U.S. Markets open in 8 hrs 20 mins

Oil jumps as FTSE 100 struggles

·50 min read
Brent crude oil prices - Danny Lawson/PA Wire
Brent crude oil prices - Danny Lawson/PA Wire

Oil prices climbed above $75 a barrel today for the first time since early August as supply problems in the US continue.

Brent rose as much as 2.8pc to $75.67 a barrel and US oil was also higher.

Prices had already been climbing this month before Hurricane Ida shut down a chunk of production on the US Gulf Coast.

The International Energy Agency has warned that the world will have to wait until October for more supply to be available as OPEC and its allies ramp up production.

05:17 PM

Wrapping up

That's all from us this evening – here are some of our top stories:

Thanks for following along!

05:06 PM

DAZN 'possibly' interested in BT Sport

Premier League BT Sport DAZN - OLI SCARFF/AFP via Getty Images
Premier League BT Sport DAZN - OLI SCARFF/AFP via Getty Images

DAZN, the sports streaming service owned by billionaire Len Blavatnik, is "possibly" interested in BT Sport, its chairman has said.

Asked if buying BT Sport could put DAZN in the running for Premier League (EPL) rights, Kevin Mayer – a former Disney executive – said "possibly".

"We would love to have EPL ultimately, how we get there, there are many paths to get there," he said at the Royal Television Society Convention in Cambridge today. "I'm philosophical about it, whatever makes most sense. BT Sport is a great business."

Asked if the talk about a deal were still live, five months after BT said it was considering selling a stake in the unit, he said: "It's really quiet."

04:48 PM

Key power cable to be knocked out until March

A key cable that brings power from France will stay partly offline until March after a major fire at an electricity converter today.

The fire at the Kent site broke out this morning, deepening an energy crisis that threatens the UK's power supply heading into winter.

The cable will stay at least partly offline until March, knocking out 1,000 megawatts, or the equivalent of a nuclear power station from UK supply. The grid said 1,000 megawatts of capacity could come back in late September.

It comes as Britain struggles with shortages that have pushed gas and power prices to new record highs every day.

04:27 PM

BBC chair Richard Sharp backs Channel 4 sale

BBC Richard Sharp
BBC Richard Sharp

BBC chairman Richard Sharp has backed privatising Channel 4, hinting that the broadcaster could be better served in the hands of a "bigger player", reports Ben Woods.

The comments from the former Goldman Sachs banker came as he downplayed the importance of Channel 4's potential privatisation as a "local issue" in comparison to threats posed to the British broadcasting by the rise of fake news on US tech platforms.

His comments came as he confirmed the appointment of Jess Brammar as the BBC's executive news editor despite concerns raised by Sir Robbie Gibb, a non-executive director on the broadcaster's board.

Asked about the Government's bid to privatise Channel 4 at the Royal Television Society convention in Cambridge, Mr Sharp said it was a "local issue".

"Channel 4 will fit into the strategy of one of the big players," he added. "That doesn't mean it cannot make a lot of money as an advertising platform, but I certainly can understand why it may need to fit in with the strategies of some of the other players."

The future of Channel 4 has dominated the events at the RTS conference, but the chief executives of Sky and ITV refused to be drawn on whether a sale would safeguard its future.

04:23 PM

FTSE 100 closes lower

The FTSE has closed lower after figures showed inflation accelerated to a nine-year high, raising concerns the Bank of England could move to taper stimulus measures sooner than expected.

The blue-chip index slipped 0.1pc, while the domestically-focused FTSE 250 dropped 1.1pc in its worst session in nearly two months.

Losses in the FTSE 100 were limited, however, by gains for BP and Royal Dutch Shell, as well as life insurers.

Just Eat Takeaway dropped 4.5pc to the bottom of the index on reports that Amazon will offer free delivery through Deliveroo to Prime subscribers.

Darktrace led the FTSE 250, rising 14.5pc after hiking its revenue forecasts for the full year.

It came after new data showed consumer prices rose 3.2pc last month in their fastest increase since 2012.

Craig Erlam, senior market analyst at Oanda, said: "We're probably going to see a lot more inflation jitters now for the next few months especially if central bankers are going to persevere, or really talk persevering with removing stimulus, because that's just going to add fuel to the inflation fire.

"If the economic recovery is slowing and COVID cases reviving, maybe more restrictions going into the winter, and yet central banks are raising interest rates that would suggest that the previous statements on the transitory nature of inflation are not necessarily the belief."

04:06 PM

ITV: Ad market outlook 'still uncertain'

ITV advertising Love Island - ITV
ITV advertising Love Island - ITV

The chief executive of ITV has warned that the UK ad market remains uncertain despite a bounceback in spending over recent months.

The public service broadcaster was expecting a strong recovery in ad revenue this summer thanks to the return of Love Island and the Euros football tournament.

But boss Carolyn McCall today said ITV did not know how winter would pan out or what would happen next year.

"I think there still remains uncertainty," she told an audience of TV executives at the Royal Television Society Convention in Cambridge.

"I'm fine with uncertainty because I think we have a robust business and we actually have a more resilient business now than we did when we went into lockdown and so I think we can absorb the uncertainty, we just have to keep moving ahead."

ITV said in July it expected ad revenue that month to be up 68pc, August up 17pc and September to be positive.

03:44 PM

UN: World economy to grow at fastest pace in almost 50 years

The global economy is expected to undergo its fastest recovery in almost half a century this year, the United Nations has said.

Following a 3.5pc contraction last year, world GDP is forecast to surge 5.3pc in 2021 due to "radical" policy intervention and successful vaccine rollouts in advanced economies.

The UN said this expansion may fall back to 3.6pc next year, taking the total cumulative income loss since 2020 to $13 trillion.

But in a report published today, the UN warned that deepening inequalities between advanced and developing countries threatened to undermine future growth.

Rebeca Grynspan, secretary general of the United Nations Conference on Trade and Development, said: “These widening gaps, both domestic and international, are a reminder that underlying conditions, if left in place, will make resilience and growth luxuries enjoyed by fewer and fewer privileged people.

“Without bolder policies that reflect reinvigorated multilateralism, the post-pandemic recovery will lack equity and fail to meet the challenges of our time.”

03:32 PM

Tata to convert Dutch steelworks to hydrogen

Tata Steel IJmuiden - Pierre Crom/Getty Images
Tata Steel IJmuiden - Pierre Crom/Getty Images

Tata Steel is set to convert its Dutch steelworks to run on hydrogen amid mounting political pressure over emissions at the site.

The London-based steel giant will use hydrogen to make iron at the plant in IJmuiden. This will later be turned into steel in electric furnaces that are yet to be built.

It comes as European rivals such as ArcelorMittal and SSAB outline plans to cut carbon from the industry, which is responsible for 7pc of global emissions.

Hans van den Berg, chairman of Tata Steel Netherlands, said: “In the next eight years, IJmuiden will change into a manufacturing site with fewer chimneys.

“We will work closely together with local and national authorities and our direct neighbors to become a green steel manufacturer.”

03:25 PM

Omega suffers shareholder rebellion after ministers fail to buy Covid tests

British Covid test maker Omega Diagnostics has been hit by a shareholder revolt amid mounting frustrations over the lack of orders through a £374m government contract, reports Hannah Boland.

Almost 45pc of Omega's shareholders voted against the reappointment of William Rhodes to its board as a non-executive director.

Up until last February, Mr Rhodes had acted as interim chairman, a post he had held since 2018.

At the vote on Wednesday, around 42pc of shareholders also withheld their votes on electing Mr Rhodes's replacement as chairman, Simon Douglas, to the board. All resolutions ultimately passed.

However, it will be seen as a show of growing restlessness among investors, coming as Omega continues to wait for orders to make Covid-19 tests in the UK.

Back in February, the Government announced it was striking a deal worth up to £374m with Omega, for the Scottish company to make Covid-19 tests once ministers had decided which ones they wanted.

Under the deal, expected to create around 200 jobs in Scotland, Omega would be able to make up to 200 million rapid lateral flow Covid tests. The move was part of a big push from the Government to start having more tests produced in the UK, rather than having to import them from China.

Omega had expected to start getting orders under the contract and to start producing them by April. However, five months later, the company is still waiting for the Government to decide which Covid-19 test it wants to be manufactured.

Omega recently said its position in the lateral flow testing market was "very much dependent on the UK Government's decisions as to test selection and timing".

In an update on Wednesday, Omega said it "remains confident in delivering significant value from opportunities within the COVID-19 testing space".

Shares were down 9.3pc in afternoon trading at 50.81p. Despite this, the company's share price still remains more than 500pc higher than it did before the pandemic hit.

03:19 PM

British economy grows faster than all G20 rivals, says OECD

The UK’s economy expanded faster than any other developed country in the second quarter as looser restrictions boosted output, reports Louis Ashworth.

He writes:

Britain’s GDP growth of 4.8pc was the quickest among the G20 group of the world’s richest countries, according to the OECD.

The rise almost doubled the pace of Italy's 2.7pc expansion, which took second place.

However, Britain remains a laggard when the pandemic is considered as a whole. UK output was 4.4pc lower at the end of June when comparing GDP in the second quarter with the final quarter of 2019, according to the Paris-based organisation.

Read the full story here.

03:04 PM

John Lewis Partnership launches Christmas hiring spree

A man wearing a protective face mask walks past the front entrance of John Lewis department store on Oxford Street in central London  - DANIEL LEAL-OLIVAS /AFP
A man wearing a protective face mask walks past the front entrance of John Lewis department store on Oxford Street in central London - DANIEL LEAL-OLIVAS /AFP

The company behind John Lewis and Waitrose has revealed plans to recruit more than 7,000 temporary and 550 permanent roles, in anticipation of increased demand over Christmas.

Bosses at the John Lewis Partnership said today this would be 2,000 more than last year and the hires will be spread across its supermarkets, department stores and fulfilment centres.

The company added that both new staff and temporary workers will be offered free food and drink to "help ensure we can attract the help we need".

02:50 PM

IoD: UK must leverage business experience for trade deals

The government must leverage the expertise of UK businesses when negotiating free trade agreements, the Institute of Directors has said.

It came in response to a new consultation on the implementation of the trade deal agreed with the EU in December 2020.

Emma Rowland, Policy Advisor at the Institute of Directors, said:

The post-Brexit trading landscape is continuing to shift globally for the UK. With sights set on the Trans-Pacific and South-East Asia for the future of free trade and enterprise, businesses can now take advantage of new and prosperous opportunities.

To realise their full potential, civil society and business engagement mechanisms should be embedded into the decision-making framework of future trade agreements. The stakeholder advisory frameworks incorporated into the TCA provide a blueprint for the way in which stakeholder voices can be taken into account in future FTAs.

The government should seek to capitalise on these new structures to take advantage of their ability to capture the needs of UK businesses. Strong mechanisms of communication between government and civil society are important for the effective implementation of these agreements.

02:42 PM

FatFace boss quits for Asda's George

The chief executive of FatFace is leaving the high street brand to join supermarket Asda as the boss of its clothing brand George.

Liz Evans is leaving FatFace after two years with the company and will be replaced by the company's current finance chief Will Crumbie. There will be a handover period running until the end of the year.

Evans, who has also served as the boss of Oasis, Warehouse and Coast, said: "George is a truly iconic British brand and I am delighted to have the opportunity to lead it and work with some brilliantly talented people."

Crumbie, who has been with FatFace for 8-years, said: "Whilst the external landscape remains challenging, I am excited about the opportunities for FatFace".

02:32 PM

Pendragon roars back to profit

Car dealer group Pendragon roared back into profit as demand for vehicles rebounded after taking a hammering last year because of the pandemic, reports Alan Tovey.

The company reported revenue for the six months to the end of June of £1.8bn, up 49pc, delivering a £30.8m pre-tax profit, reversing a £52m loss last time round.

Bill Berman, chief executive, said the performance was helped by positive market tailwinds, with the shortage of supplies of vehicles pushing up prices, as well as Pendragon’s new strategy with a greater focus on online sales.

Last summer the company announced 1,800 staff as it stripped out costs.

02:22 PM

Expert reaction: Oil prices rise once again

Craig Erlam, senior market analyst at OANDA, says:

With a couple more months to go of Hurricane season, prices may remain well supported. The flipside to that may be a slowdown in economic activity, with the Chinese data overnight highlighting the significant costs of outbreaks in the country. OPEC+ is planning to stay the course for now, after revising up its expectations for demand growth next year.

With WTI now firmly back above $70 and Brent closing in on its summer highs, we could see some profit-taking soon, although there aren't yet many signs of this happening. The momentum indicators at worst are flattening off but we're now seeing them slow just yet. Perhaps activity in the Gulf will see oil prices hit new summer highs but momentum will be key to the rally being sustained.

01:52 PM

US factory production growth slows amid shortages

US factory production - Nathan Denette/The Canadian Press via AP
US factory production - Nathan Denette/The Canadian Press via AP

Production at US factories rose less than expected in August as manufacturers continue to battle shortages of materials and labour.

Federal Reserve data showed an 0.2pc increase last month, which followed an upwardly revised 1.6pc rise in July. Total industrial production, which also includes mining and utility output, rose 0.4pc in August.

The figures were below the 0.4pc increase in factory production and 0.5pc gain in total industrial output forecast in a Bloomberg survey of economists.

The lacklustre growth reflects ongoing supply chain troubles, as well as the impact of Hurricane Ida, which the Fed estimated took 0.2pc off the manufacturing figure.

01:36 PM

US stocks inch higher

US stocks inched marginally higher at the opening bell as uncertainty over economic recovery capped optimism about slowing inflation.

The benchmark S&P 500 was 0.1pc higher at 4,447 points, while the Dow Jones rose 3.4pc to 34,580 points. The tech-heavy Nasdaq gained 0.2pc.

01:22 PM

We Buy Any Car, Sports Direct and Saga fined for sending 354m spam texts and emails

We Buy Any Car, Sports Direct and Saga have been fined almost £500,000 for sending millions of "nuisance" marketing texts and emails without permission, reports Lucy Burton.

She writes:

The Information Commissioner's Office (ICO) said the three companies together sent more than 354m spam messages to people who had not given permission for such communication.

Andy Curry, the ICO's head of investigations, said: "Getting a ping on your phone or constant unwanted messages on your laptop from a company you don’t want to hear from is frustrating and intrusive.

Read Lucy's full story here.

01:13 PM

Oil rallies as market tightens

Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma - Dronebase/REUTERS
Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma - Dronebase/REUTERS

Oil is rallying after an industry report from the US showed another decline in inventories of crude and gasoline.

Global benchmark Brent rose above $74, rising 1.7pc on the day and 9.8pc on the month. West Texas Intermediate also advanced for a fourth day.

The industry-funded American Petroleum Institute reported yesterday that nationwide crude stockpiles fell 5.44 million barrels last week, according to Bloomberg.

Official government data will be released later today.

Brent is currently trading at $73.97.

01:03 PM

FTSE 250 accelerates slide

The domestically focused FTSE 250 has accelerated its slide today, following the jump in UK inflation.

The mid-cap index has tumbled to a one month low and is currently down 0.8pc. Wagamama owner The Restaurant Group and reviews website Trustpilot are the biggest drags.

Both stocks fell 7pc, after releasing results today that disappointed investors.

Trustpilot's drop came after the company said losses mushroomed to $17m (£12.3m), compared to $6m (£4.3m) in the first six months of last year.

The Restaurant Group said its losses narrowed from £234.7m last year to £58.8m this year, even though sales slipped 4.5pc to £216.8m.

12:54 PM

Theranos ‘burnt through $2m per week’, says finance witness

Elizabeth Holmes (L), founder and former CEO of blood testing and life sciences company Theranos, leaves the courthouse with her husband Billy Evans   - NICK OTTO /AFP
Elizabeth Holmes (L), founder and former CEO of blood testing and life sciences company Theranos, leaves the courthouse with her husband Billy Evans - NICK OTTO /AFP

Prosecutors have claimed that collapsed Silicon Valley blood testing start-up Theranos was burning through $2m per week while presenting investors with a rosy view of its financial health, reports Matthew Field.

The former chief executive of Theranos, Elizabeth Holmes, is on trial for fraud in California over allegedly misleading investors and fooling patients over the effectiveness of her company’s blood testing machines.

At one stage, Theranos was valued at $9bn, had a deal to take blood samples from customers at Walgreens with investors including media mogul Rupert Murdoch.

Late on Tuesday night, Danise Yam, a former financial controller at Theranos, told a US court the company was hemorrhaging millions of dollars while claiming to investors it was on the brink of revenues of close to $1bn.

She told the US government lawyers that she had not prepared the inflated projections that had been shown to investors, but said the company had no revenues in 2012 and 2013. Prosecutors pointed to documents that said investors were told to expect revenues of $140m in 2014 and $990m in 2015.

Later, Erika Cheung, another government witness and former Theranos lab assistant, said she had been “star struck” by Ms Holmes, Theranos’ founder who was at one stage compared to Steve Jobs, but quit her job after seven months to become a whistleblower.

She told the court Theranos’s Edison machines, which were supposed to run up to 90 types of blood tests with just a pinprick of blood, could only run twelve types with the rest performed on third party devices.

“The Edison analyser could only run one type of test for one patient at a given time,” she said.

“I was uncomfortable processing patient samples,” Ms Cheung told the court, according to the New York Times. “I did not think the technology we were using was adequate enough to be engaging in that behaviour.”

In 2015, Ms Cheung sent a letter to US regulators outlining her concerns about Theranos’s lab, leading to a surprise inspection and the closure of its facility.

Ms Holmes is facing twelve counts of wire fraud and conspiracy to commit wire fraud. She has pleaded not guilty. The trial continues.

12:43 PM

British gigafactory builder becomes $1bn 'unicorn'

Britishvolt, the company planning to build a battery “gigafactory” in Northumberland, is now worth $1bn (£720m) after winning new investment, reports Alan Tovey.

He writes:

The company is understood to have raised $70m of new investment from businesses including mining giant Glencore, European green investment fund Carbon Transition and British engineer NG Bailey.

The fundraising, which was run by Barclays, means that Britishvolt has now achieved a valuation of $1bn, the level a start-up must reach to win the “unicorn” label.

Read the full story here.

12:07 PM

Wise alumni raise $10m to build UK-based Robinhood

Two alumni of British fintech firm Wise have raised $10m (£7.2m) to launch a European version of the trading app Robinhood in the UK.

In October 2020, Martin Sokk and Mikhel Aame launched Lightyear, which offers stock trading alongside multi-currency banking accounts.

Today the company said it had closed its first seed funding round at $10m and received investment from early Monzo backer Eileen Burbidge, Wise CTO Harsh Sinha and venture capitalists Mosaic Ventures.

Martin Sokk, co-founder and chief executive at Lightyear, said: “Our goal is to give all of Europe access to the world’s markets without hidden fees and to make investing cognitively easy. We’re excited to have such a strong group of investors that share this vision with us.”

Robinhood’s cancelled its debut in the UK, leaving a vacuum which companies such as Lightyear, eToro and Freetrade are rushing to fill.

This content is not available due to your privacy preferences.
Update your settings here to see it.

11:55 AM

Microsoft launches $60bn share buyback

Microsoft is planning to buy back as much as $60bn in shares in what could be its largest ever stock repurchase programme, reports James Warrington.

The tech giant’s market capitalisation has surged to $2.2 trillion following a recent resurgence, making it the world’s second most valuable listed company behind Apple.

Its last share buyback scheme, launched in September 2019, was worth $40bn.

It comes days after two senior US Democrats proposed a 2pc tax on corporate share buybacks to help fund a $3.5bn social bill.

11:39 AM

FTSE rises 0.1pc

Time for a lunchtime check in the FTSE 100.

The blue-chip index has pushed 0.1pc higher after initially falling in reaction to the surge in UK inflation.

Among the top risers are tobacco group Imperial Brands (up 2.3pc), Evraz (up 2.2pc) and BP (up 2.2pc).

Takeaway app Just Eat is still trailing, down more than 4pc.

11:23 AM

EU plot new ‘chips act’ amid semiconductor shortage

The European Commission is plotting new laws to ensure the bloc’s chip-making market is self-sufficient after a global shortage highlighted the dominance of US and Asian suppliers, writes James Warrington.

“Digital is the make-or-break issue,” Commission president Ursula von der Leyen said in a policy speech at the European Parliament in Strasbourg today.

“We will present a new European Chips Act. The aim is to jointly create a state-of-the-art European chip ecosystem, including production. That ensures our security of supply and will develop new markets for ground-breaking European tech.”

The new laws are set to encompass research, production capacity and international cooperation, while the bloc has also raised the prospect of a dedicated European Semiconductor Fund.

The US last year announced its own CHIPS for America Act aimed at boosting its ability to compete with China.

11:22 AM

US futures shrug off correction warnings

US futures climbed higher this morning in New York, signalling a muted rebound over concern earlier this week that stock markets are heading for a correction.

A September market sentiment survey published by Deutsche Bank this week predicted an equity market correction of between five and 10pc by the end of the year.

But indexes shrugged off that warning today, as Dow futures lifted 0.04pc, S&P 500 futures were up 0.1pc and Nasdaq futures rose by almost 0.2pc.

Casino companies fell in pre-market trading after Chinese officials said they would change regulations to tighten restrictions on operators.

11:12 AM

£10m backing for first UK fighter jet since the 1970s

British aerospace startup Aeralis has secured £10.5m in backing from a Middle Eastern wealth fund to develop the first fully British military jet since the 1970s.

Aeralis announced the investment at the DSEI expo in London Wednesday but did not identify the sovereign fund.

The company is taking a modular approach that will allow the jet to be tailored depending on its mission, with different wings, engines and mission systems built around a common frame and avionics.

Rolls-Royce said it will supply the jet's engines.

Aeralis has a three-year contract with Britain’s Royal Air Force to develop its aircraft as the potential successor to the BAE Systems Hawk trainer, including replacement of the Red Arrows display fleet.

It is also discussing opportunities with a number of other air forces. Gulf nations are among the biggest users of the Hawk.

This content is not available due to your privacy preferences.
Update your settings here to see it.

10:46 AM

ECB delays office return to next year

The European Central Bank is seen in Frankfurt, Germany - Michael Probst /AP
The European Central Bank is seen in Frankfurt, Germany - Michael Probst /AP

The President of the European Central Bank said employees will be allowed to work remotely until early next year in another sign that the delta variant is delaying office return dates around the world.

The “default solution is remote working, still today, and probably until the end of January, and then we will see,” ECB President Christine Lagarde said in an interview on Bloomberg TV.

A spokesperson for the Frankfurt-based ECB told Bloomberg that the decision stick to remote work was made “in light of the evolution of the current pandemic situation.”

Everyone who enters the central bank’s premises must be vaccinated, recovered or tested.

The ECB joins companies including Apple, Amazon, Facebook and Starbucks that have already postponed their return to the office to early next year.

The International Monetary Fund also delayed its office return after coronavirus began to rise again.

“In light of the unpredictable length and severity of this new Covid-19 wave, the current phase of the return has been extended until early January 2022, when the situation will be re-assessed,” a spokesperson for the fund said at the end of August.

Vaccinated staff can choose to return to IMF headquarters if they agree to regular Covid-19 testing.

10:34 AM

Pimlico Plumbers founder closes in on £100m sale

Charlie Mullins, owner of Pimlico Plumbers  - Andrew Crowley /Telegraph
Charlie Mullins, owner of Pimlico Plumbers - Andrew Crowley /Telegraph

Charlie Mullins, the outspoken founder of Pimlico Plumbers, is said to be closing in on a deal to sell his company for as much as £100m, reports James Warrington.

Sky News reports that US-based home services group Neighborly, which is owned by private equity firm KKR, is among a number of suitors that have expressed an interest in buying the 42-year-old plumbers.

Earlier this year it emerged that Mullins had hired advisers to explore a sale of a stake in the business that could value it at as much as £100m. Mullins founded Pimlico Plumbers in 1979 with a single second-hand van.

10:17 AM

Redrow warns of slowing housing market

The company logo of construction company Redrow is pictured on a flag at a new housing development near Manchester northern England - Phil Noble /Reuters 
The company logo of construction company Redrow is pictured on a flag at a new housing development near Manchester northern England - Phil Noble /Reuters

Redrow has seen its order book rise to a record £1.43bn, but warned the housing market will cool to normal levels this year, reports James Warrington.

The housebuilder has benefited from sharp sales growth during the pandemic thanks to the government’s stamp duty holiday.

But chairman John Tutte said the market had moderated in recent months and sales were expected to return to “historically average rates” this financial year.

Redrow completed 5,620 house sales in the year to 27 June, up 39pc on the previous year.

Revenue grew 45pc to £1.9bn, while pre-tax profit more than doubled to £314m.

The firm said it will pay a final dividend of 18.5p. Shares ticked up 0.4pc in morning trading

10:12 AM

Deliveroo-Amazon partnership

A Deliveroo rider makes a food delivery - Jack Taylor /Getty Image 
A Deliveroo rider makes a food delivery - Jack Taylor /Getty Image

Amazon has waded into the takeaway apps war by giving members of its Prime subscription service free delivery through Deliveroo, reports James Titcomb.

He writes:

Prime users will receive access to the takeaway app’s Deliveroo Plus scheme, which grants subscribers free delivery on orders over £25, in the UK and Ireland.

It is the first tie-up between the two companies since Amazon paid $575m (£415m) for a 16pc stake in Deliveroo last year.

The deal provoked an investigation by competition regulators, who ultimately approved it after determining it would not limit competition and that Deliveroo faced financial difficulties without the investment.

Amazon and Deliveroo declined to reveal the commercial details of the deal or say if the online retail giant is paying for the benefit.

Read the full story here.

10:08 AM

Money round-up

Here's the daily round-up from The Telegraph's Money team:

10:04 AM

Fire at key power station knocks out France link until October

The fire at a key electricity converter station in Kent is expected to shut down a major cable that brings power from France until at least October 13, according to the UK’s grid manager.

“This is a major event,” Phil Hewitt, executive director at Enappsys, told Bloomberg.

Read more about this story here.

This content is not available due to your privacy preferences.
Update your settings here to see it.

09:48 AM

FCA plots £17bn boost to consumer investment

The City watchdog has set out plans to encourage consumers to invest their money in a move that could inject £17bn into the investment market, reports James Warrington.

The Financial Conduct Authority (FCA) said there are around 8.6m people in the UK who hold more than £10,000 of investable assets in cash.

By 2025 it aims to reduce this figure by 20pc. If 1.7m people invested £10,000 in the stock market, this would equate to a £17bn influx of fresh capital.

At the same time, the watchdog said it wants to halve the number of consumers who are investing in high-risk products and reduce the amount of money lost to investment scams.

Sarah Pritchard, executive director of markets at the FCA, said: “We want to give consumers greater confidence to invest and to help them do so safely, understanding the level of risk. The package of measures we have announced today are intended to support that – we want people to have greater confidence to invest.

“We also want to be able to adapt more rapidly to the changing market and be assertive where we see poor conduct and consumer harm.”

09:35 AM

Tullow Oil swings to a profit

Tullow Oil swung to a profit in the first half of the year thanks to a large reduction in exploration costs and impairment charges, writes James Warrington.

The FTSE 250 company, which is focused in Africa and South America, posted pre-tax profit of $213m, up from a $1.3bn loss last year.

Revenue dipped by $4m over the period to $727m as sales volumes fell to 65,800 barrels of oil equivalent per day (boepd), though this was offset by a 17.4pc increase in the realised oil price to $60.9 per barrel.

Tullow said it expects full-year production to be at the upper end of its previous guidance of between 58,000 and 61,000 boepd.

Shares jumped more than 6pc following the update

09:26 AM

Zara sales and profit rise above 2019 records

A woman talks on a phone as she stands near a Zara store in central Kyiv - GLEB GARANICH /REUTERS 
A woman talks on a phone as she stands near a Zara store in central Kyiv - GLEB GARANICH /REUTERS

The world's biggest clothing retailer and owner of fashion chain Zara revealed record trading as sales and profits surged above pre-pandemic levels

Inditex reported sales of €6.99bn (£6bn) in the three months to July 31, up 7pc on the previous high from the same quarter two years ago.

Net profit also rose above 2019 records, rising to €850m (£726m) partly due to soaring online sales.

The group also continued to open new stores despite the pandemic, including in Edinburgh and Cardiff. It added 92 outlets in 27 markets, boosting its number of shops worldwide to 6,654.

Harry Barnick, a senior analyst at Third Bridge, told the PA news agency that Inditex is becoming an "early winner in the post-Covid retail world".

"Inditex group has an advanced and competitive online channel compared to peers such as H&M," he said.

09:16 AM

Inflation jump is likely temporary, says Javid

Britain's Health Secretary Sajid Javid arrives to attend the weekly cabinet meeting at 10 Downing Street yesterday - JUSTIN TALLIS /AFP
Britain's Health Secretary Sajid Javid arrives to attend the weekly cabinet meeting at 10 Downing Street yesterday - JUSTIN TALLIS /AFP

Health minister and former finance minister, Sajid Javid, said this morning that he thinks August's 3.2pc jump in inflation will prove temporary.

"My view is I think it is probably a temporary increase," he told BBC Radio. "We are globally seeing an increase in inflation and that is something that, for any government, they're going to have to take account into future spending plans."

Although Javid added he thought the government's budget plans for the health service were sufficient to cover any rise in inflation, he added: "Keeping an eye on inflation makes a lot of sense."

09:05 AM

House price growth slows

For Sale and Sold signs outside houses in north London - Yui Mok /PA
For Sale and Sold signs outside houses in north London - Yui Mok /PA

House price growth slowed from 13.1pc in June to 8pc in July as the fallout of the tapering of the stamp duty holiday hit the market, writes my colleague Isabelle Fraser.

That meant that house prices fell £9,000 on average during the month, from in June to £256,000 in July, according to the Office for National Statistics.

There was also a huge 62.8pc fall in transactions, as buyers rushed to purchase property before the deadline at the end of June.

Joshua Elash, of lender MT Finance, said this "is a temporary dip and we expect an immediate bounce back both in terms of transactional volume and house-price growth".

London was the laggard, with just 2.2pc growth over the year, compared to Scotland at 14.6pc.

08:49 AM

Pound rises

Sterling has edged higher this morning, after data showed British inflation hit a more than nine-year high last month.

The increase in consumer prices is fuelling expectations the Bank of England could act sooner to hike rates.

Sterling lifted 0.2pc versus the dollar at $1.3831, but remained below yesterday's five-week high of $1.3913.

Versus the euro, sterling rose 0.1pc to 85.42p, off yesterday's three-week high.

08:38 AM

More on restaurant inflation

Inflation accelerated 3.2pc in August compared to a year ago with the strongest upward pressure coming from prices charged by hotels and restaurants.

The rise was heavily skewed by figures from last year when the government’s Eat Out to Help Out program led to large discounts across the sector.

08:27 AM

Fever tree shares rise as retail sales exceed expectations

Products from the drinks company Fever Tree - Neil Hall /Reuters 
Products from the drinks company Fever Tree - Neil Hall /Reuters

Fever Tree shares are up 1.4pc this morning, after the drinks maker's sales jumped by more than a third over the first half of 2021.

The company said retail sales surpassed its expectations across its regions and on-trade sales - which cover hospitality venues - have performed "well" as markets continue their recovery.

It reported revenue growth of 36pc for the six months to June, compared with the same period last year.

However, it also warned that its profit margins have been "significantly impacted" by elevated transatlantic freight charges and US storage costs - issues it expects to persist throughout the rest of the financial year and into 2022.

Tim Warrillow, chief executive, commented:

Looking ahead, the long-term opportunity for Fever-Tree continues to be enhanced by the structural trends we are seeing, including the growing interest in premium mixers and spirits, and the popularity of long mixed drinks. These trends are being supported by our retail and spirit partners, and Fever-Tree's ability to capitalise and drive this opportunity is unmatched by any other premium mixer brand.

08:15 AM

Fire shuts down key UK power station

A fire is raging at a key electricity converter station in Kent, forcing a major cable that brings power from France to Britain to be shut down.

Bloomberg has the details:

The outage couldn’t come at a worse time with supplies already short and prices at record highs. Britain is a net importer of power, with France its biggest supplier via two 2,000 megawatt cables that run across the English Channel.

Fightfighters have been battling the blaze since the middle of the night and smoke continues to billow from the site.

The fire will still take several hours to put out, according to Kent Fire and Rescue Service.

Flows on the 2,000 megawatt IFA-1 cable halted just after midnight, according to National Grid Plc data.

“With margins already tight for this winter,” the outage will “tighten those margins further, resulting in higher UK power prices,” said Adam Lewis, partner at Hartree Partners.

“This is also likely to tighten the UK gas markets as the U.K. will need to substitute imports with its own generation.”

This content is not available due to your privacy preferences.
Update your settings here to see it.

08:11 AM

Countryside is latest developer to scrap doubling ground rents

Countryside has become the latest property developer to scrap contracts that meant leaseholders had to pay to ground rents that doubled every 10 to 15 years, following a Competition and Markets Authority (CMA) investigation into the practice.

Countryside will now set ground rent at the level when the homes were first sold and confirmed it no longer sells leasehold homes with doubling ground rents.

Taylor Wimpey, Barratt Developments and Persimmon Homes have all faced the same investigation as Countryside into the alleged mis-selling of leasehold homes.

In June, the CMA secured commitments from Persimmon and investor Aviva to remove the ground rent terms and confirmed it has written to other freehold investors asking for commitments.

CMA chief executive Andrea Coscelli said: "Other developers, such as Taylor Wimpey, and freehold investors now have the opportunity to do the right thing by their leaseholders and remove these problematic clauses from their contracts.

"If they refuse, we stand ready to step in and take further action - through the courts if necessary."

Read more about this story here:

08:02 AM

Wagamama owner falls 2.3pc

Pedestrians pass a Wagamama Ltd. restaurant in Londo - Jason Alden /Bloomberg 
Pedestrians pass a Wagamama Ltd. restaurant in Londo - Jason Alden /Bloomberg

Shares of The Restaurant Group have fallen 2.3pc, after the Wagamama owner said sales dipped by 4.6pc to £216.8m for the six-months ending in July.

Chief executive Andy Hornby said trading has outperformed the wider hospitality market but warned that the company is still dealing with industry-wide challenges.

He said: "Whilst there are some well-documented sector challenges to navigate in the short term, particularly around labour availability and supply chain, we believe the group is well positioned for the long term."

The group, which also runs Frankie & Benny's, said its statutory losses had shrunk to £58.8m, compared with a £234.7m loss in the same period last year.

It also plans to roughly double its pub estate - which currently stands at 78 sites - in the long term.

07:47 AM

Darktrace shares surge

Shares in Darktrace jumped today as the cyber security company funded by British entrepreneur Mike Lynch hiked sales forecasts after a year of high-profile ransomware attacks, reports James Titcomb.

Darktrace, which uses artificial intelligence to identify threats in companies’ computer networks, said it expects revenues to grow by up to 37pc in the next financial year.

The company has benefited from rising awareness of security threats after a string of damaging cyber attacks such as a hack that took down the largest fuel pipeline in the US and the SolarWinds attack that allowed malicious code to spread through major businesses and government departments by infiltrating the company’s IT management system.

Poppy Gustafsson, Darktrace’s chief executive, said that companies were in a “new era of cyber threat”.

“The attacks are faster and they're happening at a scale that has never been seen before,” she said. “The reality is that businesses still aren't secure.”

She said in more than three quarters of cases where the company’s technology had been tested in businesses, it had found previously unidentified threats.

Darktrace was among a flurry of technology companies to float in London earlier this year, alongside Deliveroo and Trustpilot. Shares have doubled since the offering, and rose by 5.4pc today, to value the company at close to £5bn.

It said revenues in the year to the end of June had risen by 41.3pc to $281.3m (£203.5m). It suffered a loss of $149.6m , compared to $28.7m the year before, largely due to costs associated with its listing in April. The company said adjusted Ebitda, a measure of underlying profitability that removes one-off costs, more than trebled to $29.7m.

Darktrace, based in Cambridge, received early investment from Mike Lynch, the founder of the former FTSE 100 software company Autonomy. Mr Lynch has been charged with fraud in the US over the company’s 2011 sale to Hewlett Packard and the case has weighed on Darktrace’s shares, partly on the prospect that Mr Lynch, who owns a 5pc stake, could be forced to sell his shares.

Analysts at Jefferies said the company continues to be undervalued compared to similar companies listed in the US.

07:33 AM

FTSE risers and fallers

The FTSE 100 has dipped 0.1pc this morning, after data showed British inflation hit a more than nine-year high in August and reignited concerns about a sooner-than-expected policy tightening by the Bank of England.

The biggest drags on the index are currently Just Eat (down 2.4pc), Entain (down 2.3pc) and JD Sports Fashion (down 1.8pc) after its surge in share price yesterday.

BAE systems was the top riser among the blue chips, up 1pc.

The domestically focused mid-cap FTSE 250 index was also down 0.3pc, with Trustpilot making the biggest losses.

The review website fell 7pc on opening after it said its losses for the first half of the year grew from $6m to $17m.

The company said this was due to costs related to its March IPO.

07:16 AM

BoE 'likely to be one of the first major central banks to hike rates next year'

Hugh Gimber, global market strategist at J.P. Morgan Asset Management, says:

Following sharp spikes in inflation across the Atlantic in recent months, the UK economy has now come to the inflation party.

The doves among the members of the Bank of England’s Monetary Policy Committee will take some comfort in the large contribution from restaurant and hotel prices, given that much of this was driven by the heavy discounts offered under the Eat Out to Help Out Scheme last summer. That said, there are also signs that inflationary pressures are increasingly broad based across many sectors of the economy.

The key question for investors is how this impacts the timing of the first rate hike. The Bank will be reluctant to move until it is also confident that the economy has successfully negotiated the end of the furlough scheme, yet record levels of job vacancies suggest ample scope for the bulk of furloughed workers to be re-absorbed into the labour market.

With inflation running hot and wages on the rise, the Bank looks quite likely to be one of the first major central banks to hike rates next year. In this context, the historically low level of UK gilt yields appears inconsistent with the inflationary pressures building in the economy.

07:09 AM

FTSE inches lower

The FTSE 100 has crept marginally downwards on opening this morning, falling 5.9 points or 0.1pc to 7,028.1.

The FTSE 250 has also dipped 0.2pc or 37 points to 23,650.3.

06:57 AM

Inflation in graphs

This content is not available due to your privacy preferences.
Update your settings here to see it.
This content is not available due to your privacy preferences.
Update your settings here to see it.
This content is not available due to your privacy preferences.
Update your settings here to see it.

06:47 AM

Eat Out to Help Out scheme is 'key culprit'

A server takes a customer's order as diners sit at tables outside a restaurant in London - TOLGA AKMEN /AFP
A server takes a customer's order as diners sit at tables outside a restaurant in London - TOLGA AKMEN /AFP

Dean Tuner, economist at UBS Global Wealth Management, comments:

Once again, factors relating to the pandemic have driven a larger than expected move in inflation. Inflation was expected to rise this month following last month’s fall, but the jump in CPI to 3.2pc is higher than expected. The key culprit on this occasion is last August’s Eat Out to Help Out scheme where base effects led to the largest contribution to inflation from Restaurants and Hotels on record. Transportation, which includes petrol prices which are almost 20pc higher this August compared to last, again due to a base effect, also made a large contribution.

Over the coming months we expect that inflation will move higher, likely peaking in the early months of next year. Beyond that, as the base effects and impacts of the pandemic start to fade, inflation will trend downwards and may even fall below the Bank of England’s two percent target.

We don’t expect the Bank of England to react in any way to today’s figures, they will instead be focused on the medium-term outlook for prices and the labour market which, as seen in yesterday’s jobs market report, is holding up better than feared. These, we think, will keep the Bank of England in a hawkish mood, laying the ground for a rate hike in the first half of next year. In light of this, the prospects for the pound remain bright.

06:44 AM

More expert reaction: 'Inflation will fall back next year'

Paul Dales, chief UK economist at Capital Economics, says:

The leap in CPI inflation from 2.0pc in July to a nine-year high of 3.2pc in August (consensus 2.9pc, CE 3.1pc) is the first step in a rise that may take inflation to 4.5pc by November. But as inflation will fall back almost as sharply next year, we don’t think the MPC will raise interest rates until 2023.

About 0.9ppts of the rise in CPI inflation in August was due to base effects linked to the sharp fall in consumer prices in August 2020, most of which was driven by the Eat Out to Help Out restaurant discount scheme. Back then catering services prices fell by 5.8pc m/m, but this August they rose by 0.2pc m/m, which was enough to push up catering services inflation from 1.4pc to 7.9pc. The rises in inflation in some areas, such as furniture (from 2.9pc to 3.7pc) and recreation (0.7pc to 2.4pc) was due to similar but smaller base effects.

But 0.3ppts of the rise was due to a strengthening in underlying price pressures. The 5.9pc m/m rise in hotel prices in August was much stronger than the 0.6pc m/m decline you usually get at this time of year, which pushed up its inflation rate from 5.7pc to 11.6pc. And the rise in food inflation from -0.6pc to +0.3pc is probably due to the pass-through of higher shipping and commodity costs as well as some product shortages.

06:34 AM

Expert reaction: Record jump for price rises

The Bank of England in the City of London - Mike Kemp /Telegraph
The Bank of England in the City of London - Mike Kemp /Telegraph

Hussain Mehdi, macro and investment strategist at HSBC Asset Management, responds:

Inflation pressures remain predominantly driven by pandemic-related distortions, such as last year’s Eat Out to Help Out scheme and VAT cut on hospitality and tourism. This was alongside rising used car prices amid supply shortages in the new car market, and re-opening led demand strength in the service sector.

This means that for the time being the Bank of England is likely to stick to its narrative of transitory inflation as these temporary factors dissipate. But as we head into 2022, evidence of more persistent supply-demand imbalances and rising wage pressures could translate to stickier inflation and a more hawkish policy stance – with the MPC potentially pushing the button on rate hikes as early as May.

Yael Selfin, chief economist at KPMG UK, comments:

While inflation may ease slightly in September, it is expected to remain elevated and could climb higher during subsequent months. Recruitment difficulties, cost pressures for businesses, supply chain issues and structural changes post-Covid are all pointing to higher inflation until at least the end of this year.

Higher inflation will inevitably raise questions for the Bank of England on the timing of tightening monetary policy and interest rate hikes to contain inflationary risks further down the line. However, any tightening now risks scuppering the recovery before it has a chance to take hold, so a delay until the middle of next year is likely.

Inflation in August reached its highest level since the start of 2012, with prices up by 3.2pc compared to a year ago. This was broadly in line with expectations as prices last August were pushed down by the impact of the Government’s Eat Out to Help Out scheme.

Richard Carter, head of fixed interest research at Quilter Cheviot, adds:

While last month saw inflation at a somewhat subdued level compared to expectations, prices have jumped in August as supply chain issues continued to bite with CPI up 3.2pc year-on-year. Restaurants and hotels and recreation made up the bulk of the price rises as the economy clearly shows the sign of life following the end of restrictions. However, the fact that the economy has over one million job vacancies is also adding upward pressure to wages which will likely feed through the system in the months ahead as businesses struggle to hire.

The Bank of England will have noted this morning’s release ahead of their next meeting on 23rd September when it’s possible they will take a more hawkish tone. With the ECB and Federal Reserve beginning to make their moves in terms of tapering, it won’t be long until the BoE feels it has to act as the recovery continues to take shape. It will be hoping, however, that the inflation pressures being experienced around the world will ultimately prove to be transitory given the latest consumer price data out of the US yesterday saw a tempering of price rises. We will wait to see if the worst is now behind us.

06:29 AM

Bailey must explain why prices are so high

More from my colleague Tim Wallace on this huge spike in consumer prices:

Inflation jumped to 9.6pc in restaurants, cafes and dancing establishments - in a sign of the return to normality from Eat Out To Help Out a year ago.

Household furniture is up 8pc while camping kit is up by just over 10pc, coming after a period of working from home, which has encouraged home renovations, and travel restrictions, promoting UK holidays.

At 3.2pc, the CPI rate of inflation is above the Bank of England’s 2pc target, which will force its Governor, Andrew Bailey, to write a letter to the Chancellor to explain why prices are running so high.

06:19 AM

Fastest annual rise since 2017, fastest monthly rise on record

Here's a quick take from my colleague Tim Wallace:

Inflation jumped to 3.2pc in August, the fastest annual increase since 2012 as the cost of meals in pubs and restaurants rebounded compared with last year’s Eat Out To Help Out discounts.

That is up from 2pc in July, marking the sharpest increase in the rate since records began.

The recovery from Covid has sent demand surging and left supply chains struggling to keep up in some products. This is reflected in global markets where booming oil prices have pushed petrol up to 135p per litre, a rise of 19pc on the year.

Electric prices climbed 5.8pc, while gas is down 4pc on the year - though capped prices due to jump 12pc in October to reflect spiralling wholesale market costs.

Other rises are on the way. The temporary VAT cut introduced for hospitality last year expires at the end of this month, with the tax increasing in stages until it returns to normal next year.

06:12 AM

Inflation surges to 3.2pc in August

Good morning.

Inflation accelerated at its fastest monthly pace on record in August, as it shot up to 3.2pc, a huge leap from July's level of 2pc to take it far above the Bank of England's target.

The jump of 1.2 percentage points is the largest ever recorded increase in CPI's annual rate since records began in 1997.

The steep increase risks fuelling fears of rocketing prices as the UK recovery takes hold as transport costs and prices at restaurants rose dramatically. Transport costs jumped by 0.87 percentage points in August as people travelled again after repeated lockdowns, while hospitality prices pushed inflation up by 0.65 percentage points, its highest ever contribution.

But the Office for National Statistics said the spike will likely prove to be temporary, pointing to Rishi Sunak's Eat Out to Help Out scheme last summer pushed the cost of dining out artificially low.

5 things to start your day

1) Deliveroo offers free delivery to Amazon Prime members Amazon has waded into the takeaway apps war by giving members of its Prime subscription service free delivery through Deliveroo.

2) Bailey blasts Brussels over clearing power grab The EU risks severely damaging the financial system if it goes ahead with a raid on London's currency clearing operations, BoE governor warns.

3) Dowden vows to protect Channel 4 in privatisation push The Culture Secretary will pledge today to protect the broadcaster’s public service remit as he defends the Government’s bid to privatise it.

4) Apple reveals new four new phones Company seeks to maintain its run of record iPhone sales with a series of new models that boost battery life and feature advanced cameras.

5) Fast-tracking lorry driver tests 'risks more crashes' Premiums may have to go up to pay for the increased risk, insurers say.

What happened overnight

Asian shares fell on Wednesday as weak Chinese economic data reinforced worries about slowing growth globally as well as in the world's second-biggest economy amid fraught nerves over a still-dominant pandemic and tapering of central banks' stimulus.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.82pc, extending earlier losses after the release of the Chinese data, while Tokyo's Nikkei shed 0.89pc, moving off a more than 31-year closing-high the day before.

A burst of data out of China showed businesses were grappling with the impact of localised lockdowns following sporadic Covid outbreaks, supply bottlenecks and high raw materials costs.

Retail sales grew at the slowest pace since August 2020 and missed analysts' expectations, while industrial output also rose at a weaker pace from July, underscoring recent signs of slackening economic momentum in China and adding to expectations Beijing will offer more stimulus over coming months.

After the data, Chinese blue chips were down 0.73pc.

The Hong Kong benchmark shed 0.87pc dragged down by casino stocks as the gaming hub of Macau begins a consultation ahead of a closely watched rebidding of its multi-billion dollar casinos next year.

Shares of Wynn Macau at one point were down more than 30pc.

Coming up today

  • Corporate: Redrow (full-year results); Fevertree Drinks, Restaurant Group, Trustpilot Group, Tullow Oil (interims)

  • Economics: Consumer prices index (UK), retail prices index (UK); industrial production (US); retail sales (China), industrial production (China); labour cost (EU)