Pound to tip over $1.40 within a year, says Goldman Sachs
The pound will rise in value against the dollar over the next year, Goldman Sachs has predicted, in a boost for British holidaymakers.
The investment banking giant said that the pound would buy $1.40 in 12 months. Today the pound buys $1.33.
Goldman has cut its predictions for the value of the dollar against a range of world currencies, including the pound, euro and yen.
The bank told clients that the US Federal Reserve has a “demonstrated willingness to respond more aggressively to that risk relative to peers”.
However, Goldman believes the Bank of England (BoE) will be more conservative than the Fed, describing the UK central bank as “patient”. It said: “The BoE kept rates on hold and sent a slightly hawkish message [last] week, emphasising a “gradual” approach to removing policy restraint.”
The pound is already up by 1pc against the dollar since the Fed cut rates by a jumbo sized half a percentage point last week. Goldman believes that cuts which began last week will continue take their toll on the value of the world’s reserve currency.
Read the latest updates below.
06:30 PM BST
Signing off...
Thanks for joining us today on an afternoon where British markets closed up and US markets are hanging near their all-time highs.
We will be back in the morning but, in the meantime, you can catch up on our latest business stories here.
06:11 PM BST
Germany holds crisis talks with car industry
The German government today hosted crisis talks with senior figures from the country’s beleaguered car industry, with Volkswagen reportedly calling for subsidies to boost slumping electric car demand.
Germany’s flagship auto sector is battling challenges on several fronts, from high manufacturing costs to a troubled transition to electric cars and weakening demand in key market China.
Among the hardest hit has been Volkswagen, which announced earlier this month that it urgently needed to cut costs and was considering the closure of some German plants for the first time in its 87-year history.
Ahead of the talks, Volkswagen CEO Oliver Blume said it was a chance to push through rapid help for the industry.
He told news channel NTV:
We have major challenges ... Perhaps the biggest in the country at the moment.
It is important to exchange ideas, to examine which levers can be used in the short, medium and long term and then to make bold decisions.
The virtual meeting hosted by economy minister Robert Habeck included representatives from the top carmakers, the VDA auto industry association, major suppliers and trade unions.
Among the suggestions put forward was reportedly the reintroduction of subsidies for electric vehicles, which were phased out last year, leading to large falls in EV sales.
The Spiegel news outlet reported that VW was calling for the government to offer a 4,000-euro (£3,335) subsidy for the purchase of a pure electric car if the manufacturer also offered a discount of 2,000 euros.
Speaking after the meeting, Habeck declined to comment on specific subsidies, stressing that the industry needed “the ability to plan long term”.
The minister warned against quick solutions to “pump up the market again in the short term” only for sales to fall again once the measures elapsed.
05:31 PM BST
Biden proposes banning Chinese vehicles for US roads
The US Commerce Department has this afternoon proposed new rules that would effectively bar Chinese cars and trucks from the American market.
The planned regulation, first reported by Reuters, would prohibit key Chinese software and hardware in connected vehicles on American roads due to national security concerns. It would also force American and other major carmakers in the years ahead to remove key Chinese software and hardware from vehicles in the United States.
President Joe Biden’s administration has raised concerns about data collection by connected Chinese vehicles on US drivers and infrastructure and potential foreign manipulation of vehicles connected to the internet and navigation systems. In February, the White House ordered an investigation.
The Commerce Department is giving the public 30 days to comment on the proposal and hopes to finalize it by Jan 20. The rules would cover all on-road vehicles but exclude agricultural or mining vehicles not used on public roads, as well as drones and trains.
The move is a significant escalation in US restrictions on Chinese vehicles, software and components. This month, the Biden administration locked in steep tariff hikes on Chinese imports, including a 100pc duty on electric vehicles and hikes on EV batteries and key minerals.
Gina Raimondo, US commerce secretary, said:
When foreign adversaries build software to make a vehicle that means it can be used for surveillance, can be remotely controlled, which threatens the privacy and safety of Americans on the road. In an extreme situation, a foreign adversary could shut down or take control of all their vehicles operating in the United States all at the same time causing crashes, blocking roads.
05:24 PM BST
European shares end higher as markets bet on more ECB policy easing
European shares closed higher this afternoon as a soft business activity reading strengthened the case for more rate cuts by the European Central Bank this year.
The pan-European Stoxx 600 index closed 0.4pc higher, recouping some losses following its biggest one-day drop since August in the last session.
Carmakers led gains among major Stoxx sectors with a 1.9pc advance while retail also gained 1.2pc.
A survey showed euro zone business activity contracted sharply and unexpectedly this month, as the bloc’s dominant services industry flatlined while a downturn in manufacturing accelerated.
Fabio Balboni, senior economist, eurozone at HSBC, said:
Today’s release was much worse than many had anticipated, suggesting a rather gloomy underlying growth picture for the eurozone.
The downturn appeared broad-based with Germany, Europe’s largest economy, seeing its decline deepen while France - the currency union’s second biggest - returned to contraction following August’s Olympics boost.
Germany’s Dax closed 0.7pc up while France’s benchmark ended near flat, bogged down by falling bank stocks.
05:15 PM BST
US stock markets having a ‘little bit of a pause’
US stock markets only slightly up this afternoon, with S&P 500 and Nasdaq up 0.1pc and Dow Jones Industrial Average flat.
Phil Blancato, chief executive of Ladenburg Thalmann Asset Management, said:
It’s a little bit of a pause considering the exuberance of last week.
There’s nothing economic right now that’s spooking the market other than the Fed going a little further than anyone expected.
05:08 PM BST
EU complains to World Trade Organisation about China
The EU has escalated its trade row with China today, launching a challenge at the World Trade Organisation (WTO) against a Chinese anti-subsidy investigation into imports of European dairy products.
Beijing announced its probe in August after the European Union unveiled a plan to hit Chinese electric vehicles with hefty tariffs.
The European Commission said:
Today, the Commission launched a consultation request at the World Trade Organisation, challenging China’s initiation of an anti-subsidy investigation against imports of certain dairy products from the EU.
The EU’s action was prompted by an emerging pattern of China initiating trade defence measures, based on questionable allegations and insufficient evidence, within a short period of time.
The Chinese investigation covers a range of items from fresh cheese and curd to blue cheese, including some milk and cream.
The Chinese probe takes aim at subsidies provided to the EU’s 27 member states under the Common Agricultural Policy, but also national subsidy plans in Ireland, Austria, Belgium, Italy, Croatia, Finland, Romania and the Czech Republic.
Beijing said it “regrets” the EU launching the challenge, and “will handle it in accordance with relevant WTO rules”.
“China has the responsibility to safeguard the legitimate demands and legitimate rights and interests of domestic industries,” the Chinese commerce ministry said.
05:02 PM BST
Mike Ashley slashes stake in Currys
Mike Ashley has slashed his stake in Currys, cashing out after a year-long share price rally at the electronics retailer, writes Hannah Boland.
Mr Ashley’s Frasers Group has reduced its position in Currys from an 11pc stake to 2.8pc, according to filings released on Monday. Stripping out voting rights held through financial instruments, Mr Ashley no longer has any direct exposure to the retailer, the filings suggested.
The move comes after months of share price growth at Currys, which bosses had previously argued was “undervalued” as a business.
Currys shares are up around two thirds since Frasers first revealed it had taken a stake in the company in the summer of 2023. Chief executive Alex Baldock recently hailed “improving momentum” for the electronics business.
Frasers had taken the stake in Currys alongside a series of other empire-building moves. Frasers also has stakes in Asos, Hornby and AO World.
04:53 PM BST
FTSE 100 closes up
The FTSE 100 closed up 0.4pc, bouyed by increases in mining stocks.
The top riser was Endeavour Mining, up 2.5pc, followed by the miner Antofagasta, up 2.1pc.
The biggest faller was retailer B&M, down 2.6pc, followed by cardboard giant DS Smith, down 2.3pc.
Meanwhil,e the mid-cap FTSE 250 rose 0.1pc.
The top riser was Currys, up 8pc, followed by Baltic Classifieds Group, up 4.1pc.
City firm Close Brothers was the biggest faller, down 6.2pc, followed by recruiter Hays, down 3.1pc.
04:41 PM BST
Global stock markets inch higher on rate hopes
Shares on both sides of the Atlantic have nudged higher today, with investors torn between hopes of further interest rate cuts and weak eurozone economic data.
Stock markets rallied last week after the US Federal Reserve announced a bumper interest rate cut, its first since 2020, as inflation is cooling.
Patrick O’Hare, an analyst at Briefing.com, said:
Visions of further rate cuts remain a supportive factor ... [But] there is some appreciation for the possibility that a market trading with a rich valuation could experience a consolidation period.
This Friday’s release of the personal consumption expenditures index, the Fed’s preferred inflation metric, could shed light on the next rate move.
European stock markets rose Monday despite data showing eurozone business activity declined for the first time in seven months in September after summer boost from the Paris Olympics.
David Morrison, analyst at Trade Nation, said:
There are serious doubts over the health of the Eurozone economies.
This morning’s release of a dismal set of Manufacturing and Services PMIs [purchasing managers’ index data] from Germany, France and the Eurozone only added to these concerns.
S&P Global’s purchasing managers’ index (PMI) - a key gauge of the overall health of the economy - dropped to 48.9 in September, down from 51 in August. Any reading below 50 indicated contraction.
Mr O’Hare said the PMI figures did not drag stock prices lower because “they have increased the possibility of a rate cut by the ECB [European Central Bank] at its October meeting”.
The pan-European Stoxx 600 index is up 0.4pc, while America’s S&P 500 index is up 0.3pc.
04:30 PM BST
US stocks rise in aftermath of interest rate cut
Wall Street is up in trading this afternoon, days after an interest rate cut that should be helpful to corporate America.
The broad S&P 500 index is up 0.3pc, the Dow Jones Industrial Average of 30 leading companies is up 0.1pc, and the tech-heavy Nasdaq is up 0.2pc.
04:23 PM BST
Germany’s Scholz warns against ‘unfriendly’ bank takeovers
Olaf Scholz, the German chancellor, has warned against “hostile” and “unfriendly” takeovers, after Italy’s UniCredit revealed it had significantly raised its stake in German lender Commerzbank.
“Unfriendly attacks, hostile takeovers are not a good thing for banks,” Mr Scholz told German media while in New York, adding that the government had made its position on the matter “very clear”.
04:17 PM BST
North faces ‘Armageddon’ without HS2 links, says Andy Burnham
The mayor of Greater Manchester has warned over slower trains and congestion without an HS2 extension. Christopher Jasper reports:
Sir Keir Starmer will doom the North to “Armageddon” unless he completes an extension of HS2 from Birmingham to Manchester, Andy Burnham has said.
Mr Burnham, the Mayor of Greater Manchester, said that a decision by the previous government to terminate the new high-speed rail link in Birmingham would force many northern trains to run even more slowly than they do at present.
He urged the Prime Minister to reverse the Tories’ decision to scrap the plan entirely and instead commit to a cheaper version of the original proposal.
Speaking on the fringes of the Labour Party Conference, Mr Burnham said: “The danger is doing nothing. Because if HS2 trains start rolling north through Birmingham and on to the West Coast Main Line we are looking at Armageddon.
04:06 PM BST
Euro zone has got interest rates wrong, claims analyst
Poor economic figures for France and Germany suggest that the European Central Bank’s caution over interest rate cuts is mistaken, an analyst has claimed.
Kathleen Brooks, research director at trading platform XTB, said:
Central banks seem to have got things round the wrong way. The Eurozone economy is faltering, as today’s PMI [purchasing managers’ index] data for September highlights, yet it’s the Fed that’s cutting interest rates by [half a percentage point], while the ECB [European Central Bank] remains on a more cautious rate-cutting path. However, the September PMI data could add some urgency to ECB rate cuts for the rest of this year.
PMI data for France and Germany was weak across the board, with surprise declines in the service sector, on top of more weakness in manufacturing sentiment ...
On Friday there was a 25pc chance of an October rate cut from the ECB, this has risen to 40[c today, on the back of the weak PMI data. We continue to think that the market is underpricing the risk of more rate cuts from the ECB this year and next.
03:59 PM BST
Gold climbs to new record high
Gold has pushed higher this afternoon, rising as much as 0.4pc to a record high $2634.90 an ounce. Axel Rudolph, senior technical analyst at online trading platform IG, said:
The gold price is on track for its third straight day of gains and continues its steep ascent towards the $2,650 per troy ounce mark.
Due to heightened tensions between Israel and Lebanon the oil price also remains bid. The focus for Tuesday will be on [Australia’s] interest rate decision, Germany’s Ifo business climate and US consumer confidence.
03:50 PM BST
Pound to tip over $1.40 within a year, says Goldman Sachs
The pound will increase in value against the dollar over the next year, Goldman Sachs has predicted, in a boost for holidaymakers going to Florida and British businesses buying US software.
It said that the pound would buy $1.40 in 12 months. Today the pound buys $1.33.
Goldman has cut its predictions for the value of the dollar against a range of world currencies, including the pound, euro and yen.
The investment banking giant said that the US Federal Reserve has a “demonstrated willingness to respond more aggressively to that risk relative to peers”.
The pound is already up by 1pc against he dollar since the Fed cut rates by a jumbo sized half a percentage point last week. Goldman believes that cuts which began last week will continue take their toll on the value of the world’s reserve currency.
However, Goldman believes the Bank of England (BoE) will be more conservative than the Fed, describing the UK central bank as “patient”. In a briefing paper, it said:
The BoE kept rates on hold and sent a slightly hawkish message [last] week, emphasising a “gradual” approach to removing policy restraint.
03:34 PM BST
US jobs market needs ‘significantly’ lower interest rates, says Fed policymaker
Interest rates need to be lowered “significantly” to protect the US jobs market and support the American economy, a Federal Reserve official has said.
Bank of Chicago President Austan Goolsbee said households can expect “many more rate cuts” after the US central bank began lowering borrowing costs last week.
The Fed cut interest rates for the first time in four years with a larger than usual half a percentage point reduction to a range of 5pc to 4.75pc.
Mr Goolsbee said:
As we’ve gained confidence that we are on the path back to 2pc, it’s appropriate to increase our focus on the other side of the Fed’s mandate — to think about risks to employment.
That likely means many more rate cuts over the next year.
Thanks for following these updates from the markets today. I am heading off and Alex Singleton is taking the reins for the rest of the day.
03:18 PM BST
Germany will ‘suffer greatly’ if Trump elected, warn economists
Germany risks a sharp economic downturn if Donald Trump is elected US president and follows through with high tariffs on international goods, analysts have warned.
Deputy economics editor Tim Wallace has the latest:
Mr Trump’s pledges to levy a tax of 60pc on all imports from China and 20pc on those from other nations would hammer Germany’s car and pharmaceutical industries, according to the Ifo Institute.
Exports of cars to the US would crash 32pc, the Ifo said, while pharma sales would fall 35pc. The scale of the crunch would deliver a permanent blow to the GDP of a nation which has already struggled to grow at all since the pandemic.
German exports to the US would drop by more than €33bn (£27bn) per year, the Ifo added.
These two charts show how Europe’s largest economy is struggling.
03:01 PM BST
Intel shares rise as Apollo eyes $5bn investment
Shares in Intel jumped in early trading in New York as a US private equity giant reportedly offered to make an investment of as much as $5bn.
Apollo Global Management has indicated in recent days it would be willing to make an equity-like investment of billions of dollars in Intel, Bloomberg News reported on Sunday.
Shares rose 2.6pc in what was once the most valuable chipmaker in the world.
Intel’s shares have lost nearly 60pc of their value since the start of the year as it is perceived to have been overtaken in the race to develop AI technology.
Intel executives have been weighing Apollo’s proposal, Bloomberg reported, adding that talks regarding the deal are in a preliminary stage and have not been finalised.
It comes soon after Qualcomm has in recent days approached Intel to explore a potential acquisition of the troubled chipmaker in what could be a transformational deal in the sector.
02:52 PM BST
Amazon should treat workers with respect or lose UK contracts, says union leader
Amazon should be at risk of losing taxpayer-funded contracts if it fails to “treat workers with respect”, according to a union boss.
GMB general secretary Gary Smith accused the online giant of using “despicable” tactics to stop workers at its Coventry site of unionising and questioned how it could be right for the company to receive more than £1bn in public contracts in the last year.
In July, the GMB announced that Amazon workers in Coventry had voted by 49.5pc in favour of union recognition - falling just short of the required majority.
Amazon responded by saying it places “enormous value on engaging directly with our employees” and said it has “always worked hard to listen to them, act on their feedback, and invest heavily in great pay, benefits and skills development”.
Mr Smith said the ambition for the new Labour Government has to be “higher than just cleaning up the Tory mess”, adding its “huge procurement powers will be critical”.
He told Labour Party conference in Liverpool: “Our Labour Government needs to be clear with Amazon: if you want to keep trousering hundreds of millions of pounds of taxpayers’ cash, they need to treat workers with respect.”
An Amazon spokesman said: “Our employees have the choice of whether or not to join a union. They always have.”
02:35 PM BST
Wall Street inches higher ahead of Fed speeches
US stock markets edged upwards to start the week as investors await comments from Federal Reserve policymakers through the week to see how big interest rates could be cut again.
The Dow Jones Industrial Average fell 3.0 points to be essentially flat at the open to 42,060.40.
The S&P 500 rose 9.3 points, or 0.2pc, at the open to 5,711.9​, while the Nasdaq Composite rose 46.6 points, or 0.3pc, to 17,994.905 at the opening bell.
02:20 PM BST
US billionaire Dan Friedkin agrees Everton takeover
Everton have announced a takeover deal with US billionaire Dan Friedkin, bringing an end to Farhad Moshiri’s chaotic ownership of the club.
Our reporter Chris Bascombe has the details:
The club said a deal with Friedkin is subject to regulatory approval, including from the Premier League, the Football Association, and the Financial Conduct Authority.
AS Roma owner Friedkin revived his interest in the Merseyside club last week having previously walked away from negotiations in July.
Previously, the level of debt at Everton and the various legal entanglements associated with the collapsed bid made by previous suitors 777 Partners had dissuaded the Friedkin Group from pursuing a deal.
Read the next steps for Everton and the Friedkin Group.
02:14 PM BST
Budget must not ‘chill’ investment with employment law changes, Reeves told
After Rachel Reeves’ speech at the Labour party conference today, Federation of Small Businesses (FSB) policy chairman Tina McKenzie said:
It was good to see Chancellor Rachel Reeves make the importance of enterprise clear in her Budget, following a bold statement from the Business Secretary on his small business plan.
Secretary of State for Business and Trade, Jonathan Reynolds, has already shown that Labour is putting delivery for small firms front and centre by tackling late payments to small businesses - reiterated in a senior ministerial speech at party conference for the very first time.
An actively pro-small business Budget is necessary this year to achieve the sustainable growth that the Labour Party has talked of creating by the end of the Parliament.
An actively pro-small business pro-worker Budget would help small businesses through formally linking the employment allowance in line with the National Living Wage, deliver on business rates promises for small firms and tackle personal guarantees that put off investment.
Of course, Labour must be extremely careful not to chill employment and small business investment, especially when it comes to plans on employment law. It is of extreme importance that ministers work closely in partnership with small employers on how we get more people, not less, back into work.
01:58 PM BST
Northvolt grapples with sagging demand for electric cars
Northvolt is cutting 1,600 jobs as the $12bn business scrambles to cut costs amid a downturn in global demand for electric vehicles.
Our senior technology reporter Matthew Field has sent this analysis:
Northvolt, which was founded by former Tesla executive Peter Carlson in 2015, has raised billions of dollars from major banks and pension funds, as well as secured the banking of the European Investment Bank, to produce batteries for customers including BMW and Volkswagen.
But while Northvolt’s customers have placed more than $50bn of orders, it has been grappling with sagging demand for electric cars in Europe as carmakers scale back their investment in battery-powered vehicles.
In June, it emerged that BMW had scrapped a $2bn deal to buy battery cells from Northvolt. At the time, industry sources told the Telegraph Northvolt had struggled to ramp up production of its batteries and suffered delays.
The business has also endured local protests over its plans to expand its factories in countries such as Canada, while last year, two workers died in accidents at the company’s Swedish plants.
European carmakers have warned that EV sales are under pressure from high prices, a lack of charging infrastructure and a drop-off in government incentives. Meanwhile, Chinese rivals are threatening to flood the market with new brands that undercut traditional manufacturers.
In Germany alone, new electric vehicle registrations fell by 70pc in August, according to industry data, while French sales fell by a third.
01:40 PM BST
Business wants more detail on Reeves’ Budget plans
Bosses want to know how Rachel Reeves plans to secure “investment in new industries, new technologies and new infrastructure”, which the Chancellor said will be “wealth created and wealth shared in every part of Britain”.
After Ms Reeves speech at the Labour party conference, Shevaun Haviland, director general of the British Chambers of Commerce, said:
It was encouraging to hear the Chancellor recognising the huge potential of British business to grow the economy and her ambition to make that happen.
Today’s speech has set the scene for her first budget which will be a huge moment to shape the expectations of business and the public for the years ahead.
This was a vital moment to lift the tone and for the Chancellor to champion the critical importance of economic growth, increased exports and investment.
Businesses will be keen to get more detail on how she plans to do this. They will want to know where any increases in the tax burden are likely to fall, but they will welcome the imminent publication of an Industrial Strategy.
The BCC believes there are three main ingredients needed to make the budget a welcome one for business. It must encourage investment, strengthen the workforce and develop our local economies.
All eyes will now be turning to October 30th to see if the Chancellor can deliver on the intent that she has set out today. We stand ready to work in partnership with Government to make the UK the best place to start, grow and invest in business.
01:30 PM BST
Gas prices rise amid air strikes against Hezbollah
Wholesale gas prices have risen amid growing tensions in the Middle East after Israel stepped up airstrikes against Hezbollah in the south of Lebanon.
Dutch front-month futures, the European benchmark, rose as much as 3.1pc to more than €35 per megawatt hour following a 3.4pc slide last week.
It comes amid concerns about the impact on Israeli gas fields, which supply Egypt and Jordan as well as its domestic demand.
Europe is already entering a period of increasing demand as colder weather sets in.
The UK equivalent contract gained as much as 3.4pc to 85p per therm.
01:17 PM BST
Nationwide offers to lend first-time buyers six times their salary
Britain’s second-biggest mortgage lender has relaxed its affordability criteria for first-time buyers as rates finally begin to fall.
Our senior money writer Fran Ivens has the details:
Nationwide will allow aspiring homeowners to borrow up to six times their income, up from 5.5 times, as part of its Helping Hand scheme.
It means a couple with a joint income of £50,000 able to borrow up to £300,000 – an increase of £75,000.
The change comes as price wars start to heat up between lenders after Santander began to offer rates less than 4pc on two-year fixes.
Read how mortgage rates are changing.
12:46 PM BST
Reeves: Era of trickle-down, trickle-out is over
Rachel Reeves has said “wealth created and wealth shared in every part of Britain” would be the “prize” of the Labour Government’s industrial strategy.
As she closed her speech at the Labour party conference, the Chancellor said the “era of trickle-down, trickle-out dogma is over”. She said:
Britain is open for business once again.
If you have felt the quiet desperation of jobs, opportunities and investment slipping away, then be assured your ambitions, your hopes, your future will not be held back any longer.
Shovels in the ground, cranes in the sky, the sounds and the sights of the future arriving.
Wealth created and wealth shared in every part of Britain. That is the prize, that is the Britain we’re building, that is the Britain I believe in.
12:42 PM BST
Northvolt slows expansion of research labs
Northvolt also announced that an expansion of its labs in Västerås, Sweden, will be carried out at a slower pace.
It said: “The fundamental platforms hosted at Northvolt Labs will be maintained, enabling Northvolt Labs to retain its position as Europe’s leading campus for battery innovation and product development.”
The company aims to reduce its global workforce by 20pc, and by 25pc in Sweden. The company said in July that it had 6,000 employees.
It added: “The company is currently engaged with its union representatives surrounding all relevant processes and the path forward.”
The job losses come after the promising start-up has been plagued by a series of unexplained accidents, with five employees dying since November last year.
Two deaths occurred at the factory in separate accidents, whereas three others took place off-site and were described as a “tragic coincidence” by the company.
12:22 PM BST
Electric car battery maker to slash 1,600 jobs
Europe’s best bet for battery manufacturing has announced it is cutting 1,600 jobs and will suspend construction of a new flagship factory as the world’s drive towards electrification hits the skids.
Swedish battery maker Northvolt, which has raised more than £10bn to take on China, said it would axe the roles across three factories and halt the development of its Ett expansion project.
It said the suspension of the scheme, which had been intended to provide an additional 30 GWh of annual cell manufacturing capacity, was “critical to ensure a sustainable operation and cost base”.
It comes as industry figures show European electric car sales have failed to hit the necessary pace to be compliant with new CO2 targets for cars and vans that come into effect next year.
Peter Carlsson, chief executive and co-founder of Northvolt, said:
While overall momentum for electrification remains strong, we need to make sure that we take the right actions at the right time in response to headwinds in the automotive market, and wider industrial climate.
We now need to focus all energy and investments into our core business.
Success in the ramp-up of production at Northvolt Ett is critical for delivering to our customers and enabling sustainable business operations.
Recent production records at Northvolt Ett show that we are on the right path, but the decisions we’re taking today, however tough, are required for Northvolt’s future.
12:12 PM BST
Israel protesters disrupt Chancellor’s Labour conference speech
Rachel Reeves’s speech to the Labour party conference was interrupted by anti-Israel protesters.
A heckler shouted “and we are still selling arms to Israel!”
Ms Reeves said in response: “This is a changed Labour Party, a Labour Party that represents working people, and not a party of protest.”
Watch the speech below and follow the latest in our politics live blog.
12:00 PM BST
Eurozone private sector ‘heading towards stagnation’
Eurozone business activity declined for the first time in seven months in September, as France lost steam after the end of the Paris Olympic Games, a key survey said Monday.
S&P Global’s purchasing managers’ index (PMI) - a key gauge of the overall health of the economy - dropped to 48.9 in September, down from 51 in August.
Any reading below 50 indicated contraction. It follows weak figures from its largest economies: Germany and France.
Dr Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said:
The eurozone is heading towards stagnation.
After the Olympic effect had temporarily boosted France, the eurozone heavyweight economy, the composite PMI fell in September to the largest extent in 15 months.
Considering the rapid decline in new orders and the order backlog, it doesn’t take much imagination to foresee a further weakening of the economy.
11:42 AM BST
Wall Street on track to rise at opening bell
US stock indexes edged higher in premarket trading as investors awaited comments from policymaker to gauge the outlook for interest rates.
The Fed’s began cutting interest rates last week, which put Wall Street’s main indexes on track for monthly gains, bucking a historical trend where September has been a weak month for equities on average.
Having rallied for much of the year, the S&P 500 is a whisker away from an all-time high and the blue-chip Dow closed at a record high on Friday.
However, with the benchmark index’s valuations above its long-term average, some caution prevails about further bids.
All eyes will be on Fed officials this week, including Chairman Jerome Powell on Thursday, as markets await their insights on the state of the economy, which most analysts believe is robust.
Traders now expect with a 54pc chance that the central bank’s next move will be to ease by another half a percentage point. Markets have priced in a quarter of a point move.
In premarket trading, the Dow Jones Industrial Average was up 0.1pc, the S&P 500 had lifted 0.2pc and the Nasdaq 100 had gained 0.3pc.
11:26 AM BST
Oil edges higher amid escalating Israel and Hezbollah conflict
Oil prices have risen after a second weekly gain amid the escalation in the conflict between Israel and Hezbollah.
Brent climbed 0.2pc towards $75 a barrel after adding 4pc in its biggest weekly advance since April. West Texas Intermediate traded 0.3pc higher above $71.
It comes after Hezbollah launched about 115 rockets, missiles and drones toward northern Israel on Sunday, leading to counterattacks against the Iranian-backed group in Lebanon.
The escalation has sent Brent up more than 8pc from the lowest since 2021 reached earlier this month.
However, hopes that last week’s Federal Reserve rate cut will lift consumption have been kept in check by concerns over a worsening outlook for demand.
Vandana Hari, the founder of Vanda Insights, said:
Crude may go into a holding pattern for a bit, consolidating last week’s gains.
Market cheer from the jumbo Fed cut is keeping sentiment aloft. But at some point, we could see crude under renewed downward pressure as the Fed glow fades and oil market attention returns to the souring demand picture.
11:10 AM BST
Tesco ‘skimps on chicken nuggets’ in Aldi price match row
Tesco has been accused of skimping on ingredients in the products it price matches to Aldi, such as chicken nuggets with far less chicken in them.
Our senior business reporter Daniel Woolfson has the details:
A survey of 122 Tesco products by BBC Panorama found that nearly a third contained at least five percentage points less of their main ingredient when compared with their counterpart in Aldi.
Its chicken nuggets, for instance, contain 39pc chicken while Aldi’s contain 60pc, the investigation found, while Aldi’s chicken kyivs contain 57pc chicken compared with Tesco’s 44pc.
Other products in which Tesco was found to have used less of the main ingredient include chilli con carne, cottage pies, and apple and blackcurrant squash.
See the difference in the percentage of the main ingredient in products at Tesco and Aldi.
10:56 AM BST
German 10-year bond yield rises amid ahead of expected rate cuts
Yields on Germany’s 10-year bond rose above that on its two-year debt for the first time in two years as weak business activity in Europe’s largest economy drove expectations of more ECB rate cuts this year.
The yield on the rate-sensitive German two-year bond dropped by as much as 10 bps to 2.14pc, while the 10-year yield dropped to as low as 2.14pc, which was seven basis points lower.
Longer-dated bond yields are generally higher than shorter-dated ones. But when this reverses, or inverts, it is often seen as a signal of a recession in the next one to two years.
The curve usually turns positive before a downturn begins, with short-term yields dropping faster on expectations of interest rate cuts to support a weakening economy.
Kenneth Broux head of corporate research FX and rates at Societe Generale said the German yield curve disinversion “is more than symbolic on a day when the weak PMIs will inevitably fuel the debate about (an) October rate cut by the ECB”.
10:35 AM BST
JCB warns over hit from German downturn
JCB has posted a jump in profits for the past year but warned about the declining German economy and “challenging” conditions in the UK construction market.
The Staffordshire-based company, well known for its yellow excavators and machinery, said its outlook is “less positive” for 2024 as the slowdown in Europe has impacted demand for machinery.
Bosses said it has been knocked by weaker housebuilding after a surge in interest rates over the past two years impacted the mortgage market.
The company reported that turnover increased by 14pc to £6.5bn for 2023, with machinery sales hitting 123,228.
JCB chief executive Graeme Macdonald said:
North America remains the world’s largest market for construction equipment and JCB’s sales there grew strongly during 2023.
JCB’s business in India also performed well in a growing market and while the UK market remained largely flat in 2023, JCB increased its share of the market.
The full-year market outlook for 2024 is less positive, with challenging conditions in the UK and Europe, particularly in Germany where economic activity has declined sharply during 2024.
In the UK, housebuilding activity has contracted, which is having a negative impact on machine utilisation.
10:15 AM BST
Prudential to invest up to £263m in climate transition
Prudential has launched a framework for climate transition funding and committed to up to $350m (£263m) of investments.
The London-listed insurance giant said it is particularly focused on looking at emerging markets in relation to financing related to the climate transition.
The company told shareholders that it had now set up a framework to address particular challenges related to these investments.
It will seek to address issues related to financing “high carbon to low carbon” projects and the lack of a standardised definition for these.
Prudential said the framework will also help address a need for flexibility linked to emerging markets in Asia and Africa.
Today, Prudential confirmed that it will invest $200m (£150m) as a founding investor in Brookfield’s Catalytic Transition Fund, their first dedicated fund for transition investing in emerging markets.
It also said it is committing up to $150m (£113m) to a climate-focused strategy managed by global investment firm KKR, which seeks to make infrastructure equity investments in Asia focused on the energy transition.
Ben Bulmer, chief financial officer of Prudential, said: “Our responsible investment strategy leverages our unique position as a large asset owner in Asia and Africa.”
09:51 AM BST
Pound falls as economy grows less than expected
The pound has dropped in value following the latest economic data showing the private sector expanded less than expected.
Sterling was down 0.4pc against the dollar to $1.327 as the closely watched PMI readings for Britain’s services and manufacturing sectors fell to the lowest levels since June.
Traders were already betting that the Bank of England will cut interest rates in November but ramped up wagers on a second cut by the end of the year from a 62pc chance to 71pc.
09:40 AM BST
UK economy ‘heading for soft landing’ as private sector expands
Britain’s economy is showing signs that it will leave behind the period of high inflation and interest rates without falling into another recession, according to closely watched data.
Private sector output expanded for the 11th month in a row in September, according to the S&P Global Flash UK PMI.
However, growth was the slowest since June as employment growth eased for the second month running.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said:
The September PMI data bring encouraging news, with robust economic growth being accompanied by a cooling of inflationary pressures.
The data therefore hint at a ‘soft landing’ for the UK economy, whereby the fight against inflation is showing increasing signs of being won without higher interest rates having caused a downturn.
A slight cooling of output growth across manufacturing and services in September should not be seen as too concerning, as the survey data are still consistent with the economy growing at a rate approaching 0.3pc in the third quarter, which is in line with the Bank of England’s forecast.
UK private sector firms indicated a sustained upturn in business activity during September, marking 11 months of continuous expansion.
09:31 AM BST
Eurozone bond yields fall amid growing bets on eurozone rate cuts
Eurozone government bond yields have fallen after business activity data from France and Germany raised expectations that the European Central Bank (ECB) will announced more interest rate cuts this year.
Germany’s 10 year yield, the eurozone benchmark, was down six basis points at 2.16pc and the rate sensitive two-year yield was down nearly nine basis points at 2.17pc.
Bond prices, which moved inversely to yields, rose as traders increased bets on the ECB cutting rates by another half a point by the end of the year, raising the chances from 53pc to 78pc.
They fell after PMI data showed Germany’s businesses are laying off staff at the fastest pace in 15 years outside the pandemic, while France’s services sector contracted sharply in September after a brief boost driven by the Olympic Games.
French debt was less moved by the data, suggesting German bonds were benefiting from safe-haven inflows. France’s 10-year yield was down two basis points at 2.95pc.
That caused the gap between German and French 10-year yields to widen two basis points to 78.3, its widest since market volatility in early August.
The UK’s 10-year gilt yield was down three basis points to 3.87pc.
09:09 AM BST
FTSE 100 rebounds after Bank of England holds interest rates
UK shares have rebounded after logging their worst day since August on Friday after the Bank of England held interest rates at 5pc.
The blue-chip FTSE 100 was up 0.4pc and the more domestically-focused FTSE 250 gained 0.3pc amid a more optimistic mood after the Federal Reserve cut benchmark rates by an outsized half a percentage point last week.
Both indexes had notched their worst day in nearly seven weeks on Friday, after the Bank of England held interest rates steady on Thursday.
Last week, Britain’s inflation figures - which are closely watched by the Bank for its monetary policy - pointed to persistent price pressures in the services sector.
Precious metal miners rose 0.9pc as gold prices scaled record highs, driven by Fed rate cuts and demand for the safe-haven asset amid geopolitical risks in the Middle East.
Rightmove jumped 3.1pc to top the FTSE 100 after Australia’s REA Group made a third pitch to buy the UK property-listing company for £6.1bn.
AstraZeneca slipped 1.1pc after the drugmaker said its experimental precision drug did not significantly improve overall survival for patients with a type of breast cancer in a late-stage trial.
08:56 AM BST
German companies cut jobs at fastest pace in 15 years
Germany’s private sector economy sank deeper into decline, a key survey showed, as businesses cut jobs at the fastest rate in more than 15 years excluding the pandemic.
Europe’s largest economy weakened for the fourth consecutive month, according to the HCOB Flash Germany Composite PMI Output Index.
Its reading of 47.2 indicated that business output was at its lowest level since February, with factory output suffering its steepest rate of contraction in a year.
Dr Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said:
The downturn in the manufacturing sector has deepened again, evaporating any hope for an early recovery.
Output plunged at the fastest rate in a year, with new orders collapsing. In a sign of resignation, companies have shed staff at a rate not seen since the Covid-19 pandemic in 2020.
This comes as several major automotive suppliers have announced significant job reductions.
These troubling figures are likely to intensify the ongoing debate in Germany about the risk of deindustrialization and what the government should do about it.
08:41 AM BST
Murdoch family edges towards £6.1bn deal with Rightmove
Rightmove’s board has said it will “carefully consider” a new £6.1bn bid from Rupert Murdoch’s property website business as the two sides move a step closer to a deal.
REA Group, which is majority-owned by the media tycoon’s News Corp, has confirmed it has made a third takeover approach for Rightmove worth £6.1bn.
The new proposal is worth 770p a share, which compares to previous bids worth 705p and nearly 750p per share, which valued Rightmove at £5.6bn and £5.9bn, respectively.
The continued pursuit comes as News Corp seeks to further diversify its business beyond media as patriarch Rupert Murdoch hands over the reins to his eldest son, Lachlan.
Rightmove rejected the initial approach as “opportunistic” and some investors have also spoken out to criticise the structure of the offer, which is based on a mix of cash and shares in the combined group.
However, it said today that its board “will carefully consider” the increased proposal.
Chairman Andrew Fisher said: “Rightmove is an exceptional company with a very clear strategy, a consistent track record of delivery and a strong management team.
“The board is confident in the company’s short and long term prospects, and sees a long runway for continued shareholder value creation.
“Based on the implied value and structure of REA’s first and second indicative non-binding proposals, we considered these proposals to be uncertain, highly opportunistic and unattractive. Accordingly, the Board unanimously rejected them.
“The board will continue to act on behalf of our shareholders and respond to the most recent proposal in due course.”
Rightmove shares rose 2.8pc to the top of the FTSE 100 after the third offer emerged.
08:26 AM BST
French economy slips back into decline after Olympics
France’s private sector economy slipped rapidly back into decline, a closely watched survey showed, as the boost from the Paris Olympics faded.
Overall business activity levels fell at the fastest pace since January, the HCOB Flash France PMI showed.
The slump to 47.4 in September - below the 50 mark separating growth from contraction - amid an accelerated contraction in new orders.
While manufacturing production fell at the sharpest pace since January, September’s fresh decline was primarily driven by the more sizeable services sector, which slipped back into contraction after strong growth in August.
Dr Tariq Kamal Chaudhry, economist at Hamburg Commercial Bank, said:
It is a sad reality; the strong growth in the French economy seen in August evaporated by September.
This confirms the suspicion that the service sector surge in August was an Olympics-related anomaly, which has now dissipated.
08:05 AM BST
UK markets edge down ahead of Labour conference
The FTSE 100 began the week lower as business leaders wait to see what the Chancellor will say in her speech at the Labour party conference.
The UK’s blue chip index was down 0.1pc to 8,220.71 while the midcap FTSE 250 was flat at 20,826.32.
07:56 AM BST
China slashes interest rates in bid to revive faltering economy
China’s central bank cut a short-term interest rate and announced fresh stimulus in a bid to turn around the fortunes of its stuttering economy.
The People’s Bank of China (PBOC) lowered the 14-day reverse repo rate to 1.85pc from 1.95pc and supplied 14-day cash to its banking system for the first time in months, signalling its intent to further ease monetary conditions.
It injected 234.6bn yuan (£25bn) into the banking system through open market operations, saying it wanted to “keep quarter-end liquidity adequate at a reasonable level in the banking system”.
China stocks rose amid heightened expectations that Beijing will unveil fresh economic stimulus.
Hong Kong shares, which are more sensitive to the US rate-cutting cycle that started last week, rose to a three-month high, while noth China’s blue-chip CSI 300 index and the Shanghai Composite Index rose 0.7pc.
The Hang Seng Index was up 0.6pc and China’s 30-year treasury yield hitting a record low
Zhang Zhiwei, chief economist at Pinpoint Asset Management, said:
I wouldn’t take this rate cut as a signal that PBOC loosened monetary policy further.
Nonetheless, I do expect PBOC will cut seven-day repo rate as well as the reserve requirement ratio in the coming months. There is a press conference tomorrow when the financial regulators will shed light on their policy stance.
07:38 AM BST
Reeves defends cuts to winter fuel payment
Chancellor Rachel Reeves delivers her speech at the Labour party conference today and has defended her decision to means-test winter fuel payments.
She said the increased take-up of pension credit and the retention of the state pension triple lock would protect incomes.
She told Times Radio that the campaign to encourage take-up of pension credit, which means people become eligible for the winter fuel payment, meant “we’re now seeing applications at more than 10,000 a week, they were around 3,000 a week previously”.
Ms Reeves said:
But, also, we’re committed to keeping the triple lock, not just for one year, but for the whole of this parliament.
Already, the triple lock means that the pension this year is worth £900 more than a year ago, I’ll announce at the Budget probably another increase of around £460 next April, and over the course of this parliament, the new state pension is likely to rise by £1,700.
So, we are protecting pension incomes through the triple lock, which means that they will go up by the highest of inflation, 2.5pc or earnings.
07:29 AM BST
Rupert Murdoch’s property seller makes third takeover bid for Rightmove
Rupert Murdoch’s REA Group has confirmed it has made a third takeover approach for Rightmove worth more than £6 billion.
Australian property portal REA, which is majority-owned by the tycoon’s News Corp group, said it put forward a 770p a share proposal on September 22 valuing Rightmove at about £6.1bn.
It comes after REA first tabled a possible offer in early September, valuing Rightmove at £5.6bn, but its advances have so far been rejected by the London-listed property portal.
Rightmove has yet to respond to the latest sweetened approach.
07:23 AM BST
BT to spend £4m for apprenticeships
Telecoms giant BT has announced millions of pounds in apprenticeship funding aimed at supporting smaller companies, charities and public sector organisations across England.
BT Group has partnered with training provider Babington to transfer up to £4m from its apprenticeship levy funds to help train new apprentices and upskill existing workforces.
BT said the fund could support up to 550 apprentices.
Chris Sims, managing director for small and medium business (SMEs) at BT, said:
SMEs make a significant contribution to our economy, but their uptake of apprenticeships is low.
By sharing up to £4m from our apprenticeship levy funds, we’re giving these businesses the financial support they need to invest in talent.
This not only helps create a more skilled, diverse and competitive workforce, it also provides SMEs with additional resources to grow and scale their business.
The apprenticeship programme at BT has not only shaped our workforce, it has also helped set industry standards.
07:22 AM BST
Boost for motorists as fuel prices drop at fastest rate this year
Petrol and diesel prices are falling at their fastest pace this year in a boost to motorists/
Both fuels are nearly 7p cheaper than a month ago, according to the RAC, with the average price of unleaded down to 136.15p, saving drivers nearly £4 when filling up the tank.
Diesel has dropped to 140.87p on average, leaving the price of both fuels at their cheapest in nearly three years. The last time fuel prices dropped so quickly was between November and December last year.
The RAC expects average pump prices for petrol to dip to as low as 132p and diesel to 138p within the next fortnight.
RAC fuel spokesman Simon Williams said:
It’s really encouraging to see pump prices coming down so rapidly, which we know is as good for drivers’ wallets as it is for keeping the headline level of inflation in check.
Of course, global oil prices and even the strength of the pound can fluctuate wildly and that’s something completely out of drivers’ control.”
Based on wholesale pump prices, which is what retailers pay to buy the fuel in the first place, we know there’s scope for further price cuts so we very much hope that within the next few weeks we’ll see pump prices reach their lowest levels in three years.
07:10 AM BST
Good morning
Thanks for joining me. We begin the week with good news for motorists as petrol and diesel prices drop at their fastest pace this year.
A typical litre of petrol has fallen to 136.15p, with diesel down to 140.87p, both of which are at thier lowest in nearly three years.
5 things to start your day
1) How Britain’s overflowing airports became Starmer’s biggest headache | UK aviation has become the battleground for a clash between net zero and the economy
2) Jim Ratcliffe’s North Sea pipeline risks closure 10 years early | Oil tax raids and drilling bans risk ‘suffocating’ the industry, warns Ineos boss
3) How trouble is brewing for the man who owns David Beckham | Jamie Salter’s burgeoning brand empire is at risk of becoming an unwieldy conglomerate
4) I saw the home working sham exposed on a Mediterranean holiday | Making flexible working a right for all employees risks damaging the economy
5) Pensions industry struggles with lump sum stampede amid fears over tax raid | Savers rush to withdraw from retirement pots amid ‘widespread concern’ ahead of Budget
What happened overnight
Asian stocks were steady ahead of central bank meetings that are widely expected to deliver two more rate cuts and key US inflation figures that should flash a green light for more easing there.
China’s central bank surprised many by lowering its 14-day repo rate by 10 basis points, a couple of days after disappointing markets by not cutting longer-term rates. That helped nudge Chinese blue chips up 0.5pc.
A holiday in Japan made for thin trading and MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.2pc, after bouncing 2.7pc last week.
Tokyo’s Nikkei was shut but Hong Kong’s Hang Seng Index was up 0.4pc at 18,325.53 and Shanghai’s Composite was up 0.2pc at 2,743.11.
China’s central bank supplied 14-day cash to its banking system for the first time in months on Monday and at a lower interest rate, signalling its intent to further ease monetary conditions.
The People’s Bank of China injected 234.6bn yuan (£25bn) into the banking system through open market operations, saying it wanted to “keep quarter-end liquidity adequate at a reasonable level in the banking system”.
Monday’s injection comes ahead of China’s National Day holidays starting October1, and the cut in rates aligns the 14-day repo rate with the shorter seven-day repo rate which was cut in July.
It comes after Wall Street stocks delivered a mixed performance on Friday after a Federal Reserve official showed confidence inflation is coming down, boosting hopes for further interest rate cuts.
The S&P 500 retreated some 0.2pc while the tech-heavy Nasdaq 100 slumped as much as 1pc during the day.
