Scotland will raise money on the international bond markets for the first time by 2026, Humza Yousaf has said.
The First Minister said that issuing bonds would help establish the country’s financial independence from the UK.
The move would demonstrate Scotland’s “credibility” to international investors as the SNP seeks to hold another independence referendum, despite Westminster confirming they will not allow a new referendum to take place.
Speaking at the Scottish National Party (SNP) conference on Tuesday, Mr Yousaf said: “It will raise our profile as a place where investment returns can be made. In doing so, we will show the world not only that we are a country to invest in today.”
Money raised through international bond markets would be invested in infrastructure projects, as the SNP seeks to improve Scottish public services and build a green economy, Bloomberg reported.
The proposed debt sale would take place before the current Scottish parliament’s term ends in 2026, subject to due diligence and appropriate market testing, according to Mr Yousaf.
The SNP leader did not specify how much the devolved government is seeking to raise.
Read the latest updates below.
05:29 PM BST
Recession looming as jobs market weakens, says Bank rate-setter
Britain is slipping towards a recession, a Bank of England rate-setter has warned, as official data showed signs that the labour market is weakening.
Swati Dhingra, the Monetary Policy Committee member who has voted most consistently against raising interest rates, said there are “early indicators” of possible “over-tightening” as higher borrowing costs bite.
“The labour market is really loosening,” she said, speaking at a Royal Economic Society event.
“The sharp increase in vacancies that we had seen after the pandemic has already undone 80pc of its overshoot. It’s very hard to imagine where further momentum in wage growth is going to come from.”
Ms Dhingra described the cycle of rate rises from 0.1pc to 5.25pc as “a very, very sharp tightening in a very short span of time”.
Deputy economics editor Tim Wallace reports…
04:46 PM BST
PwC to charge clients for ChatGPT-generated advice on tax and due diligence
PwC is to charge clients for advice generated by artificial intelligence as the Big Four firm seeks to cut costs and boost productivity.
My colleague Simon Foy reports:
The firm has partnered with OpenAI, the owner of ChatGPT, to use AI to provide advice on complex tax and legal matters.
This includes carrying out due diligence on companies, identifying compliance issues and even recommending whether to give the green light to business deals.
Bivek Sharma, chief operating officer for tax, legal and people at PwC UK, told Bloomberg, which first reported the development, that the firm’s new AI system is already “behaving like a 25-year tenure partner”.
It comes as accounting and consulting giants seek to cut costs amid a slowdown in client demand. PwC is freezing pay increases and bonuses for some of its 25,000 UK staff.
04:38 PM BST
FTSE 100 closes in the green
The FTSE 100 has closed 0.58pc higher at 7,675.21, while the FTSE 250 midcap index closed 0.97pc higher at 17,689.46.
04:16 PM BST
Scotland poised to issue first-ever bond, says Yousaf
Scotland is planning to raise money on international bond markets for the first time.
Humza Yousaf, leader of Scotland’s devolved government, said that the move would demonstrate the country’s credibility on the global stage as his party seeks independence.
Speaking at the Scottish National Party (SNP) conference, he said:
I can confirm that by the end of this parliament the SNP Government will – subject of course to due diligence and appropriate market testing – we will go directly to the international bond market for the first time in our own right.
Mr Yousaf did not set out how much the government intended to raise. The current Scottish parliament runs until May 2026.
04:06 PM BST
Biden’s latest ban on AI chips will not have ‘meaningful impact’ on upcoming results, says Nvidia
Nvidia’s share price has tumbled after the Biden administration announced plans to toughen controls of AI chips to China amid security fears.
Nvidia, which is worth more than $1 trillion (£820bn) and one of the world’s most valuable companies, is among the chipmakers which will be affected by Joe Biden’s new regulations.
Nvidia’s A800 and H800 chips will be captured by the restrictions, which have been widened to restrict a broader range of advanced chips and chipmaking tools.
However, the company said that it does not expect “a near-term meaningful impact on our financial results” as a result of the tighter rules.
Nvidia’s share price is down 4.3pc to $440.96.
03:47 PM BST
Joe Biden toughens export controls of AI chips to China amid security fears
Joe Biden is planning to tighten controls on Nvidia artificial intelligence chips being exported to China amid fears the technology could be put to military use.
According to Gina Raimondo, US commerce department secretary, the latest restrictions seek to limit China’s access to “advanced semiconductors that could fuel breakthroughs in artificial intelligence and sophisticated computers that are critical to (Chinese) military applications”.
The new measures aim to hamper China’s military development by closing loopholes in regulations issued last October.
The regulations will probably be updated “at least annually,” Ms Raimondo added.
The latest restrictions also widen restrictions on shipments of AI chips and chipmaking tools to more than 40 additional countries which present risks of diverting the technoogy to China, including Iran and Russia.
03:09 PM BST
Handing over
I’ll bid you farewell for another day and… drum roll please, leave you in the hands of the returning Adam Mawardi from here.
I’ll leave you with a look at benchmark 10-year US government bonds, where the yield is creeping back toward 16-year highs in the wake of the instability caused by the Middle East conflict.
The 10-year yield is up 13 basis points today to 4.84pc. The 10-year UK gilt yield has risen seven basis points to 4.55pc.
03:04 PM BST
KPMG announces fresh job cuts amid dealmaking slowdown
KPMG has launched a fresh round of job cuts in its UK business amid a slowdown in dealmaking in the City.
The financial services and auditing giant said it will reduce roles and freeze pay in its deal advisory business.
It is understood the move, which was first reported by the Financial Times, will affect about 110 people, or almost 7pc of the company’s nearly 1,700-strong UK deal advisory division.
Last month, KMPG launched a separate consultation process over plans to axe up to 125 jobs in its consulting business.
A KPMG UK spokeswoman said:
A challenging economic environment has driven a softening in a number of markets, including the deals market.
These conditions have impacted demand in certain areas, as some clients have chosen to pause or delay projects.
We have therefore taken the difficult decision to put forward proposals to reduce our headcount in a small number of areas of our business.
02:44 PM BST
Greta Thunburg among 21 arrests at oil demonstration
Police have confirmed they made 15 arrests outside the InterContinental London hotel in Park Lane this afternoon.
They were held under the public order act, with one arrested on suspicion of criminal damage.
Officers had already arrested six people this morning for obstruction of the highway.
A statement from the Metropolitan Police said that officers imposed conditions on the protesters under the Public Order Act at 12.32pm.
The statement added:
Officers asked the protesters to move from the road onto the pavement, which would enable them to continue with their demonstration without breaching the conditions.
A number of protesters failed to do so and we have now made a further 14 arrests for section 14 of the public order act and a further one for criminal damage. Officers remain on the scene.
02:32 PM BST
Wall Street slumps at the opening bell
Away from the protests briefly, US stock markets fell at the opening bell as Goldman Sachs reported a slump in profits and investors assessed diplomatic efforts to contain the Middle East conflict.
President Joe Biden will visit Israel on Wednesday, after Washington said Prime Minister Benjamin Netanyahu had agreed to allow humanitarian aid to reach Gazans.
Kyle Rodda, senior market analyst at Capital.com, said: “Markets fear a ground offensive by Israel could ignite a larger and more complicated regional conflict that risks regional supply chains, energy output, economic growth and financial stability.”
Meanwhile, Goldman Sachs’ profit fell in the third quarter as the investment bank was weighed down by a writedown on its GreenSky fintech business and its investments in real estate.
However, Bank of America’s profit rose in the third quarter as it joined rivals in earning more from interest payments by its customers, while investment banking and trading fared better than expected.
The Dow Jones Industrial Average opened 0.3pc lower at 33,886.97. The broad-based S&P 500 fell 0.7pc to 4,343.02.
Meanwhile, the tech-heavy Nasdaq Composite was down 1.1pc to 13,415.29.
02:28 PM BST
Protesters block oil executives from attending conference
Shell chief executive Wael Sawan revealed he will deliver his speech to the annual Energy Intelligence Forum in London remotely as he cannot access the hotel.
Protesters have been successful in disrupting the programme of events at the gathering of oil executives.
The chief executives of trading houses Gunvor and Trafigura missed their appearances at the conference because they were stuck outside the venue, according to Bloomberg News.
The organisers had earlier told anyone attempting to enter the Intercontinental Hotel to wait until more police officers arrived to disperse the protesters.
Police on the scene estimate that 200 to 250 protesters are blocking access to the venue.
02:12 PM BST
Thunberg stands calmly after being led away
Video footage of her arrest showed Greta Thunberg, wearing a badge with the slogan ‘Oily Money Out,’ standing calmly as two police officers spoke to her. One was seen holding her arm.
She had gathered with campaigners outside the Energy Intelligence Forum taking place at the InterContinental London hotel in Park Lane, where the speakers include net zero minister Graham Stuart.
Mr Stuart has previously said that allowing oil and gas companies to continue drilling the North Sea for resources is necessary for energy security.
Protesters and energy analysts have said any new fossil fuel projects, such as the Rosebank field approved last month, would have no immediate effect on consumer bills and would mostly be sold abroad.
Lauren McDonald, a campaigner against Rosebank, said:
The only reason that they continue to pursue this is for profit, there is no justification for this.
So as we head into another round of climate talks, we are demanding that Norway – that wealthy happy country that is powered by green energy at home – we are demanding that Norway stops putting the brakes on other countries’ energy transitions.
We are demanding that Norway stops profiteering while others around the world are struggling to pay their bills, struggling to live and struggling to survive in our destabilising climate.
01:56 PM BST
Thunberg arrested in protest expected to last three days
Greta Thunberg was led away after taking part in a demonstration which campaigners say will run throughout the three-day meeting of the Energy Intelligence Forum.
Earlier, activists from Greenpeace abseiled down from the roof of the hotel to unfurl a banner reading “make big oil pay”, while a strong wind billowed the message and the protesters against the side of the building.
Ms Thunberg earlier told climate activists:
We cannot let this continue. The elite of the oil and money conference, they have no intention of transition.
Their plan is to continue this destructive search of profits. That is why we have to take direct action to stop this and to kick oil money out of politics.
We have no other option but to put our bodies outside this conference and to physically disrupt. And we have to do that every time, we have to continue showing them that they are not going to get away with this.
01:40 PM BST
Greta Thunberg arrested outside hotel
Greta Thunberg has been arrested after taking part in a protest outside a London hotel where oil bosses are holding an annual meeting:
01:28 PM BST
Goldman Sachs profits slump 33pc
Goldman Sachs saw its profits slump by a third in the three months to September as it made fewer deals amid muted market conditions.
The bank also saw a notable rise in expenses in the third quarter, as it had to write down its investment in lending platform GreenSky as well as its real estate investments.
Goldman made earnings of $2.06bn (£1.69bn), or $5.47 a share, down 33pc from a profit of $3.07bn (£2.52bn), or $8.25 a share, in the same period a year ago.
Analysts had low expectations for Goldman this quarter, with the bank firm announcing earlier this year that it was pulling out of its nascent consumer lending business.
The bank is selling off its GreenSky business, which the bank had to write off this quarter.
Chief executive David Solomon said: “We’re confident that the work we’re doing now provides us a much stronger platform for 2024.”
01:20 PM BST
Hundreds of jobs at risk after electric lorry start-up files for bankruptcy
Hundreds of British jobs are at risk after a Swedish electric truck start-up filed for bankruptcy.
Our senior technology reporter Matthew Field has the details:
Volta Trucks, which had been developing a 16-tonne all-electric vehicle, said it had filed for bankruptcy in Sweden after its main battery supplier collapsed.
Its UK division is also applying for administration and has appointed insolvency experts Alvarez & Marsal. The collapse puts roughly 600 British jobs at risk. The majority of Volta’s 850 staff were based in the UK, largely in the Midlands.
The company said: “Volta Trucks accomplished a great deal from a standing start in 2019, revolutionising commercial vehicle operations for a sustainable future.
“However, like all scale-ups in the EV manufacturing sector, Volta Trucks has faced challenges along the way.”
Read how it is the latest electric vehicle company to run into difficulties.
12:30 PM BST
Goldman Sachs chief to stop DJing in public after backlash
Goldman Sachs’ boss has called time on his DJ career as it was confirmed he will no longer play at high-profile events.
Our banking and financial services correspondent Simon Foy has the details:
David Solomon, who has been known for moonlighting as a disk jockey in recent years under the moniker DJ D-Sol, has scaled back his hobby after a barrage of criticism.
It comes after Mr Solomon last year played at Lollapalooza, the four-day music festival in Chicago alongside acts such as Metallica, Dua Lipa and Green Day.
In a post on his personal Instagram account at the time, Mr Solomon said: “Lolla was full of special moments, but this was the best” in a nod to a performance of his song “Learn To Love Me”.
Critics of Mr Solomon’s side gig have argued it is a distraction to his day job leading Wall Street’s most prestigious bank.
See pictures of him in action.
12:07 PM BST
Protesters block access to oil summit in London
Dozens of protesters including Greta Thunberg blocked the road to a hotel hosting a major gathering of oil executives.
The activists held banners and pink umbrellas with eyes painted on at both ends of Hamilton Place, stifling access to the InterContinental Hotel on Park Lane.
They shouted “oily money out” and “cancel the conference”, while others lit yellow and pink smoke flares.
A white fence surrounded the hotel entrance keeping protesters out while police smuggled conference attendees through the crowd of chanting activists and a samba band.
Miss Thunberg said:
We cannot let this continue. The elite of the oil and money conference, they have no intention of transition.
Their plan is to continue this destructive search of profits. That is why we have to take direct action to stop this and to kick oil money out of politics.
11:50 AM BST
Revolution Bars suffers loss as young customers hit by cost-of-living crisis
Revolution Bars said the late-night hospitality industry is facing “very challenging” times as it swung to a yearly loss and revealed a drop in sales.
The group, which runs Revolution, Revolucion de Cuba and Peach Pubs, said young people were facing a cost-of-living squeeze and visitor numbers were being affected by train strikes.
It told investors its total revenues were up by £11.8m to £152.6m in the year to the end of July compared to the previous year, after taking over Peach Pubs – a chain of 21 gastropubs focussed in UK market towns – last October.
But like-for-like sales, which strips out new venues that were not trading as part of the company a year ago, were down by 8.7pc.
The group said it swung to a statutory pre-tax loss for the year of £22.2m, having made a profit of £2.1m a year ago.
Chief executive Rob Pitcher said there had been a “seismic shift” after the pandemic, with the cost-of-living crisis now being the most significant factor impacting the hospitality sector.
Young people, who are the key demographic for its Revolution bars, have been the most impacted by high inflation, which has reduced the value of their wages, he said.
11:29 AM BST
Investor morale improves in Germany amid inflation hopes
German investor confidence improved more than expected in October, a key survey showed, thanks to slowing inflation and growing hopes that the European Central Bank has finished raising interest rates.
The ZEW institute’s economic expectations index surged by 10.3 points month-on-month to reach minus 1.1 points, the third consecutive monthly rise.
Analysts surveyed by FactSet had expected a smaller increase, pencilling in a reading of minus seven points. A negative reading means most investors are pessimistic.
ZEW president Achim Wambach said: “It seems that we have passed the lowest point.”.
Although the assessment of Germany’s current economic situation remained bleak, brighter expectations for the months ahead were driven “by the anticipation that inflation rates will decrease further and the fact that now more than three-quarters of respondents anticipate stable short-term interest rates in the eurozone,” he said.
He added: “Negative factors such as the Israel conflict – cited by some respondents as a reason for revising their growth forecasts downward – had only limited impact on the overall more optimistic outlook.”
11:12 AM BST
Gas prices fall back after Israel shock
Gas prices have eased further from the highs triggered by the conflict in the Middle East and closure of Israel’s Tamar field.
The European benchmark has dropped 1.7pc today to less than €48 per megawatt hour while the UK equivalent has dropped 1.8pc toward 119p per therm.
Prices have dropped by around 15pc from highs reached in the days after Hamas’ surprise attack on Israel which left 1,300 people dead.
It comes despite Finland’s climate minister saying that the sudden damage caused to a gas pipeline and telecoms cable connecting Finland and Estonia earlier this month was caused by an “external force”.
Investigators have said the damage could have been the result of deliberate sabotage.
10:52 AM BST
Wage rises will ease and cool inflation, says Bank of England policymaker
Wage growth will slow down and lead to a further cooling of inflation, according to a Bank of England policymaker.
Swati Dhingra, who has consistently called for an end to interest rate rises, said wage trends, falling producer
prices and “subdued profit growth” will cause inflation to cool.
She told a panel at a Royal Economic Society Summit:
It’s very hard to imagine where further momentum in wage growth is going to come from.
We should see some relenting of domestic inflationary pressures.
10:32 AM BST
India aims to put astronaut on the Moon by 2040
India aims to send an astronaut to the Moon by 2040, the government has said, as Prime Minister Narendra Modi issued instructions to the space department that include plans for a space station by 2035.
India’s space ambitions got a boost when it became the first country to land a spacecraft near the unexplored south pole of the moon in August, just days after a similar Russian mission failed, and the fourth overall to achieve a soft landing.
After that success, India launched a rocket to study the sun and is scheduled to conduct a test later this week as part of its crewed space mission.
A statement said:
Prime minister directed that India should now aim for new and ambitious goals, including setting up ‘Bharatiya Antariksha Station’ (Indian Space Station) by 2035 and sending first Indian to the moon by 2040.
To realise this vision, the Department of Space will develop a roadmap for moon exploration.
Modi has also called on scientists to work on missions to Venus and Mars.
10:15 AM BST
St James’s Place scraps exit fees after pressure from watchdog
St James’s Place briefly jumped to the top of the FTSE 100 after the asset manager announced it would scrap its controversial exit fees following pressure from the financial regulator.
Our senior money reporter James Fitzgerald has the latest:
In a market statement published today, Britain’s biggest wealth manager said it will be removing its early withdrawal charges on all new investment bond and pension business in the second half of 2025.
The business also announced it will be capping its initial advice fee to a maximum of 4.5pc with ongoing advice reduced to 0.8pc, and fund charges at 0.52pc.
It said the charges overhaul is expected to cost the business between £140m and £160m by the time they are rolled out in two years time.
The changes follow the introduction of new consumer rules this summer, which state companies must provide their clients with fair value for money or face action from the city regulator, the Financial Conduct Authority (FCA).
Read our guide to Britain’s top wealth managers.
10:00 AM BST
Oil steadies as traders await Middle East developments
Oil prices were flat after dropping more than 1pc on Monday amid reports that Washington is considering easing restrictions on Venezuelan crude to boost global supplies.
Brent, the international benchmark, was little changed just under $90 while US-produced West Texas Intermediate was down fractionally toward $86.
The uncertainty around the conflict in Israel has kept prices on hold.
Ian Lyngen at BMO Capital Markets said: “The price action doesn’t reflect an improvement in investors’ outlook for the Israeli conflict, rather the absence of a significant escalation.”
Stephen Innes at SPI Asset Management added:
The recent risk-off sentiment that had cast a shadow over the markets seems to be easing, partly due to extensive shuttle diplomacy by the White House and other regional actors.
Nevertheless, this optimism comes before Israel launches its ground offensive in Gaza, and this development could swiftly sour sentiment once more.
09:33 AM BST
Frasers buys German sports retailer SportScheck
Frasers Group has agreed a deal to buy German sports retailer SportScheck.
Mike Ashley’s retail vehicle, which owns Sports Direct and House of Fraser, told shareholders it has entered a “binding agreement” to buy the business from Signa Retail Department Store Holding.
Frasers did not disclose the value of the deal.
The UK retail firm said the move will allow it to grow its presence in Germany and saw key supplier partner Adidas praise the deal.
SportScheck runs 34 stores in cities across Germany and has annual revenues of around €350m (£303m).
It is the latest deal in Frasers’ acquisition strategy, which has also seen it build up a stake in German luxury brand Hugo Boss.
On Monday, Frasers also increased its stake in online fashion retailer Boohoo.
09:15 AM BST
House builders rocked as Bellway warns it will make a third fewer homes
House builders are on shaky ground across UK stock markets after Bellway revealed it expects to suffer a 31pc slump in the number of homes it builds next year.
Taylor Wimpey, Barratt Developments, and Berkeley Group are all trading in the red after Bellway said it expects to deliver about 7,500 completions in 2024, compared to 10,945 this year.
It also cut its expectations for its overall average selling price by 4.9pc to around £295,000.
Bellway said revenues fell 3.7pc to £3.4bn in 2023, while underlying pre-tax profits fell 18.1pc to £532.6m.
Its shares slumped as much as 4.2pc in early trading, extending a decline of more than 10pc in the past six months. The house building sector has slumped as much as 1.7pc today.
Victoria Scholar, head of investment at Interactive Investor, said:
Since the peak in May, shares have been under pressure weighed down by falling house prices, build cost inflation pressures, and weak demand for properties amid the ‘higher for longer’ interest rate environment that has made mortgages considerably less affordable.
Offsetting this to some extent is the chronic shortage of housing supply in the UK which is stemming an even steeper slide in house prices.
09:01 AM BST
Pound falls as wage growth slows
The pound has fallen against the dollar after figures showed that wage growth is slowing in the UK.
Sterling has slumped 0.3pc to below $1.22 as average earnings – both including and excluding bonuses – eased in the three months to August.
It comes as wage tracker data from jobs website Indeed indicated growth of advertised pay for new hires eased in September on both the single-month and three-monthly measures.
Senior economist Jack Kennedy said:
Wage growth remains a crucial metric for the Bank of England in assessing the persistence of domestically-generated inflation and hence prospects for interest rates.
While the strength of wage growth means policymakers need to remain vigilant, more recent data from the Indeed Wage Tracker offers them hope that pay pressures may be starting to cool.
08:33 AM BST
Engine-maker Rolls-Royce helps boost FTSE 100
UK shares have moved higher as the announcement of up to 2,500 job cuts at Rolls-Royce boosted shares in the aerospace sector.
The FTSE 100 index has gained 0.2pc while the mid-cap FTSE 250 has risen 0.3pc.
Engineering company Rolls-Royce said it would cut 2,000 to 2,500 roles across its global business as part of a cost-cutting drive, sending shares up 2.2pc.
It helped sent the broader aerospace and defence sector up 1.3pc today. The sector has gained 7.9pc since the outbreak of the conflict in the Middle East.
Industrial metal miners were down 0.6pc, as the US dollar and Treasury yields firmed ahead of economic data and Federal Reserve chairman Jerome Powell’s speech this week.
Shares of gambling company 888 have gained 1pc after earlier falling 1.5pc on news that the Government is considering a new levy on online gambling companies of up to 1pc to fund research, prevention and treatment of gambling addiction.
Bellway tumbled as much as 3.3pc after the homebuilder reported a slump in its annual profit and warned to build 31pc fewer homes in 2024, as high mortgage rates took a toll on demand. The homebuilders index was down 1.2pc.
08:20 AM BST
Bank of England has ‘more reason to pause interest rate increases’
As wage growth slowed down, Emma Mogford, fund manager at Premier Miton, said:
With the number of employees on payroll falling and wage inflation below expectations, this gives the Bank of England more reason to pause its interest rate increases.
If we are at peak rates, then a more stable outlook for interest rates could help the economy and stock market.”
08:05 AM BST
UK markets mixed at open
The FTSE 100 was down slightly after the open amid the ongoing turmoil in the Middle East.
The UK’s blue chip index has fallen 0.1pc to 7,626.60 while the domestically-focused FTSE 250 gained 0.3pc to 17,497.84 as official data showed wage rises cooling.
08:03 AM BST
Slowing wage growth eases pressure on Bank of England
Wages increased at a slower pace than expected, official figures show, easing pressure on the Bank of England to raise interest rates again before the year is over.
Pay including bonuses increased by 8.1pc in the three months to August, compared to a record pace of 8.5pc in July, according to the Office for National Statistics. Economists had expected an increase of 8.3pc.
It is the first time the figure has eased from one month to the next since February.
Ashley Webb of Capital Economics said the data showed “cooling labour market conditions appeared to start feeding through into an easing in wage growth in August”.
He added: “That supports our view that interest rates have peaked at 5.25pc. But as we suspect wage growth will fall only slowly, interest rates will probably stay at their peak until late in 2024.”
Emma Mogford, fund manager at Premier Miton, said: “With the number of employees on payroll falling and wage inflation below expectations, this gives the Bank of England more reason to pause its interest rate increases.”
Average regular earnings excluding bonuses increased 7.8pc in the three months to August and lifted 0.7pc after taking inflation into account.
Chancellor Jeremy Hunt said: “It’s good news that inflation is falling and real wages are growing, so people have more money in their pockets.
“To keep this progress, we must stick to our plan to halve inflation.”
Labour’s shadow chancellor Rachel Reeves said: “Thirteen years of Conservative economic failure has left working people worse off, with low growth, low pay and high taxes.
“Working people saw pay rise faster under the last Labour government. But, with the Conservatives we have seen a decade of stagnant wage growth.”
07:57 AM BST
Pay will not grow ‘meaningfully’ until 2025, says PwC
Jake Finney, economist at PwC UK, said the latest pay figures are not expected to change the Bank of England’s next decision on interest rates. He said:
In the underlying data there were more signs that pay growth is softening. The overall pace of increases in pay is slowing.
Meanwhile, the alternative pay data based on payroll figures (PAYE) has fallen for two of the past three months. The latest vacancies data also provides even more evidence that the labour market is loosening.
Two years of high inflation combined with our long-term productivity challenges have left their mark on living standards.
We expect to close the year with real pay lower than where it was in 2006. This is equivalent to seventeen years of lost pay growth. We do not expect pay to grow meaningfully in real terms until at least 2025, once inflation has turned a corner.
07:47 AM BST
Watchdog orders rethink on Heathrow passenger charges
A decision on how much Heathrow Airport can charge airlines must be reconsidered, competition regulator the Competition and Markets Authority (CMA) said.
In February, aviation regulator the Civil Aviation Authority (CAA) said the cap on Heathrow’s average charge per passenger must be reduced from £31.57 for 2023 and last year, to £25.43 over the next three years.
But the airport and three airlines – British Airways, Delta Air Lines and Virgin Atlantic – appealed against the CAA’s decision.
Kirstin Baker, who chairs the CMA’s group which assessed the appeals, said:
Having considered these appeals, we found that the CAA’s Heathrow price control struck broadly the right balance between ensuring prices for passengers are not too high and encouraging investors to maintain and improve the airport over time.
There are a handful of smaller issues we have ordered the CAA to look at again and it has agreed to do this swiftly.
07:37 AM BST
Good news that real wages are growing, says Hunt
Chancellor Jeremy Hunt said:
It’s good news that inflation is falling and real wages are growing, so people have more money in their pockets.
To keep this progress, we must stick to our plan to halve inflation.
07:30 AM BST
Public sector pay growth hits record high
Average regular earnings excluding bonuses increased 7.8pc in the three months to August and lifted 0.7pc after taking inflation into account, according to the Office for National Statistics.
Annual average regular pay growth for the public sector was 6.8pc in the three months to August, which is the highest figure since comparable records began in 2001.
For the private sector, this was 8pc and among the largest annual growth rates seen outside of the pandemic.
Annual growth in regular pay (excluding bonuses) was 7.8% in June to August 2023.
This is similar to recent periods and is one of the highest regular annual growth rates since comparable records began in 2001.
➡️ https://t.co/BSaupiBfjJ pic.twitter.com/ivXyy1P0Xp
— Office for National Statistics (ONS) (@ONS) October 17, 2023
07:20 AM BST
Rolls-Royce confirms plans to cut 2,500 jobs
Rolls-Royce has proposed to cut between 2,000 and 2,500 jobs across its global business in the latest stage of a significant transformation plan.
The aerospace engineering specialist said it aims to become a “simpler, more streamlined, organisation” through the process.
The company, which currently employs 42,000 people, said it also plans to remove “duplication” and deliver cost efficiencies through the shake-up.
Chief executive Tufan Erginbilgic said:
We are building a Rolls-Royce that is fit for the future.
That means a more streamlined and efficient organisation that will deliver for our customers, partners and shareholders.
Our business is full of committed, talented people and I believe these changes will enable them to build greater capability in areas that are key to our long-term success.
This is another step on our multi-year transformation journey to build a high performing, competitive, resilient and growing Rolls-Royce.
Here is the Telegraph’s story from overnight.
07:11 AM BST
Good morning
Thanks for joining me. Wage rises slowed down from the record pace they had set in the three months to July, according to official figures.
Pay including bonuses rose by 8.1pc in the three months to August, easing off from the 8.5pc jump in the previous period.
5 things to start your day
1) Israel to boycott Europe’s biggest tech conference after founder accuses country of ‘war crimes’ | Dozens of companies pull out of Lisbon event following a wave of protest from tech bosses
2) Sunak’s stealth tax raid equivalent to extra 6p on income tax, IFS says | Think-tank says the Government is in a ‘fiscal bind’ amid low growth and high debt servicing costs
3) Rolls-Royce to cut 2,500 jobs | Redundancies come amid a wider drive to trim costs
4) King Charles hands start-up right to mine gold and silver in Cornwall | Cornish Tin celebrates ‘significant win’ as region looks to revive mining heritage
5) Too early to declare victory in inflation fight, warns Bank of England | Persistent wage growth could keep interest rates higher for longer
What happened overnight
Asian stocks rose in cautious trading, with investors choosing to focus on corporate earnings prospects and the resilience of the US economy ahead of tensions in the Middle East.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.4pc. Tokyo’s Nikkei 225 was up 1pc at 31,988.40 and the Hang Seng in Hong Kong added 0.7pc to 17,763.41.
The Shanghai Composite index gained 0.3pc to 3,081.75. In Australia, the S&P/ASX 200 climbed 0.5pc to 7,059.00. India’s Sensex advanced 0.5pc and the SET in Thailand rose 0.5pc.
It has been confirmed that US President Joe Biden will visit Israel on Wednesday as the country prepares to escalate an offensive against Hamas militants that has set off a humanitarian crisis in Gaza and raised fears of a broader conflict with Iran.
Iran’s Foreign Minister said Israel would not be allowed to act in Gaza without consequences, warning of “pre-emptive action” by the “resistance front” in the coming hours.
Israel’s shekel weakened beyond four-to-the-dollar for the first time since 2015 on Monday, as it bears some of the brunt of worry and uncertainty about the Gaza situation.
On Monday on Wall Street, the S&P 500 climbed 1.1pc for its best day since the October 7 surprise attack on Israel by Hamas. It closed at 4,373.63. The Dow rose 0.9pc to 33,984.54 and the Nasdaq Composite added 1.2pc to 13,567.98.
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