Another 840,000 Americans out of work amid stimulus doubts

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A worker cleans an American Airlines Group Inc. check-in counter at Tulsa International Airport Credit: Patrick T. Fallon/Bloomberg

Wrap-up

Time to wrap up. Here are some of the day’s top stories:

Thanks for following along today – we’ll be back tomorrow morning!

British firm is surprise bidder for TikTok

A British investment firm has emerged as a surprise bidder for viral video app TikTok as the Chinese company’s partnership with Oracle awaits US and Chinese government approval.

My colleague James Cook reports:

Centricus, a four-year-old London firm run by former investment bankers which previously helped to set up SoftBank's £100bn technology fund, has been negotiating with the chief executive of TikTok’s parent company ByteDance in recent weeks, The Wall Street Journal reported.

The fund is reportedly hoping to become an alternative to TikTok’s deal to run its American division with software business Oracle in case the partnership collapses.

The negotiations with TikTok, which were first reported in August, include discussions on a purchase of the company's operations in the US, Canada, India, Australia and New Zealand, which would value the divisions at $20bn (£15bn).

Market moves

Gains across European markets are extending, taking the continent’s indices to their highest levels of the day. Meanwhile, Wall Street’s benchmark, the S&P 500, has gained slightly. 

More than 1,100 Deloitte consultants working on Test and Trace

A huge number of Deloitte employees are working on test and trace Credit: REUTERS/Hannah McKay

Great scoop from Sky News: there are 1,114 Deloitte management consultants working on test and trace – roughly the size of a small Government department.

The broadcaster reports:

According to documents released by the Department of Health and Social Care (DHSC) under Freedom of Information rules, there are currently 1,114 consultants from the single firm working on the scheme…

The news is the latest evidence of the growing cost of Britain's testing system, which is already budgeted at around £12bn - equivalent to the cost of four aircraft carriers.

Deloitte, which has both accounting and management consultancy arms, charges anything up to £2,360 a day for each of its consultants.

Canada’s Tim Hortons plans UK invasion

Canadian coffee and donut chain Tim Hortons is planning a big UK expansion that will create about 2,000 jobs.

My colleague Ed Clowes reports:

It will open drive-outlets in every major city and town over the next two years, starting with Milton Keynes.

Tim Hortons first launched in the UK in 2017 with a branch in Glasgow, followed by Belfast, Manchester and the Midlands. It now has 23 sites including seven drive-throughs.

Kevin Hydes, chief commercial officer of Tim Hortons UK and Ireland, said: “Despite challenging times for the sector, our drive-thru and flagship locations have delivered exceptional performance and our model is proving to be well attuned to the evolving needs of customers at this time.”

Wall Street rises

Wall Street has climbed a bit at the open, extending last night’s rise, while European equities have maintained their gains.

Credit: Bloomberg TV

Big fall in apprenticeship starts

Lockdown has caused a collapse in the number of people starting apprenticeships, fuelling fears of a lost generation of young employees.

More from my colleague Alan Tovey:

New data shows that between 23 March and 31 July, just 58,160 people started vocational training courses, down from 107,750 at the same point a year ago, according to Department for Education figures. Analysis of the numbers also revealed that the vast majority of new apprenticeships went to older people, with 55pc of those starting the training aged 25 and above. Some 29pc were aged 19 to 24 years, and just 16pc were 18 years old or less.

Verity Davidge, policy director at trade body MakeUK, says the drop was expected but highlights fears that young people entering the workforce - the ‘lockdown generation’ - are suffering the most. “The worry is that the trend will continue even as lockdowns ease. A four-year apprenticeship is a huge and costly commitment for companies and the point of such programmes is they lead to a job, something which they just don’t know they will be able to do in the current climate.”

Only about 45pc of MakeUK members plan to recruit apprentices in the coming 12 months - half the normal level, Ms Davidge adds.

McDonald’s returns to sales growth in US 

Rapper Travis Scott launches the Travis Scott Meal at a McDonald's in Downey, California last month

Back across the pond again, McDonald's says limited edition celebrity meals from the likes of rapper Travis Scott helped the fast food chain to return to growth in the US.

Drive-thru and delivery also helped its sales rise 4.6pc in the third quarter. 

However, global like-for-like sales were down 2.2pc, with declines in the UK, France, Spain, Germany, Latin America and China. Australia and Japan - where the virus has been more under control - remained in the black. 

Google loses French court battle

A French appeals court has upheld an order forcing Google to open negotiations with French publishers over payments to use their news content.

The Paris Court of Appeal sided with France's competition authority, which had ordered the US tech company to discuss compensation with publishers and news agencies for reusing their material online.

French regulators had argued that Google must enter talks under a "neighboring rights" law adopted after the European Union overhauled the bloc's copyright rules, which include allowing news companies to demand payments when search engines display snippets of their stories.

Google had threatened last year to stop displaying snippets and thumbnails in its search results but French regulators said in April that the company was likely to be abusing its dominant position.

Google argued it should not have to pay because news companies benefit from the millions of readers it sends to their websites.

National Trust cutting 1,300 jobs

Another 840,000 Americans out of work

Employment churn in the US remains incredibly high, with 840,000 initial claims for unemployment benefits last week. The numbers continues to decline, but remains huge by pre-pandemic standards.

Meanwhile, continuing claims also fell slightly:

Deutsche Bank plans artwork auctions

From any budding art collectors out there: German lender Deutsche bank is planning to sell some 200 of its 5,500-piece art collection.

Bloomberg has more details:

Only objects that do not belong to the collection’s main focus -- works on paper and photographs – will be sold, according to a statement on Thursday. This includes paintings, sculptures, drawings and prints from the early classical modernist period of the early 20th century.

In addition, paintings and sculptures from the postwar modernist period from 1945 to the 1970s will be offered for sale.

The first auction will be at Christie’s in Paris, on October 22nd.

Bidfood cuts 500 jobs – The Grocer

Foodservice wholesale group Bidfood has made more than 500 employees redundant and closed five depots in response to the pandemic, The Grocer reports.

The industry publication says:

The job losses account for around 7pc of the foodservice giant’s 7,500 strong-workforce and come at the end of a three-month consultation process working alongside trade unions.

The redundancies are understood to be predominantly from five of Bidfood’s 22 sites, which have been forced to close.

The site closures include fresh fruit & vegetable subsidiary Oliver Kay in Bolton and a depot in Wednesbury.

Sterling flattens out

The pound has steadied out after a decent jump this morning on Brexit deal hopes.

BA’s last Boeing 747 enters retirement

The last of British Airways’ jumbo jets took to the skies for the final time on Thursday, but cloud and heavy rain prevented a dual take-off of the airline’s last two Boeing 747s.

My colleagues report:

BA, once the operator of one of the world’s largest fleets of 747s, officially retired its last two jumbo jets after coronavirus brought air travel to a standstill in the face of international travel bans.

The jets taxied for take-off one after the other for the last time at Heathrow, but a planned synchronised take-off on dual runways fell foul of the bad weather.

BA chief executive Alex Cruz called the spectacle an “emotional milestone” in BA’s history, after the 747 helped bring commercial air travel to the masses in the 1970s.

Electrocomponents anticipates smaller hit from virus in second half

Electronic and industrial parts distributor Electrocomponents said it anticipates smaller pandemic profit pressures in the second half of the year, after a 7pc drop in revenues during the six months to the end of September.

Sales dropped across all the FTSE 250 group’s operating regions, with emerging markets taking the most severe hit, it said in a trading statement.

But it added profitability pressures “are expected to ease somewhat” in the second half, as freight charges and labour inefficiencies are reduced.

Chief executive Lindsley Ruth said:

While we remain cautious with respect to the ongoing Covid-19 situation, I am confident in the group’s prospects and we are well placed to take advantage of the significant growth opportunities we see.

Economy risks stalling, Bailey warns

As well as a newspaper interview, Andrew Bailey has spoken this morning on a panel at the Single Resolution Board conference. My colleague Tom Rees has a full report:

Bailey warned the risks to the recovery were “very much on the downside”, but said the Bank had enough monetary firepower to tackle a second or third wave of the virus if needed.

There was a risk that the surge in cases and more caution from consumers could hurt the recovery, Mr Bailey said. He also urged banks to use their capital buffers to inject more money into the economy despite a “natural unease” following the financial crisis.

The outlook for the economy has darkened in recent weeks as local restrictions tighten with stricter measures expected to be announced next week.

HSS cuts 300 jobs

HSS made a £12.5m loss in the first half Credit: Handout

Tool rental company HSS Hire has announced plans to cut 300 job as it closes dozens of branches.

PA reports:

The business said that it will invest more in technology, cutting out the need for many of its sites, meaning it could shut 134 branches.

As a result, about 300 people are likely to lose their jobs with the company, with consultations set to start…

As many building sites closed across the country during the depths of lockdown, HSS took a major hit to its finances.

The company lost £12.5m in the first half of the year, over £5m more than last year, on revenue of £125.8m, down 22pc.

Market moves

With nearly three hours of trading past, European markets are maintaining minor gains. The FTSE 100 is up narrowly. 

UK seeks to review O2/Virgin Media deal

The Competition & Markets Authority has requested that the European Commision refer the proposed merger of O2 with Virgin Media for investigation.

Virgin media-owner Liberty and O2-owner Telefónica outlined plans to merge their UK businesses earlier this year.

The competition watchdog said:

The proposed merger falls under the remit of the EC to review but can, subject to the agreement of the EC, be transferred to the Competition and Markets Authority (CMA).

The CMA believes that the case should be transferred given its potential impact on competition in several retail and wholesale telecommunication markets in the UK.

 CMA chief executive Andrea Coscelli added:

Ultimately, this is a decision for the EC, but as the merger will only impact UK consumers – and any effects would only be felt after the end of the transition period – it is only right for the CMA to request it back.

The initial deadline for a response is November 19th.

Money round-up

Here are some of the day’s top stories from the Telegraph Money team:

Furlough usage edges lower in final weeks of scheme

Usage of the Government’s furlough support fell to 9pc across all industries in mid-September, with the scheme set to wind up at the end of this month.

The proportion was highest for the arts, entertainment & recreation sector, where 31.6pc of workers were on partial of full furlough leaves between the 7th and 20th September, according to the Office for National Statistics.

Here are more of the ONS’s findings from Wave 8 of its fortnightly Covid-19 business impact survey:

  • 86pc of businesses were currently trading, compared with 66pc in Wave 7 (1 June to 14 June 2020). In Wave 14 (7 to 20 September 2020)
  • 47pc of businesses experienced a decrease in turnover, compared with 65pc in Wave 7
  • Of businesses currently trading, 43pc experienced a decrease in profits compared with what is normally expected for this time of year, while 7pc experienced an increase.

CMC Markets expects performance at top end of expectations

Spread-betting platform CMC Markets said it expects trading performance “towards the upper end” of market consensus while also warning of higher operating costs.

The FTSE 250 group said its momentum continued over the six months to the end of September, adding client retention had been “well in excess” of its “above 80pc” guidance.

Volatile markets and increasing trading activity played into the group’s hands, driving “a strong trading performance across all areas of the business”.

It warned on costs, saying it expects to spend £80m as a result of technology investments and marketing costs.

Chief executive Peter Cruddas said:

I am delighted with our record first half performance, which vindicates our strategy of diversification and continuing focus on high value clients.

Shore Capital’s Vivek Raja said CMC’s outlook was “confident and positive”.

Unite Group braces for student housing cancellations

Universities have been thrown into chaos by the pandemic, with many students locked in accommodation Credit: REUTERS/Jason Cairnduff

Student accommodation provider Unite Group has reported a rise in cancellations and warned it is bracing for more, as Covid-19 throws Britain’s universities into disarray.

The FTSE 250 company said occupancy had fallen short of its 90pc target, and warned rental income could fall between 10pc and 20pc this year. At present, 88pc of its bed spaces have been let, versus 98pc for the same period last year.

It said it has “high visibility over income” for 79pc of its bookings, but that 21pc were still to check in, compared to 4pc last year.

Unite warned it was “too early” to commit to restoring its dividend, but said the decision would remain under review during the 2020/21 academic year.

Chief executive Richard Smith said:

We are very aware of the challenges currently faced by students and are doing all we can to help keep them and our staff safe throughout this difficult period…Despite the challenging backdrop, we have delivered a robust performance which is a real credit to the hard work of all our people across the UK.

Hargreaves Lansdown inflows fall sharply

Net new business inflows at Hargreaves Lansdown dropped sharply year-on-year, falling 53pc to £800m during the first quarter.

The investment platform’s assets under administration edged higher despite the fall in inflows, rising to £106.9bn – up 5pc on July–September last year.

Chief executive Chris Hill said the results “are against the ongoing backdrop of market uncertainty and highlight the resilience of our business model and client proposition”. He added:

 We are confident that the strategy we have invested in, with our focus on the needs of UK investors and savers and delivering the highest level of client service, means that we continue to be well positioned to deliver continued attractive long-term growth.

The group is the biggest faller on the FTSE 100 currently:

Imperial Brands sees higher revenues, but profit hit

Tobacco giant Imperial Brands is among the FTSE 100’s top risers today, after saying its full-year revenue performance has been slightly ahead of expectations, while also warnings its profits will be hit by Covid-related costs.

Its core tobacco business “continued to perform well despite an uncertain and disrupted trading environment”, Imperial said in a trading statement ahead of its full results next month, with customers appearing to spend more on cigarettes and cigars through lockdown,

Those gains offset a downturn in the duty free channel and from some tourist destinations.

Imperial said trading in its next-generation products lineup had be “disappointing, albeit in line with our revised expectations”, following reduced investment.

The group said it had incurred some “additional manufacturing costs” due to the pandemic, saying these had contributed to an expected 6pc fall in earnings per share.

Chief executive Stefan Bombard said:

Imperial has continued to show resilience in adapting to the challenges posed by the COVID-19 pandemic and our priority remains the health, safety and well-being of our people across our operations.

European stocks climb

Stock markets in Europe have opened slightly higher, although the FTSE 100 is once again barely shifting, having dragged its feet since Tuesday.

Credit: Bloomberg TV

EasyJet cuts flights and sees £845m loss

EasyJet has has a tumultuous year amid the pandemic Credit: Chris J Ratcliffe/Getty Images

EasyJet will fly just a quarter of its usual flights this autumn after warning it will slump to its first-ever annual loss. 

My colleague Ben Gartside reports:

The low-cost airline expects to make a pre-tax loss of £845m for the year to September after it carried half the number of passengers this year than last.  

The pandemic has caused EasyJet's debt position to triple compared to this time last year, with debt hitting £1.1bn.

The Luton-based carrier said losses reached between £295 million and £325 million in its fourth quarter, which were lower than those in the previous three months when planes were grounded during the lockdown.

It said it continued to keep its finances under review and “assess further funding opportunities” amid reports it has warned the Government it may need further financial support if the pandemic continues to batter demand.

TalkTalk receives 97p/share takeover bid

Telecoms group TalkTalk says it has received a 97p-per-share takeover offer from Toscafund Asset Management.

The group’s shares have jumped 13pc to 94p following the announcement. TalkTalk’s board said it “has considered the terms of the proposal and has agreed to progress the proposal further with TAM along with taking advice from [TalkTalk’s] advisers”.

It said the proposal contains “a number of pre-conditions”, including that TAM recieves “an irrevocable undertaking” of support from Sir Charles Dunstone – TalkTalk’s executive chairman, who owns 29.86pc of the group.

With a 29.05pc stake, funds controlled by Toscafund are already TalkTalk’s second-biggest shareholders after Sir Charles.

TalkTalk added there can be no certainty a firm offer will be made.

BoE’s Bailey: UK and EU should be able to reach a deal – Reuters

Bank of England Governor Andrew Bailey Credit: Tolga Akmen/Pool via REUTERSI/File Photo

Bank of England Governor Andrew Bailey has said that the UK and EU should be able to reach a trade deal, even as both sides engage in increasing brinkmanship.

In an interview with The Yorkshire Post, Mr Bailey also said the second British Covid-19 wave should not be as damaging as the first.

Reuters reports:

“I do think it is in the interests of both sides – let’s be blunt – to get an agreement,” he said in an interview published on Thursday.“I’m surprised that the EU wants to restrict where their citizens can do business. We will certainly keep our markets open to the world,” he added…Bailey reiterated that while he would like to see Britain and the EU retain equivalent standards in financial services regulation, it would be wrong for Britain to continue to follow EU rules it had no control over.Bailey also said that the rising number of coronavirus cases in Britain was likely to hurt the economy, though less badly as the initial surge earlier this year, which led to a 20pc fall in output in the three months to June.

As far as I can tell, The Yorkshire Post hasn’t uploaded its own version of the interview online – if I see it later, I’ll add a link here.

GVC ups guidance as strong trading continues

Ladbrokes Coral-owner GVC Holdings has upped its forecast for full-year performance, amid continued strong trading across its operations.

It forecast full-year earnings before interest, taxation, depreciation and amortisation to come in at £770m to £790m – decently ahead of the £728m forecast by analysts.

The FTSE 100 group said online gaming volumes are still ahead of pre-pandemic levels, which GVC said reflected the diversity of its business model as well as high demand.

Net gaming revenues rose 14pc on a constant currency basis over the third quarter, from July to the end of September, while online revenues rose 28pc.

Chief executive Shay Segev said:

While the risk of further restrictions as a result of COVID-19 mean that we remain cautious on the short-term outlook, in the longer term we are confident of being able to continue delivering sustainable growth for all our stakeholders.

GVC also announced it has agreed to acquire Bet.pt – “one of the leading online gambling operators in Portugal with a particular strength in sports-betting”. The acquisition should give the group a foothold in the “rapidly” growing Iberian gambling market, the company said.

Berenberg analysts called the report an “outstanding set of results”, noting GVC’s US operations have maintained strong momentum.

Trump stimulus comments drive markets

Good morning. European markets were tipped to open higher after US stocks rebounded last night as Donald Trump appeared to change his stance on a stimulus bill.

In a move seen by many as the president rowing back on comments that he had walked away from talks, Mr Trump said he was “waiting to sign” a standalone bill. A deal, however, still looks unlikely before the election. 

5 things to start your day 

1) Sharp rise in mortgage costs heaps further pain on first-time buyers: Mortgage rates for first-time buyers have rocketed in the wake of the Covid crisis, dealing a major blow to Boris Johnson as he promises to get a generation of young people on to the housing ladder.

This morning, figures out from Rics suggested estate agents had become more negative about the future of the property market. Firms polled by the group said buyer enquiries, agreed sales and new listings continued to rise in September but warned the boom would soon fade.

2) Greene King cuts 800 jobs as curfew rule hits pubs: The operator will cut up to 800 jobs and shut dozens of pubs after warning that ministers' 10pm curfew has trashed the hospitality industry. 

Greene King, which employs 38,000 people, will close 79 of its 3,100 sites due to the restrictions - with a third expected to never reopen.

3) Black and Asian businesses could not access Covid support, MPs find: Nearly two thirds of black and Asian business owners felt unable to access state-backed loans and grants in the early days of the coronavirus pandemic - leaving many on the brink of financial ruin, research conducted for MPs suggests.

Britain’s 250,000 minority-owned businesses contribute £25bn to the economy annually, but have been hit disproportionately hard since the start of the crisis according to an inquiry by a committee of cross-party MPs and the Federation of Small Businesses.

4) Liam Fox knocked out of race to lead World Trade Organisation: The former international trade secretary was eliminated before the last of three rounds to replace Roberto Azevedo, who stepped down a year earlier than expected at the end of August.

He lost out to Nigeria’s Ngozi Okonjo-Iweala and South Korea’s Yoo Myung-hee as the pool of candidates was whittled down from five to two, sources said.

5) Bicester Village warns on VAT rules: The owner of Bicester Village has dismissed mandarins’ efforts to defend a Treasury crackdown on duty-free shopping and warned it risks trashing tourism after Brexit.

James Lambert, boss of the destination’s owner Value Retail, hit out at a new rule which will stop overseas visitors from reclaiming VAT on luxury purchases in the UK.

What happened overnight 

A gauge of Asian shares climbed to a one-month high on Thursday, as renewed hopes for more US stimulus helped restore investor confidence with markets now pricing in a Democratic victory during elections in November.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3pc for its fourth straight session of gains to a level not seen since early September.

Australia's benchmark index jumped 1.1pc to a one-month high helped by a larger-than-expected fiscal stimulus announced in by the federal budget on Tuesday night.

New Zealand shares rallied on expectations of further monetary policy easing after the country's central bank said it was "actively considering" negative interest rates and a funding-for-lending programme.

Japan's Nikkei added 0.5pc.

Coming up today

Trading statements: Unite Group, EasyJet

Economics: Balance of trade (Germany), jobless claims (US)