General News
9:54AM
House prices grow at slower pace ahead of rate cut decision
Average house prices rose at a slower pace across the UK in the year to July, official figures show, shortly before the Bank of England announced its first interest rate cut in four years.
Average UK house prices increased by 2.2pc to £290,000, the Office for National Statistics (ONS) said, which was down from 2.7pc in the 12 months to June 2024.
Meanwhile, average UK private rents increased by 8.4pc in the year to August, down from 8.6pc the previous month.
ONS head of housing market indices Aimee North said:
Annual house price growth slowed this month. The North East saw the highest annual growth while London was the only region to show annual price falls.
Rental prices continue to climb at a near-record rate, although the pace of the increase has slowed slightly. London again saw the fastest growth in rents, with the slowest rise in the South West of England.
House prices grew by 2.2pc in August compared to the same month last year
Gareth Fuller/PA Wire
9:36AM
Asda chairman takes control of struggling supermarket as Mohsin Issa steps down
Asda has revealed that co-owner Mohsin Issa is to step down from his executive role at the supermarket as it continues to lose market share.
Asda said Mr Issa will this week leave his executive role to concentrate on his recently announced move to become sole chief executive of the petrol station forecourts business, EG Group.
He will hand over the reins to chairman Lord Stuart Rose but will remain co-owner of the chain, alongside private equity backer TDR Capital, and a non-executive on the board.
Asda said it will continue its hunt for a chief executive to lead the company and will update “in due course”.
It comes as Asda has lost market share and sales tumbled 6pc in the 12 weeks to Aug 4, according to Kantar.
Lord Rose will take on Mr Issa’s executive responsibilities at Asda, alongside TDR partner Rob Hattrell and the supermarket’s existing management team.
Mr Issa said: “I have decided now is the right time for me to step back from my oversight role at Asda to focus on EG Group as sole chief executive.
“It is a very exciting time for EG Group, and I am looking forward to focusing on the business while supporting Stuart, Rob and the leadership team in my capacity as a shareholder of Asda.”
Asda co-owner Mohsin Issa has stepped down as boss of the struggling supermarket
Jamie Lorriman
9:16AM
Google’s €1.5bn EU fine thrown out after court battle
Google has won a court challenge against a €1.5bn (£1.3bn) European Union fine over its online advertising business.
The European Union’s General Court said it was throwing out the 2019 penalty imposed by the European Commission.
“The General Court annuls the Commission’s decision in its entirety,” it said.
The commission’s ruling applied to a narrow portion of Google’s ad business: ads that the US tech giant sold next to Google search results on third-party websites.
Regulators had found that Google inserted exclusivity clauses in its contracts that barred these websites from running similarly placed ads sold by Google’s rivals.
The commission, the EU’s competition enforcer, said when it issued the penalty that Google’s behaviour resulted in advertisers and website owners having less choice and likely facing higher prices that would be passed on to consumers.
A €1.5bn fine imposed against Google by the EU has been thrown out in court
Leon Neal/Getty Images
9:01AM
FTSE 100 falls ahead of ‘uncertain’ Federal Reserve interest rate decision
British stock indexes retreated as investors awaited the highly anticipated yet uncertain Federal Reserve decision on interest rates this evening.
The blue-chip FTSE 100 was down 0.3pc while the FTSE 250 fell 0.2pc, having both closed at their highest since early September on Tuesday.
Consumer price index inflation was unchanged at 2.2pc in August but exporter came under pressure as the pound moved higher following a rise in services inflation – a figure closely watched by the Bank of England.
Globally, investors remain focused on the Federal Reserve, which is expected to cut interest rates later, although the size of the reduction is still not clear.
Pricing for a larger-than-usual 50-basis-point rate cut – equivalent to half a percentage point – has leapt to 68pc on money markets, up from around 18pc a week ago.
Deutsche Bank analyst Jim Reid said: “You’d have to go back over 15 years to find such an uncertain situation this close to the decision. A lot of money will be made and lost today.”
Across the FTSE 350, industrial miners lost 0.8pc as metal prices eased ahead of the Fed decision.
In corporate news, Reckitt Benckiser rose as much as 3.3pc to the top of the FTSE 100 after a media report that the company has launched early discussions with potential suitors for a sale of its homecare assets.
8:44AM
L&G strikes £1.4bn deal to sell Cala Homes to US private equity giant
Insurance and asset management giant Legal & General (L&G) has agreed to sell its housebuilding subsidiary Cala back to its former owner in a £1.4bn deal.
Investment firms Sixth Street Partners and Patron Capital have formed a joint venture to buy Cala, which is among the UK’s 10 biggest housebuilders.
Patron Capital formerly part-owned Cala, holding a 46.5pc stake in the company alongside L&G. However, it offloaded its stake to L&G in 2018.
Founded in 1875 as the City of Aberdeen Land Association, Cala focuses on the premium end of the market, building homes in the south of England, the Cotswolds and Scotland.
It employs more than 1,300 people across 10 offices, and sold just under 3,000 homes last year.
The deal will see L&G get £1.2bn, with the rest coming from the buyers acquiring Cala’s net debt.
L&G shares fell 1.9pc despite it saying it could use some of the proceeds to return cash to shareholders via share buybacks.
Antonio Simoes, chief executive of L&G, said the deal is part of “simplifying our portfolio”.
8:33AM
Services inflation too high for rate cuts, say economists
Services inflation is too high for the Bank of England to cut interest rates this week, economists have warned.
The rate of price rises in services hit 5.6pc in August, up from 5.2pc in July, while core inflation, which strips out volatile food and energy prices, rose from 3.3pc to 3.6pc.
NIESR associate economist Monica George Michail said: “Given that inflation is set to gently rise towards the end of the year, and that underlying inflation remains elevated, this reduces chances of a rate cut tomorrow, and new developments will be closely monitored by the Monetary Policy Committee.”
Jake Finney, economist at PwC, said the “Taylor Swift effect” may be partly behind the more than doubling in cinemas, theatres and concerts price inflation, which jumped from 4.4pc to 9.2pc last month, with August seeing the last of her UK dates for the Eras tour.
He added the latest data overall “suggests that a September rate cut is unlikely”.
He said: “However, we expect that the latest inflation data will do little to dissuade the Bank from cutting in November, given that headline and services inflation are both tracking lower than their latest externally published forecasts.”
Sanjay Raja, chief UK economist at Deutsche Bank Research, added: “Looking through the Bank of England’s range of underlying services measures, we still see some marginal improvement in the data despite the uptick in the headline services measure, with underlying inflation continuing to ease. This is good news for the MPC. That said, today’s data won’t be enough to trigger a surprise rate cut tomorrow.”
8:16AM
Campari Group boss quits
The boss of Aperol maker Campari has quit after a short spell leading the Italian drinks company.
Matteo Fantacchiotti said he was leaving for personal reasons just five months after taking over the role from long-standing chief executive Bob Kunze-Concewitz.
The move comes after Campari shares fell 5.6pc following comments by Mr Fantacchiotti at a financial conference on Friday about the sector’s ongoing weakness in the current quarter.
Shares of the Skyy vodka maker have fallen 16pc since he took the helm in April.
Campari boss Matteo Fantacchiotti has resigned with immediate effect
ANDREAS SOLARO/AFP/Getty Images
8:05AM
UK markets fall as inflation remains stubborn
The FTSE 100 fell as trading began as inflation remained stubbornly above the Bank of England’s 2pc target.
The UK’s blue-chip stock index dropped 0.2pc to 8,294.56 as traders also wait to see the scale of interest rate cuts expected to be announced by the US Federal Reserve this evening.
The FTSE 250 fell 0.1pc to 20,911.59 as services inflation in Britain rose from 5.2pc to 5.6pc, likely meaning rates will remain on hold when the Bank of England announces its next decision tomorrow.
7:54AM
Tupperware files for bankruptcy
Away from inflation briefly… Tupperware, the household name behind the colourful plastic food containers, has filed for bankruptcy in the face of mounting losses.
Our reporter Adam Mawardi has the details:
The kitchenware company and some of its subsidiaries filed for Chapter 11 bankruptcy protection in the US.
The Florida-based business, founded in 1946, said it is seeking court permission to begin the sale process and aims to continue operating during this period.
Tupperware listed between $1bn and $10bn is estimated liabilities with between only $500m and $1bn in estimated assets, according to bankruptcy filings submitted to Delaware’s bankruptcy court.
Laurie Ann Goldman, chief executive, said: “Over the last several years, the company’s financial position has been severely impacted by the challenging macroeconomic environment.
“As a result, we explored numerous strategic options and determined this is the best path forward.”
The company said that it has made “significant progress” in modernising its operations following the appointment of a new management team in the past year.
The brand became a household name in the 1950s and 1960s at Tupperware Parties, where people gathered in homes to buy and sell the containers.
The 78-year-old firm has recently attempted to boost revenue by remarketing itself towards a younger audience. Its share price has fallen nearly 8pc in after hours trading.
Tupperware has filed for bankruptcy protection in the US
Clara Molden for The Daily Telegraph
7:51AM
Air fares accounted for majority of rise in inflation
Economists think it bodes well for rate cuts later this year that the majority of the inflation pressure in August came from rising air fares, rather than wage increases.
Thomas Pugh, economist at RSM UK, said:
The rebound in services inflation in August makes an interest rate cut tomorrow even less likely, but this is just a bump in an otherwise downward path.
Services inflation should continue to slow over the rest of the year, leaving the door wide open for one, or even two, more cuts towards the end of the year.
Overall, we’re not worried about the rebound in services inflation,
