- FTSE rallies on vaccine update
- Pfizer says vaccine candidate more effective than first thought
- Inflation climbs on rising cost of clothing and food
- Shop early this Christmas, Amazon warns
- Jeremy Warner: Digital cash is too much for banks to bear right now
- Win £10k playing the Telegraph's Fantasy Fund Manager game
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Thank you for following along today. Here are some of our top stories today:
- Billions in subsidies needed for electric car switch, industry warns
- Norwegian files for bankruptcy protection
- Business owners rush to sell before capital gains tax changes, broker warns
- Northern Irish business leaders demand Brexit grace period
- London’s £33bn Crossrail 2 project ‘ready to be restarted’ in future
See you again tomorrow!
FTSE ends in green, mid-caps rise
London shrugged off early pessimism and traders relished another piece of positive news: Pfizer said its vaccine is better than first revealed, with a 95pc effectiveness as opposed to the last week's announcement of 90pc.
The FTSE 100 gained 0.3pc by close, to 6,385.24.
Midcaps also jumped, as hopes of a post-Brexit trade deal added to optimism.
The domestically focused FTSE 250, considered a barometer for Brexit sentiment, closed 0.9pc higher.
The EU's Trade Commissioner said Britain and the EU were in the last moments to reach a Brexit trade deal.
Croda buying Iberchem for £732
Yorkshire-based UK chemicals group Croda has agreed to buy Spain's Iberchem - Europe's largest cosmetic-ingredients maker - for €820m (£732m) as demand grows for fragrants and home products in emerging markets.
Bloomberg has more:
- Croda plans to raise £600m in equity to help pay, from private equity firm Eurazeo.
- Iberchem generates 80pc of its sales from fragrances used in personal and home-care products such as detergents.
- Food, drug and oral care account for the remainder of the €174m in revenue last year.
According to the Financial Times, Croda "hopes the acquisition will boost its sales of fragrance formulations for shampoos, cosmetics and scented products in high-growth markets from China to the Middle East".
Its shares jumped 5pc in morning trading, before paring gains to end down 0.9pc.
Ministers accused of ‘cover-up’
Transport committee chairman Huw Merriman has accused transport minister of hiding key details about emergency measures from parliament.
My colleague Oliver Gill reports:
Transport minister Chris Heaton-Harris and rail tsar Peter Wilkinson were accused of hiding key details from parliament during a hearing of an influential parliamentary committee.
Emergency contracts, called Emergency Recovery Measures Agreements or “Ermas”, were agreed by the Department for Transport with train companies in September at a cost of between £3bn and £5bn.
Billions in subsidies needed for electric car switch
The Government must provide clear long-term financial incentives to encourage greater take-up of low emission vehicles, industry warns
My colleague Alan Tovey reports:
The alert comes after Boris Johnson announced the ban on the sale of new cars with petrol and diesel engines will be brought forward by five years to 2030, with sales of hybrid-engine vehicles ending from 2035.
Car makers welcomed the goal, part of the Prime Minister’s 10-point plan for a “green industrial revolution” to combat climate change.
Soaring lettuce prices pushes Canadian inflation higher
A huge increase in the price of lettuce pushed Canada's annual inflation to 0.7pc in October, exceeding forecasts.
Due to crop disease and inclement weather in lettuce growing regions, the price of lettuce surged by more than a quarter, driving overall fresh vegetable prices up by a tenth.
Economists had expected the inflation rate to accelerate by 0.4pc for the period.
Eagerness on both sides to secure UK-Australia trade deal, says Abbott
Former Australian PM Tony Abbott (now a UK trade adviser) has been speaking to MPs this afternoon on the likelihood of a UK-Australia trade deal.
My colleague Lizzy Burden reports:
Speaking to the Commons International Trade Committee, Mr Abbott, who now acts as an adviser to the UK Board of Trade, said: "Given the goodwill that continues to exist between Britain and the countries of the Commonwealth I think it is important to make the most of that, to utilise it as far as is possible, particularly if there is not always that much goodwill at the moment between Britain and the EU."
He added that there had been no formal process for his appointment.
"I received a phone call one evening from the Secretary of State Liz Truss. She said: 'We are going to reconstitute the Board of Trade, including a number of the advisers. Would you be prepared to be one of the advisers?' I said, 'I'd love to be considered, I am happy to help as far as I am able'."
Boris Johnson faced criticism over Mr Abbott's appointment amid controversy surrounding his past remarks about women, homosexuality and climate change.
Mr Abbott said he believed the environment was "incredibly important" but “there are other forums to pursue climate initiatives” outside trade deals.
Music industry suffers £3bn pandemic hit
Britain's music industry is bracing for a sharp slump as the pandemic triggers a £3bn fall in its economic firepower.
My colleague Ben Woods reports:
The sector's contribution to the economy is poised to plunge from nearly £6bn last year, according to trade body UK Music that includes record labels, publishers, musicians and venues.
Chief executive Jamie Njoku-Goodwin said the industry had suffered a "devastating blow", with the impact being felt in every corner.
"The lockdowns threw into sharp focus the health benefits of music-making as activities like singing in a choir, playing in an orchestra or band were paused," he added.
"The cancellation of gigs and festivals laid bare how reliant local economies are on music venues which bring trade to businesses from taxi firms to take-away stands."
It comes after the industry recorded a strong year prior to the pandemic, increasing its contribution to the UK economy by 11pc to £5.8bn in 2019.
Four-day week beckons at HSBC
More signs the pandemic is upsetting the old norms. HSBC is offering its Hong Kong staff greater flexibility to work from home, in the latest sign the pandemic is transforming the role of the office in business life, Bloomberg reports.
The London-based lender, which counts Hong Kong as its biggest market, is now allowing eligible staff to work as many as four days a week from home, according to an internal memo and guidelines seen by Bloomberg.
An HSBC spokeswoman confirmed the plan, which offers varying degrees of flexibility for employees. “We’re constantly looking to develop overall flexibility in how we work,” the memo sent to staff on Nov 4 said. “In recent employee exchanges and surveys, some of you have expressed an interest in a blend of in-office and home working.”
Fantasy Fund Manager is back
The Telegraph’s Fantasy Fund Manager game is back for a second season to give you the chance to put your stock-picking skills to the test, challenging thousands of fellow Telegraph readers, friends and family and our (mostly) expert journalists.
You can create your fund from today here. The competition begins on Monday 23 Nov at 8am and will last for three months. Whoever has made the most money by Friday 19 Feb 2021 will be declared the winner and win the £10,000 grand prize. There will also be a £100 prize for the best performing fund each week.
For more details on the game, check out this post here.
Time for a quick catch-up of what's been happening...
- The Prime Minister's green plan is being picked over by Westminster. For more on the banning of petrol and diesel cars by 2030, read our piece from earlier in the week. Can the UK get ready for the switch?
- Pfizer's final results show its vaccine is 95pc effective with no major side effects. Follow our live coronavirus blog here.
- Boeing’s 737 Max can safely return to the skies with an extensive package of fixes, US regulators ruled, after the plane was grounded for close to two years following fatal crashes that killed almost 350 people.
- Apple will reduce its App Store fees to 15pc for small businesses earning up to $1m (£774,000), its latest concession as it faces mounting criticism over its cut of earnings.
- Savers could be charged negative interest rates in future if the Bank of England successfully establishes a widely used digital currency, according to its chief economist.
M&S to launch food 'innovation hub'
M&S Food is set to launch a new innovation hub, which will involve a team of nine people focusing on how disruptive technology can improve its products and services
M&S added that the new group will focus on how technology can be used to boost sustainability, including examining soya-alternative proteins for plant-based foods and the latest in material science to reduce plastic packaging.
Stuart Machin, M&S Food’s managing director, said:
Creating a dedicated team with the sole purpose of driving disruptive innovation will support us in being more relevant to our customers. But it’s not just about relevancy today; the Innovation Hub will enable us to track emerging trends and insights, so we’re one step ahead in responding to our customers’ needs in the future.
The team will play a key role in helping us to build an even bigger and better food range and show customers that we’re taking action to address the sustainability issues they care about most.
Lloyds restarts closure of 56 bank branches after pandemic pause
Lloyds will shut 56 branches, restarting plans it paused after the spread of coronavirus.
Bloomberg has the details:
The closures are spread across its Lloyds, Halifax and Bank of Scotland brands and will impact 160 jobs, according to an emailed statement Wednesday from trade union Unite.
“In January this year we announced that these branches would be closing due to a decline in use,” Lloyds said in a statement. “We paused these closures due to the Covid-19 pandemic and, after careful consideration, these planned closures will take place in March and April 2021.”
The branches were meant to shut between April and October this year, according to the union, which urged the bank to reverse its decision.
Chief Executive Officer Antonio Horta-Osorio resumed a job- cutting program in September, taking the ax to the bank’s wealth and insurance division.
The lender eliminated more than 1,000 roles at its technology and retail units earlier this month.
More on the Pfizer update
The coronavirus vaccine from Pfizer – which is due to arrive in the UK before the end of the year – is 95 per cent effective and has passed its safety checks, according to further data from the firm.
My collegue Jamie Johnson reports:
Results from the late-stage trial of Pfizer's COVID-19 vaccine show it was 95 per cent effective, adding it had the required two-months of safety data and would apply for emergency U.S. authorization within days.
The drugmaker said efficacy of the vaccine developed with German partner BioNTech SE was consistent across age and ethnicity demographics, and that there were no major side effects, a sign that the immunization could be employed broadly around the world.
Efficacy in adults over 65 years, who are at particular risk from the virus, was over 94 per cent.
The final analysis comes just one week after initial results from the trial showed the vaccine was more than 90 per cent effective. Moderna Inc on Monday released preliminary data for its vaccine, showing similar effectiveness.
House prices jump 4.7pc in September
House prices in September jumped 4.7pc year-on-year to hit a record high of £245,000, official statistics show.
My colleague Melissa Lawford reports:
Pressure to transact before the stamp duty holiday expires at the end of March, combined with pent-up demand and a new desire to move after lockdown, has pushed British house price growth to its highest level since October 2017, according to the Office of National Statistics.
The growth in the wake of the pandemic is an extreme contrast to the sluggish pace of the property market last year. In September 2019, annual growth was just 0.9pc.
On a seasonally adjusted basis, monthly house price growth between August and September was 1.8pc, up from a rate of 1.1pc the previous month.
In July, Chancellor Rishi Sunak temporarily raised the nil-rate stamp duty band from £125,000 to £500,000 in England and Northern Ireland, meaning homeowners can save up to £15,000 in tax if they transact before March 31 2021. Scotland and Wales have adopted similar but less extensive policies.
September price growth was strongest in England, which benefits from the most generous stamp duty holiday and has a larger number of the more expensive properties that benefit from higher savings than Northern Ireland. The average house price in England was £262,000, up 4.9pc on 2019.
Green plan gets cautious welcome
There's plenty of reaction today to the Prime Minister's new 10-point green plan, particularly the move to ban sales of new petrol and diesel cars from 2030.
Jonathan Geldart, Director General of the Institute of Directors, has given the plan a cautious thumbs-up:
The Prime Minister is right to put private sector innovation at the heart of the strategy. To effect change, what businesses need most is clarity and leadership from Government, and today’s plan is an important step in that regard. For instance, the 2030 target for polluting cars may be stretching, but it provides something clear for the industry to aim toward.
Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), says "the new deadline is challenging and despite the continued improvement to the charging infrastructure, there remain a number of practical barriers to the uptake of EVs". She adds:
Strong incentives are key to ensuring the UK remains a strong consumer market for electric cars as the market begins to mature. We have to avoid a situation where the least well-off car drivers are deterred from buying a new car when the time comes to replace their old one.
'Stamp duty cut poured fuel on the flames'
Here's some reaction to those ONS figures showing house prices climbed 4.7pc year on year in September.
Jonathan Hopper, of Garrington Property Finders, says the house price boom was "surprising" after the pandemic hit. “The Land Registry’s data confirms that the surge in prices is real and sustained. In the 12 months to the end of September, prices rose nearly four times faster than they did in the year leading up to the UK’s Covid outbreak," he says. Hopper adds:
Lockdown living sparked the fire, as months of confinement led thousands of people to decide that they wanted more from their home – more space, somewhere comfortable to work and a better standard of life away from the big cities. The Chancellor’s Stamp Duty cut, and crucially the fact it was time-limited, then poured fuel on the flames.
Lucy Pendleton, of estate agents James Pendleton, says this “was the moment the market really entered fifth gear", with London leading the way. But she warns:
Expect this rate of growth to cool though. Fast forward to the autumn and renters have reverted to type and have begun putting off moves until the New Year.
Paul Stockwell of Gatehouse Bank notes the glut of properties now on the market has created its own challenges:
What began as a disastrous year for the property industry has been turned on its head by government interventions, creating a surge of demand predominantly in England and Northern Ireland where the stamp duty reduction is greatest. This in itself has presented new challenges to the industry with property portal Zoopla estimating 418,000 sales in the pipeline nationally, 50pc more than the typical number for this time of year.
House prices climb again
The average UK house price stood at a record high of £245,000 in September, after jumping by 4.7pc over the year, the Office for National Statistics (ONS) said this morning.
London's average house prices also hit a record high of £496,000 in September, it said.
Average house prices increased over the year in England to £262,000 (4.9pc annual increase), in Wales to £171,000 (3.8pc), in Scotland to £162,000 (4.3pc) and in Northern Ireland to £143,000 (2.4pc).
Recent price increases may reflect a range of factors including pent-up demand, some possible changes in housing preferences since the coronavirus pandemic, and a response to the changes made to property transaction taxes across the nations, the ONS said.
Lockdown spurs changes in spending
Here's a little more on those inflation numbers this mornng.
The Office for National Statistics said its consumer prices index rose from 0.5pc in September to 0.7pc in October, beating analysts’ expectations that it would plateau, writes Lizzy Burden.
Unlike last year, food prices rose in October as consumers stocked up on potatoes and fruit as health restrictions tightened in Scotland, Wales and Northern Ireland. A one-month lockdown was announced for England at the end of the month and started on Nov 5.
The price of computer games also climbed as people stayed home, although the rise was partially offset by falls in the cost of energy and holidays. The jump in the price of IT equipment also reversed from 10.9pc to 6.4pc as supply shortages were filled.
SSE takes £115m Covid hit as profits drop
SSE revealed a £115m pandemic-related hit as it posted a 26pc drop in profits for its first half.
The energy giant said the estimated impact is slightly lower than expected but puts the group on course for a full-year earnings blow in the middle of the £150m to £250m range previously announced.
The company reported underlying pre-tax profits of £193.9m for the six months to September, down from £263.4m for the same period last year.
Chairman Richard Gillingwater said:
The resilience of SSE's business model and the ongoing commitment of our employees are reflected in the strong operational performance we have reported for the first half of 2020/21.
Challenges lie ahead - not least in navigating another wave of the pandemic, the potential operational impact of the weather in the second half and the lingering uncertainties around Brexit - but these are far outweighed by the wealth of significant opportunities we have to create value in the transition to net zero emissions.
Shares rose 3.4pc to £13.93 in early trading.
Halfords boosted by cycling boom
Halfords has more than doubled its half-year profits after capitalising on Britain's cycling boom during the pandemic.
The retailer posted pre-tax profits of £56m for the six months to October, up from £25.9m during the same period last year.
Sales of cycling products surged by 54pc during the period, with sales of "e-mobility" equipment growing by 184pc.
Britons have rushed to buy bicycles in order to avoid public transport during the pandemic, with many retailers struggling to cope with the surge in demand.
Chief executive Graham Stapleton said:
We have worked hard to capitalise on the cycling market tailwinds by sourcing more stock from existing and new suppliers, as well as launching new products and brands to serve the high level of demand for our cycling products and services.
Shares rose 8.2pc to 284p in early trading.
UN recruits 40 airlines to deliver vaccine to poorest countries
Unicef is set to recruit some of the airline industry’s biggest operators to help distribute a Covid vaccine to the world’s poorest nations.
Bloomberg has the details:
Unicef held a call with about 40 carriers to make plans for the global airlift and to identify what commercial tasks each party can perform, according to Glyn Hughes, head of cargo at the International Air Transport Association, which helped arrange the meeting.
Unicef, already the number one buyer of vaccines, is leading efforts to purchase and distribute Covid shots to 92 states with funds from the GAVI immunization program, which brings together governments, the World Health Organization and World Bank. Another 80 higher-income countries have chosen it to procure inoculations they will buy, extending the plan to 70pc of the population.
The summons to airlines was triggered by positive late-stage trial results reported by Pfizer and Moderna on two separate vaccines, Hughes said in an interview. Neither has yet been approved for use, but attention is turning toward how a successful shot can be distributed, especially to less well off countries without the resources for mass purchases.
RSA agrees £7.2bn takeover
More Than owner RSA Insurance has agreed to a takeover by a group led by Canadian firm Intact Financial Corporation in a deal valuing the firm at £7.2bn.
My colleagues report:
The board of the FTSE 100 has accepted an offer of 685p a share in cash for the 300-year-old business.
The company said this represented a 51pc premium to the closing price on Nov 4, the day before the takeover interest became known.
Under the deal Intact will pay £4.2bn and Danish insurer Tryg £3bn.
The sale will be put to RSA shareholders, with 15pc of its investors already pledging to back the takeover.
Martin Scicluna, chairman of RSA, said: "The board of RSA is pleased to be recommending Intact and Tryg's cash offer for the company, which delivers attractive, certain value for our shareholders.
"The offer reflects the strength and performance of RSA during a challenging period for our industry, representing a significant premium in cash."
Inflation 'still way below the BoE's 2pc target'
Despite the rise, inflation is still a long way off the Bank of England's 2pc target.
Commenting on the figures, Laith Khalaf, an analyst at AJ Bell, says:
CPI is slowly making a comeback, but it’s still way below the Bank of England’s 2pc target. Inflation isn’t just a measure of prices in the here and now, but also one year ago. More substantial gains can therefore be expected as we head into spring, as the baseline for comparison moves into the post-pandemic era.
The current lockdown may create some short-term volatility in the number, but the overall picture is one of low, gradually rising inflation. The economic damage of the pandemic means that many businesses won’t want to deter valuable customers by raising prices for some time to come.
Inflation rises to 0.7pc in October
Inflation rose to 0.7pc in October as clothing prices ticked up.
Between September and October, clothing prices climbed by 2.8pc compared to 0.9pc for the same period last year.
Food prices rose by 0.1pc compared to a 0.6pc fall last year. .
Jonathan Athow, deputy national statistician at the ONS, said:
The rate of inflation increased slightly as clothing prices grew, returning to their normal seasonal pattern after the disruption this year.
The cost of food also nudged up, while second-hand cars and computer games also all saw price rises. These were partially offset by falls in the cost of energy and holidays.
British Land warns office leasing volumes will be hit by Covid and Brexit
British Land has said office space leasing volumes will likely take a hit as customers are expected to continue to defer decisions and extend leases amid virus and Brexit uncertainty.
It came as the FTSE 100 company reported a fall in half-year profits but resumed its dividend with an interim pay out of 8.4 pence a share.
Chief executive Chris Grigg said:
Despite the unprecedented situation brought about by Covid, our business is more financially resilient, our focus on mixed use London campuses is clear and we have an unrivalled pipeline of opportunities.
We are closer to our customers and our expertise in creating and managing space that reflects their needs has never been more important.
Agenda: Stocks set to drop
Good morning. The FTSE 100 is set to fall for a second day as Monday's vaccine rally continues to fade. Investors are increasingly focusing on the near-term virus risk as opposed to the longer-term implications of a vaccine.
The pound continued to rise on Brexit deal optimism.
5 things to start your day
1) Festive ads are an early Christmas present for media sector: John Lewis' Christmas advert is a welcome reprieve for broadcasters, after facing a £500m plunge in TV ad spending from March to June.
2) Tech billionaires fuel boom in private jet sales: Cash-rich but time-poor tech execs are increasingly splashing out on larger aircraft for transcontinental travel without the need for fuel stops.
3) Shop early this Christmas, Amazon warns: Online retail giant fears even hiring an extra 250,000 workers this year may not be enough to avoid shipping delays this festive season.
4) Officials spent £6m on body bags from Slovakia at the height of the first wave: Ministers paid £6m in April to a Slovakian medical goods firm as the UK’s Covid death rate spiralled and stocks ran low, according to official filings
5) Elon Musk is world's third-richest person as Tesla enters S&P 500: Elon Musk has overtaken Facebook’s Mark Zuckerberg to become the world’s third-richest person, after his fortune soared by $7.6bn (£5.7bn).
What happened overnight
Asian stock markets were mixed on Wednesday after Wall Street declined as worries about the long-term impact of the coronavirus pandemic tempered enthusiasm about possible vaccine development.
Benchmarks in Tokyo and Hong Kong declined while Shanghai and Seoul advanced.
Also on Wednesday, Japan reported its export decline narrowed to 0.2pc over a year earlier in October.
The Nikkei 225 in Tokyo lost 0.7pc to 25,827.23 while the Shanghai Composite Index gained 0.4pc to 3,355.06. The Hang Seng in Hong Kong retreated less than 0.1pc to 26,383.95.
The Kospi in Seoul was up less than 0.1pc at 2,539.20 and Sydney's S&P-ASX 200 added 0.3pc to 6,515.50.
Coming up today
Corporate: British Land, Halfords, SSE (Interim results); Avon Rubber (Full year); Tbc Bank Group, Safestore, Spirax-Sarco Engineering, Equiniti, Nvidia (Trading Statements)
Economics: Inflation (UK, eurozone), car registrations, house price index (UK); building permits, housing starts (US)