Tens of thousands of Americans are in line to share $2.2bn (£1.7bn) after GSK agreed a settlement over claims its indigestion drug caused cancers.
The British drug giant has agreed to pay up to $2.2bn to settle tens of thousands of US lawsuits claiming its heartburn drug Zantac caused cancer.
The company said it had struck a settlement deal with 10 law firms that represent more than 90pc of legal claims related to the medicine.
The law firms have unanimously recommended that their clients accept the terms of the settlement. If endorsed, the settlement would resolve around 80,000 cases. It is expected to be implemented by the middle of next year.
Each legal case represents at least one plaintiff, though in practice some cases may have been combined. A simple division assuming each case represented just one person would suggest each person suing GSK is in line for $27,500.
GSK said: “While the scientific consensus remains that there is no consistent or reliable evidence that ranitidine [the generic name for Zantac] increases the risk of any cancer, GSK strongly believes that these settlements are in the best long-term interests of the company and its shareholders as they remove significant financial uncertainty, risk and distraction associated with protracted litigation.”
As well as settling the majority of state court cases on Wednesday, GSK said it had also struck a deal to pay $70m to resolve a separate Zantac complaint.
As part of the settlement deals, GSK has not admitted any liability. It is expected to pay the costs of the settlements through its existing resources.
The Zantac dispute stems from 2019, when US watchdogs pulled it from sale because of “unacceptable levels” of probable cancer-causing ingredients in the medicine. At the time, GSK sold Zantac as a prescription drug in the UK but it stopped as a precaution following the US decision.
GSK and other sellers of the medicine have always maintained that suggestions Zantac could cause cancer were “inconsistent with the science”. The British drug giant has pointed to past research by regulators in the EU and US that has failed to establish a causal association.
However, GSK has been dogged by concerns over looming legal payouts for years.
Morgan Stanley previously suggested the Zantac cases could cost GSK as much as $30bn to settle, although other analysts have since put the figure at somewhere between $2bn and $8bn.
Concerns over Zantac have been blamed for keeping GSK’s share price depressed at a time of booming sales and profits at the British drugmaker.
Earlier this year almost £7bn was wiped off GSK’s value in one day after a judge in Delaware ruled that 70,000 lawsuits against the company related to Zantac could move forward.
Read the latest updates below.
07:09 PM BST
Signing off…
Thanks for joining us today.
Chris Price will be back from around 7am to cover the latest in the markets but, in the meantime, you can read the full breadth of our business and economics reporting and commentary here.
07:06 PM BST
Fed rate setters gain confidence over inflation, according to minutes
Minutes of last month’s Federal Reserve rate-seting meeting have just been released.
They indicate that “almost all” of the participants were gaining stronger confidence on beating inflation. The minutes say:
With regard to the outlook for inflation, almost all participants indicated they had gained greater confidence that inflation was moving sustainably toward 2 percent.
Participants cited various factors that were likely to put continuing downward pressure on inflation.
These included a further modest slowing in real GDP growth, in part due to the Committee’s restrictive monetary policy stance; well-anchored inflation expectations; waning pricing power; increases in productivity; and a softening in world commodity prices.
The minutes indicated that a “substantial majority” favoured a half a percentage point cut, which was implemented,
Earlier in the day, Dallas Fed president Lorie Logan warned over cutting interest rates too quickly. She said:
I continue to see a meaningful risk that inflation could get stuck above our 2pc goal … the [Fed] should not rush to reduce the fed funds target to a ‘normal’ or ‘neutral’ level but rather should proceed gradually while monitoring the behavior of financial conditions, consumption, wages and prices.
06:17 PM BST
US law firm to pay British trainees £70k a year amid talent war
A US law firm will offer starting salaries of at least £70,000 to trainee solicitors at its London office as British rivals remain under pressure in the war for talent.
Davis Polk, which is headquartered in New York, has increased salaries for its most inexperienced employees to £65,000 in their first year, jumping to £70,000 in their second year.
It marks an increase from the previous trainee salaries of £60,000 and £65,000, respectively. Davis Polk also promised to hand trainee lawyers a £100,000 pay rise upon qualifying, bringing their third-year salary to £170,000.
The hefty sums are in addition to Davis Polk’s trainee benefits package, which includes sponsorship through law school and a six months’ secondment in either New York or Brussels.
The latest pay rise has set a record for entry-level salaries in London, the news website Legal Cheek first reported.
05:54 PM BST
European stocks bounce back from dismal Tuesday
European stocks settled higher on Wednesday, bouncing from losses in the previous session as investors focussed on upcoming interest rate cuts and a key U.S. inflation report later this week.
The continent-wide Stoxx 600 index was up 0.6pc, with the automobiles and parts sector, which has lagged for most of the year, among top gainers with a 1.1pc jump.
On the flipside, banks underperformed as Dutch lender ING dropped 2.5pc after Deutsche Bank downgraded the stock to “hold”, calling 2024 a peak for capital returns and share buybacks.
The benchmark Stoxx 600 touched a two-week low on Tuesday, with China-exposed mining and luxury sectors taking a beating as investors were disappointed by a lack of fresh stimulus steps from Beijing.
Against a backdrop of a stagnating economy, cooling price pressures and a softening labour market, the Stoxx 600 index along with equities in major regional stock markets are on track for gains this year.
Richard Flax, chief investment officer at Moneyfarm, said:
Europe is trading at a discount relative to the U.S. and even though (economic) growth is less than what you would want, corporate profitability is still holding up in aggregate terms.
You’re going to see interest rate cuts and then an acceleration in European growth over the next 12 to 18 months.
05:46 PM BST
Wall Street rises ahead of release of Fed minutes
The main Wall Street stock indexes turned higher this afternoon as investors awaited the minutes of the Federal Reserve’s latest meeting.
The Dow Jones Industrial Average rose 0.8pc, the S&P 500 gained 0.6pc, and the Nasdaq Composite gained 0.5pc.
The S&P 500 touched a fresh record high, with shares of Norwegian Cruise Line topping the benchmark index with a 10.8pc gain after Citi upgraded its rating to “buy”. Industry peer Carnival (which is also traded in London) jumped 7.5pc.
Trading has been choppy through the week, with investors adjusting their rate-cut expectations, seeking new catalysts for a clearer market direction. Their attention will now turn to crucial inflation data on Thursday and the upcoming third-quarter corporate earnings season.
Minutes from the Fed’s September meeting, when policymakers kicked off monetary policy easing with a half a percentage point cut, are due at 7pm (UK time).
Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder, said:
The Fed minutes are always interesting, but they may be a little bit more interesting this time given the last Fed meeting, though I don’t expect any surprises.
05:25 PM BST
British bosses in line for bumper paydays amid talent exodus fears
Investors have paved the way for higher pay at Britain’s biggest companies amid fears of a talent exodus to the US.
The Investment Association (IA), a trade body representing £9.1 trillion of funds, on Wednesday published a new set of pay guidelines giving shareholders more leeway to reward FTSE chief executives with higher pay.
The move represents a seachange in the City after years of shareholder rebellions over high pay. The rebellions were partly blamed on restrictive voting policies tying the hands of shareholders.
Changing the policy could usher in a new era of bigger awards and fewer investor rebellions.
Under the plan, the IA will introduce three broad “principles” on pay, giving investors greater flexibility to vote through large deals without falling foul of the guidelines.
It is hoped the new principles will allow fund managers to make decisions on a case-by-case basis and reward company chief executives who do well.
The change is driven by fears that London risks becoming a global backwater for talent because of the higher pay packages on offer in the US.
05:18 PM BST
Bank of England will cut rates to 3pc by early 2026, say economists
The Bank of England will cut interest rates to 3pc by early 2026 as a result of inflation plunging to below its 2pc target, leading economists have said.
Capital Economics said the fall will be bigger than traders’ predictions of rates falling from 5pc today to 3.75pc by 2026.
The economists added:
In the second half of 2025, we think CPI inflation will fall below the 2.0pc target and core inflation will ease from 3.6pc now to 2.0pc late in 2026 as the persistence of inflation fades.
We think this will prompt the BoE to cut interest rates quicker than the markets anticipate in the second half of 2025, perhaps to 3.00pc by early 2026 rather than to 3.75pc.
While gilt yields have risen recently, we doubt it’s due to fiscal credibility concerns. If it was, sterling would have fallen more significantly, like it did after the ‘mini-budget’.
If we’re right that Bank Rate will be cut further than investors expect, 10-year gilt yields will soon fall again, from 4.2pc now to 3.5pc next year.
05:07 PM BST
FTSE closes up
The FTSE 100 closed up 0.7pc today.
The largest riser was paper giant Mondi, up 4pc, followed by British Gas owner Centrica, up 3.3pc.
At the other end of the index, housebuilder Vistry fell 2pc, while rival Persimmon fell 0.6pc.
Meanwhile, the FTSE 250 rose 0.9pc.
The top riser was Carnival, up 8.3pc, followed by St James’s Place, up 5.9pc.
The biggest faller was investment trust Fidelity China Special Situations, down 1.8pc, followed by real estate investment trust PRS Reit, down 1.5pc.
04:29 PM BST
Dollar pushes upwards as traders bet on smaller cuts to interest rates
The US dollar has been on an upward path today ahead of the release of records from the Federal Reserve’s September decision to slash interest rates by half a percentage point.
It reflects traders’ confidence that the central bank will not continue easing so aggressively.
While the minutes from the last Federal Open Market Committee meeting could show how heated the debate was over the larger than expected cut, it will be somewhat out of date after last Friday’s robust non-farm payroll data caused markets to reprice near-term Fed rate cut expectations.
The dollar index, which measures the greenback against a basket of currencies including the pound and the euro, is up 0.21pc.
Traders are also watching a parade of Fed speakers on Wednesday and keeping powder dry for Thursday’s release of September’s consumer price index (CPI).
04:21 PM BST
TikTok revenue surges amid heightened scrutiny
TikTok’s European sales have surged to over £3.5bn as the video sharing app continued its breakneck growth despite heightened scrutiny from regulators in Britain and on the continent.
Revenues at TikTok Information Technologies UK, which includes its UK, European and parts of its Latin American divisions, climbed 75pc to $4.6bn (£3.5bn)in the year ending December 2023, up from $2.6bn. The UK branch generates sales from advertising sales and live streaming.
However, the tech giant’s operating losses widened after it set aside $1bn as a provision for legal claims relating to alleged privacy breaches in the Netherlands. The class action claims are currently subject to an appeal.
TikTok, owned by Beijing-headquartered Bytedance, is facing a regulatory crackdown in Europe as officials in Brussels launch proceedings against the app over claims it has an “addictive design” and can harm children’s mental health. TikTok has insisted it has “pioneered features and settings to protect teens”.
The social media app is also facing the prospect of a ban in the US over national security fears thanks to its ties to China’s Bytedance. TikTok has always denied posing a security threat and is challenging a US law in court that demands Bytedance divest the app or shut it down.
04:14 PM BST
FTSE up as it escapes pessimism about China
The FTSE 100 is up 0.5pc, and the FTSE 250 is up 0.8pc, as the market moves on from yesterday’s worries about the Chinese economy.
Chinese shares have been volatile recently, with investors first enthusiastic about a series of steps to kickstart domestic growth and were then left deflated yesterday when a press conference did not provide any further measures.
Stephen Innes, a partner at SPI Asset Management, said:
When the market’s expectations were set sky-high for a 2-3 trillion yuan stimulus package and instead got hit with a big, fat zero, the party was over before it even began.
Investors are now awaiting a Saturday briefing on fiscal policy by finance minister Lan Fo’an for more indications about official plans.
But analysts warned there was unlikely to be the big “bazooka” stimulus akin to the support seen during the global financial crisis.
Shehzad Qazi at China Beige Book said Beijing was “opting for targeting stimulus – including allocating funds for projects previously announced”.
Hong Kong’s stock market had soared more than 20 percent between the first batch of announced measures in late September and the start of this week.
The Hang Seng Index collapsed more than nine percent on Tuesday – its worst day since 2008 – and shed another one percent Wednesday.
Shanghai ended 6.6pc lower today.
03:57 PM BST
Oil prices slump for a second day
Oil prices are currently down 1.8pc today, which also fell yesterday as a result of fears about the Chinese economy.
Chris Beauchamp, chief market analyst at online trading platform IG, said:
Oil bulls have been unable to drive the price higher over the past 48 hours, bereft of news from the Middle East and now beset by a hefty rise in inventory levels.
A substantial Israeli response is still likely, but if it stops short of oil and nuclear installations then we can expect further selling in Brent [crude] and [US benchmark] WTI.
03:50 PM BST
Rescuer of Thomas Cook branches posts rising profits
The travel company that bought 555 Thomas Cook stores out of bankruptcy five years ago has posted rising profits after they gambled on the future of the high street.
In accounts to the end of April seen by The Telegraph, pre-tax profits at Hays Travel rose 42pc to £73.4m, up from £51.6m a year earlier. Total transaction value, a measure of sales used in the travel industry, rose 16pc to £2.5bn.
Hays Travel, which had 190 shops before the deal, bought Thomas Cook’s entire retail estate in October 2019 and aimed to re-employ its 2,500-strong workforce. The deal saw its estate grow to 745 but it has subsequently trimmed the number to 470.
Dame Irene Hays, the chairman, said:
No one could have predicted a global pandemic when we took on Thomas Cook, but even with hindsight I would do it all again. It’s thanks to the effort and resilience of our Hays Travel colleagues and the many colleagues who joined us from Thomas Cook that we were able to care for our customers during lockdown, and were here to help them travel again, as soon as the restrictions were lifted.
03:32 PM BST
Global shares rise ahead of Fed minutes
UK and Wall Street shares have risen as investors awaited new signals on interest rates from the minutes of the last meeting of the US Federal Reserve.
The FTSE 100 was up 0.4pc and the FTSE 250 gained 0.9pc in afternoon trading, while the Dow Jones Industrial Average in New York gained 0.3pc.
Wall Street’s S&P 500 and Nasdaq Composite were up 0.2pc while Europe’s main stock markets were slightly higher.
Oil prices fell for a second day amid reports of rising US inventories and as Israel appears to be holding off – at least for the moment – from striking Iranian energy installations.
Minutes from the Fed’s September meeting, due later today, will be examined for insight into the Fed’s thinking.
With that, I will hand you over to Alex Singleton, who will guide you through to the evening.
03:24 PM BST
Google pays double UK tax after surge in profits
Google UK’s bill to HMRC more than doubled last year after a jump in corporation tax and a surge in the tech giant’s profits.
The internet search giant’s UK branch paid a total tax charge of £128.6m in the year ending December 2023, compared to £59.1m a year earlier.
The company’s revenues increased by a third, up to £373.8m from £282.9m, while its sales climbed by around £200m to more than £2.8bn.
The division’s UK sales do not represent the overall size of its advertising business in Britain, rather its revenues account for marketing and R&D services to the wider group.
Separately, revenues at Google’s UK-based Deepmind business, which provides artificial intelligence (AI) technology to the tech giant, climbed to over £1.5bn.
It comes as Google leans ever more on the UK lab’s technology, which has helped to power its new AI search products and chatbots.
03:10 PM BST
Germany hit by weak demand and high interest rates
Germany’s economy is heading for its first two-year recession in two decades after it was weighed down by stubbornly weak domestic and foreign demand, high interest rates and costly energy in the wake of Russia’s war in Ukraine.
Its woes were highlighted by a spate of bad news from the country’s carmakers recently, as the flagship industry struggles with rising production costs and fierce competition from Chinese manufacturers on electric vehicles.
Volkswagen, Europe’s biggest auto manufacturer, last month cut its annual outlook and said it would for the first time have to consider closing factories in Germany.
Rivals BMW and Mercedes-Benz have also lowered their outlook, citing falling Chinese demand.
The economy ministry nevertheless expressed confidence that a rebound was just around the corner, predicting the economy would grow by 1.1pc in 2025 and 1.6pc in 2026.
Economy minister Robert Habeck said the government’s proposed “growth initiative” had a key role to play in the anticipated economic revival.
OUCH! The German govt sees Germany contracting for 2nd consecutive year. The govt revises down its GDP projection for 2024 from +0.3% to -0.2%. A decline in output in 2024—following a drop of 0.3% last year—would mark only 2nd instance of consecutive years of shrinking GDP since… pic.twitter.com/Z3UQov2PLh
— Holger Zschaepitz (@Schuldensuehner) October 9, 2024
02:57 PM BST
Rayner promises to put ‘decency at heart’ of plans for housing
Decency will be put “at the heart” of the Government’s plan for housing, MPs heard, as Angela Rayner said she wanted every renter to be able to have a safe and secure home.
The Deputy Prime Minister and Housing Secretary said Labour was prioritising its Renters Rights Bill as it criticised the previous Conservative government for delaying their own planned reforms.
Introducing the second reading of the Bill, Ms Rayner said: “I hope the entire house will agree that everyone should live in a decent, safe and affordable home. Everyone should, but not everyone can.
“This is why I have put decency at heart of my plans for housing and taken the steps to ensure that all homes are warm and safe, and nowhere is that more needed than in the private rented sector.”
Ms Rayner added: “The Conservatives promised to pass a renters’ reform Bill in the 2019 manifesto. Yet in a desperate attempt to placate their backbenchers, they caved into vested interests, leaving tenants at the continued mercy of unfair section 21 eviction notices.
“They dithered, delayed and made excuse after excuse for their inaction.”
She said since 2019 more than 100,000 households have been subject to a no-fault eviction, with 26,000 being in the last year alone.
“That is the inheritance that we need to fix,” she added.
02:39 PM BST
Wall Street slumps ahead of Fed minutes
US stock markets declined at the opening bell ahead of the publishing of minutes from the last meeting of Federal Reserve policymakers which could shed light on the future path of interest rates.
The Dow Jones Industrial Average slipped 0.1pc to 42,043.34 while the broad-based S&P 500 was flat at 5,749.10.
The tech-heavy Nasdaq Composite fell 0.2pc to 18,147.33.
02:28 PM BST
Netflix password crackdown drives record UK revenues
Netflix has posted record UK revenues after its crackdown on password sharing boosted subscriber numbers.
The US streaming giant recorded revenues of almost £1.7bn in the UK in 2023, its biggest annual total to date and up from £1.5bn the previous year. Pre-tax profits also surged by almost 80pc to £61m, according to newly-filed accounts.
Netflix pinned the record performance on growth in subscriber numbers after the streaming company began cracking down on password sharing last year.
This chart shows how streaming platforms’ prices compare.
02:06 PM BST
Bitcoin creator allegedly unmasked in HBO documentary
A documentary has claimed to have unmasked the mysterious creator of the cryptocurrency Bitcoin as a little-known Canadian software developer.
A planned broadcast on HBO – Money Electric: The Bitcoin Mystery – will suggest that Peter Todd, who was involved in early discussions around the development of Bitcoin, was its pseudonymous creator, Satoshi Nakamoto.
The true identity of Nakamoto, who invented the cryptocurrency, has remained a mystery for over 15 years.
Read on for details about the alleged creator of Bitcoin.
01:44 PM BST
Germany’s economy to shrink this year, says government
Germany’s economy is on track to shrink for a second consecutive year, Olaf Scholz’s government has warned, as Europe is “squeezed between China and the US”.
The Chancellor’s administration slashed its forecast for gross domestic product (GDP) this year from 0.3pc growth to a 0.2pc contraction.
The German economy shrank by 0.3pc last year as its industry struggled to recover from the energy crisis triggered by the war in Ukraine.
Vice Chancellor Robert Habeck, who is also the economy minister, said that the country has not seen powerful growth since 2018 amid structural problems and wider global challenges.
He said: “In the middle of the crises, Germany and Europe are squeezed between China and the US, and must learn to assert themselves.”
He added: “There has never yet been such a prolonged phase of weakness in the German economy.”
01:35 PM BST
Drivers face rise in petrol prices this month, warn economists
Drivers will have to pay more at the petrol pumps this month, economists have warned, amid the growing conflict in the Middle East.
Deutsche Bank said it expected “upward momentum” for pump prices in October and November following the recent spike in oil prices.
Brent crude briefly tipped back above $80 a barrel on Monday, having been below $70 before Iran launched rockets at Israel last week.
As a result, inflation will average 2.6pc this year, the bank said.
The predicted rise in forecourt prices comes as the amount paid by drivers for petrol has fallen by 15.5p since the start of May, while diesel has dropped by 18.5p, according to the RAC.
Sanjay Raja, chief UK economist at Deutsche Bank, said: “Upward momentum will likely gather pace.
“The recent run of energy deflation will likely come to an end shortly.
“Indeed, pump prices are likely to reverse course in October, while dual fuel bills will see a hefty 10pc rise.”
01:17 PM BST
Inflation has fallen back below 2pc, say economists
Inflation has fallen back below the Bank of England’s 2pc target, economists have said, as policymakers are expected to ramp up the pace of interest rate cuts.
Deutsche Bank predicted that the consumer prices index fell back to 1.8pc in September, down from 2.2pc in August amid declining air fares and petrol prices, as well as falling food and drink prices.
Such a drop would raise pressure on the Bank of England to cut interest rates, especially after Governor Andrew Bailey said policymakers might become “more aggressive” about reducing borrowing costs if inflation news was good.
Sanjay Raja, chief UK economist at Deutsche Bank, said:
Energy inflation contracted in September, as pump prices fell for a fourth consecutive month.
Our pump price trackers point to a near 3.5pc month on month drop in petrol prices for CPI.
12:53 PM BST
Boeing talks break down as strikes head for fourth week
Talks between Boeing and union officials have broken down as strikes at its manufacturing sites head into a fourth week.
The aerospace company said on Tuesday it withdrew its pay offer to around 33,000 US factory workers, saying the union had not considered its proposals seriously after two days of talks.
The contract offer would have given striking workers 30pc raises over four years.
Boeing commercial airplanes head Stephanie Pope said: “Unfortunately, the union did not seriously consider our proposals.”
She said the union’s demands were “non-negotiable”, adding: “Further negotiations do not make sense at this point.”
It comes as Boeing seeks to raise billions of dollars to shore up its balance sheet after a string of scandals – notably a midair blowout on a flight in January – knocked confidence in the plane maker.
12:33 PM BST
Former Glencore executives face trial on bribery charges in 2027
A group of former Glencore executives have been told they will stand trial in 2027 on bribery charges.
Alex Beard, the former head of oil at the commodities giant, and Andy Gibson, ex-head of oil operations, are accused of conspiring to make corrupt payments to government officials and state-owned oil company employees in Nigeria, Cameroon and the Ivory coast more than a decade ago.
Former Glencore employees Paul Hopkirk, Ramon Labiaga, Martin Wakefield and David Perez are charged with corruption.
Beard, who indicated at his first court appearance last month that he will plead not guilty, was not formally asked to enter a plea at a brief hearing at London’s Southwark Crown Court on Wednesday.
Beard, who is the most high-profile commodity trader to have been charged in Britain for alleged corruption, joined Glencore in 1995 from BP, the biggest trading desk at that time, and was head of oil from 2007 until 2019, when he retired.
He helped Glencore become one of the top three oil trading companies, trading as much as 7pc of the world’s oil in its heyday.
All six defendants are expected to formally enter pleas in October 2025 ahead of a trial in mid-2027.
12:03 PM BST
US stocks poised to edge lower at the opening bell
Wall Street inched down in premarket trading ahead of the release of the minutes from the Federal Reserve’s last meeting.
Shares of Alphabet fell 1.4pc ahead of the opening bell after the US Department of Justice said it may ask a judge to break up Google, including the Chrome internet browser and Android operating system.
Indexes closed higher on Tuesday, recovering from Monday’s selloff, with technology stocks leading the gains as US Treasury yields eased.
Trading has been choppy this week as investors reprice their expectations on interest rate cuts.
US inflation figures will be released on Thursday.
In premarket trading, the Dow Jones Industrial Average and S&P 500 were marginally down, with the Nasdaq 100 lower by 0.1pc.
11:38 AM BST
Nearly half of global electricity ‘to be powered by renewables by end of decade’
Nearly half of the world’s electricity is set to be powered by renewable energy by 2030, according to forecasts, but the landmark would still miss global targets.
The world is on course to add the equivalent power capacity of China, the European Union, India and the US combined, about 5,500 gigawatts (GW), via renewables, the International Energy Agency said.
However, the massive forecast ramp-up of solar panels, wind turbines and other green power sources will still miss a goal set last December by the UN of tripling global renewable capacity by the end of the decade.
Fatih Birol, the IEA’s executive director, said the growth in renewables was not just being driven by efforts to cut emissions, but by the fact that they offer “the cheapest option to add new power plants in almost all countries around the world”.
As a result, renewables growth is “moving faster than national governments can set targets for”, he said.
Nonetheless, if countries are going to hit the target of tripling global renewables capacity, Governments need to ramp up efforts to join green power sources to their power grids.
This would mean building or upgrading 25 million kilometres of pylons, cables and other grid connections over the coming years.
11:27 AM BST
UK gas prices outstrip Europe amid scramble for supplies ahead of winter
UK gas prices have become more expensive than in Europe as Britain tries to restock supplies following a slowdown in shipments earlier this year.
British contracts for delivery in November have been trading about 2pc above the benchmark used on the Continent in recent days.
Prices are higher than at the same time last year amid concerns that the UK market could face increasing demand.
Nick Campbell, a managing director at Inspired, said: “A prolonged cold snap could quickly drain UK storage facilities, hence the need to price at a premium to the continent.”
UK gas prices are usually cheaper than Europe during the summer but sometimes become more expensive in winter as Britain tries to secure extra supplies for the colder months.
However, liquefied natural gas shipments to the UK more than halved in January to September compared to 2023 levels, according to ship-tracking data compiled by Bloomberg.
Elizabeth Kunle, gas market analyst at S&P Global, said vessels with the super-chilled fuel have been “favouring northwest European and Italian terminals over UK”.
Dutch front-month futures, the European benchmark, were last down 0.2pc below €39 per megawatt hour. Meanwhile, the UK equivalent contract was down 1pc towards 96p per therm.
10:55 AM BST
Pound falls as fewer US rate cuts expected
The pound has continued its decline against the dollar as traders expect fewer interest rate cuts by the US Federal Reserve.
Sterling was down 0.1pc to $1.309 after a strong jobs market report last week reduced the chances of a reduction in borrowing costs in America next month to 88pc.
Before US nonfarms payrolls came in well above forecasts for September, money markets had indicated there was a 35pc chance that the Fed would cut rates by half a percentage point, with a quarter of a point move priced in.
Now, traders are much less certain, and are unsure that the Fed will cut rates twice more this year, as had previously been expected.
As a result, the Bloomberg Dollar Spot Index, a measure of the strength of the US currency, is up for an eighth straight day and on track for its longest winning streak since April 2022.
The currency has surged to its strongest level since mid-August.
Against the euro, the pound was flat at 83.8p.
10:40 AM BST
Eurozone interest rates ‘very likely’ to be cut next week, says policymaker
The European Central Bank will very likely make its third interest rate cut of the year next week as inflation is coming under control, one of its policymakers has said.
The odds of a rate cut at the ECB’s October 17 meeting rose after eurozone inflation slowed to 1.8pc in September, falling below its 2pc target for the first time since 2021.
Francois Villeroy de Galhau, who heads France’s central bank and sits on the ECB governing council, told franceinfo radio:
“Victory against inflation is in sight. A cut is very likely.”
He added: “By the way, it will not be the last.”
As to the size of the cut, he said the ECB was “used to acting gradually… without taking too large steps” – signalling that policymakers would again opt for a cut of a quarter of a percentage point
The Frankfurt-based institution launched an unprecedented streak of eurozone rate hikes beginning in mid-2022 to tame runaway food and energy costs, which surged in the wake of the Covid pandemic and Russia’s invasion Ukraine.
10:25 AM BST
TfL pledges talks as workers vote over strikes
Transport for London has pledged to continue talking to unions about pay and conditions following the threat of strikes.
The Transport Salaried Staffs Association (TSSA) is balloting its members on London Underground for industrial action.
The union said the Underground has made an offer which would see most grades receive a below-inflation pay rise and is freezing most pay ranges, which it claims raises the possibility of long-term, or indefinite, pay freezes.
TfL said that, alongside an annual pay rise, with a greater increase for those earning less than £40,000, it has also proposed additional improvements including increased paternity leave.
A TfL spokesman said:
We are disappointed that the TSSA is balloting London Underground employees over pay, conditions and pension arrangements.
We have held a number of constructive discussions with our trade unions and have considered their feedback on our pay offer.
We are will continue to work with the unions to ensure that we reach a fair agreement for our hardworking colleagues that is also affordable and delivers for London.
10:07 AM BST
Oil prices pick up after slump over China fears
The price of oil has risen slightly after its sharpest fall in a month on Tuesday amid fears that demand will be weak from China’s economy.
Brent crude plunged 4.6pc after traders were left unimpressed by Beijing’s failure to give details on its plans to stimulate growth in the world’s second largest economy.
Today it rebounded slightly, gaining 0.6pc but still belo $78 a barrel after tipping above $80 earlier in the week over concerns about widening conflict in the Middle East.
Peter Branner, chief investments officer at Abrdn, said: “Geopolitical uncertainty will shape this quarter and beyond with several major risks to our main scenario.
“One is further conflict escalation in the Middle East that sends oil prices and geopolitical risk premia substantially higher.”
Kathleen Brooks, research director at XTB, said: “China stimulus fears and a lack of escalation in the direct attacks between Iran and Israel have calmed the oil markets for now, but they remain sensitive to headline risk.”
09:47 AM BST
CMC Markets jumps as it returns to profit after job cuts
Trading platform CMC Markets swung back to profit and has seen a surge in revenue over the last six months, following a period of strong trading and a cost-cutting programme.
The London-listed company said its net operating income is expected to have risen 45pc to £180m for the six months to September 30.
CMC Markets, which was founded by Tory peer Lord Peter Cruddas, has been trying to keep costs under control after it reported a £2m loss this time last year.
That included slashing 200 jobs earlier this year, equating to about 17pc of its workforce, by merging its support teams, streamlining reporting lines and automating some processes.
The “disciplined cost management” helped it push operating costs down by 7pc, and swing back to a £51m profit for the half-year.
The company also suffered from a slump in deals in 2023, with investment banks axing jobs and consolidation ramping up among City brokerages.
In response, it launched several new products, including a new business-to-business service, and expanded its investment platform into Singapore, where it has an office.
Shares topped the FTSE 250 today as they rose 4.9pc.
09:27 AM BST
Tax raid fears trigger slump in business confidence
Fears of tax rises in the Budget and the loss of winter fuel payments for millions have shattered business and consumer confidence, according to several influential new surveys that will raise fresh fears about the economy.
Business confidence suffered its first drop in a year, according to the Institute of Chartered Accountants in England and Wales’s (ICAEW) most recent quarterly survey. Almost one business in every three said taxes were a growing challenge.
A separate report from NatWest showed business activity slowed in almost every region of the country in September compared to August as the “Autumn Budget dominates [the] outlook”.
Meanwhile, a survey by Which? found that consumer confidence has also been hammered, particularly by the decision to remove winter fuel payments from most pensioners.
Only 17pc of people believe the economy will get better over the next year, while just over half – 51pc – predict it will get worse, the consumer group found.
The gloom comes amid expectations of tax rises and public spending cuts at the upcoming Budget. The Chancellor, Rachel Reeves is widely expected to increase capital gains and inheritance tax in a Budget raid on business and wealth.
Sebastian Burnside, chief economist at NatWest, said businesses were waiting to see how taxes, spending and borrowing decisions affected the economy.
He said: “This is going to be a really big budget, both for the size of the fiscal hole the Chancellor says she needs to plug, and beyond the raw numbers we are going to learn a lot more about this Government’s approach to tackling the problems and issues it faces. Whenever you talk to any business it is either issue one or two that they bring up.”
09:12 AM BST
China justifies EU brandy restrictions as tariff row deepens
China said its anti-dumping measures against brandies imported from the European Union are “legitimate trade remedy measures” as its row with the bloc over trade tariffs intensifies.
French brands such as Hennessy and Remy Martin will face the restrictions, adopted just days after the EU voted for tariffs on Chinese-made electric vehicles (EVs), sparking its biggest trade row with Beijing in a decade.
China’s commerce ministry said preliminary findings of an investigation showed that dumping of brandy from the EU threatened “substantial damage” to domestic industry.
Today the ministry said the bloc’s actions against Chinese EVs “seriously lack a factual and legal basis” and “clearly violate” World Trade Organisation (WTO) rules.
China has protested strongly to the WTO, it added.
Trade tensions have surged since the European Commission said last week it would press ahead with tariffs on China-made EVs, even after Germany, the bloc’s largest economy, rejected them.
Another sign of rising trade tension was the ministry’s remarks on Tuesday that an anti-dumping and anti-subsidy investigation into EU pork products would deliver “objective and fair” decisions when it wraps up.
08:56 AM BST
FTSE 100 rebounds after China worries
UK shares rebounded from a one-month low caused by the doubts about China’s economy.
The blue-chip FTSE 100 moved 0.5pc higher, while the mid-cap FTSE 250 was up 0.5pc.
Among individual stocks, Rio Tinto’s UK-listed shares slipped as much as 0.9pc after the Australian miner said it would buy Arcadium Lithium in a $6.7bn (£5.1bn) all-cash deal to become the world’s third-largest lithium producer.
Mondi gained 3.6pc to top the FTSE 100 after the paper and packaging company agreed to buy Schumacher Packaging’s German, Benelux and UK packaging assets for €634m (£531.2m), including debt, to expand in Western Europe.
CMC Markets advanced 6.2pc to lead the FTSE 250 after the trading platform forecast a 45pc rise in first-half net operating income, buoyed by cost cuts and sustained levels of trading activity.
08:43 AM BST
Ministers ‘looking seriously’ at rail investment after ‘HS2-light’ suggested
Transport Secretary Louise Haigh is looking “very seriously” at how to increase rail investment in the north, a Cabinet colleague said amid reports a “HS2-light” railway line could be built between Birmingham and Crewe.
Senior government figures are looking at a proposal to extend the rail line in a less expensive way than the original scheme, according to The Times.
Culture Secretary Lisa Nandy said: “I think the difficulty that the Transport Secretary and the Chancellor have is that the last government seriously overcommitted to projects that they had no idea how they were going to fund from the public finances, and so it’s meant some very tough decisions.
“I can’t obviously pre-empt what’s going to be in the spending review, which the Chancellor will announce in a matter of weeks.
“But I know it’s something that the Transport Secretary is looking at very seriously.”
Asked about a report in The Times suggesting the line will go ahead, Wigan MP Ms Nandy told Times Radio: “As a constituency MP, and also as a member of the Government, we would want to see far more investment in transport in the north of England, and far more ability for mayors and councils to be able to determine how that investment is spent.”
08:35 AM BST
China stocks suffer worst fall since 1997
China stocks suffered their worst day in 27 years as traders were left disappointed by a lack of stimulus for the country’s ailing economy.
The Shenzhen Composite Index on China’s second exchange tumbled 8.6pc, or 181.45 points, to 1,917.32, which was its sharpest fall since May 1997.
The Shanghai Composite Index dived 6.6pc, or 230.92 points, to 3,258.86, after racking up big gains a day earlier following a week-long break.
The benchmark CSI 300 dropped by 7.1pc, which was its biggest fall since February 2020.
China’s 🇨🇳 CSI 300 Index — is tanking after a massive drop yesterday. Investors aren’t convinced that the government’s stimulus plans will help.
Some think China is waiting for the US election to act, but many are pulling money out of China and putting it into US tech stocks… https://t.co/BnMtyXOeRf pic.twitter.com/a3W7HkJDLG
— Nicholas Mugalli (@RealNickMugalli) October 9, 2024
08:25 AM BST
China to hold weekend briefing as stocks plunge
China’s finance minister will hold a briefing this weekend focused on fiscal policy, Beijing authorities said, after a sharp sell-off in the nation’s stock markets.
Traders on the mainland and in Hong Kong were left disappointed by a news conference on Tuesday in which officials failed to unveil any new stimulus and provided scant detail on its plans for implementing the raft measures already flagged.
Lan Fo’an will use Saturday’s news conference to outline “countercyclical adjustment of fiscal policy to promote high-quality economic development”, Beijing announced.
The world’s second-largest economy has struggled to regain its footing since the lifting of pandemic measures at the end of 2022.
Economists say more direct state support is needed to boost flagging consumption and achieve the government’s official national growth target of about 5pc for this year.
08:08 AM BST
FTSE 100 rebounds from sharp fall
The FTSE 100 began the day higher after steep falls on Tuesday triggered by worries about demand from the Chinese economy.
The UK’s blue chip index rose 0.4pc to 8,222.84 while the midcap FTSE 250 gained 0.2pc to 20,680.76.
07:58 AM BST
Revolution Beauty sales slump as it clears old stock
Cosmetics brand Revolution Beauty has revealed tumbling first half sales amid an overhaul but said it is set to return to growth in its fourth quarter as the turnaround starts to pay off.
The group said net sales plunged by a fifth to £72m in the six months to August 31 as it simplified its product offering and ramped up clearance promotions to shift old stock.
It also revealed an £11.3m write off on old stock as it continues the shake up.
Underlying earnings, excluding the stock write down, fell 11pc to £3.1m in its first half.
But the company said sales for the full-year are now set to fall at a slower pace in the second half, with a return to growth in the final three months.
“This growth is expected to accelerate through 2025-26,” it said.
Full-year underlying earnings are expected to be “at least in line with 2023-24”, as previously guided, it added.
07:42 AM BST
Marston’s sales grow as it offloads brewery business
Marston’s saw a 4.8pc rise in like-for-like sales over the past year, amid strong growth across both its food and drink divisions.
The group, which operates 1,339 pubs across the UK, said sales even grew over the most recent three months to the end of September, despite unusually wet weather during the quarter.
Marston’s announced in July that it has pulled out of brewing after 186 years after selling the remainder of its beer business to Carlsberg for £206m.
It was announced this week that its former Banks’s Brewery in Wolverhampton would be closed in the autumn of next year.
Chief executive Justin Platt said: “The strong revenue performance is very pleasing. This reflects the quality of the experiences we are providing for our guests as well as the continued focus and passion of our team.
“This performance, combined with our recent disposal of CMBC puts Marston’s in a strong position to drive value for our shareholders as a focused pub business.”
07:29 AM BST
US considers break-up of Google in landmark online search case
Google could be broken up, the US Department of Justice has said, after a landmark case which found it had built an illegal monopoly over online searching.
Its parent company Alphabet may be forced to divest parts of its business, such as its Chrome browser and Android operating system, the DoJ said.
It comes after Judge Amit Mehta of the US district court for the District of Columbia ruled in August that Google had unfairly blocked rivals by paying $26bn to become the default search engine on smartphones and web browsers.
The Justice Department said: “Fully remedying these harms requires not only ending Google’s control of distribution today, but also ensuring Google cannot control the distribution of tomorrow.”
Google, which has more than 90pc of the market share for global internet searches, said it plans to appeal.
The company said in a corporate blog post that the proposals were “radical” and said they “go far beyond the specific legal issues in this case.”
07:16 AM BST
Rio Tinto to buy lithium mining giant in $6.7bn deal
Rio Tinto has announced it will buy US-based lithium producer Arcadium Lithium in a $6.7bn (£5.1bn) deal.
The all-cash takeover worth $5.85 per share will transform the London-listed miner into the world’s third-largest supplier of lithium, which is used in a variety of products including hybrid and electric car batteries, laptops and phones.
The acquisition has been unanimously approved by both companies’ boards and is expected to take place by the middle of next year.
Rio Tinto chief executive Jakob Stausholm said: “Acquiring Arcadium Lithium is a significant step forward in Rio Tinto’s long-term strategy, creating a world-class lithium business alongside our leading aluminium and copper operations to supply materials needed for the energy transition.
“Arcadium Lithium is an outstanding business today and we will bring our scale, development capabilities and financial strength to realise the full potential of its Tier 1 portfolio.”
Arcadium Lithium boss Paul Graves said: “We are confident that this is a compelling cash offer that reflects a full and fair long-term value for our business and de-risks our shareholders’ exposure to the execution of our development portfolio and market volatility.”
07:14 AM BST
China stocks suffer worst fall since pandemic
China stocks suffered their worst drops since the pandemic after traders were left disappointed by Beijing’s plans to stimulate the world’s second largest economy.
Shanghai stocks tumbled 5.3pc overnight after racking up big gains a day earlier following a week-long break, while the Shenzhen Composite Index on China’s second exchange sank 6.7pc, or 140.07 points, to 1,958.70.
The benchmark CSI 300 Index tumbled as much as 7.4pc, which was its biggest fall since 2020.
Stocks on the mainland and Hong Kong rocketed after China last month began announcing measures aimed at boosting its flagging economy, piling on more than 20pc each.
However, a much-anticipated news conference in Beijing on Tuesday – after the Golden Week break – left traders disappointed as officials refused to unveil more stimulus and provided scant detail on the measures already pledged.
Stephen Innes of SPI Asset Management said: “Let’s call it what it is — an abject failure — as Chinese shares opened sharply lower, sending a clear signal that the market is no longer buying half-hearted promises.”
Yeap Jun Rong of IG added: “A lack of new stimulus has been the cause of disappointment, with many market participants hoping that its fiscal policies will follow in the footstep of the financial ‘bazooka’ delivered in late-September, but there was clearly a step-down in yesterday’s announcement.”
06:57 AM BST
Good morning
Thanks for joining me. We begin the day with a look at what is happening in China, where stocks have suffered heavy declines as traders were left unimpressed by Beijing’s efforts to kick start the world’s second largest economy.
Stocks in Shanghai, Shenzhen and Hong Kong were all down heavily, with the benchmark CSI 300 recording its worst drop since 2020.
5 things to start your day
1) Britain needs fresh approach to risk-taking, says FCA boss | Nikhil Rathi warns against ‘rules for the sake of it’ amid concerns watchdog has failed to boost growth
2) Workers show preference for zero-hours contracts Rayner plans to ban | New research shows many young people use roles as stepping stones to secure permanent jobs
3) Why Reeves’s plans to turn on the spending taps could fail to boost the economy | Chancellor’s promised supercharge of investment risks being ‘underspent’ by Whitehall
4) Shein overtakes Boohoo and closes gap on Asos as UK sales hit £1.6bn | Boom in sales at Chinese fast fashion giant lays groundwork for £50bn London listing
5) Drinkers warned over quality of French wine | Drinkers warned over quality of wine after bad weather hits harvest
What happened overnight
Shares in China slumped as details of economic stimulus plans from officials in Beijing failed to live up to investors’ expectations.
The Shanghai Composite lost 5.1pc to 3,311.02 after it gained 4.6pc Tuesday when it reopened from a national holiday.
The CSI300 Index, which tracks the top 300 stocks traded in the Shanghai and Shenzhen markets, fell by 5.6pc.
Stocks in Hong Kong fluctuated between gains and losses, with the Hang Seng Index falling by 2.4pc to 20,418.61. This decline followed a plunge of over 9pc on Tuesday – its worst since 2008 – as traders sold off shares after recent rallies.
Stephen Innes of SPI Asset Management said: “Let’s call it what it is — an abject failure — as Chinese shares opened sharply lower, sending a clear signal that the market is no longer buying half-hearted promises.”
In Tokyo, the Nikkei 225 index advanced 0.6pc to 39,178.70. Shares of the Japanese retailer Seven & i Holdings soared more than 10pc in early trading after media reported that Canadian convenience store operator Alimentation Couche-Tard had increased its takeover bid by about 20pc.
Japan’s parliament was due to be dissolved on Wednesday to pave the way for a general election. Prime Minister Shigeru Ishiba is seeking to consolidate support after taking office last week, amid signs the Liberal Democrats’ ruling coalition remains shaky after Ishiba’s predecessor, Fumio Kishida, stepped down following a slew of scandals among the party’s lawmakers.
Australia’s S&P/ASX 200 gained 0.2pc at 8,189.70. South Korea’s markets were closed for a public holiday.
On Wall Street, rises in big tech firms such as Nvidia and Apple boosted the main indexes, even though oil and mining stocks pull downwards. The Dow Jones Industrial Average rose 0.3pc, to 42,080.37, the S&P 500 rose 1pc, to 5,751.13, and the Nasdaq Composite rose 1.5pc, to 18,182.92.
The yield on benchmark 10-year US Treasury notes dipped to 4.02pc from 0.1pc late on Monday.
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