British Airways cancels hundreds of flights because of Rolls-Royce engine issues
British Airways scrapped hundreds of long-haul flights as maintenance issues with its Rolls-Royce jet engines grounded aircraft.
The carrier has halted the launch of services to Malaysia, halved frequencies to Qatar and suspended services between Gatwick airport and New York JFK – affecting travel plans for thousands of people.
BA said it was forced into the measures because of excessive wear and tear to the Trent 1000 engines that power its fleet of Boeing 787 Dreamliner jets.
Rolls-Royce has been unable to supply enough replacement engines and parts to keep all of the 787s flying, leading five to be grounded. This equates to 15pc of the fleet.
Boeing 777s, which had been standing in for the stricken planes, have also been overworked to such an extent that they too require visits to the workshop.
A BA spokesperson said: “We’ve taken this action because we do not believe the issue will be solved quickly, and we want to offer our customers the certainty they deserve
“We’ve apologised to those affected and are able to offer the vast majority a flight the same day with British Airways or one of our partner airlines.
“We continue to work closely with Rolls-Royce to ensure the company is aware of the impact its issues are having on our schedule and customers, and seek reassurance of a prompt and reliable solution.”
BA said the launch of a new Heathrow to Kuala Lumpur route will be delayed from November to April next year.
One of two daily trips from Heathrow to Doha will be scrapped until March, while flights from Gatwick to JFK will be suspended from early December for the whole of the winter season.
BA warned there will also be a number of cancellations on other long-haul routes between now and January.
It said the bulk of passengers affected will be accommodated on its own flights, including eight daily services from Heathrow to New York, or with partners including Qatar Airways.
The carrier had already scrapped 11 round-trip services due to the Rolls-Royce issues. It is understood that the situation has been exacerbated by a strike over pay at Boeing, which has held up supplies of some other parts.
BA has started to contact customers whose flights have been cancelled to offer alternative travel arrangements and laying the blame squarely at the door of Rolls.
“Unfortunately, Rolls-Royce, our engine supplier for our fleet of Boeing 787 aircraft, is experiencing challenges,” it said.
“We’re not the only airline experiencing this issue and are doing all we can to work with Rolls-Royce to resolve the situation.”
A Rolls-Royce spokesman said: “We continue to work with British Airways and all of our customers to minimise the impact of the limited availability of spares due to the current supply chain constraints. Unfortunately, this is an issue affecting the whole aerospace industry.”
Read the latest updates below.
06:22 PM BST
Signing off...
Thanks for joining us today.
We will be back on the Markets blog on Monday morning but do keep up with all our latest business news, analysis and comment over the weekend here.
06:04 PM BST
US banking giants say consumers still spending
American consumers remain resilient and are continuing to spending, two of the country’s biggest lenders said on Friday.
Jeremy Barnum, chief financial officer of JPMorgan, said:
Overall, we see the spending patterns as being sort of solid. [They are] consistent with the narrative that consumers are on solid footing and consistent with a strong labour market and the current central case of a kind of ‘no-landing’ scenario economically.
Meanwhile, Michael Santomassimo, chief financial officer of Wells Fargo chief financial officer, said spending on credit and debit cards, while down a little from earlier this year, was still “quite solid.”
The market will get a fuller picture when Bank of America and Citigroup, the country’s other two major consumer banks, report next week and retail sales data is released. Several investors said Friday’s earnings were so far a positive sign.
Taylor Krystkowiak, at invesment firm Themes ETFs, said:
The fact that ... not only are we averting a hard landing, there might even be a chance that there’s no landing, and that we’re able to continue to push forward is definitely going to be a big windfall for banks.
Still, Mr Santomassimo warned that the cumulative impact of higher inflation was stretching lower-income consumers and the bank was watching to see if that pattern spread to higher income customers.
05:57 PM BST
Uber shares jump in response to unveiling of Tesla’s robotaxi
Shares in ride-hailing firms Uber and Lyft were both up about 10pc today, as analysts said the lack of details on Tesla’s robotaxis eased competition worries for the companies.
Last night electronic dance music-infused event run by Elon Musk failed to impress shareholders. Some investors and experts said they were hoping for more concrete details on how the company plans to transform from an automaker into an autonomous driving and artificial intelligence titan with a solid business plan.
Tesla shares fell nearly 8pc in Friday trading. The stock, which has been pummeled in recent years by fears of cheaper EV rivals eating into Tesla’s market share, is up nearly 50pc since April when Musk announced the shift to robotaxis. Still, shares are down 8pc over the last year, compared with a 33pc increase in the broad-market S&P 500 index.
Ross Gerber, a Tesla shareholder and CEO of Gerber Kawasaki Wealth and Investment Management, said:
His vision is lovely, but somebody has to actualise it. For now, for the next 24 months, Tesla has to sell EVs. Why aren’t we focused on that?
Mr Gerber said he was happy to see products like the Cybercab and the robovan, but hoped to also see a more traditional, lower-priced mass-market vehicle that the company could sell in the near future.
Musk had for years pledged to sell a car expected to start at about $25,000, which investors saw as critical to winning new customers. It was reported in April that Tesla had abandoned this project.
05:21 PM BST
S&P 500 hits new record as it passes 5,800 milestone
Wall Street’s benchmark index, the S&P 500, rose above 5,800 for the first time after America’s biggest companies began issuing their earnings reports.
The index is up 0.5pc this evening Banking stocks are among the biggest risers today after several financial giants released strong results.
Wells Fargo is up 6pc, JP Morgan is up 5.1pc and Bank of America, which reports next week, is up 5.1pc
05:07 PM BST
European stocks close up
The major European stock markets rose today, with the pan-European stock index reversing early losses to end up by 0.5pc.
The FTSE 100 edged up 0.2pc, while Germany’s Dax and Spain’s Ibex closed up 0.7pc and 0.5pc respectively.
France’s blue-chip Cac 40 reversed early losses and ended higher after the government delivered its 2025 budget with plans for €60bn (£50bn) worth of spending cuts and tax hikes on the wealthy and big companies.
Markets finished a volatile week that saw Shanghai markets drop on uncertainty around policy support, oil prices spike on Middle East tensions and US data raise doubts about sustained cooling of inflation.
Daniela Sabin Hathorn, senior market analyst at Capital.com, said:
We’re now in that limbo phase where economies are not expecting to plunge into recession, rates are still high, there’s no clear path on interest rate cuts and earnings have been resilient, but again the expectations were pretty low.
Overall, there was a sense of caution as investors awaited China finance ministry’s press conference on Saturday, with expectations of stimulus announcements running high.
04:58 PM BST
Virtually no housebuilders believe Starmer will hit target of building 1.5m homes
Almost no housebuilders believe Sir Keir Starmer will reach his target of building 1.5m homes in the next five years, a new survey has found.
Just 2pc of housebuilders are confident of the sector’s ability to meet the Government’s pledge to deliver at least 300,000 homes per year, according to findings from Knight Frank’s upcoming land index and housebuilder survey.
By contrast, 98pc of housebuilders expect to produce much lower volumes.
In total, 85pc said the sector could only deliver up to 1m homes – equalling 200,000 per year – over the next five years.
Of that 85pc, around 40pc thought the sector’s capacity would fall below one million.
The findings underline a crucial gap between the Government’s ambitions and what the industry believes it can deliver. In July, Angela Rayner, the Housing Secretary, raised the national housebuilding target to 370,000 per year.
04:52 PM BST
FTSE closes up
The FTSE 100 closed up this afternoon by 0.2pc.
The top riser was Endeavour Mining, up 2.6pc, followed by packaging giant DS Smith, up 2.5pc.
At the other end of the index, Sainsbury’s dropped 5.9pc, followed by Prudential, down 1.7pc.
Meanwhile, the mid-cap FTSE 250 rose 0.4pc
The top riser was Hochschild Mining, up 6.9pc, followed by Auction Technology, up 3.8pc.
The biggest faller was Dowlais, down 5.2pc, followed by Ocado, down 2.4pc.
04:42 PM BST
Investors await signs of progress at Premier Inn owner amid restructuring
Investors will be hoping hotel and pub owner Whitbread can reveal strong progress in a trading update next week amid a recent restructuring and tough market conditions.
Shares in the FTSE 100 group have sagged over the past year as pressure on customer finances has impacted spending on hotel visits and eating out.
In its previous update, the Premier Inn owner said total group sales increased by 1pc to £739m for the three months to May 30.
However, it indicated that they were 1pc down year on year over the first seven weeks of the second quarter.
Demand in the quarter, from the start of June until the end of August, will have also been affected by continued weak weather conditions.
The company did highlight in its previous update that accommodation demand had recovered to move in line with the previous year.
Analysts at Bernstein have indicated revenues per available room are likely to have improve from a 2pc decline in the first quarter to just a 0.4pc drop in the latest quarter.
Deutsche Bank analysts have meanwhile suggested the company could report a “solid” first-half but are facing a “red October”, with industry data pointing to below-par consumer spending.
Sales increased in both July and August across hospitality venues including pubs and restaurants, but this growth was below the rate of inflation in both months, pointing to weaker activity from Britons.
In April, the group - which also owns the Beefeater and Brewer’s Fayre brands - revealed a shake-up at its food and beverage division, due to weak performances among some brands.
It said it would cut its branded restaurants by more than 200 in favour of building more hotel rooms, leading to 1,500 job cut.
04:32 PM BST
Labour to start trade talks with Switzerland
Sir Keir Starmer’s administration is to restart trade talks with Switzerland on Monday, with negotiators meeting for the first time since the election.
Jonathan Reynolds, the business and trade secretary, is attempting to sign more trade agreements without reopening the wounds over Brexit.
Before the election, he rejected the idea of rejoining the EU single market, saying that he preferred “practical, trade-based agreements that we put forward, rather than the constitutional arguments around customs unions or single markets”.
The aim of the Swiss negotiations is to develop “an enhanced and upgraded free trade agreement”, the Department for Business and Trade said today. “The current UK-Switzerland trade deal is largely based on an EU-Swiss deal from 1972 and does not cover digital trade or data flows. However, 80pc of all services exported from the UK to Switzerland were digitally delivered in 2021.”
04:10 PM BST
Boss of Fiat owner says car-making in Italy is too expensive
The head of Fiat and Jeep maker Stellantis told Italian parliamentarians today that producing cars in Italy was too expensive due to energy costs, while demand for electric vehicles would only come through bold incentives.
Carlos Tavares, chief executive, told a parliamentary hearing that the carmaker had planned new vehicles for all its factories in Italy “until 2030, in some cases until 2033.”
“But it is not enough. The problem is the costs that are too high in Italy, 40 percent higher than those that our competitors have to bear,” said Mr Tavares, in comments published by Italy’s AGI agency.
Mr Tavares cited the “very high” cost of energy in Italy, double that of in Spain.
“It’s a huge disadvantage, it doesn’t allow us to maintain [profit] margins,” he added. “Producing vehicles that can’t be purchased by the middle class because they cost too much is useless.”
Referring to electric cars, Mr Tavares pointed the finger at Italian lawmakers, saying it was their responsibility to spur demand.
“Why don’t we sell electric cars in Italy? They cost too much. We need to make them accessible through incentives and subsidies. How?... It’s your decision. To support demand, we need big incentives, otherwise we won’t make it,” he said.
Tensions have been mounting for several months between the government of Giorgia Meloni, the Italian prime minister, and Stellantis. Rome has accused the multinational of relocating its production to low-cost countries to the detriment of Italian factories.
04:03 PM BST
UK bonds sold at fastest pace since Truss mini-Budget crisis, says Wall Street bank
Clients at a Wall Street bank have been selling UK bonds at the fastest pace since the Liz Truss mini-Budget crisis, it has been reported.
The yield on 10-year gilts has risen from 3.76pc in mid-September to 4.23pc, its highest level since July, pushing up the cost of government borrowing.
The yield, which moves inversely to a bond’s price, is the return the government promises to pay buyers of its debt.
Bond yields notably surged in 2022 after a steep sell-off by bond market vigilantes following Liz Truss’s unfunded tax cuts and spending, announced in her mini-Budget, which eventually led to her downfall as prime minister.
The Bank of New York Mellon Corporation, known as BNY, said customers were offloading UK bonds, known as gilts, ahead of Rachel Reeves’ Budget later this month.
Geoff Yu, senior EMEA market strategist at BNY, told Reuters:
UK gilt markets recently faced the most concentrated round of selling by UK and international clients since the mini-budget of 2022.
He said clients sold £3.04bn of gilts last month.
03:56 PM BST
Wall Street rises despite hit from Tesla
The S&P 500 rose and the Dow hit a record high this afternoon, driven by gains in major banks following third-quarter results. Meanwhile mixed producer price index data had the effect of reinforcing expectations for a quarter point rate cut by the Federal Reserve in November.
However, the tech-heavy Nasdaq struggled due to an 7.4pc drop in Tesla, after the EV maker unveiled its long awaited robotaxi, but did not provide details on how fast it could ramp up production or deal with potential regulatory hurdles.
The Dow Jones Industrial Average rose 0.2pc, the S&P 500 rose 0.5pc, and the Nasdaq - after opening in negative territory - rose 0.2pc.
03:43 PM BST
US consumer sentiment drops but spending may still be strong, says economist
A closely watched survey of American consumer sentiment shows a drop during October, with the index going into reverse after two months of gains.
Sentiment dropped 1.7pc to 68.9 in the University of Michigan survey, while a forward-looking index of consumer expectations dropped 2pc to 72.9. Both indexes are up year on year.
Bradley Saunders, a North America economist at Capital Economics said:
The trivial fall in the University of Michigan consumer sentiment index in October was likely driven in part by Hurricane Helene, although the fall in the expectations index suggests the mood among households may have soured more generally.
In any case, the poor link between confidence and consumption in recent years means consumption growth may not be as weak as suggested.
03:34 PM BST
Netflix can get away with hiking prices, says broker
Netflix could raise prices by 12pc without problems, a leading broker has said, as the streaming giant prepares to announce its quarterly results next week.
Kathleen Brooks, research director at XTB, said:
With Netflix investing heavily in new content and features, this could be a good time to raise prices...
A price increase may not prove too controversial [after] Netflix saw its subscriber base grow when it cracked down on password sharing. Added to that, a Netflix subscription is considered a necessity for some, and an affordable luxury for others, that saves on the cost of a night out or a trip to the cinema. Thus, we believe that price increases could be absorbed well by a global audience hooked on Netflix shows.
The company may choose to announce any potential price increases at a later date; however, we think that if price hikes are not formally announced on the 17th, then they may tout the possibility of the increase on next week’s [earnings] call...
Analysts are expecting a strong set of results for Netflix. If it can meet analyst expectations, then [that] would be a growth rate of 38.4pc year on year. Revenues are forecast to rise 14.4pc year on year, with net income expected to be more than 33pc higher on an annual basis.
The market is expecting Netflix’s growth rate to be stronger than its peers in the streaming sector, and if Netflix reports a strong quarter of results, it could solidify its position as the top global streaming service and pulling further away from the likes of Disney+ and Paramount.
03:32 PM BST
Tesla event ‘light of real numbers’
Tesla was accused of lacking details at the unveiling of its robotaxi - named Cybercab - which is designed to autonomously drive passengers without the need for a steering wheel or pedals.
RBC Capital Markets analyst Tom Narayan said: “Investors we spoke to at the event thought the event was light of real numbers and timelines.”
Nancy Tengler, a Tesla investor who attended the event, told Bloomberg: “The only specific was the $30,000 for a Cybercab. The concepts were all grand. Is the idea super cool? Absolutely.”
Jefferies analysts said Tesla’s robotaxi appears “toothless”.
With that, I will sign off and leave you in the capable hands of Alex Singleton as you head towards the weekend.
03:04 PM BST
LMVH boss Arnault’s email address accidentally revealed
The Government has apologised after accidentally disclosing the email address of Bernard Arnault, one of the world’s richest men, in the run up to its investment summit next week.
Sir Keir Starmer and Rachel Reeves will on Monday host some of the world’s most prominent financial and tech leaders at the event which is aimed at drumming up investment in Britain.
Mr Arnault, the chairman and chief executive of the world’s biggest luxury group LVMH, was amongst those Ms Reeves was hoping to convince that Britain is “open for business”.
But government officials had neglected to make Mr Arnault’s email private when they pressed send on details for the event, meaning all recipients were able to see his address plus those of a number of other executives, Sky News reported.
The Department for Business and Trade (DBT) said it had referred itself to the data protection watchdog following the mistake.
“This was caused by an administrative human error, and we apologise to those affected,” a DBT spokesman said.
“We take data protection very seriously, and we have referred this issue to the Information Commissioner’s Office.”
02:50 PM BST
P&O Ferries owner pulls £1bn UK investment after Rayner attack
P&O owner DP World has put a £1bn expansion of one of Britain’s biggest container hubs on hold after ministers attacked the ferry company’s employment practices.
The Dubai-based business had planned to announce the investment in London Gateway port at a summit convened by Prime Minister Sir Keir Starmer next week.
However, DP World boss Sultan Ahmed bin Sulayem will no longer attend the event after Transport Secretary Louise Haigh and Deputy Prime Minister Angela Rayner called P&O “unscrupulous” and “exploitative” earlier this week.
02:38 PM BST
Tesla suffers $74bn hit after unveiling car with no steering wheel
Quite the blow for Tesla as trading gets underway on Wall Street, with shares dropping by more than 9pc, wiping $74bn off the value of the electric car maker.
US stock indexes were mixed at the open as traders kept intact bets on a quarter of a percentage point Federal Reserve rate cut in November.
The Dow Jones Industrial Average rose 53.4 points, or 0.1pc, at the open to 42,507.53.
The S&P 500 fell 5.0 points, or 0.1pc, at the open to 5,775.09​, while the Nasdaq Composite dropped 64.3 points, or 0.4pc, to 18,217.73.
02:13 PM BST
Tesla shares sink after Elon Musk reveals £23k robotaxi
Tesla shares dropped sharply on Wall Street after investors were left underwhelmed by the unveiling of its new robotaxi.
The electric car maker’s stock was down 6.5pc in premarket trading on Wall Street after it failed to provide details on how fast it could ramp up production of its new project, called Cybercab.
At a much-hyped event in California on Thursday, chief executive Elon Musk said the vehicle will be available to buy for less than $30,000 (£23,000) but he did not say how it would deal with potential regulatory hurdles.
02:00 PM BST
US wholesale inflation higher than expected
Wholesale prices in the US gathered pace last month in a sign that the Federal Reserve will not rush to cut interest rates.
The US producer price index (PPI) — which tracks inflation before it hits consumers — rose 1.8pc last month from a year earlier, down from a 1.9pc in August. Excluding food and energy prices, which tend to fluctuate from month to month, so-called core wholesale prices rose 2.8pc from a year earlier, up from 2.4pc in August.
The wholesale inflation data arrives one day after the government said consumer prices rose just 2.4pc in September from 12 months earlier — the smallest year-over-year rise since February 2021.
That was barely above the Federal Reserve’s 2pc target and far below inflation’s four-decade high of 9.1pc in mid-2022.
Traders slightly reduced bets on a quarter of a point interest rate cut next month after the PPI data came out, dropping the chances from 85pc to 83pc.
September PPI #inflation +1.8% year/year vs. +1.6% est. & +1.9% prior (rev up from +1.7%) … core +2.8% vs. +2.6% est. & +2.6% prior (rev up from +2.4%) pic.twitter.com/vrvcf3idBE
— Liz Ann Sonders (@LizAnnSonders) October 11, 2024
01:43 PM BST
Qatar dumps £300m Sainsbury’s stake as Reeves prepares tax raid
Qatar is selling a £306m stake in Sainsbury’s a week after the supermarket’s chief executive warned that Budget uncertainty was hitting sales.
The Qatar Investment Authority (QIA), an investment fund backed by the Qatari royal family, is offering nearly 110m shares for 280p each in a process overseen by investment bank Goldman Sachs, according to Reuters.
Qatar is Sainsbury’s biggest shareholder, with a stake of 14.2pc, and the share sale would reduce its holding by about 5pc.
It comes amid expectations of a tax raid in the Budget.
01:02 PM BST
Wall Street edges down after stronger-than-expected inflation
US stocks are poised to edge lower despite strong earnings reports from major banks after higher-than-expected inflation figures.
Wall Street investment banks have kicked off the earnings season, with JPMorgan Chase rising 1.9pc after the lender reported its third-quarter results.
Wells Fargo rose 3.9pc, reversing initial declines after the bank’s profit fell in the third quarter as its interest income was squeezed by subdued loan demand.
However, shares of Tesla dropped 6.5pc in premarket trading after the EV maker unveiled its long awaited robotaxi, but did not provide details on how fast it could ramp up production or deal with potential regulatory hurdles.
All three major indexes are on track to notch their fifth consecutive week of gains - the best winning streak for the Dow in eight months and the best for the Nasdaq since May.
Wall Street closed slightly lower on Thursday after the keenly watched consumer prices index showed inflation rose higher than expected in September.
In premarket trading, the Dow Jones Industrial Average was flat, the S&P 500 was down 0.1pc and the Nasdaq 100 had fallen 0.3pc.
12:50 PM BST
LEK Consulting to oversee Thames Water turnaround plan
NEW: Thames Water's turnaround plan is to be monitored by LEK Consulting, the global consultancy recently appointed by regulator Ofwat. Confirmation is expected to be announced by Ofwat later today.
— Luke Vance Barr (@LukeVanceBarr) October 11, 2024
12:19 PM BST
World politics ‘treacherous and getting worse’, warns JP Morgan boss
The world economy faces a geopolitical crisis that is “treacherous and getting worse”, according to the boss of Wall Street’s biggest bank.
JP Morgan chief executive Jamie Dimon said the investment bank has been “closely monitoring the geopolitical situation for some time” as it announced revenues rose 7pc to $42.7bn compared to the previous year.
He said: “There is significant human suffering, and the outcome of these situations could have far-reaching effects on both short-term economic outcomes and more importantly on the course of history.
“Additionally, while inflation is slowing and the US economy remains resilient, several critical issues remain, including large fiscal deficits, infrastructure needs, restructuring of trade and remilitarization of the world.
“While we hope for the best, these events and the prevailing uncertainty demonstrate why we must be prepared for any environment.”
JP Morgan shares surged nearly 1pc in premarket trading as net interest income rose 3pc to $23.4bn, which was well ahead of analyst estimates.
12:10 PM BST
BlackRock assets under management hit record $11.5 trillion
The world’s largest investment manager revealed its assets under management rose to a record $11.5 trillion as it attracted more client cash.
BlackRock added $160bn (£122.5bn) to its long-term investment funds in the third quarter of the year, which was above analyst estimates.
Chairman and chief executive Larry Fink, said: “Our strategy is ambitious, and our strategy is working.
“The assets we manage on behalf of our clients reached a new high, ending the third quarter at $11.5 trillion, having grown $2.4 trillion over the last twelve months.
“In that time, clients have entrusted BlackRock with $456bn of net inflows, including a record $221bn in the third quarter.”
11:59 AM BST
Battery maker ‘scrambles to raise €200m’ as it abandons projects
The battery maker Northvolt is reportedly in talks to raise €200m (£167.4m) in short-term funding as it scrambles to stabilise its finances.
The Swedish company, which raised £10bn to challenge China’s dominance of batteries, said last month it is cutting 1,600 jobs and scaling back its commitments.
It also cancelled the expansion of its struggling factory in Skellefteå, near the Arctic Circle, as the “challenging” market for electric vehicles bites manufacturers.
Northvolt has been negotiating with investors and lenders this week and is aiming to raise larger amounts of money in the long term, according to Reuters.
Late on Thursday, the company said it will be able to pay its taxes of 287m Swedish krona (£21.2m) that fall due on Monday, responding to speculation as to whether the company would be able to do so.
11:42 AM BST
EU fingerprint checks delayed indefinitely
New EU border rules which would force British tourists to submit fingerprints and facial biometrics have been postponed indefinitely.
Brussels will now investigate the possibility of a new approach phasing in the system gradually over time but that will not begin on November 10.
It is the third time it has been postponed but this time no new deadline has been set.
It comes as several nations said they were not ready to roll out the new electronic replacement for wet-stamping the passports.
11:28 AM BST
Saga surges amid ‘exclusive’ talks over sale of underwriting business
Saga has said it is in “exclusive negotiations” with Ageas over a tie-up for its insurance arm and has agreed to sell its underwriting business to the Belgian company.
Shares in Saga were up more than 10pc after it told its shareholders about the talks to establish a 20-year partnership for motor and home insurance.
It came after the companies confirmed last week they were holding negotiations over a potential deal, which would help Saga to reduce its debt burden.
Ageas UK would run Saga’s motor and home products, which consisted of gross written premiums in excess of £479m for the year to July.
Ageas will pay £80m up front as part of the deal, with this potentially increasing if certain targets are met.
The companies also confirmed that Ageas will buy Saga’s Acromas insurance underwriting business. Ageas UK will pay £67.5m for the business in a deal expected to complete in the second quarter of next year.
Mike Hazell, chief executive of Saga, said: “We are hugely excited at the opportunity to grow our home and motor insurance business through this proposed partnership with Ageas.
“The coming-together of Saga’s fantastic brand and Ageas’s unrivalled expertise in operating successful affinity insurance partnerships would create a winning combination.”
11:10 AM BST
Elon Musk unveils new Tesla robotaxi with no steering wheel or pedals
Elon Musk has unveiled his long-promised robotaxi – called Cybercab – as the electric car boss bets on self-driving ride-hailing cars to revive his company’s fortunes.
At a much-hyped event in California on Thursday the Tesla chief executive arrived on stage in one of the new robotaxis, which has no steering wheel or pedals.
He told the excited crowd that Tesla will begin production on the new cars in 2026.
10:53 AM BST
Oil tanker catches fire near Germany
An oil tanker has caught fire off the Baltic Sea coast of northern Germany.
All seven crew members on board at the time were taken ashore, maritime rescue services said.
Three vessels have been deployed to the burning tanker Annika in the Mecklenburg Bay to extinguish the blaze, with several firefighting teams also en route to the site via helicopters, according to the statement.
The Germany-flagged, 73-metre-long tanker is carrying around 640 tonnes of oil, it added. The vessel is at anchor and connected to a tugboat on site.
Meanwhile, the price of oil has edged lower after a 3.7pc rise on Thursday as traders wait to see if there is an Israeli response to Iran’s missile strikes last week.
Global benchmark Brent dropped 0.7pc below $79 a barrel, while West Texas Intermediate fell towards $75.
Israel’s security cabinet on Thursday did not reach a decision on a response to Iran’s attack, public broadcaster Kan reported.
10:36 AM BST
‘Low confidence’ hamping UK jobs market, warns recruiter Hays
Britain’s corporate jobs market remained in the doldrums over the summer, and will stay that way for the immediate future, according to one of Britain’s biggest recruiters.
Hays, which recruits for companies in the accountancy and technology sectors, among others, saw a one-fifth drop in its UK fees over the three months to September 30.
Chief executive Dirk Hahn said the trading reflected “tough market conditions, particularly the longer time to hire and low levels of confidence which we expect to continue”.
The poor results come amid a global pullback in hiring, which has already pushed Hays to trim its 11,000-strong army of consultants by about a quarter over the last 18 months.
Today, it said it has cut headcount by a further 2pc. The company has shut or merged 17 offices worldwide in the last year, including 12 between April and June.
Fees were also significantly down in Germany and Australia, where Hays has significant workforces, adding up to a 14pc like-for-like fee reduction across the group.
Fees from hiring for temporary jobs were only down 16pc in the UK, versus 26pc for permanent jobs.
Shares in the group nudged up 2.3pc but remained 20pc down for the year.
10:16 AM BST
BBC plots new streaming superpower in bid for survival
When Samir Shah takes to the stage at an event in Leeds next month, one topic will be sure to dominate the conversation: the BBC’s survival.
In his first public speech since taking over as the corporation’s chairman in March, Shah is expected to discuss how to safeguard public service broadcasting in the streaming age.
Behind closed doors, however, BBC executives are already exploring more radical ways to reverse a steady decline in audience numbers, including the possibility of opening up iPlayer to include programmes from other UK channels.
09:58 AM BST
Gas prices fall as wait goes on for Israeli attack
Gas prices are on track for a weekly loss as traders wait for an Israeli response to last week’s missile attack by Iran.
Dutch front-month futures, the European benchmark, were down as much as 1.7pc today and on course for a fall of more than 2pc this week.
It follows an abrupt 5.1pc rise on Thursday when Israel’s security cabinet was scheduled to meet.
European gas prices have risen this month amid the tensions in the Middle East, despite the Continent’s storage sites being nearly 95pc full.
Energy Aspects analysts wrote in a note to clients: “Israel has succeeded in neutralising the vast majority of Iranian missiles to date, but a successful strike on the Leviathan, Tamar or Karish gas production facilities threatens to cut off Israel’s gas exports to Egypt and Jordan.”
09:44 AM BST
ScottishPower owner to invest £24bn as Miliband pushes through divisive solar projects
ScottishPower will double its planned investment in UK clean energy projects after the Government pushed through a clutch of divisive solar projects earlier this year.
Iberdrola, which owns ScottishPower, will invest £24bn in the UK between now and 2028, up from a previous £12bn announced in December.
Chief executive Keith Anderson, who will meet Sir Keir Starmer in Edinburgh today, said the controversial approach to planning is “what we want to see as an investor”.
In Labour’s first weeks in Government, Energy Secretary Ed Miliband waved through a handful of Britain’s largest solar farms in Lincolnshire, Suffolk and Cambridgeshire, overruling local opposition.
The decision sparked outcry from regional campaigners and even a legal challenge from two councils, which was later withdrawn.
But Mr Anderson said it “sends a clear message” to ScottishPower’s parent company, Spanish giant Iberdrola, about the UK’s green prospects, alongside wider plans to decarbonise the power grid.
He added: “That gives us a lot of confidence, pushing through those planning decisions.
“We’re seeing enough clarity around the plan for clean power by 2030 and the investment horizon looks good. So that’s it. We’ll sign up for this.”
09:33 AM BST
Britain’s latest GDP figures suggest ‘stagnation rather than healthy growth’
Rob Morgan, chief investment analyst at wealth manager Charles Stanley, said the growth figures pointed to a picture of “stagnation rather than healthy growth”.
He said: “With the government having spoken in cautious tones about the economy and warning of ‘difficult decisions’ around tax and spending, it is harder for businesses to retain confidence about the environment going forward.”
Mr Morgan warned that rumoured policies like raising capital gains taxes or hitting employers with a tax on jobs in the form of higher national insurance contributions in the Budget risked undermining growth.
He said: “In the build-up to the election there were plenty of encouraging noises within the Labour campaign around encouraging growth while remaining fiscally responsible. We hope this more positive mindset will be echoed in the Budget.”
09:09 AM BST
FTSE 100 on track for weekly fall as Sainsbury’s slumps
The FTSE 100 was flat in early trading as it was weighed down by losses in Sainsbury’s after its biggest shareholder cut stake in the supermarket chain.
Sainsbury’s was the worst performer on the index as it dropped 4.2pc after the Qatar Investment Authority looked to sell £306m worth of shares.
BP slipped 0.4pc after it said weak refining margins would dent its third-quarter profit by up to $600m (£459m).
The FTSE 100 was on track for a second consecutive week of declines. The midcap FTSE 250 index edged up 0.1pc, but was also headed for a weekly decline.
Stocks took little comfort from data that showed Britain’s economy grew in August after two consecutive months of no growth.
James Smith, economist at ING, said: “The bottom line is that the economy still seems to be growing at a reasonable pace, but the 0.6pc to 0.7pc quarterly GDP readings we became accustomed to in the first two quarters of the year are not going to be repeated in the second half of the year.”
Jupiter Fund Management fell 1.3pc after it reported lower assets under management with outflows of £1.6bn in the third quarter.
Saga jumped 9.6pc after it said Belgian insurer Ageas is in exclusive talks to set up a 20-year motor and home insurance broking partnership with the British over-50s holiday group.
08:52 AM BST
‘Weak’ oil trading to hit BP profits
BP expects a slump in refining margins to take a $400m (£306m) to $600m (£459m) chunk out of its third-quarter profit.
The oil major said it also expects oil trading to be “weak” for the three months to the end of September, in a trading statement on Thursday.
BP follows Shell in reporting a drop in margins after the companies’ refining businesses suffered a downturn in global demand recently across both consumer and industrial sectors.
Economic slowdowns in major economies including China, along with a growth in electric car sales, have contributed to the fall.
Refiners have enjoyed bumper profits driven by supply shortages caused partly by Russia’s invasion of Ukraine.
BP and Shell’s US rival Exxon Mobil also flagged last week that lower oil prices and refining margins in the most recent quarter will likely hit its profits for the period.
It comes after a period when oil prices fell significantly this year, with Brent crude futures prices tumbling by more than one-sixth during the third quarter.
The figures do not cover the price rises in recent weeks, which have been driven by renewed military clashes between Israel and Iran, prompting concerns around supply from the Middle East.
08:30 AM BST
Businesses need to see Reeves’ ‘vision for the economy’
Business are keen to see Rachel Reeves “vision for the economy” as UK GDP eked out an expansion of 0.2pc in August.
Barret Kupelian, chief economist at PwC, said:
UK economic activity reached a cruising speed north of 1pc in year-on-year terms in August, with all sectors of the economy growing.
This comes on the back of some sluggishness in the previous months, but expect the positive momentum to continue in the following months given some of the tailwinds we see in the domestic economy.
The big question mark is the Government’s vision for the economy. For economic growth to continue on a sustained basis, businesses, households and foreign investors require certainty to make choices and investment decisions.
We will get a glimpse of the pieces of the puzzle being put together in Labour’s planned Investment Summit next week, followed by the Autumn Budget at the end of the month which sets out details on spending and tax policy.
Finally, the Chancellor’s Mansion House speech in November could outline her thoughts on how to deploy accumulated financial resources to deal with the challenges of the future.
08:20 AM BST
Mike Ashley’s Frasers group takes stake in protein shake seller THG
THG shares plunged after Mike Ashley’s Frasers revealed it had taken a stake in the protein shake retailer.
The online beauty company’s stock was down 5.8pc after it announced it was raising £95.4m in funding through a share offering.
This included a £10m investment from Frasers and £10m from its founder and chief executive Matthew Moulding.
In June, Mr Ashley’s company bought a series of luxury goods websites from THG, including Coggles.
08:11 AM BST
FTSE 100 falls as growth ‘tailing off’
The FTSE 100 fell as trading began as economists suggested the overly negative messaging from the Government meant economic growth was “tailing off”.
The UK’s blue chip stock index fell by 0.1pc to 8,227.52 while the midcap FTSE 250 was flat at 20,706.84 as official figures showed UK GDP grew by 0.2pc in August.
NIESR associate economist Hailey Low said: “While the economy continues to expand, there are growing signs that momentum is tailing off compared to the strong performance observed in the first half of the year.
“We hope the Chancellor seizes this crucial opportunity at the upcoming Budget to announce policies which foster higher investment levels and drive the UK into a sustained era of higher output growth”
07:57 AM BST
Growth could have been higher but for Reeves’ ‘negative framing’, say economists
Britain’s economy could have grown even more if the Government had not been so pessimistic about its inheritance ahead of the Budget, according to economists.
Simon French, chief economist at Panmure Liberum, said the UK’s economic data has “consistently outperformed expectations since the General Election”, as the economy grew by 0.2pc in August.
He said: “The frustration has been how much better it could have been without the over negative framing of the economic inheritance.”
Rachel Reeves has long talked about the need to fill a £22bn “black hole” in the public finances, which the IFS this week calculated at £25bn.
Anna Leach, chief economist at the Institute of Directors, urged the Chancellor to “shift the narrative from filling today’s deficit to building tomorrow’s economy” at an International Investment Summit next week.
She said: “Ahead of the Budget, there’s an understandable focus on addressing this year’s fiscal deficit. But we need to shift the narrative from filling today’s deficit to building tomorrow’s economy – that’s the key to sustainable public finances and higher living standards.
“The Investment Summit and Budget provide opportunities for the government to build on its manifesto commitments to drive up investment by providing further detail on the National Wealth Fund’s role in catalysing private capital and the early priorities for the industrial strategy.”
UK economic data has consistently outperformed expectations since the General Election, and is the only major economic region that has done according to Citi's Economic Surprise Index. The frustration has been how much better it could have been without the over negative framing… https://t.co/8QWg5WFKpY pic.twitter.com/0a1Noufz4x
— Simon French (@Frencheconomics) October 11, 2024
07:51 AM BST
Growth more likely than recession, say economists
The return to growth in August means a year of “modest” economic expansion is more likely than a recession, say economists.
UK GDP grew 0.2pc in August after 0pc growth in June and July, while expansion in the second quarter of the year was recently revised down from 0.6pc to 0.5pc.
Ashley Webb, UK economist at Capital Economics, said the latest ONS data “lends some support to our view that a mild slowdown in GDP growth in the second half of this year is more likely than another recession”.
The consultancy forecasts that GDP will rise 0.1pc in September, with growth of 0.2pc to 0.3pc during the third quarter as a whole.
He added: “As a result, we continue to expect the Bank of England to cut interest rates slowly in the coming months, from 5pc to 4.75pc in November, and thereafter perhaps by 25 basis points at every other meeting.”
So-so #GDP data... 😶
The UK economy returned to growth in August, as expected, but the latest three month on three month rate of 0.2% is much slower than in the first half of the year. https://t.co/4ZsxB4FLgX— Julian Jessop (@julianHjessop) October 11, 2024
07:36 AM BST
Bank of England expected to cut interest rates as UK economy grows by 0.2pc
Traders are maintaining bets that the Bank of England will likely cut interest rates next month.
Money markets imply there is a 93pc chance that interest rates will be cut from 5pc to 4.75pc in November after the latest official data showed Britain’s economy grew by 0.2pc in August.
MHA economic adviser Joe Nellis said:
While the moderate growth in GDP announced this morning will no doubt be welcomed by the Government and business, they do reflect a UK economy that has been close to stagnation since July.
The over cautious and at times negative messages coming from the Government and an air of uncertainty in the lengthy lead-up to the Budget have certainly discouraged corporate investment and household expenditure.
However, confidence in the UK economy has also been undermined by ongoing geopolitical turbulence – exacerbated by recent escalations in the Middle East – an unusually long wait for the new government’s budget, and the wet weather reducing economic activity. This has all combined to dampen the ‘animal spirits’ that underpin consumer confidence.
The Government will be hoping that their long overdue Budget and a possible cut in interest rates by the Bank of England early next month will create a more conducive environment for investment, reigniting growth in the UK economy.
07:31 AM BST
Pound slips as Budget ‘cannot come quickly enough’
The pound edged down as Britain’s economic growth appeared too weak to stop the Bank of England cutting interest rates at its next meeting.
Sterling fell 0.1pc against the dollar to $1.305 after UK GDP expanded by 0.2pc in August.
Neil Birrell, chief investment officer at Premier Miton, said: “The UK economy grew modestly in August in line with expectations. But that feels like a long time ago now.
“Since then, concerns over government fiscal policy have dented consumer and business confidence and it’s hard to believe that won’t have a real world impact.
“When the Bank of England meets in November, they’ll have more data and the Budget details to review, but the economy could benefit from them providing some stimulus.”
Douglas Grant, chief executive of Manx Financial Group, said: “Today’s UK GDP data reflects the national sense of sluggish frustration with investments stagnant and as if hands were being sat on.
“The highly anticipated Autumn Statement at the end of the month cannot come quickly enough.”
07:18 AM BST
Reeves: Growing economy is number one priority
Chancellor Rachel Reeves said:
It’s welcome news that growth has returned to the economy.
Growing the economy is the number one priority of this Government so we can fix the NHS, rebuild Britain, and make working people better off.
While change will not happen overnight, we are not wasting any time on delivering on the promise of change.
Next week hundreds of the world’s biggest businesses will come to Britain as the we deliver on our promise to bring investment, growth, and jobs back to every part of the country.
07:13 AM BST
Services sector growth edges higher
Britain’s dominant services sector grew by 0.1pc in August, helped by growth in professional, scientific and technical activities.
The next largest contribution came from information and communication but human health and social work activities contracted.
It follows an expansion of 0.1pc in the services sector in July.
The Bank of England is closely monitoring the risk of inflation in the services sector as it mulls whether to keep cutting interest rates.
07:06 AM BST
Economy’s ‘broader picture is of slowing growth’, says ONS
As Britain’s economy expanded by 0.2pc in August, ONS director of economic statistics Liz McKeown said:
All main sectors of the economy grew in August, but the broader picture is one of slowing growth in recent months, compared to the first half of the year.
In August, accountancy, retail and many manufacturers had strong months, while construction also recovered from July’s contraction.
These were partially offset by falls in wholesaling and oil extraction.
07:05 AM BST
Economy returns to growth as Reeves prepares Budget
Britain’s economy returned to growth in August, official figures show, in a boost for Rachel Reeves as she prepares to unveil her first Budget as Chancellor.
Gross domestic product (GDP) grew by 0.2pc during the month, according to the Office for National Statistics (ONS).
The expansion follows two months of zero growth experienced in June and July, and was in line with analyst forecasts.
Ms Reeves will unveil her Budget on October 30 in which she is expected to raise taxes to fill a £25bn gap in the public finances.
The GDP figures come as the Prime Minister and the Chancellor will host an International Investment Summit on Oct 14, with up to 300 industry leaders due to attend.
Global business leaders will be told by Sir Keir Starmer and Ms Reeves that the UK is “open for business”, with a key pitch from ministers expected to be that the UK represents a more politically stable investment proposition than other leading countries in the West.
GDP grew 0.2% in August 2024 and 0.2% in the 3 months to August 2024
In August, services grew 0.1%, production grew 0.5% and construction grew 0.4%.
Read more ➡️ https://t.co/EypD1riojP pic.twitter.com/WZLU3UL5vY— Office for National Statistics (ONS) (@ONS) October 11, 2024
07:01 AM BST
Good morning
Thanks for joining me. We begin the day with the latest growth figures for Britain’s economy.
The Office for National Statistics revealed that UK GDP grew by 0.2pc, which was in line with analyst forecasts.
5 things to start your day
1) Surge in business owners looking to sell for fear of Labour tax raid | The share of proprietors planning to make an exit is up 6pc over the last year
2) How ‘restaurant-quality’ supermarket meals threaten to kill off casual dining | Retailers are ramping up their range of premium dishes in a bid to convince diners to stay at home
3) How Britain became hooked on sickness benefits | The UK’s rising disability benefit bill is forecast to hit £100bn by the end of the decade
4) Mental health benefit claims surge to 400 a day | Growing strain on public finances after PIP claims triple since pandemic
5) Sadiq Khan under fire for allowing advert of Islamic preacher burning dollars on Tube | Transport body accused of double standards after banning adverts featuring junk food
What happened overnight
Asian markets were mixed on Friday as investors digested disappointing US inflation data.
Chinese stocks fell in morning trading on Friday. The Shanghai Composite lost 1.6pc to 3,249.14, and the CSI 300 Index, which tracks the top 300 stocks traded in the Shanghai and Shenzhen markets, gave up 1.9pc.
Hong Kong markets were closed Friday for a public holiday. On Tuesday, the index dropped more than 9pc, marking its worst loss since the 2008 global financial crisis.
Elsewhere, South Korea’s central bank cut its benchmark interest rate by 25 basis points to 3.25pc overnight, signaling a shift to an easing cycle intended to stimulate economic growth.
This is the Bank of Korea’s first rate cut since 2020, which comes after a contraction in gross domestic product in the second quarter, along with an inflation rate in September that fell below the central bank’s target of 2pc.
The Kospi in Seoul added 0.4pc to 2,610.64.
Australia’s S&P/ASX 200 dipped 0.1pc to 8,218.40.
On Wall Street, the Dow Jones Industrial Average fell 0.1pc, to 42,454.12, the S&P 500 fell 0.2pc, to 5,780.05, and the Nasdaq Composite fell 0.01pc, to 18,282.05.
In the bond market, the yield on benchmark US 10-year Treasury notes was roughly flat at 4.07pc last night after reaching 4.1pc earlier in the day.