Markets fall as virus fears mount

 Louvre museum in Paris
The empty courtyard of the Louvre museum in Paris

Wrap-up

Time to wrap up. These were some of the day’s top stories:

  • Stock markets drop: European markets sold off sharply as government across the continent tightened restrictions in response to the fresh virus wave. The pound took a sharp knock amid preparations for a partial London lockdown, and a continue impasse over a post-Brexit trade deal.
  • Banks not ready for negative rates, warns NatWest chairmanThe chairman of Royal Bank of Scotland owner NatWest has admitted that banks are not ready for negative interest rates just days after the Bank of England asked bank bosses about their preparedness for the unprecedented move.
  • Boots sales slide continues: Boots’ sales collapsed in its most recent quarter as shoppers continued to shun its shops in city centres, train stations and airports.
  • Pub group Marston’s to axe 2,000 jobs: Marston’s is set to cull more than 2,000 jobs after the Government's latest restrictions on the hospitality industry “undermined” consumer confidence and “created uncertainty”. 
  • Jobs crisis to trigger spike in mortgage defaults, Bank warnsThe Bank of England has warned of a spike in mortgage defaults as a winter jobs crisis looms.

Thanks for following along today! We’ll be back tomorrow!

EU leaders call for UK to make ‘necessary moves’ for deal

The European Council summit’s discussion of Brexit has reportedly concluded – Bloomberg says EU leaders have called on Britain to “make the necessary moves” for a deal to take place.

That’s in line with the draft proposals, although a reference to “intensifying” talks have been cut.

Market moves

European equities have stayed fairly entrenched in the red, with not long left until the close. 

Von der Leyen self-isolates

Lookers set to update on trading but yet to sign off accounts 

A couple on the forecourt at a Looker near Liverpool in June Credit: Peter Byrne/PA Wire

Troubled car dealer Lookers is set to report strong sales in a trading update on Friday but is still to finalise annual accounts originally due in March after uncovering potential fraud.

My colleague Alan Tovey reports:

Shares in the company were suspended in July because of problems with its numbers, which hit had previously said it hoped to release by the end of August.

Lookers is also reported to be in talks with lenders including Lloyds about refinancing its £250m revolving credit facility. Lookers first revealed problems last summer when it announced it was being investigated by the Financial Conduct Authority over its sales practices.

In September, The Telegraph revealed the watchdog's interest was sparked by a string of mis-selling allegations from a whistleblower.

Wall Street in the red

Here’s how the top US indices stand: 

Credit: Bloomberg TV

Market malaise persists

The FTSE 100 is down more than 2pc, while losses in Paris and Frankfurt are closer to 3pc, as further restrictions are imposed across the Continent in a bid to combat outbreaks of the virus.  

Wall Street has also opened lower as an unexpected rise in weekly jobless claims exacerbated fears of a stalling economic recovery, a day after Treasury Secretary Steven Mnuchin dashed hopes for more fiscal aid before the election.

The Dow Jones Industrial Average fell 190 points or 0.7pc, while the S&P 500 dropped 1pc and the Nasdaq Composite shed 1.8pc.

Call for action on tech giants

France and the Netherlands have urged EU regulators to limit the power of Silicon Valley giants like Google and Facebook – and break them up if necessary.

AFP reports:

Firms such as these as well as Amazon and Apple have considerable power over companies wishing to reach consumers using their platforms and concerns are mounting about how they use it.Meanwhile, some companies that sell on Amazon's online marketplace have grumbled that it uses information it gains on sales to compete against them and places undue restrictions on them.French digital minister Cedric O and Dutch counterpart Mona Keijzer said in a joint paper that Brussels should “regulate too-powerful large digital platforms” that can act as a gatekeeper to the internet and consumers.

US offers to settle tariffs row

The US has offered to settle a long-running aircraft subsidy dispute with the European Union and remove tariffs on wine, whisky and other products if Airbus repays billions of dollars in aid to European governments, sources have told Reuters.

The news wire reports:

The offer was made by US Trade Representative Robert Lighthizer days before the World Trade Organisation's release on Tuesday of a report authorising Brussels to slap counter-tariffs on American  goods over subsidies to Boeing.

However, his proposal is unlikely to win support from the EU, which appears set to ask the WTO at an Oct. 26 meeting to endorse $4bn in EU tariffs on US goods. The imposition of $7.5bn of US tariffs over Airbus subsidies has already started to hit European goods.

The European Commission confirmed it had received what it described as the first US response to its own July proposal to end the dispute.“That is the first time we have received US feedback on some substantive aspects of our proposal. We have now provided our reaction and we are prepared to continue these discussions,” a Commission spokeswoman said.

Shares in BTS backer soar in Seoul

BTS on the Tonight Show with Jimmy Fallon earlier this month

Shares in the company behind K-pop sensation BTS soared on their debut in Seoul on Thursday, making the boy band's members into multimillionaires.

Big Hit Entertainment  opened at 270,000 won (£182) after being priced at 135,000 won a share and rose as much as 30pc before closing at 258,000 won.

The £634m offering was South Korea’s largest in three years. The firm has thrived despite coronavirus forcing it to cancel live concerts and investors piled in to the float on BTS’s continued popularity from online performances and hits such as Dynamite, the group's first English language release.

New Tempest fighter could bring £25bn boost to UK economy

The Tempest programme to build a futuristic laser-armed stealth fighter without a pilot will deliver £25bn of benefits to the UK economy and create valuable technology spin-offs, it has been claimed.

My colleague Alan Tovey reports:

The projection comes as a consortium led by BAE Systems, Rolls-Royce, MBDA and Leonardo that is driving the project to get the new aircraft into service by 2035.

An economic analysis of Tempest conducted by PwC calculates the programme will also support 20,000 skilled jobs a year between 2026 to 2050.

More than 200 UK companies including  SMEs are working on Tempest employing about 1,800 people. 

BAE, which released the report, said the potential economic benefit of Tempest did not include any export sales. 

Further 373,000 claims made under Pandemic Unemployment Assistance

Those state-level claims don’t give the full picture of job losses, as the New York Times’s Ben Casselman notes: 

Meanwhile, the Washington Post’s Heather Long says that the climb last week may reflect redundancies as Disney and several airlines:

Nearly 900,00 US jobless claims last week

There were 898k, initial claims for unemployment benefits filed by Americans last week, marking a rise on figure from a fortnight ago.

The figures have reached a plateau in recent weeks, and remain elevated well above pre-pandemic levels.

 Meanwhile, continuing claims fell slightly, from a revised 11.2m to 10m:

Hammerson has collected just 41pc of rent for fourth quarter

The Bullring in Birmingham, one of Hammerson’s top shopping centres, in better times Credit: Jon Super/PA Wire

Retail landlord Hammer – which recently lost its spot in the FTSE 250 – said it has collected on 41pc of rent due for the fourth quarter.

In a statement, the group said:

We have worked hard to reach agreements on rent during the closure period that are fair and reasonable.  This has involved a combination of rent deferrals, moving to monthly payments, and in some cases waivers, particularly for smaller and independent brands.

It said the levels of collections has improved over the quarter, and that it expects rate to get better as time wears on.

As of Wednesday, all of its destinations were open, with 94pc of flagship tenants permitted to trade in the UK and Ireland open.

It confirmed new chief executive Rose Gagné will join the group on 2nd November, at which point incumbent David Atkins will step down.

MPs call for update from banks on forgery claims

MPs have written to the City regulator and fraud investigators to demand an update on their investigation into claims of widespread signature forgery at British banks. 

My colleague Michael O’Dwyer reports:

Campaigners believe forged signatures were used on an industrial scale by banks and that some customers had their homes repossessed as a result. 

The Bank Signature Forgery Campaign said it had submitted more than 360 crime reports backed by 19 files of documentary evidence and testimony from handwriting experts to the National Crime Agency (NCA). 

The reports set out allegations against some of the UK’s biggest banks, including Lloyds and Royal Bank of Scotland, which has rebranded as Natwest. The banks deny wrongdoing. 

The allegations include forgery, perverting the course of justice and proceeds of crime money laundering offences. 

NatWest chairman says banks not ready for negative rates

Howard Davies, chairman of NatWest Credit: Chris Ratcliffe/Bloomberg

British lender aren’t ready to implement negative interest rates, NatWest’s chairman warned.

Bloomberg reports:

“We’re not completely ready for it,” Howard Davies said in a Bloomberg Radio interview Thursday. “There would be technical issues and many contractual issues.”

Davies said he was against the introduction of sub-zero rates, noting there was little evidence it had spurred investment in other countries. “We are really assuming interest rates are pretty well zero for any reasonable planning horizon. It could be worse than that.”

The Bank of England is currently investigating the possibility of negative rates, as it looks at ways to provide further monetary stimulus to the UK economy.

Morgan Stanley beats revenue estimates

Morgan Stanley boss James Gorman Credit: Simon Dawson/Bloomberg

Morgan Stanley posted third-quarter revenues of $11.7bn, beating consensus estimates by around a billion dollars.

The US bank rounded out Wall Street’s earnings season with quarterly profits of $2.7bn. A $1.66 per share, that beat the $1.28 analysts polled by Refinitiv had expected.

James Gorman, its chief executive, said:

We delivered strong quarterly earnings as markets remained active through the summer months, and our balanced business model continued to deliver consistent, high returns.

Morgan Stanley is the last of the six biggest US bank to report results. It join JP Morgan, Goldman Sachs and Citigroup in beating expectations, while Bank of America and Wells Fargo fell short.

Boots sales drop almost a third despite online surge

A surge in online sales couldn’t offset a drop in bricks-and-mortar store sales at Boots Credit: Simon Dawson/Bloomberg

Sales fell sharply at Boots despite a surge in online sales over the quarter-year to the end of August.

Full-year results released today by its parent, the Walgreens–Boots Alliance, show that Boots.com sales rose 155pc in the fourth quarter, but this was unable to offset a “significant” reduction in revenues from high street, train station and airport locations.

It said:

Boots UK market share was lower in all categories except beauty, as the pandemic continued to impact heavily on buying habits and consumers temporarily shifted purchasing to one-stop grocery shopping.

Overall, WBA’s international pharmacy division (of which Boots is the biggest part) made an quarterly operating loss of $132m, compared to a $181m profit for the same period a year ago.

That including an estimated $300m impairment caused by Covid-19.

Raab: UK sanctioning Navalny poisoners

 Foreign Secretary Dominic Raab tweets:

A full list of those sanctioned is on the Government website, and includes two member of Vladimir Putin’s presidential staff, and Russia’s deputy minister of defence.

In a statement, the FCO said:

Today’s asset freezes and travel bans significantly punish Russia’s reckless and malign behaviour…

The UK and its partners have agreed that there is no plausible explanation for Mr Navalny’s poisoning, other than Russian involvement and responsibility.

Russia must hold a full and transparent investigation into the poisoning of one of its citizens on its soil with a banned chemical weapon. Russia must also declare its Novichok programme to the [Organisation for the Prohibition of Chemical Weapons].

Bank of England warns jobs crisis will lead to surge in mortgage defaults

The Bank of England has warned of a spike in mortgage defaults as a winter jobs crisis looms.

My colleague Lizzy Burden reports:

Default rates on loans to households and businesses are expected to rise in the fourth quarter, according to the Bank’s credit conditions survey of banks and building societies that was carried out last month.

It comes after Andrew Bailey, the Governor of the Bank of England, this week said the Covid-19 pandemic risked causing long-term scars for the economy.

About 1.5m people are officially unemployed, according to Office for National Statistics data, although the true scale of the crisis is likely to be far worse after being masked by the taxpayer-funded furlough scheme.

Pound falls as restrictions tighten

The pound has dropped today, shedding much Wednesday’s gains, as London heads for tighter restrictions and the situation around Manchester remains unclear.

No agreement on Manchester lockdown

A meeting between the Government and local leaders in the Manchester area over the potential imposition of Tier 3 restrictions has ended without an agreement, Bloomberg reports.

Domino’s dives as orders drop

Shares in Domino’s Pizza have fallen sharply despite the delivery firm reporting a sales surge as Britons staycationed over the summer.

My colleagues report:

UK  like-for-like sales rose 18.3pc for the 13 weeks to September 27 as franchisees boosted sales by passing on the Government's VAT cut on hot takeaway food from 20pc to 5pc in July.

Domino's said demand for pizzas jumped as the pandemic forced people to holiday in the UK this year, helped also by the return of live sports on TV.

However, it said there was pressure on sales in September as more rivals reopened after lockdown and some students delayed returning to university.

FTSE 100 extends losses

The FTSE 100 has continued its fall, down abut 2.5pc currently amid heavy losses across European markets. The drop has taken London’s blue-chip index to its lowest price since mid-May:

Dunelm repays furlough cash as sales continue to soar

Dunelm has traded strongly this year as Brits lean toward home improvement Credit: F Stop Press

Homeware chain Dunelm will hand back £14.5m it claimed under the Government's furlough scheme.

My colleagues report:

The retailer said it would also not make any claims for Chancellor Rishi Sunak's Job Retention Scheme bonus of £1,000 per employee, following a strong performance as pandemic-inspired DIY and home improvements continue to remain strong.

The pledge came as bosses revealed that sales jumped 36.7pc to £359m in the three months to September 26, with strong growth in online sales, which accounted for almost 30pc of sales.

Since the new Covid-19 regional restrictions have been implemented, executives said the business has not seen any disruption but added that they “recognise that the situation remains dynamic with a number of ongoing risks and uncertainties”.

However, with Covid-19 restrictions increasing and the future remaining uncertain, the company warned that it is “unable to provide any meaningful guidance”.

BBC’s Kuenssberg: No 10 has told Greater Manchester it will enter Tier 3 restrictions

The BBC’s political editor Laura Kuenssberg tweets: 

Ofcom opens probe into BT’s broadband provision compliance

BT is required to offer broadband for customers in areas with a slow connection

Ofcom has launched a probe into BT’s compliance with its obligation to be a universal service provider of broadband.

The regulator said it is concerned that BT may not be complying with rules when it assesses excess costs for provide internet connections to areas with poor connectivity.

It follows the introduction of legislation in 2018 that created a ‘universal service obligation’ under which homes and businesses have the right to a decent broadband connection.

BT was designated as a universal service provider for broadband, with customers able to request a connection from BT if they cannot currently access broadband services at 10 megabits/second.

As Ofcom explains:

Upon receiving such a request, BT must assess the costs of providing that connection and, where this is less than £3,400, BT must provide the connection. Where the assessed costs exceed that amount, BT must also provide the connection if the customer is willing to pay the excess costs.

It has become concerned that the telecoms giant may not be following regulations on this front, specifically suggesting that it may not be taking into account when several customers could take advantage of the same new infrastructure:

While the cost of some connections will be high due to the remoteness of many of these premises, we are concerned that BT may not be complying with the regulatory conditions correctly where it assesses excess costs for a given connection. This could result in some customers' quote for a connection being higher than necessary.

Ofcom said it has begun gathering evidence, and expects to determine new steps by the end of the year.

Market moves

Things are going from bad to worse for European equities, which are sinking deeper into the red: 

Markets.com’s Neil Wilson sums up the mood:

 There is a strong risk-off tone to today’s trade in Europe. Fading stimulus hopes, Brexit risks and rising virus cases across Europe – all make for nasty cocktail for risk appetite this morning after stocks fell in Wall Street yesterday.

Treasury secretary Steve Mnuchin said it would be difficult to get a deal done on stimulus before the election as the Republicans and Democrats remain far apart on certain issues. France has locked down its cities, Germany has posted a record increase in daily cases.

The UK is heading for further restrictions that will hurt the economy. Fears of a second wave leading to further restrictions on people’s movements and activity is certainly affecting confidence today, but we are not making new lows – yet. Second wave and lockdown fears have really hit travel & leisure stocks this morning in particular.

Traffic levels continue to fall

One notable part of today’s ONS data drop are the latest figures on traffic: according to data provided by the Department for Transport, traffic levels have fallen for the fourth week in a row (although we’re a long way off the nadir seen in April):

Latest ONS stats: 9pc of workforce still on furlough

The Office for National Statistics has released its latest set of experimental data measuring the impact of Covid-19 on the UK economy.

Among a slew of interest stats, a couple of key points:

  • 9.1pc of the UK workforce remains on furlough
  • 65pc of adults travelled to work during the survey period – the highest since the start of the pandemic

Here are the key stats (and neat time series):

AO World shares jump as sales momentum remains strong

AO World has seen high demand for white goods Credit: Mark Waugh / markwaugh.net

White goods retailer AO World is leading risers on the FTSE 250 today, after reported continued strong sales momentum during its second quarter (from July to September) despite many of its bricks-and-mortar competitors reopening.

The group said it expects revenue for its whole first half to be around £715m, a rise of 57pc year-on-year. In a trading statement, it said:

In our UK retail business, the sales momentum continued from Q1 throughout Q2 despite the reopening of competitor bricks and mortar stores. We believe we have seen a lasting step change in online penetration. 

Its UK revenue rise by 54pc over the period, while sales in Germany were up 83pc on a constant currency basis. 

Chief executive John Roberts said:

The last six months of trading have been like no other during my two decades in the business. AO was in good shape coming into this financial year and the global, structural shift in customer behaviour to online, accelerated by Covid, emphasised our strengths.

Shore Capital’s Greg Lawless said it was “another strong trading update reflecting the acceleration in online shopping”. He added:

Despite the strong first half trading, we think that the shares look fairly valued today but highlight that the confirmation of German profitability in H2 on a monthly basis is an important milestone for the company.

What the tiers mean

Here’s a reminder of what the tier system means in practice:

London set to enter ‘Tier 2’ at midnight on Friday

The Guardian’s Elgot: New London restrictions ‘increasingly likely’

The Guardian’s deputy political editor Jessica Elgot tweets:

Hays fees fall sharply

Net fees at big business recruiter Hays dropped 29pc year-on-year in the three months to the end of September.

Temporary hiring markets remained stable, down about 25pc, while the permanent hiring markets was knocked a more substantial 35pc.

In the UK, its fees were down 34pc overall, with public sector fees upperforming the private sector at 20pc down vs 40pc down respectively.

The group said it expects it first half performance (from July to the end of December) to be “modestly profitable”, despite tough market conditions, but warned a “material recovery” in profitability beyond then would require a significant uplift in net fees.

Chief executive Alistair Cox said:

Although many uncertainties remain, our business is resilient and our highly experienced management teams are focused on best positioning us for recovery. With our strong balance sheet and leading positions in key sectors, we are confident we can take further market share. 

Money round-up

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

Mondi sees earnings hit from lower prices

Packaging group Mondi is among the bigger fallers on the FTSE 100 today, after reporting worse third-quarter earnings amid price pressure and currency swings that offset high demand.

The group’s underlying earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped 20pc year-on-year to €306m, following a 26pc decline in the first half.

It said:

Good volume growth in uncoated fine paper and fibre-based packaging products and ongoing strong cost control were more than offset by the impact of planned maintenance shuts, negative currency effects and lower average selling prices.

Mondi said demand for its corrugated packaging offerings “remained strong”, adding: “we are currently in discussions with customers around price increases for various containerboard grades”.

Chief executive Andrew King said:

We continue to make good progress leveraging our award-winning innovation capabilities and customer-centric approach to optimise packaging design using ‘paper where possible, plastic when useful’.

Goodbody’s David O’Brien said the update was “broadly in line” with expectations, but expected further price pressure to create a “better entry point for the stock”.

Rolls-Royce prices bonds as it aims to boost balance sheet

Rolls-Royce’s shares had their best week ever last week – but it’s still massively down this year Credit: Nathan Laine/Bloomberg

Rolls-Royce has priced £2bn of bonds in three tranches as the embattled engineering giant bolsters its balance sheet as part of a £5bn refinancing plan that includes a £2bn rights issue.

My colleague Alan Tovey reports:

The company is offering senior unsecured notes, with $1bn of at interest rates of 5.75pc, €750m at 4.625pc and £545m at 5.75pc. The bonds are due between 2026 and 2027.

Coupons being paid on the bonds reflect the pressure Rolls is under because of the collapse in air travel, with this sector normally representing half of its pre-pandemic annual revenues of £15bn.

The repayments are far higher than the European corporate bond benchmark 3.73pc, and dwarf the coupons of less than 1pc the company was able to borrow at two year ago. 

BAT names Luc Jobin as next chair

British American Tobacco has named Luc Jobin, currently an independent non-executive director, as its next chairman.

He will take up the role on 28th April next year, succeeding Richard Burrows.

BAT said a search of external and internal candidates had “concluded that Mr Jobin's experience of enterprise transformation, extensive North American knowledge and cross-industry credentials make him the right candidate to lead the Board”.

Heineken fined after forcing pubs to stock ‘unreasonable’ amounts of its beers

Star Pubs & Bars is Heineken’s leased pub business Credit: Paul O'Driscoll/Bloomberg News

Heineken’s UK pubs business has been fined £2m after forcing tenants to sell “unreasonable levels” of the group’s drinks.

In the first investigation conducted under the Pubs Code, adjudicator Fiona Dickie said the “nature and seriousness” of breaches by Star Pubs & Bars, part of the heineken group, merited the financial penalty.

Her ruling said Star “had persisted in forcing its tenants to sell unreasonable levels of Heineken beers and ciders when they requested to go free of tie. This was despite repeated regulatory interventions and clear arbitration rulings from the PCA.”

  • The full PCA report can be read here

Ms Dickie found a total of 12 breaches, as well as “systemic corporate failures” in Star’s approach to compliance. That included this breach:

Specifically, during the investigation she found that the company had included a responsibility in the job description of the company’s Code Compliance Officer ‘to ensure the Code is interpreted to the commercial benefit of Heineken UK’. This breached the Code requirement to appoint a compliance officer whose role is to verify compliance.

Her report says Star was given opportunities to become compliant but “intentionally or negligently failed to do so”. 

Ms Dickie said:

The company must change its mindset and become proactive in its approach to compliance. I have decided this can best be achieved by the imposition of a sanction that will serve as a deterrent to future non-compliant conduct by Star and other pub-owning businesses.

Wells Fargo fires over 100 employees for aid abuse – Bloomberg

A grim story from overnight: US lender Wells Fargo has fired over 100 employees for “improperly collection coronavirus relief funds“, Bloomberg reports.

The news service says:

The firm determined that the staffers defrauded the Small Business Administration “by making false representations in applying for coronavirus relief funds for themselves,” according to an internal memo reviewed by Bloomberg. The review focused on employees who tapped the Economic Injury Disaster Loan program, a key part of the government’s effort to prop up businesses during the pandemic.

“We have terminated the employment of those individuals and will cooperate fully with law enforcement,” David Galloreese, Wells Fargo’s head of human resources, said in the memo. “These wrongful actions were personal actions, and do not involve our customers.”

Shares plunge

European shares have dropped sharply at the open. 

Credit: Bloomberg TV

Ryanair cuts winter capacity to 40pc

Ryanair boss Michael O’Leary said the cuts were regrettable Credit: Simon Dawson/Bloomberg

Ryanair has cut its winter schedule from 60pc to 40pc of the previous year’s levels in the wake of new flight restrictions in Europe.

The budget airline said air travel from much of Central Europe, the UK, Ireland, Austria, Belgium and Portugal has been “heavily curtailed” due to increased measures.

It expects to maintain 65pc of its route network over the winter period – from November to March – but has already announced “significant” base aircraft cuts in Belgium, Germany, Spain, Portugal and Austria.  

Chief executive Michael O’Leary said the group is trying to avoid job cuts:

While we deeply regret these winter schedule cuts they have been forced upon us by Government mismanagement of EU air travel. Our focus continues to be on maintaining as large a schedule as we can sensibly operate to keep our aircraft, our pilots and our cabin crew current and employed while minimising job losses.

It is inevitable, given the scale of these cutbacks, that we will be implementing  more unpaid leave, and job sharing this winter in those bases where we have agreed reduced working time and pay, but this is a better short term outcome than mass job losses.

Pub group Marston's to axe 2,000 jobs

Pub chain Marston's is set to cull more than 2,000 jobs after the Government's latest restrictions on the hospitality industry “undermined” consumer confidence and “created uncertainty”,

My colleague Simon Foy reports:

The Wolverhampton-based company said 2,150 pub-based roles that are currently subject to furlough – around 15pc of its total staff – are set to be axed.

It has also launched a full review of overhead costs, which will be concluded by the end of the year.

Marston's, one of Britain's biggest brewers and pub chains, said: “The introduction of these further restrictions and guidance affecting pubs is hugely disappointing in view of a lack of clear evidence tying pubs to the recent increase in infection levels, and our own data which suggests that pubs are effective in minimising risks.”

Agenda: FTSE set to slump

Good morning. The FTSE 100 is set to open in the red following reports that London is set to be placed under tier two restrictions as early as Friday, meaning different households will not be able to meet in any indoor settings.

Countries across Europe are tightening restrictions as virus cases continue to rise.

France announced a curfew in Paris and other cities, Ireland put an end to all household visits, while Northern Ireland clamped down further, closing schools, bars and restaurants.

In Britain, Greater Manchester and Lancashire are also set to be placed on the highest level of restrictions, which would see large swathes of the hospitality industry shut in those regions.

However, Germany is taking a soft-touch approach and is urging citizens to double down on hygiene and social distancing rules. 

Chancellor Rishi Sunak warned on Wednesday that a new “circuit break” lockdown would inflict terrible harm on the UK and precipitate a new “economic emergency”. 

5 things to start your day 

1) Asos fears recession could dent demand: The fast fashion retailer warned that swathes of it young customers may be unable to afford fast fashion as Covid wrecks the fortunes of a generation.

2) Hedge fund circles British Airways owner: One of Britain’s most powerful hedge funds has taken a major stake in BA owner IAG as the flag carrier braces for a turbulent winter.

3) Deloitte quits as auditor of Issa brothers' petrol station chain EG Group: The Big Four accountant is said to have resigned from the position with immediate effect due to governance concerns.

4) Ocado depot plan in London derailed by locals' interventionOcado has lost the right to open a new depot in north London after the local council ruled that a planning application was misleading.

5) Why China is winning the pandemicPresident Xi Jinping wants Shenzen to become a technological powerhouse to challenge Silicon Valley.

What happened overnight 

Global shares slipped on Thursday as investors locked in recent gains amid rising concerns about resurgent Covid-19 infections and after the US Treasury Secretary dashed any remaining hopes of a stimulus package before the November 3 presidential election.

MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.5pc while Japan's Nikkei dropped 0.5pc.

US S&P 500 futures sagged 0.27pc in Asia after major US stock indexes ended the previous session lower, with the S&P 500 closing down 0.7pc and the Nasdaq Composite Index shedding 0.8pc.

Disappointing quarterly results from Bank of America and Wells Fargo led the S&P 500 banks index 2.4pc lower.

Concerns that a resurgence in the pandemic could lead governments to again shut down economies spurred profit taking, particularly after the recent stock rally.

Coming up today

Trading statement Countryside Properties, Domino’s Pizza, Dunelm, Hays, Mondi, Rathbone Brothers

Economics Inflation (China); EU Council meeting day one of two; jobless claims (US)