looking through the Bank of England’s range of underlying services measures, we still see some marginal improvement in the data despite the uptick in the headline services measure, with underlying inflation continuing to ease. This is good news for the MPC. That said, today’s data won’t be enough to trigger a surprise rate cut tomorrow.”
08:16 AM BST
Campari Group boss quits
The boss of Aperol maker Campari has quit after a short spell leading the Italian drinks company.
Matteo Fantacchiotti said he was leaving for personal reasons just five months after taking over the role from long-standing chief executive Bob Kunze-Concewitz.
The move comes after Campari shares fell 5.6pc following comments by Mr Fantacchiotti at a financial conference on Friday about the sector’s ongoing weakness in the current quarter.
Shares of the Skyy vodka maker have fallen 16pc since he took the helm in April.
08:05 AM BST
UK markets fall as inflation remains stubborn
The FTSE 100 fell as trading began as inflation remained stubbornly above the Bank of England’s 2pc target.
The UK’s blue-chip stock index dropped 0.2pc to 8,294.56 as traders also wait to see the scale of interest rate cuts expected to be announced by the US Federal Reserve this evening.
The FTSE 250 fell 0.1pc to 20,911.59 as services inflation in Britain rose from 5.2pc to 5.6pc, likely meaning rates will remain on hold when the Bank of England announces its next decision tomorrow.
07:54 AM BST
Tupperware files for bankruptcy
Away from inflation briefly... Tupperware, the household name behind the colourful plastic food containers, has filed for bankruptcy in the face of mounting losses.
Our reporter Adam Mawardi has the details:
The kitchenware company and some of its subsidiaries filed for Chapter 11 bankruptcy protection in the US.
The Florida-based business, founded in 1946, said it is seeking court permission to begin the sale process and aims to continue operating during this period.
Tupperware listed between $1bn and $10bn is estimated liabilities with between only $500m and $1bn in estimated assets, according to bankruptcy filings submitted to Delaware’s bankruptcy court.
Laurie Ann Goldman, chief executive, said: “Over the last several years, the company’s financial position has been severely impacted by the challenging macroeconomic environment.
“As a result, we explored numerous strategic options and determined this is the best path forward.”
The company said that it has made “significant progress” in modernising its operations following the appointment of a new management team in the past year.
The brand became a household name in the 1950s and 1960s at Tupperware Parties, where people gathered in homes to buy and sell the containers.
The 78-year-old firm has recently attempted to boost revenue by remarketing itself towards a younger audience. Its share price has fallen nearly 8pc in after hours trading.
07:51 AM BST
Air fares accounted for majority of rise in inflation
Economists think it bodes well for rate cuts later this year that the majority of the inflation pressure in August came from rising air fares, rather than wage increases.
Thomas Pugh, economist at RSM UK, said:
The rebound in services inflation in August makes an interest rate cut tomorrow even less likely, but this is just a bump in an otherwise downward path.
Services inflation should continue to slow over the rest of the year, leaving the door wide open for one, or even two, more cuts towards the end of the year.
Overall, we’re not worried about the rebound in services inflation, it was driven by erratic airfares.
Most other sectors show that price pressures are continuing to ease. While there is little chance that the MPC will cut interest rates tomorrow, we think the chances of getting two cuts towards the end of the year are rising.
IEA economist Julian Jessop agrees:
Digging deeper, the jump in air fares added just under 0.2 percentage points to *overall* inflation (and therefore accounted for the bulk of the 0.4pp rise in *services* inflation)... 🤓
— Julian Jessop FRSA (@julianHjessop) September 18, 2024
07:43 AM BST
Traders reduce bets on Bank of England cutting interest rates
Traders are betting there is an even smaller chance of the Bank of England cutting interest rates tomorrow after services inflation rose from 5.2pc to 5.6pc.
Money markets indicate there is a 14pc chance that the Monetary Policy Committee will reduce borrowing costs, down from 25pc before the inflation figures were out.
Traders are still pricing in two more rate cuts by the end of the year, although by a smaller margin.
Suren Thiru, economics director at ICAEW, said:
These figures suggest that inflation is in a difficult phase as stronger services sector price pressures helped keep the headline rate frustratingly above the Bank of England’s 2pc target in August.
The direction for UK inflation over the rest of this year looks largely locked in, with the boost to demand from a growing economy and higher energy bills in October likely to put inflation on a modest upward trajectory.
While the increase in services inflation confirms that it remains a key barrier to keeping the headline rate consistently at or below target, the growing squeeze on wages should help put it on a firmer downward path.
An interest rate cut on Thursday is looking unlikely with the majority of the Monetary Policy Committee likely to want to assess the impact of next month’s budget before deciding when to loosen policy again.
07:35 AM BST
Pound edges up as inflation holds firm
The value of the pound inched higher after the latest official figures showed inflation remained at 2.2pc in August, slightly above the Bank of England’s 2pc target.
Sterling was up 0.1pc against the dollar to $1.317 on the day that the US Federal Reserve is expected to begin cutting interest rates for the first time in four years.
Economists think the latest inflation figures indicate the Bank of England will “almost certainly press the pause button on interest rate cuts” at its next meeting on Thursday.
Ruth Gregory, deputy chief UK economist at Capital Economics, said:
Overall, a pause on interest rate cuts was already expected tomorrow and today’s release cements that view.
We continue to assume the next 25 basis point rate interest rate cut will take place in November and that rates will be cut at alternative Bank of England meetings until June.
Yael Selfin, chief economist at KPMG UK, added: “Strong services sector inflation likely closes the door on interest rate cut tomorrow.”
07:25 AM BST
Holidaymakers hit by 22pc increase in air fares
Air fares rose at the second-fastest pace since records began in 2001, dealing a blow to families during the school summer holidays.
The cost of air travel jumped by by 22.2pc between July and August, according to the Office for National Statistics.
It said the increase came principally from European routes.
Prices last year fell 2.1pc between July and August 2023, which was only the second time that fares had fallen between these months.
07:18 AM BST
Years of sky-high inflation have taken their toll, says Treasury minister
As inflation remained above the Bank of England’s 2pc targed, Chief Secretary to the Treasury Darren Jones said:
Years of sky-high inflation have taken their toll; and prices are still much higher than four years ago.
So, while more manageable inflation is welcome, we know that millions of families across Britain are struggling, which is why we are determined to fix the foundations of our economy so we can rebuild Britain and make every part of the country better off.
07:12 AM BST
Rising air fares offset by falling petrol prices, says ONS
As inflation held at 2.2pc, ONS economist Grant Fitzner said:
Inflation held steady in August as various price fluctuations offset each other.
The main movements came from air fares, in particular to European destinations, which showed a large monthly rise, following a fall this time last year.
This was offset by lower prices at the pump as well as falling costs at restaurants and hotels.
Also, the prices of shop bought alcohol fell slightly this month, but rose at the same time last year.
Following two months of growth, raw materials prices fell, driven by lower crude oil prices, while the increase in the cost of goods leaving factories slowed again.
07:04 AM BST
Inflation remains above 2pc target ahead of interest rate decision
The rate of inflation remained unchanged last month as the consumer prices index stood at 2.2pc, the Office for National Statistics said.
Services inflation, which has been closely watched by the Bank of England as it decides whether to cut interest rates, rose from 5.2pc to 5.6pc.
CPI rose by 2.2% in the 12 months to August 2024, unchanged from July 2024.
Read the release ➡️ https://t.co/3rW4NgMQNJ pic.twitter.com/AvTfVmsj53— Office for National Statistics (ONS) (@ONS) September 18, 2024
07:01 AM BST
Good morning
Thanks for joining me. Inflation has remained stubborn as the the Bank of England prepares to announce its next interest rate decision.
The consumer prices index was unchanged in August from 2.2pc in July, according to the Office for National Statistics.
It comes ahead of the Bank of England’s next monetary policy meeting on Thursday, where it is expected to hold rates at 5pc.
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What happened overnight
Asian shares were mostly higher as markets prepare for the US Federal Reserve’s first cut to interest rates in more than four years.
Japan’s Nikkei 225 gained 0.8pc in morning trading to 36,482.21. Australia’s S&P/ASX 200 stood virtually unchanged at 8,139.30.
South Korea’s Kospi added 0.1pc to 8,139.30. The Shanghai Composite index edged up nearly 0.2pc to 2,709.06, while trading was closed in Hong Kong for a national holiday.
On Tuesday night, Wall Street ended nearly flat after hitting record highs earlier in the day.
The S&P 500 rose to an all-time high at one point in the session, but flattened in afternoon trading and closed only 0.03pc higher at 5,634.58. The Dow Jones Industrial Average fell 0.04pc, to 41,606.18.
The tech-heavy Nasdaq Composite bucked the Wall Street trend to close 0.2pc higher at 17,628.06.
In the bond market, the yield benchmark 10-year US Treasury notes rose 3.64pc, from 3.62pc late on Monday.