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West End Final: If it’s hurting, it’s working, but it still sucks
“At about 10:45 this morning I turned to Jonathan Prynn, the Standard’s business editor, and asked what he made of the latest purchasing managers’ index (PMI) numbers,” Jack Kessler writes. “His answer was unprintable.
“In fairness, at fifteen minutes to deadline, I picked a bad time to bother him. But Jonathan is hardly alone in his view of the UK economy.
“The figures tell the tale of a private sector declining at its fastest rate in two-and-a-half years, when the nation was enduring the second major Covid-19 lockdown. The August flash PMI reading fell unexpectedly to 47.9 (bear in mind a score of over 50 indicates growth, under 50 contraction). All this means the markets now expect interest rates to peak below 6 per cent.
“In some ways, this represents a victory for the Bank of England. Its mandate is to maintain price stability and hit the target of 2 per cent inflation, something eagle-eyed readers will know it has not been wholly successful at achieving in recent times.”
Read the full West End Final newsletter from Jack Kessler here
Water companies almost breached licences to keep supply flowing, documents show
Several water companies came close to breaching their licences in order to maintain public water supply after the intense heat and dry weather last summer, Environment Agency (EA) documents show.
Obtained through a freedom of information request by Unearthed, Greenpeace’s investigative journalism unit, the documents show how the EA was worried about companies not having enough clean water with which to supply their customers.
The majority of reservoirs were “exceptionally low” by September, with some near to the point of being classed as “dead storage”, where the quality of the remaining water is so poor that treating it may not be possible.
Read more here
Alison Rose to still make £2.4 million salary after resigning amid Farage controversy
Former NatWest boss Dame Alison Rose will still be paid her £2.3 million compensation package while under investigation for leaking information about Nigel Farage’s bank account, the partially Government-owned bank revealed today.
However, this salary could still be clawed back by NatWest, depending on the outcome of an investigation into her revealing ofcertain information regarding Mr Farag’es account. In addition, possibility of a larger buyout is in doubt, as NatWest said decisions about other payments “will be made taking into account the findings of the Investigations, as appropriate”.
Rose will receive her £1.16 million fixed pay and her a fixed-share allowance of the same value, which is released over five years, while she is on 12-month gardening leave. She stepped down as head of the banking giant after revealing that she had provided information to a BBC reporter that led to an inaccurate report regarding the closure of Nigel Farage’s account with Coutts.
Read more here
Key market data as FTSE climbs higher
Tkae a look at today’s market snapshot as the FTSE 100 climbed higher on the back of lower expected interest rates.
City Comment: Relax, lawyers and accountants. AI isn’t going to take your jobs
A nice respectable career as a lawyer or an accountant has been the ambition of generations of young people.
But with professional services firms investing billions in AI technology will the jobs still be there for them in years to come?
Today “big four” accountancy firm PwC revealed that it spent £100 million on “emerging technologies” last year including on AI and “digital collaborations with Harvey, Microsoft and Icertis, and ContractPodAI”.
But did that result in swathes of eager young auditors and consultants being laid off and replaced by robots and algorithms? Apparently not.
Read more here
JD Sports shares sink after Footlocker cuts guidance
Shares in JD Sports fell as much as 5% this afternoon after its US rival Footlocker cut back its guidance.
Sales at Footlocker fell to $1.9 billion in the second quarter while it swung to a $5 million loss from a $94 million profit the previous year.
That promted the firm to cut its guidance and suspend its quarterly cash dividend. Its shares fell 265 in pre-market trading on Wall Street.
(Yui Mok/PA)
/ PA ArchiveNew NatWest boss Thwaite to make seven figures, but less than Alison Rose
New NatWest interim boss Paul Thwaite will be paid a seven-figure salary, partially funded by the taxpayer, but his pay will be slightly less than predecessor Dame Alison Rose who quit last month amid controversy over Nigel Farage’s bank account.
But there is still uncertainty over Rose’s final payout, as NatWest said decisions about her compensation “will be made taking into account the findings of the Investigations, as appropriate”.
Thwaite – who will be in charge of NatWest for the next 12 months – will make a £1.05 million base salary, less than the £1.16 million that Rose was on. He could make another £2.6 million in bonuses, but this is also below the maximum that Rose was eligible for. His salary will be pro-rated for this year based on the amount of time he’s been on the job.
Read more here
Recession fears grow and interest rate expectations decline after surprise slump in output
Recession fears stalked the City again today as a key business survey painted a grim picture of the strains in the economy this month.
The preliminary or “flash” version of the closely watched S&P Global/CIPSprivate sector output index fell far more steeply than expected by forecasters from 50.8 In July to 47.9 this month.
It was the first reading under 50 — which indicates contracting output — since January ending a six-month period of expansion as the economy shrugged off slump fears earlier in the year.
Read more here
150 jobs saved as private equity firm buys wine bar Vinoteca out of administration
A City private equity firm has bought upmarket wine bar chain Vinoteca out of administration, saving 150 jobs after train strikes and high energy costs put the operation on the brink of collapse.
Administrators at Interpath sold Vinoteca, which has five locations all in London, to Cannon Street-based Breal Capital.
Last week, the chain warned it was close to collapse, blaming “inflation, spiralling energy charges and regular train strikes”. It closed a Birmingham wine bar, the largest in the UK’s second city, in May, less than a year after it opened.
The wine bar was founded by Elena Ares, Brett Woonton and Charlie Young in 2005. They remained as directors and major shareholders until administrators took over.
Read more here
FTSE 250 surges as traders revise rate hike bets, Ithaca falls on 2024 production guidance
Rate sensitive stocks are dominating the FTSE 350 risers board after today’s shock decline in UK private sector activity.
With the City scaling back its rate hike bets, shares in the likes of Severn Trent, Taylor Wimpey and Land Securities are all up 2% or more.
London’s top flight rallied 48.71 points to 7319.47 and the FTSE 250 index improved 157.45 points to 18,181.71, with second tier risers including shopping centre owner Hammerson after a gain of 3% or 0.8p to 25.1p.
Elsewhere in the FTSE 250, shares in North Sea firm Ithaca Energy weakened 2.8p at 161p after it warned that production is likely to fall next year due to the impact of the Energy Profits Levy.
The company, which has stakes in six of the ten largest fields in the UK North Sea and two of the largest three prospective developments, has fallen in value since joining the stock market last November in a £2.5 billion flotation.
Ithaca today hailed its robust operating performance but also revealed Energy Profits Levy charges of $223 million (£176 million) in the first half of its financial year. Net income of $159.6 million (£126 million) also included a $73.7 million (£58.2 million) writedown due to a reduction in planned activity in its Greater Stella Area.
Ithaca said it continued to press the UK government to review the current fiscal regime, including an appropriate price floor for the tax.
On AIM, Angling Direct shares rose 1.5p to 40p after the fishing tackle retailer reported a 10.1% rise in first-half sales to £40.9 million.
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