Volvo ditches electric car plans
Volvo has ditched plans to sell only electric cars by 2030 amid waning demand for battery powered vehicles.
The Swedish carmaker blamed the move on changing market conditions, amid fears many of the public continue to prefer petrol and diesel models.
It comes as major carmakers grapple with slowing demand for electric vehicles because of a lack of affordable models and the slow rollout of charging points needed to support electric vehicles.
Jim Rowan, chief executive of Volvo, said: “We are resolute in our belief that our future is electric.
“However, it is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds of adoption.”
The company, which is majority-owned by China’s Geely Holding, is also bracing for the effects of European tariffs on electric cars made in China.
The decision to scale back its ambitions comes three years after Volvo announced plans to go fully electric by 2030.
Volvo is now aiming for between 90pc and 100pc of cars sold to be fully electric or plug-in hybrid models by the end of the decade.
The Chinese-owned automaker said that its new target would also allow for up to 10pc of its sales to include a limited number of so-called mild hybrid models if needed.
Read the latest updates below.
07:00 PM BST
Signing off...
Thanks for joining us today on the Markets blog. We’ll be back in the morning to cover all the latest - but in the meantime do read some of our latest business articles elsewhere at The Telegraph:
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06:52 PM BST
US stocks turn negative in choppy trading
Wall Street has moved back into negative territory this evening, with the S&P 500 and Dow Jones both down 0.1pc.
The tech-heavy Nasdaq Composite is flat.
It comes a day after a major sell-off of shares in the US which saw the Nasdaq fall by more than 3pc.
Chris Larkin, at E*Trade from Morgan Stanley, said:
The markets may not be as nervous as they were a month ago, but they’re still looking for confirmation the economy isn’t cooling off too much.
So far this week, they haven’t gotten it.
06:35 PM BST
Nvidia up 1pc after $279bn wiped off its market value
Tech giant Nvidia is up this evening, a day after shares plummeted by 9.5pc, wiping $279bn (£212bn) off its market capitalisation.
Michael Kirkbride, portfolio manager at Evercore Wealth Management, said that Nvidia’s shares were under pressured because there is not much on the calendar to encourage the shares upwards. He told Bloomberg:
We’re in a bit of a void right now. We’re through with earnings, and there is a lot of economic data coming up this month. There’s a lot of caution ahead of that.
When you’re in a trading vacuum, it becomes a shoot-first market that is very short-term in nature ...
We’re still long-term holders and we haven’t heard anything to change the story, either about Nvidia or its customers and their spending plans.
06:18 PM BST
Oil cartel close to agreeing delay to output hike
The oil cartel Opec+ is discussing delaying an output increase scheduled to start in October after oil prices hit their lowest in nine months, four sources from the producer group told Reuters on Wednesday.
The move comes as oil prices have been falling on concerns about a weak global economy and particularly soft data from China, the world’s biggest oil importer.
Last week, the Organisation of the Petroleum Exporting Countries and allies led by Russia, or Opec+ as it is known, was set to proceed with a 180,000 barrels-per-day output hike in October.
It was part of a plan to gradually unwind its most recent cuts.
A delay to the October output increase is looking “highly possible”, one of the sources said.
06:05 PM BST
Burberry booted off FTSE 100 after 15 years as share price slumps
Burberry has been kicked off the FTSE 100 after 15 years on the UK’s top stock market index, after a bruising year for the company’s share price amid a luxury retail slump.
Following the latest reshuffle on the London Stock Exchange, insurer Hiscox has been promoted to the top index while Raspberry Pi has joined the FTSE 250 shortly after its stock market debut.
Analytics group FTSE Russell confirmed the changes, which are based on share prices at the end of the day on Tuesday, and will come into effect on September 23.
Burberry’s share price has flopped by about 50pc over the past six months, reaching lows not seen since 2010.
The historic British brand, which is known for its check print and trench coats, was hit by the slow reopening of the Chinese economy after the Covid pandemic.
It has also felt the impact of a slowdown in the wider luxury sector, with demand from shoppers coming under pressure during the cost-of-living crunch.
The company replaced boss Jonathan Akeroyd after just over two years in the job in July, alongside announcing it was suspending its dividend payment to shareholders while it works to bolster its finances.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said:
Turning things around from here is a tough task for the new chief executive, Joshua Schulman.
His experience at brands such as Michael Kors, Coach, and Jimmy Choo should help Burberry build back up its brand desirability, but this is likely going to take considerable investment and patience.
Burberry will drop to the FTSE 250 index as a result of the review.
05:39 PM BST
Technology stocks lead European shares lower as growth worries weigh
Europe’s main share indexes fell to a two-week low today, with technology stocks leading declines as concerns of an imminent slowdown in the US and weakness in the Chinese economy rattled global markets.
The pan-European Stoxx 600 index fell 1pc, with all major regional markets down between 0.5pc and 1pc.
Europe’s technology stocks led declines with the sector falling over 3pc to a near one-month low. It tracked a selloff in Wall Street technology stocks after a string of softer than expected economic data dampened sentiment.
Additionally, China’s manufacturing activity sank to a six-month low in August, weighing on luxury stocks in Europe such as LVMH, Richemont and Christian Dior which dropped between 3pc and 5.8pc.
Worries about slowing growth in the US and China, the world’s two largest economies, have pressured European markets over the past month as the region’s economies grapple with their own economic woes.
Euro zone business activity was a mixed bag, with France’s services sector receiving a boost in August from hosting the Olympic Games, while growth in Germany’s services sector slowed for a third consecutive month in a further sign that Europe’s biggest economy is losing steam.
05:37 PM BST
World shares dip but Wall Street is up
World stocks are lower today, while safe-haven assets such as Treasury bonds are in demand, after a mixed batch of economic data on US jobs and trade.
MSCI’s World index is down 0.3pc, and the pan-European Stoxx 600 closed down 1pc.
Major stock market indexes in London, Paris and Germany fell, with France’s Cac 40 falling the most, by 1pc.
However, despite choppy trading on Wall Street, the S&P 500 is currently up 0.1pc, the Dow Jones is up 0.2pc and even the Nasdaq is up 0.3pc after a sell-off yesterday.
In the bond market, benchmark 10-year US Treasury notes are lower at 3.79pc, down from 2.84pc late on Tuesday.
Wall Street indexes had closed sharply lower on Tuesday - registering their biggest drop since early August - as investors took profits in growth stocks and reacted to weaker than expected US manufacturing data.
05:19 PM BST
Reeves meets boss of world’s biggest bank as she bids to woo investors
Chancellor Rachel Reeves held talks with the head of the world’s biggest bank JP Morgan earlier today to discuss the Government’s economic growth agenda. Michael Bow reports:
Ms Reeves met Jamie Dimon, who is one of Wall Street’s most influential figures, to discuss the importance of financial services to the British economy, according to a source.
The move is part of the Chancellor’s bid to woo international investors to invest in the UK ahead of an international investment summit scheduled for next month.
Mr Dimon met Ms Reeves and Prime Minister Sir Keir Starmer when they were in opposition and today’s meeting marks the first since the party was elected to power.
Mr Dimon, who has led JP Morgan for nearly two decades, is the latest big Wall Street name to meet the Chancellor after Citigroup chief executive Jane Fraser and Blackstone founder Steve Schwarzman held talks with Ms Reeves last month.
JP Morgan and the Treasury declined to comment.
05:04 PM BST
US trade deficit widens to two-year high
The US trade deficit widened to the highest level in more than two years in July businesses were likely front-loading imports in anticipation of higher tariffs.
Thomas Ryan, North America economist at Capital Economics, said that the continued strength of imports painted “a better picture of domestic demand than renewed recession fears would suggest”.
The trade gap increased 7.9pc to $78.8bn, the widest since May 2022, the Commerce Department’s Bureau of Economic Analysis said.
President Joe Biden’s administration has announced plans to impose steeper tariffs on imports of Chinese electric vehicles, batteries, solar products and other goods.
The US government said last week a final determination will be made public in the “coming days.” There are also fears of even higher tariffs on Chinese imports should former President Donald Trump return to the White House after the November election.
The politically sensitive goods trade deficit with China increased $4.9bn to $27.2bn.
Christopher Rupkey, chief economist at Fwdbonds, said:
Imports of goods from China increased which shows how difficult it will be to direct US manufacturers away from their dependence on lower-cost goods originating from China if that is what Congress and political candidates wish to do.
04:53 PM BST
FTSE closes down
The FTSE 100 closed down 0.4pc this afternoon.
The biggest riser was Rolls-Royce, up 1.8pc, followed by cigarette business Imperial Brands, up 1.6pc.
The biggest faller was Airtel Africa, down 5.2pc, followed by housebuilder Barratt, down 4.6pc.
Meanwhile, the mid-cap FTSE 250 was down 0.1pc.
The top riser was Balanced Commercial Property, up 10.3pc, followed by train and bus giant Firstgroup, up 4.5pc.
The top faller was Wizz Air, down 3.4pc, followed by Rolex dealer Watches of Switzerland, down by a similar percentage.
04:47 PM BST
Deutsche Bank chief says Germans should work harder to escape slump
Deutsche Bank chief executive Christian Sewing has called on Germans to work harder to help fix the German economy.
In comments reported by Bloomberg, he told a conference in Frankfurt:
Investors have been telling us for more than a year that they doubt Germany’s and Europe’s ability to perform, and even worse, the will to perform.
Let’s just go back to working as hard as the EU average.
Mr Sewing told the conference that EU citizens work 34 hours a week on average compared with just 28 hours in Germany.
“We simply have to tell our fellow citizens that we have to do more again,” he said.
04:37 PM BST
Energy prices, low investment and skills gaps are hurting the EU, says ex-ECB chief
Low investment, high energy prices and skills gaps are undermining the EU’s competitiveness, former European Central Bank chief Mario Draghi told EU ambassadors today.
The European Commission asked Mr Draghi a year ago to write a report on how the EU should adapt to remain economically competitive against rivals such as China and the United States.
Mr Draghi, also a former Italian prime minister, is expected to publish the report on Monday.
His report, expected to run to around 400 pages, is set to cover the EU’s productivity gap compared to rivals, the need to cut reliance on China for key commodies such as used in making batteries, and the challenge of climate change.
It will conclude with recommendations for 10 major industrial sectors.
Draghi has previously said the EU needs to respond more effectively to rivals no longer playing by long-established global rules in ways to boost their competitive positions and focus more on global than internal EU competition.
04:29 PM BST
Wall Street rises following worst day in a month
Stocks are rising on Wall Street this afternoon, a day after the market’s worst performance in a month.
The S&P 500 is up 0.1pc following a 2.1pc drop a day earlier. The Dow Jones Industrial Average is up 0.3pc and even the Nasdaq has returned to positive territory, with shares up 0.1pc currently.
Job openings in the US fell unexpectedly in July, a sign that hiring could cool in the coming months. The release of the figures had a downward effect on Wall Street in early trading.
Carl Weinberg and Rubeela Farooqi, economists at High Frequency Economics, said:
Job vacancies declined, hires rose and quits were steady. There is no signal here of any sudden collapse of the labor market here or any imminent recession.
Several other reports this week will help give a clearer picture of the economy for the Fed and Wall Street.
04:26 PM BST
Investors rethink ‘frothy valuations’, says analyst
The market “may be starting to re-think some frothy valuations in the cold light of economic data”, an analyst has said.
Adam Vettese, of investment platform eToro, said:
We saw a heavy sell-off [yesterday] after soft US manufacturing data rekindled anxieties over the state of the US economy. The fall in prices included a 9pc slide in Nvidia along with a wider correction amongst semiconductor companies. This is a further signal that the market may be starting to re-think some frothy valuations in the cold light of economic data that suggests softening in demand.
[Today] the FTSE 100 index began the day playing catchup after the falls on Wall Street, dropping rapidly in early morning trading, before slowly clawing back a portion of its losses. Around three quarters of the constituent stocks in the FTSE 100 were still in the red by early afternoon in London, though the falls have been far less dramatic than we saw across the Atlantic yesterday.
04:23 PM BST
UK banks brace for potential tax raid in the first Labour budget
British banks are intensifying their lobbying against possible tax hikes in the new Government’s first budget next month, senior industry sources told Reuters.
Neither Prime Minister Sir Keir Starmer nor Chancellor Rachel Reeves has said banks will have to pay higher taxes, but Sir Keir’s recent reference to the burden falling on those with “broader shoulders” has fuelled concerns, three sources said.
Ms Reeves is due to meet senior sector representatives in the coming days, when bankers expect a rise in taxes on bank profits will be discussed, two of the sources said.
A third source said Jamie Dimon, chief executive of JP Morgan Chase, was meeting Ms Reeves in London on Wednesday.
Britain is home to one of the Wall Street heavyweight’s largest non-US operations.
A spokesperson for the Treasury told Reuters it would not comment on “speculation about tax changes outside of a fiscal event”.
The sources said they anticipate the Treasury will seek to raise an existing surcharge that banks already pay.
This was the simplest way Reeves could tap the sector to help fill the black hole in public finances in her Oct 30 budget, the sources said.
This would be easier than cutting the amount of interest UK banks earn on reserves parked at the Bank of England, which could distort the effects of its monetary policy, they added.
Trade body UK Finance is poised to reiterate calls for the banks levy and corporation tax surcharge to be phased out altogether in its pre-budget submission to the Treasury, a spokesman said. They added:
Banks based in the UK pay a significantly higher rate of tax than those in New York. And our analysis shows that they are expected to pay notably higher rates of tax in future years than in other European capitals.
A Treasury spokesman told The Telegraph:
Following the spending audit, the Chancellor has been clear that difficult decisions lie ahead on spending, welfare and tax to fix the foundations of our economy and address the £22bn hole in the public finances left by the last government.
04:13 PM BST
Volkswagen has ‘one year’ to adapt as European sales collapse
Volkswagen has as little as a year to adapt to plunging sales in Germany, its finance boss has said, as it considers closing a factory in its home market for the first time in 87 years. Matthew Field reports:
Arno Antlitz, Volkswagen’s chief financial officer, told staff at the company’s Wolfsburg headquarters they had “a year, maybe two” to transform the business.
Daniela Cavallo, the chief of the company’s works council, which represents staff, said the closure threats amounted to a “declaration of bankruptcy”.
Volkswagen now expects to sell around 500,000 fewer cars in Europe per year, “the equivalent of around two [car] plants”, Mr Antlitz said, addressing a staff general meeting.
“We still have a year, maybe two years, to turn things around,” he added. “But we have to make use of this time.”
Workers carrying banners whistled and heckled executives, Reuters reported, as they delivered prepared statements. Around 16,000 staff gathered for the meeting, with some chanting “Auf Wiedersehen” as Mr Antlitz spoke.
04:00 PM BST
Dollar drops as US job openings fall
The dollar fell against most major currencies after US job openings data for July pointed to a weaker labour market.
The latest figures tilt the odds further in favour of larger interest rate cuts by the US Federal Reserve.
Traders on Wednesday added to bets that the Federal Reserve will deliver a half percentage point reduction at its next meeting, after data showed job openings in July fell to the lowest level in three and a half years.
Wednesday’s data release comes ahead of Friday’s US payrolls report that could offer investors clues to the timing and pace of Fed interest rate cuts.
The US central bank must not keep interest rates too high much longer or it risks causing too much harm to employment, Atlanta Federal Reserve president Raphael Bostic said.
The Dollar Index, which measures the US currency’s strength against six major peers, is down 0.5pc.
The dollar is down 0.2pc against the pound.
03:51 PM BST
Labour abandons plans for Jeremy Hunt’s ‘British ISA’
Jeremy Hunt’s plans for a “British ISA” that would only allow investment to be made into London-listed stocks is being scrapped by the Labour administration, according to a report.
The FT quoted a Government source who said: “We are not planning to complicate the Isa landscape even further.”
In March, the Tory administration proposed the scheme, which would have offered an additional £5,000 Isa allowance. A consultation document said:
The main objective for the UK Isa is to support a culture of investment in the UK and to give people the opportunity to invest and benefit from the UK’s vibrant capital markets and high-growth companies.
But the proposal received pushback from the industry. Stockbrokers AJ Bell said that “research shows the complexity of the current landscape – where there are already six versions of ISAs – acts as a barrier to investing and risks undermining the successful ISA brand”.
It found that half of adults thought the different versions of ISAs made them too complicated, while only 29pc knew the current size of the ISA allowance.
AJ Bell’s research also found that 65pc of financial advisers believed unnecessary complexity had crept into the ISA market, and 77pc believed this was down to “too many variants and names” for ISA products.
In May, Labour said the party had “no plans” to scrap the new savings allowance.
A Treasury spokesperson told The Telegraph:
No decisions have been made. The Government will provide further information on its plans for the British ISA in due course.
03:36 PM BST
City urges support for EVs as Volvo waters down all-electric plans
The Government should “support” customers to switch to electric vehicles, an influential City lobby group has urged.
The UK Sustainable Investment and Finance Association - which counts HSBC, Aviva Investors and NatWest Cushion among its members - said that Volvo’s decision to abandon plans to sell only fully electric cars by 2030 underlined the need for government action.
Joe Dharampal-Hornby, head of public affairs, said:
Today’s announcement underlines the need to support consumers to transition from heavily polluting vehicles to EVs.
We know that the vast majority (93pc) of large UK transport firms believe that the expansion and standardisation of EV infrastructure, including charging points, will be central to this.
To achieve the UK’s target of 300,000 EV charging points by 2030, installation rates must increase by 60pc on the current pace, and should be located equitably across the country.
Delivering this should strengthen EV demand, generating economic growth while supporting the green transition of the UK’s transport sector.
03:28 PM BST
Nasdaq dips amid continued pressure on Nvidia
Tech firms pushed the Nasdaq downwards this afternoon as chip titan Nvidia lost further ground while disappointing data on US trade also hit sentiment.
All three leading indexes in New York had ended sharply lower yesterday, with the tech-heavy Nasdaq hit hard as traders dumped big-name tech firms including Apple, Alphabet and Amazon, while Nvidia shed a record $279bn (£212bn) of value on fears the surge in artificial intelligence-linked firms may have run too far.
There was no let-up this as Nvidia lost 3pc shortly after the New York open.
Nvidia shares are currently down by more than 0.5pc. However, the Philadelphia Semiconductor Sector index of 30 leading US chip stocks, just up 0.1pc.
The broad-based S&P 500 was flat while the Dow Jones Industrial Average edged up 0.3pc.
Another factor taking sentiment down was data showing that the US trade deficit expanded to $78.8bn in July, the largest since mid-2022.
03:21 PM BST
US job openings fall as demand for workers weakens
America’s employers posted fewer job openings in July than they had the previous month, a sign that hiring could cool in the coming months.
The US Labor Department reported this afternoon that there were 7.7m open jobs in July, down from 7.9m in June. The pace of hiring picked up, though, from June to July.
Today’s figures indicate that fewer companies are seeking to add workers despite recent data showing that consumer spending is still growing. Last week, the US government estimated that the economy expanded at a healthy 3pc annual rate in the April-June quarter.
The number of job openings has been trending gradually down over the past year. Yet there are still roughly 1.1 job openings for every unemployed person, today’s report showed. That reflects the economy’s continuing need for workers and marks a reversal from before the pandemic, when there were always more unemployed people than available jobs.
The July report on job openings is the first of several measures this week of the labour market’s health that the Fed will be watching closely. If clear evidence emerges that hiring is faltering, the Fed might decide at its next meeting Sept 17-18 to start cutting its benchmark interest rate by a relatively aggressive half a percentage point. If hiring remains mostly solid, however, a more typical quarter-point rate cut would be likelier.
On Thursday, the US government will report how many laid-off workers sought unemployment benefits last week. So far, most employers are largely holding onto their workers, rather than imposing redundancies, even though they have been slower to add jobs than they were earlier this year.
On Friday, the week’s highest-profile economic report - the US monthly jobs data - will be released. The consensus estimate of economists is that employers added 163,000 jobs in August and that the unemployment rate dipped from 4.3pc to 4.2pc.
Last month, the US government reported that job gains slowed in July to just 114,000 - far fewer than expected and that the second-smallest total in over three years - and the unemployment rate rose for a fourth month in a row.
Those figures sparked fears that the economy was seriously weakening and contributed to a plunge in stock prices.
03:16 PM BST
Handing over
That’s all from me. I’m handing you over to Alex Singleton who has the latest updates on the US stock markets.
03:03 PM BST
Britain’s chaotic air traffic control increasing carbon emissions, says EasyJet
EasyJet said an analysis of its services over the past 12 months has revealed that inefficient flight paths are driving up carbon emissions by as much as 20pc.
Christopher Jasper, transport editor, has the story:
Chief executive Johan Lundgren said the study had identified Britain’s air traffic control (ATC) system as among the most chaotic in Europe, leading to extended flight times and increased emissions from services at its Luton base and main hub at Gatwick.
EasyJet said an analysis of its services over the past 12 months has revealed that inefficient flight paths are driving up carbon emissions by as much as 20pc.
He called on Labour, which included a commitment to modernise UK airspace in its election manifesto, to fund an overhaul that would allow more-direct flights. That would slash fuel consumption and CO2 while also shortening journey times for customers.
He said: “London is the big one and the most complex one. People say there’s a shortage of airspace. That’s not true. There’s a shortage of airspace in certain of these corridors but there’s plenty of space elsewhere.”
Mr Lundgren said upgrades of 70-year-old routings ill-equipped to handle 2.5m flights into the UK per year will need to involve National Air Traffic Services, which controls the skies about 7,000 feet, together with airport control towers that manage flights at lower altitudes.
The CEO said that an overhaul of the ATC system would also go a long way toward easing travel disruption at UK airports and improving the passenger experience.
He said: “Don’t forget that congestion causes delays and sometimes cancellations as part of this antiquated system that we have.”
EasyJet’s pitch to Labour would help UK carriers bypass a logjam in Brussels, which has failed for the past decade to secure backing from EU governments for the creation of a so-called single European sky.
Mr Lundgren said EU states are putting concerns about control of their skies for military reasons ahead of easing travel for citizens. He said those worries are misplaced, with the Ukraine conflict showing Nato can take control of airspace within minutes when required.
02:24 PM BST
Ireland’s data watchdog ends court battle against X
Ireland’s data watchdog had ended court proceedings against X after the social media platform agreed to limit its use of personal data collected from European Union users to train its AI.
Ireland’s Data Protection Commission last month sought an order to suspend or restrict Elon Musk’s X from processing the data of users for the purposes of developing, training or refining its AI systems.
A DPC spokesman said: “The proceedings have been struck-out on the basis of X’s agreement to continue to adhere to the terms of the undertaking on a permanent basis.”
01:58 PM BST
Volvo abandons plans to sell only electric vehicles by 2030 amid waning demand
Volvo has scrapped plans to sell only fully electric cars in 2030 amid slowing demand for battery powered vehicles.
The Swedish carmaker said that it would instead allow plug-in vehicles as well as some hybrid engine cars as part of its lineup.
It blamed the decision to scale back ambitions on changing market conditions and customer demands.
The company, which is majority-owned by China’s Geely Holding, is also bracing for the effects of European tariffs on electric cars made in China.
Volvo is now aiming for between 90pc and 100pc of cars sold to be fully electric or or plug-in hybrid models, while up to 10pc would be so-called mild hybrid models if needed.
The move comes three years after committing for all of its cars to be all-electric by 2030.
It comes as major carmakers have grappled with slowing demand for electric vehicles because of a lack of affordable models and the slow rollout of charging points.
Jim Rowan, chief executive of Volvo, said: “We are resolute in our belief that our future is electric.
“However, it is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds of adoption.”
01:40 PM BST
Microsoft’s partnership with AI rival cleared by watchdog
The UK’s competition watchdog has approved Microsoft’s hiring plans for its London-based artificial intelligence hub.
The Competition and Markets Authority launched an inquiry into the tech giant’s plans to hire the majority of staff from Inflection AI, a business launched by Google DeepMind co-founder Mustafa Suleyman.
The regulator investigated whether the recruitment efforts and other arrangements between the firms qualified as a merger and if it could negatively affect competition in the tech sector.
It concluded that the deal qualified as a merger but does not substantially reduce competition as Inflection does not qualify as a strong rival to Microsoft’s consumer chatbots.
It comes after Microsoft announced plans to establish a new AI division in its Paddington office as part of plans to invest £2.5bn in the UK.
01:24 PM BST
PM faces growing rebellion to winter fuel raid
Sir Keir Starmer is facing a growing rebellion over cutbacks to the winter fuel payment ahead of a crunch Commons vote next week.
Jack Maidment, The Telegraph’s politics live blog editor, has more:
Around a dozen Labour MPs have now voiced concerns over the move, including eight who have signed a motion urging him to pause it.
Former frontbencher Stella Creasy became the latest to intervene, saying No 10 should make savings on Private Finance Initiative schemes instead.
“Before we ask pensioners to pay more for heating, we should ask how we pay less for PFI,” she wrote in an article for the Labour List website.
The Prime Minister is set to call a vote, to take place on Tuesday, on the move to strip the winter fuel payment from 10 million pensioners.
It comes as the Prime Minister signalled the Government will not change course over scrapping winter fuel payments for 10 million pensioners.
Read the live coverage of today’s Prime Minister’s Questions in the House of Commons here
12:28 PM BST
Old Peculier at risk from glass bottle tax, warn brewers
A swathe of Britain’s best-known bottled ales, such as Old Peculier, are at risk of disappearing owing to a new, green packaging tax, producers have warned.
Brewers and soft drinks makers selling their products in glass bottles have warned that a coming tax on the bottles could cause prices to surge and burden businesses with higher costs.
Industry bosses have written to Steve Reed, the Environment Secretary, calling for a rethinking of the impending extended producer responsibility for packaging (EPR) tax.
Senior business report Daniel Woolfson has more...
12:14 PM BST
Business confidence ‘faded’ because of Autumn budget uncertainty
A post-election boost to business confidence has faded because of uncertainty ahead of October’s Budget, a new survey has warned.
Tim Moore, economics director at S&P Global Market Intelligence, said:
“The modest post-election bounce in business activity expectations faded, however, in August.
“Hopes of interest rate cuts and steady improvements in broader economic conditions helped to support confidence, but some firms cited concerns about policy uncertainty in the run up to the Autumn Budget.”
His comments come as the S&P Global UK services PMI survey found that growth in the UK’s services sector picked up pace last month as businesses initially felt the benefits of post-election political stability.
Businesses were also aided by falling borrowing costs, higher customer spending as a result of improved economic conditions, and businesses hiring more staff to meet expansion plans.
The UK scored survey 53.7 in August, up from the 52.5 recorded July and the highest reading since April.
The headline score, which is watched closely by economists, central banks and financial markets.
11:42 AM BST
Raising state pension won’t help retirees losing winter fuel payments, MPs warn
Conservative MPs have warned that Labour’s reported plans to increase state pension does not help those losing winter fuel payments.
Around 1.6m people living below the poverty line are likely to lose their £300 winter fuel payments, research by consultants LCP based on the latest available Department for Work and Pensions figures suggests.
Labour has come under fire for its planned winter fuel raid, a policy which goes against repeated assurances made by the party while it was in opposition.
Mel Stride, shadow work and pensions secretary and Tory leadership candidate, said:
“Next April’s routine state pension increase does not help pensioners losing Winter Fuel Payments this coming winter.
“Labour repeatedly misled voters at the election saying they had no plans to cut Winter Fuel Payments, as well as matching the Conservative pledge to protect the triple lock. This was not an either-or. Now they are trying to use the triple lock as an excuse for going back on their word.
”An increase next April in line with earnings is the minimum required in law - Labour would have needed to pass primary legislation to change this. Yet they expect pensioners to be grateful while two thirds of those already in poverty are set to lose their winter fuel support.”
Dame Harriett Baldwin, Tory MP and former chair of the Treasury select committee:
“The State Pension will rise next year by the higher of earnings inflation or 2.5pc thanks to the triple lock put in place by the Conservatives.
“This is of no help to a frail ninety year old on an income of £13,000 facing a 10pc rise in their heating bills this winter.
“Labour have made a chilling political choice to take from those with the weakest shoulders to pay their union paymasters.”
11:20 AM BST
‘The UK is going to go bust’: Readers blast Labour’s plans to increase state pension
Labour plans to raise the state pension by more than £400 a year have been criticised as “unaffordable” which will force the UK to borrow “more and more”.
Here’s what some of our readers have to say:
Mark Thomas:
“As a pensioner, getting £400 extra will be worth only £320 as the £400 will push me into the tax regime. My earnings are just over £13,000 a year and I have to pay tax. My winter fuel allowance has been removed as I’m now classed as a rich pensioner. I don’t really feel rich.”
Archie Crompton:
“What other group is suffering real term reductions in their income? Any pension increase for my wife and I means more of our private pensions being reduced by tax. If the pension is to become a benefit then private pension income should be tax exempt.”
Patricia Crompton:
“Stop the public sector pensions which are beyond unaffordable. Very rare now in the private sector as they are financially unsustainable. It’s absolutely disgraceful.”
Peter Glancy:
“The UK is going to go bust. There just simply is not enough money for the Government to spend like this. They will have to borrow more and more.”
Michael Pinkowicz:
“Giving with one hand taken away by the other, so in effect a couple will be 3.5pc worse off, Well done Labour.”
Jane Marple:
“These ‘rises’ are simply to try to keep pace with cost of living increases. Stop trying to represent them as anything else.”
11:10 AM BST
EU investors are returning to Britain for the first time since Brexit, says M&G boss
EU investors are flocking back to the UK for the first time since Brexit, the head of a £346bn fund manager said.
City correspondent Michael Bow reports:
Andrea Rossi, chief executive of M&G, said large investors on the continent were keen to buy UK stocks and real estate after they fell out of favour post-Brexit.
“I spend a lot of time with international investors that are looking at the UK and many of them are actually looking at the UK again as an investable country,” he said.
“We should not forget that after Brexit all the large EU institutions shied away and we’re seeing some interest from them to come back and invest into the UK.”
He said it was unclear whether this was driven by a change in government, as the trend has been developing since the start of the year.
Large EU pension funds and insurers were exploring plans to plough more into UK infrastructure and property and also the UK stock market, which has been undervalued.
“There are big distributors that have actually been asking us for UK equities, which was something that in the last year nobody wanted to look at,” Mr Rossi said.
10:31 AM BST
English winemaker records 98pc profit drop as rivals cut prices
Shares in the English winemaker Chapel Down have plunged by as much as 22pc after the company posted a 98pc drop in profits.
Senior business reporter Daniel Woolfson has more:
The Kent-headquartered firm’s pre-tax profits fell from £2.4m to just £40,000 in the first six months of 2024 compared with the same period last year, it said on Wednesday.
Chapel Down’s sales in pubs and restaurants grew 20pc, but the brand was hit by a 36pc drop in sales to retailers as it battled a mountain of excess stock, softer demand and increased competition from rivals on supermarket shelves.
Andrew Carter, Chapel Down’s chief executive, said: “There were a lot of brands that actually went deeper on price, and we weren’t prepared to do that.”
He added that the figures were being compared against last year when the King’s coronation sparked a massive rise in sales of English wine.
It comes as the company, which is the UK’s biggest domestic wine producer, is currently up for sale in a bid to raise as much as £30m to fuel expansion.
In a separate announcement, Chapel Down announced that Mr Carter would leave the company next year after three years in post. He will join the Yorkshire ale brewer Timothy Taylor.
10:24 AM BST
Thousands more at risk of ‘retirement tax’ as state pension forecast to rise
Increasing the state pension will hit at least 300,000 pensioners with a “retirement tax” as a result of the frozen personal allowance, according to former pensions minister Steve Webb.
Under the triple lock promise, the state pension rises each year in line with the highest of September’s inflation, wage growth or 2.5pc.
With inflation currently sitting at around 2pc, it is expected that the benefit will be uplifted in line with average earnings figures released next week.
Steve Webb, partner at pension consultants LCP said:
With tax thresholds frozen yet again in April 2025, even a relatively modest pension rise could drag more than 300,000 more pensioners into the tax net for the first time.
Roughly two thirds of all pensioners now pay income tax, typically at the basic rate, so for most people a rise of £400 next April will only be worth £320 once income tax has been deducted.
Senior money writer Fran Ivens reports...
10:03 AM BST
City law firm Slaughter and May gives junior lawyers £25,000 pay rise
City law firm Slaughter and May has given a £25,000 pay rise to junior lawyers amid fierce competition for talent.
The elite institution will pay newly qualified solicitors £150,000 after two years of training, a 20pc increase from £1250,000.
The move brings the lawe firm in line with other members of the Magic Circle - Britain’s most prestigious law firms - which have also raised NQ starting salaries to £150,000 in recent months.
It marks the latest twist in the pay war between UK firms and their deep-pocketed US rivals in London competing for top talent.
A Slaughter and May spokesman said:
Following recent market moves, we have brought forward our November pay review. We have now completed a review of salaries for all associates and our NQ salary will increase to £150,000, effective from 1 September.
Our approach to pay reflects the firm’s values, allows us to attract and retain the best talent, and ensures that we maintain our culture of excellence and collegiality.
Here’s why Slaughter and May’s pay rise signals its desire to remain within the Magic Circle...
09:49 AM BST
Labour’s windfall tax rise will harm UK investment, warns Harbour Energy boss
Labour’s plans to raise windfall taxes on oil and gas producers will damage the UK’s ability to attractive investors, the boss of Harbour Energy has warned.
Linda Cook, chief executive of Harbour Energy, the biggest oil and gas producer in British waters, told the Financial Times:
“The thing I scratched my head about the most [was that] everyone understands that the UK will need oil and gas for many years to come, so why don’t we seem to want to use our own? It is better for investment, for energy security, for tax revenues, balance of trade and emissions.”
Ms Cook, who previously criticised the windfall taxes when introduced by then chancellor Rishi Sunak in 2022, said the fiscal regime in other countries where Harbour Energy operates will be “more attractive”.
It comes after Rachel Reeves announced plans backed by Mr Miliband, the Energy Secretary, to increase windfall taxes on oil and gas profits from 75pc to 78pc in November.
The Chancellor also extended the windfall tax until 2030 and abolished tax incentives for further investment.
09:31 AM BST
‘Five out of six’ pensioners below the poverty line set to lose winter fuel payments
Rachel Reeves will strip most pensioners who live in poverty of their winter fuel payments, analysis of official figures suggests.
Money reporter Noah Eastwood has the story:
Experts warned Labour has taken a “sledgehammer” approach to its winter fuel raid that will leave the country’s poorest retirees worse off.
The Government is facing a growing rebellion against the policy, which goes against repeated assurances made by the party while it was in opposition.
Around 1.6 million people living below the poverty line are likely to lose their £300 winter fuel payments, research by consultants LCP based on the latest available Department for Work and Pensions figures suggests.
Here’s what the plans mean for the poorest pensioners...
09:25 AM BST
Money manager M&G raises cost-cutting target to £220m
City investment firm M&G is seeking to slash costs by an extra £20m as customers withdrew more than a billion pounds from its funds.
The FTSE 100 company recorded £1.5bn in outflows during the first half of the year, with customers withdrawals hitting the firm’s institutional asset management business and its wealth division.
The extra savings is on top of M&G’s previously announced £200m cost-cutting target, which includes a voluntary redundancy programme.
Chief executive Andrea Rossi said the group’s “simplification agenda continues at pace”.
He added:
Against the backdrop of a challenging market environment in the first half of the year, we have delivered another resilient financial performance with adjusted operating profit and capital generation nearly matching last year’s excellent results.
The company’s share price is trading down 2pc at 211p.
09:04 AM BST
Direct Line misses profit forecast despite aggressive price hikes
Direct Line has posted lower-than-expected results after aggressive price hikes push further customers away.
The insurance group recorded pre-tax profits of £61.6m for the six months to June 30 against losses of £76.3m a year ago.
It marked the FTSE 250 company’s return to profitability but fell short of the £85m forecasted by analysts.
Further customers fled the business as the number of in-force insurance policies declined 3.1pc since December 2023, with the largest reduction in the motor business.
Direct Line has aggressively raised insurance prices to shore up its balance sheet against higher claims inflation.
The company’s share price is trading down 0.4pc.
08:31 AM BST
Fraud and scam complaints reach record high
Online bank transfer scams have pushed fraud complaints to a record high, new figures show.
The Financial Ombudsman Service received more than 8,7000 complaints about fraud and scams between April and June, up 43pc on the previous year and the highest ever quarterly level on record.
More than half of the complaints were from victims of “authorised push payment” fraud, where individuals are convinced to willingly sendn money from their bank account to the scammer.
The Ombudsman attributed the surge to the increase of people inadvertently using their credit or debit cards to pay fraudsters.
It also warned that the crimes are becoming “more complex and convincing”, with some frauds involving multiple banks and professional representivies.
It comes as the Goverment prepares to hand banks new powers to block large payments for four days under new fraud prevent rules, giving lenders an extra 72 hours to investigate suspected fraud or dishonesty.
Regulators are reportedly planning to reduce the maximum fraud payout that banks must pay to victims from £415,000 to £85,000 after facing pressure from ministers and payment firms.
Pat Hurley, the Ombudsman’s director for banking, said:
Fraudsters’ methods are always evolving, and we continue to see that reflected in the complaints brought to our service.
We are currently receiving – and resolving – around 500 fraud and scam complaints a week. In all the cases we receive, we’ll look at the individual circumstances and investigate whether a business did everything it was required to do.
When we do uphold complaints, we expect firms to learn from our findings and apply them to any future interactions with their customers.
08:08 AM BST
FTSE 100 markets dip after US market sell off
Stock markets in London have dipped after artificial intelligence giant Nvidia led a sell-off in American stock markets on Tuesday.
The FTSE 100 is down 0.74pc at 8,236.82 while the midcap FTSE 250 is down 0.9pc at 20,621.84.
07:54 AM BST
British warehouse developer Segro buys rival in £552m deal
British warehouse developer Segro has agreed a deal to buy rival Tritax EuroBox.
The companies have agreed to an all-share takeover bid for Tritax, which values the company’s share at 68.4p each.
It represents a premium of around 27pc on the closing price of the stock price on May 31 when the offer was made for the real estate fund manager.
The deal values Tritax at £552m, which increases to £1.1bn when including the company’s debt.
David Sleath, chief executive of Segro, said the deal offers an opportunity to buy an portfolio of big box warehouses across Europe.
07:39 AM BST
Get ready for more rate cuts, says top central banker
A member of the European Central Bank has hinted at further interest rate cuts at next week’s meeting.
Martins Kazaks, a member of the central bank’s governing council, said that the “picture is pretty clear”.
The Latvian central-bank governor told Latvian TV:
“Next week we have the ECB’s council meeting, and to to my mind — looking at the data that we have at available at the moment — we can take the next step in the direction of decreasing rates.
“Of course there will be a discussion, as there always is, but for me at this moment this picture is pretty clear.”
His comments come ahead of the European Central Bank’s meeting on September 11-12 where officials are expected to further lower borrowing costs after cutting rates in June.
07:32 AM BST
Barratt Developments blames ‘challenging’ market for near 60pc profit decline
Barratt Developments saw profits decline 57pc to £385m after the number of completed houses fell last year.
The homebuilder blamed a “challenging” backdrop in which high interest rates have depressed the housing market, while inflation pushed up costs for builders.
The London-listed company confirmed its previously reported figure of 14,004 home completions for the year ending June 30.
However, Barratt Developments hailed Labour planning reforms as a “one of the key levers” to boost housebuilding.
David Thomas, chief executive of Barratt, said:
Whilst demand continues to be sensitive to mortgage affordability, and reduced land buying activity during the past two years has had a near-term impact on the number of outlets we are operating from, we are well-positioned to meet the strong underlying demand for new homes of all tenures in the UK.
We welcome the Government’s proposed reforms of the planning system as one of the key levers to increase housebuilding, drive economic growth and tackle the chronic undersupply of high-quality, sustainable homes.
07:17 AM BST
Good morning
Thanks for joining me. Labour is poised to raise the state pension by more than £400 a year after Rachel Reeves was heavily criticised for means testing the winter fuel allowance.
The Treasury’s internal working calculations reportedly show that the full state pension could increase as a result of April’s triple lock. Changes would take the full state pension to around £12,000 in 2025/26, after the £900 increase in 2023.
It comes after the Chancellor was accused of using pensions as a cash cow when she announced plans to limit the fuel allowance to those receiving pension credits.
Pre-2016 retirees who may be eligible for the secondary state pension under the old system are also expected to see a £300 per year increase to £9,000 in 2025/26, according to internal working calculations seen by the BBC.
The final decision on pension increases will be made by Liz Kendall, Pensions Minister, ahead of October’s budget.
Rachel Reeves on Monday reaffirmed the government’s backing of the triple lock until the end of this Parliament.
A Treasury spokesman said: “We’re committed to protecting the Triple Lock which will boost over 12 million pensioners’ incomes by hundreds of pounds next year.
5 things to start your day
1) Volkswagen electric car brand would be ‘wiped out’ by EU tariffs | Taxes to protect European motor industry have ‘opposite effect’, warns Cupra boss
2) Reeves loses pick for investment minister before he even starts | Benjamin Wegg-Prosser leaves Government scrambling to find replacement before key summit
3) Ed Miliband adds £150 to household bills with wind turbine building spree | Profits from record-breaking green expansion will go to foreign energy firms
4) The war on pensioners is becoming more vindictive by the day | Labour’s assault on society’s most vulnerable is as illogical as it is unpleasant
5) Ambrose Evans-Pritchard: Let’s be honest: shale fracking has saved the West | Without America’s wildcat drillers, Europe would be facing an industrial death spiral
What happened overnight
On Wall Street, all three major indexes suffered their biggest daily declines since Aug 5.
The Dow Jones Industrial Average fell 1.5pc, to 40,936.93; the S&P 500 lost 2.1pc, to 5,528.93; and the Nasdaq Composite lost 3.3pc, to 17,136.30.
MSCI’s gauge of stocks across the globe fell 1.63pc, also showing its biggest one-day drop since Aug 5.
In the bond market, the yield on benchmark US 10-year notes fell to 3.85pc, from 3.91pc late on Friday.
Stocks in Asia slumped the most since the Aug. 5 rout, tracking a selloff in US peers driven by a plunge in Nvidia.
Shares of Asian chipmakers tumbled amid renewed concerns over the artificial intelligence frenzy, bringing a regional equity benchmark down more than 2pc. Chip giants Taiwan Semiconductor Manufacturing Co. and SK Hynix Inc. fell at least 4pc each. US futures also slid in Asian trading after the S&P 500 shed more than 2pc.
The broad risk-off mood came as a closely watched US manufacturing gauge again missed forecasts, shifting investor focus toward the odds of an economic slowdown in the world’s largest economy. That added to an already-weak sentiment in Asia, where a run of disappointing Chinese data had been hurting risk assets.
Treasury yields steadied after a tumble Tuesday. A dollar gauge snapped a five-day winning streak, its longest since April. The yen edged higher. Oil pushed lower after a decline of almost 5pc on Tuesday amid weak demand and oversupply concerns.
Elsewhere in Asia, the Australian dollar held on to losses as data showed Australia’s economic weakness persisted in the three months through June.
Chinese stocks fell after a private survey showed services activity expanded less than expected, the latest sign of the economy’s fragility.