AstraZeneca's shares dip over new vaccine trials

AstraZeneca

Wrapping up

EU considers stopgap measure for UK financial services post Brexit

EU assessments of whether to grant market access for British banks and financial firms won't be completed in time for January. Stop-gap measures are being considered, reported Reuters citing an EU diplomat.

The news agency has more:

Britain's unfettered access to the EU under transition arrangements ends on Dec 31, leaving the City of London faced with being cut off from its biggest export customer.
The EU assessments are being made by the European Commission, which declined to comment, under the bloc's system of direct financial market access known as equivalence. 

Boris Johnson's new chief of staff hails from the City

Boris Johnson today named Dan Rosenfield as his new chief of staff - to start on Jan 1 - after changing his mind about giving the role to now-resigned Lee Cain.

Mr Rosenfield, 43, joins from strategic advisory firm Hakluyt and previously worked as managing director, investment banking at Bank of America.

The Mancunian also worked as private secretary to Alistair Darling, when he was Labour chancellor - including through the aftermath of the 2008 financial crisis - and for his Tory successor George Osborne.

A few takeaways from the PM's speech

Nothing majorly new from Boris Johnson's speech, but a few takeaways:

  • Workers should continue to work from home, if they can
  • Shops, gyms, places of worships, cinemas, hospitality (in some capacity) are opening across all tiers
  • "Tough measures in our winter plan are the best way to avoid" a lockdown in the new year
  • Tier allocations will be reviewed every 14 days
  • Johnson has no doubt that in Spring - after lockdowns, with testing and hopefully a vaccine - we can "reclaim our lives and all the things we love"
  • The government has supplied about 200,000 laptops to schools to aid remote learning, but urges keeping schools open is a priority

Astra boss vows new vaccine trials 

AstraZeneca's boss has said the pharma firm is likely to do another global trial to see how effective its coronavirus vaccine is, after current studies raised questions over its level of protection, reported Bloomberg.

The news agency has more:

The new trial would be run instead of adding an arm to an ongoing US trial and would evaluate a lower dosage that performed better than a full amount in Astra’s studies.
The company’s acknowledgment that the lower level was given in error fueled concerns.
“Now that we’ve found what looks like a better efficacy we have to validate this, so we need to do an additional study,” chief executive Pascal Soriot said in his first interview since the data were released.  

News broke just before London markets closed. Its shares lost 0.7pc to £77.48 through the day.

Handover

Time for me to hand over to my colleague Louise Moon, who will steer the blog into the evening through Boris Johnson’s planned 5pm press conference. Thanks for following along today!

RTE’s Connolly: Full deal on financial services equivalance is unlikely to be completed by end of 2020

Tony Connolly from Irish broadcaster RTE tweets:

Amazon’s Alexa slammed for spreading anti-Semitic material

Amazon has been accused of spreading antisemitic messages through its Alexa voice assistant by MPs who warned they would be contacting police over the incidents.

My colleagues Hannah Boland reports:

In a letter from the All-Party Parliamentary Group Against Antisemitism, the MPs said they had found that Alexa was answering questions about Jewish people using information from antisemitic websites and conspiracy theories. 

In one example given, Alexa had answered a question over whether "Jews control the media" with information from “Jew Watch”, saying: “Jew Watch claims that Jews control the world's financial systems and media.”

In another, to a question on whether the Holocaust was a hoax, the voice assistant had cited information from a Holocaust denial source, saying: “Most Holocaust deniers claim, either explicitly or implicitly, that the Holocaust is a hoax – or an exaggeration – arising from a deliberate Jewish conspiracy designed to advance the interest of Jews at the expense of other people.”

TUC: PM’s ‘no more austerity’ promise has been broken

The Trades Union Congress has come out against the Chancellor’s Spending review, following the IFS’s analysis this morning.

General secretary Frances O’Grady said:

It’s clear now that the Prime Minister’s promise of no new cuts to public services has been broken. And cuts to public services will also undermine the promise to level up, as they will hit the poorest communities hardest.

The Chancellor should be doing everything possible to protect the economy. Public services are vital to the UK’s economic strength, and to our ability to recover quickly from the pandemic and recession. These cuts will only make the recovery slower and harder.

OBR’s gloomy forecasts risk leading Sunak to slam the breaks on

Rishi Sunak unveiled his Spending Review yesterday Credit: Ray Tang/Anadolu Agency via Getty Images

The budget watchdog’s gloomy forecasts risk hurting the UK recovery by luring Rishi Sunak into slamming the brakes on spending too soon, economists have warned as its chief defended the under-fire predictions.

My colleagues Tom Rees and Tim Wallace report:

City forecasters said AstraZeneca and Oxford University’s vaccine triumph has made the Office for Budget Responsibility’s forecasts too pessimistic amid concerns the Chancellor’s economic support will be withdrawn prematurely.

A build-up of household savings ready to be unleashed and hopes of an earlier end to Covid restrictions mean the Treasury’s official forecaster could be overly downbeat on the economy’s prospects. 

The OBR made its forecasts before the positive results in vaccine trials by UK scientists and its main scenario assumed a jab only being widely available by mid-2021. However, economists warned an overly pessimistic view on future borrowing could tempt the Chancellor into pulling support back too early.

Market moves

With Wall Street closed, the mood is pretty set on European markets – the FTSE 100 is putting in a markedly weak performance compared to its continental rivals.

Alexa bag picks up Mulberry

Alexa Chung inspired the Alexa handbag Credit: Charles Sykes/Invision/AP

Mulberry has hailed a “strong reaction” to the relaunch of its Alexa handbag as it unveiled a plunge in sales, but noted an improvement in recent trading.

My colleague Hannah Uttley reports:

The luxury firm said sales for the six months to 26 September fell 29pc to £48.9m, while pre-tax losses narrowed to £2.4m from £10.1m a year ago as it cut costs and boosted online trade.

Mulberry highlighted that its sales decline had improved to 18pc in the final three months of the period after falling as much as 39pc in the first quarter.

Sales fell 19pc in the eight weeks to 21 November as the enforced closure of non-essential retail in England during the second lockdown hit trade. Mulberry warned that the pandemic was likely to negatively impact trading for at least the rest of the financial year.

That sinking feeling

Away from tiers for a moment, Sam Benstead has a little more on Bitcoin's tumble.

The price of Bitcoin has dropped 11pc from its three-year high: one Bitcoin now costs $17,220 (£12,900) down from £14,500 just 24 hours ago, according to Coinbase, a cryptocurrency trading site. The digital currency, often referred to as “ digital gold” due to its finite supply and supposed low correlation with stocks and bonds, was on the cusp of  reaching an all-time high of £15,000 before traders turned against it.

‘98pc of UK’s hospitality trade in tiers 2 or 3’

Here's a more detailed response to the tiers system from UK Hospitality's Kate Nicholls. Perhaps unsurprisingly, she notes that 98pc of the sector will be caught up in tiers 2 and 3, with even the former imposing harsh restrictions on trade. She says:

The new tiers will see over 120,000 venues across England placed into Tier 2, with tens of thousands of these forced to close as they are unable to provide a table meal, either physically or financially. This affects the employment of nearly 1.5m people.

Under this severe a restriction, 94pc of our members say they will be unviable or trading at a loss.For the 38,000 businesses in Tier 3, employing over 540,000 there is no option but to provide takeaway or close altogether.

Stamp dealer hopes to have it licked

Stamps and collectibles dealer Stanley Gibbons has been “disrupted and bloodied” by coronavirus but has “come out fighting and fought hard”.

My colleague Alan Tovey writes:

The defiant talk came from chief executive Graham Shirecore as he posted grim interim results for the specialist in old stamps, coins and medals. In the six months to the end of September, sales fell by more than a quarter to £5m, generating a loss of £2.2m, three times that at the same point last year.

Mr Shirecore said while Covid-19 “has certainly impacted trading performance, it has not all been negative”.

Lockdowns have limited the company’s ability to trade face-to-face with customers, and also “limited supply of high value coins and stamps coming to the market”. But online business has jumped, from 12pc of trade a year ago to 22pc now, giving hope to the chief executive.

He added: “While there is still a lot of work to do and more battles to be won, I believe that we are on course to achieve this.” Shares in the company rose 2.5pc to 4.05p.

M&S U-turn on keeping stores open on Boxing Day

Marks and Spencer has reversed its decision to open hundreds of stores on Boxing Day.

Chief executive Steve Rowe said the move would allow workers to spend more time with friends and family over the festive season.

M&S will now close all of its company-owned stores in the UK, as well as its customer contact and distribution centres.

Last week, the retailer said about 400 stores would open until midnight in the days leading up to Christmas, from December 21 to 23.

Mr Rowe said: "In the run-up to Christmas we are opening longer hours and have accelerated the launch of new digital services such as Sparks Book & Shop to help our customers prepare, but it’s also why we have taken the decision to close our operations on Boxing Day, so that our colleagues can enjoy more special time with their loved ones.

"This is a big decision, but it is absolutely the right one given the incredible effort everyone has made in the most challenging of circumstances.”

What support is available for businesses?

England is set to come out of the second national lockdown on December 2, but the picture will look very different for businesses around the country as Boris Johnson’s tier system resumes.

With the Coronavirus Job Retention Scheme (CJRS) extended through to the end of March 2021, and the Job Support Scheme (JSS) currently postponed, here (via my colleague Josh Wilson) is a rundown of the support currently on offer to British businesses:

Reminder: NYSE closed

As a reminder, the New York Stock Exchange will not be operating today, as traders are taking the day off for Thanksgiving. That could make for a slightly sleepy afternoon.

Tiers: Reaction from businesses

As ever, we’ve got a slew of reaction from businesses, politicians and beyond to today’s lockdown announcements, which will majorly affect many companies at this crucial time of year.

Matthew Fell from the CBI said many businesses will feel like they have entered “suspended animation” as they await a vaccine:

Some parts of the economy, such as retail, can begin to re-open and look towards a recovery. It gives our high streets a chance to rescue some of the vital festive trading period.

But for other businesses the ongoing restrictions in tiers 2 and 3 will leave their survival hanging by a thread. Hospitality will remain frozen. And supply chains that cross regions in different tiers will be hit even if they don’t face direct restrictions.

He said such companies need more information about what support will be available so they can plan ahead – urging the Government to avoid the flip-flopping fiscal policy of this autumn.

Andy Street, West Midlands mayor, called the decision to put the region into Tier 3 “very disappointing”:

Adam Marshall from the British Chambers of Commerce said the ongoing restrictions will be “devastating” for many businesses:

To weather a difficult winter ahead, greater support will be needed for the hardest-hit firms, including those in town and city centres that will miss out on trade as employees continue to work from home. 

Chambers have been clear that businesses need to see and understand the evidence behind these decisions. While the Government has today added some clarity about the rationale for which restrictions apply where, they must waste no time in producing a full impact assessment and engage with businesses on how to mitigate the ongoing economic effect.

A review of tiers on December 16 will provide hope for a way out of the strongest restrictions, but the process by which areas can move into new tiers should be transparent and include clear triggers and enough time to allow businesses to plan accordingly.

Tweeting ahead of the announcement, Kate Nicholls from industry body UKHospitality said ongoing support will be crucial:

London has escaped the toughest restrictions, but Richard Burge from London Chamber of Commerce and Industry said there are still challenges to rebuild confidence:

It’s obviously better to be able to trade than not, but Tier 2 still means a challenging operating environment for many in the hospitality sector.  Scrapping the 10pm curfew helps, but no household mixing indoors will inevitably mean many businesses continue to rely on government support through this period.  I’m pleased there will be a December 16 review date, which hopefully shows that we continue to move in the right direction and supports a further easing of restrictions.

Find your lockdown tier

With the Government’s website still having problems, use our tool to find out what lockdown tier you will be in from December 2nd:

Amigo drops to £63m loss as pandemic shuts down lending

Amigo Loans tumbled to a £63m pre-tax loss in the six months to September as it battled a wave of customer complaints and the pandemic forced it to stop almost all lending. 

My colleague Michael O’Dwyer reports:

Revenue was hit as the company lost more than 46,000 customers compared to a year earlier, leaving it with 176,000, and its loan book shrank by a third to £485m. 

Amigo lends up to £10,000 to borrowers with low credit ratings provided a friend or relative agrees to step in if they fail to repay.

It has offered payment holidays to 57,000 customers during the pandemic with 22,000 of these still active. 

The firm has earmarked £159m for dealing with claims for compensation from customers as it continues to face regulatory scrutiny. 

Despite the challenges faced by the company, it said debt collections remained “robust” and it is sitting on £160m of cash. 

Markets unmoved by tier announcements

The reaction from markets to the new tier rules has been muted to say the least. The FTSE 250 – which is more domestically-exposed than its blue-chip sibling – nosed up slightly before the announcement, but remains solidly in the red:

Bodycote shares fall on new restructuring plan

Bodycote provides heat treatment services Credit: Handout

Bodycote, the heat treatment and thermal processing company, is restructuring again because of weak demand from aerospace customers.

My colleague Alan Tovey reports:

The FTSE 250 business, which has already cut almost a fifth of its workforce, some 950 jobs, with another 100 positions to go, said it was consolidating its aerospace, defence and energy (ADE) business into fewer, larger facilities.

Bodycote is now studying how to reshape the ADE business and will release details about its plans in March. Update on trading over the four months to the end of October, Bodycote said revenue was 20pc lower at £193.6m, though this was better than the 28pc fall in the preceding four months.

Sales for the 10 months to the end of October were £550.3m, 18pc below the level at the same point in 2020.

Tiers: the different rules explained

In case you’re struggling to get to grips with the new tier system, here’s a breakdown of the rules:

Royal Mail moves closer to scrapping Saturday post

The spectre of Royal Mail letter deliveries being cut to five days a week moved one step closer after the postal regulator signalled customers no longer wanted a six-day service.

My colleague Oliver Gill reports:

Ofcom said Royal Mail, which is bound by a legal requirement to deliver letters six-days-a-week, must “modernise its network and become more efficient”.

Lindsey Fussell, Ofcom director said: “Our research suggests that people’s needs would still be met if letter deliveries were reduced from six days a week to five.”

The announcement will be a boon for Royal Mail, which raised the prospect of culling the Saturday service in September.

The former FTSE 100 company, run by former British Airways chief Keith Williams, is trying to make significant changes to its strategy and working practices.

Technical issues pervade

It looks like interest in the Government’s new tiers is causing some technical problems:

Market moves

The FTSE 100 is the worst performer across European indices today, with the FTSE 250 also underperforming.

As my colleague Lizzie Roberts reports:

The forthcoming announcement of tougher tier restrictions will see millions of people in England placed under the highest levels of restrictions, while Liverpool and London are set to avoid the harshest measures.

The Health Secretary is to set out which tier each local authority in England will fall under in Parliament, after the end of the national lockdown on December 2.

The formal announcement is expected at about 11:30am, butit appears a list has already been released:

Households could face £70 council tax hit, IFS warns

IHS director Paul Johnson Credit:  David Rose

Households could face a £70 hit next year from higher council tax in the wake of Rishi Sunak's spending review, the Institute for Fiscal Studies has warned.

My colleague Russell Lynch reports:

Its analysis highlighted that the Chancellor had chosen to cut support to local authorities and given them the ability to raise council tax by 5pc instead.

IFS director Paul Johnson said: “If they do, and they’ll mostly probably need to, that will increase annual tax bills by an average of around £70 per household.”

The IFS also claimed that the Government could have to cut spending or raise taxes to fill a £40bn black hole in the public finances by 2025 – bigger than the estimates of the Office for Budget Responsibility published on Wednesday.

Mr Johnson said he “would be most surprised” if the current spending plans – which involve no top-up to NHS spending after next year – were adhered to. The IFS also expects pressure on the Government to extend the extra £20 a week in Universal Credit which expires in March. 

Bitcoin drops sharply

The price of bitcoin dropped by nearly $3,000 in less than a day after nearing a record high.

The popular cryptocurrency, which has risen strongly in recent months, dropped overnight to as low at $16,857 per coin.

It has risen strongly this year in the face of extraordinary stimulus efforts from Governments and central banks alike – a run Deutsche Bank analysts have labelled “spectacular”.

Some analysts predict bitcoin will soon pass the $20,000 a coin mark, which has proved something of a psychological barrier in the past.

Mothercare to seek AIM listing as restructuring plans near completion

Retailer Mothercare has said its restructuring is “all but complete”, and announced its intention to list on London’s AIM next year.

The group has secured a £19.5m loan from Gordon Brothers Brand, and reached agreements with creditors and the trustees of its pension scheme.

The company’s loss-making UK arm went into administration last November.

It posted a £4.4m loss from its continuing operations for the half year to October 10th, with sales down 42.4pc to £189.2m.

Chair Clive Whiley said:

The restructuring phase of Mothercare is now all but complete. The singular focus of the business is to return Mothercare to its rightful place as the leading global brand for parents and young children and to deliver the operational and financial performance commensurate with that leading position…

With these foundations in place Mothercare can move forward again with confidence as a profitable and cash generative international franchise business both in store and online, generating revenues through an asset-light model in the UK and some 40 international territories. 

Proportion of workers on furlough climbs

It‘s Thursday, so we’ve got the latest set of faster indicator readings on Covid-19’s impact courtesy of the Office for National Statistics. The figures show a continued rise in the number of workers on furlough, after the CJRS was extended due to the second lockdown in England.

Pound’s winning streak on cusp of ending

The pound is ever-so-slightly lower against the dollar today, leaving it poised to break a five-day winning streak that can be pinned on the generally positive market mood and Brexit hopes.

It’s nerves in the second category that can possibly be blamed for today’s drop –  French foreign minister Jean-Yves Le Drian has said the UK is dragging is feet in trade talks, warning the outcome remains “highly uncertain”.

Mitchells & Bulers axes jobs as Fullers posts steep loss

It has been a torrid year for Britain’s pubs Credit: Yui Mok/PA Wire

Pub chain Mitchells & Butlers has axed 1,300 jobs since the end of September as the forced closure of the hospitality sector takes its toll livelihoods. 

My colleague Simon Foy reports:

The owner of All Bar One and Harvester said reduced levels of trading and the closure of 20 sites meant that a significant number of jobs were unviable.  

It came as the FTSE 250 company plunged to £123m a pre-tax loss for the 12 months to September, while revenues declined by more than a third to £1.47bn for the period. 

The group’s share price briefly spiked this morning following those results, which were actually a little better than analysts had expected:

Meanwhile, smaller fellow pub chain Fuller, Smith & Turner (aka Fullers) also posted a steep loss. Simon again:

Fullers posted a £22m interim pre-tax loss after Covid restrictions meant the business lost two-thirds of its trading weeks during the period. 

Chief executive Simon Emeny warned that added restrictions in tier 2 post-lockdown would make almost three-quarters of the UK's pubs unprofitable, meaning they are unlikely to open. 

Money round-up

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

Britvic shares wobble after full-year results

Shares in Britvic have already been on a trip this morning, dropping 2.5pc before popping 3pc higher after its full-year results.

The soft-drinks maker posted a 6.8pc drop in revenues to £1.41bn for the twelve months to the end of September, although its profit before tax remained steady, rising slightly to £112.2m

The group disappointed investors with a 21.6pc dividend, down from 30p for 2019.

Britvic said “positive trading momentum” at the start of its financial year hit the rocks from March, as social distancing measure introduced in response to the pandemic hurt sales.

It added:

Looking ahead, 2021 brings both continued uncertainty and an opportunity to capitalise on the trends which have accelerated as a result of Covid-19. We have started the new financial year with some form of restrictions on either trading and/or the movement of people in all our markets, and this will undoubtedly continue to affect performance, especially in the first half of the financial year.

Royal Bank of Canada’s Emma Letheren said the drop in revenues was surprising given Britvic’s positive trading statement last month, adding that the dividend level was likely to disappoint. But she added that the group is “well-placed” to weather Covid-19 due to its strong balance sheet.

FTSE slips as Europe trades flat

After a flattish open, the FTSE 100 has slipped slightly, despite a narrow fall in the value of the pound.

Credit: Bloomberg TV

Aviva surprises with dividend pledge

Analysts have welcomed Aviva’s announcement of a “new sustainable and resilient” dividend policy.

The FTSE 100 insurer has proposed a 21p per share 2021 dividend, which Jefferies analysts said looked “surprisingly high”. The payout will be subject to board approval in March.

In a trading update this morning, Aviva said its performance over the nine months to the end of September had been “resilient”, adding that its estimate for the total cost of Covid-19 linked claims is currently £100m net, down from £165m earlier this year. It said the drop was “mostly a result of lower claims frequency during the third quarter reflecting reduced economic activity”.

Chief executive Amanda Blanc said:

Our trading performance is robust and our financial position is strong with a capital surplus of £11.8 billion. The first nine months have demonstrated Aviva's ability to grow in core markets where we have attractive, long-term growth prospects. 

The group said it would raise dividends further once its debt levergae target of <30pc has been reached, a threshold it expects to cross in 2022.

Aviva said trading impacts during the fourth quarter remained “uncertain”, but said it expects “no significant increase in net [business insurance] claims”.

Boohoo appoints Leveson to oversee supply chain review

Lord Justice Brian Leveson Credit: Dan Kitwood/AFP/Getty Images

Boohoo has appointed retired senior judge Sir Brian Leveson to oversee the online fashion giant’s programme to overhaul its supply chain issues and tackle working practices. 

My colleague Simon Foy reports:

The retailer said Sir Brian would report directly to the board and all of his reports will be published. He will be assisted by KPMG as part of Boohoo's “Agenda for Change”, the company added. 

It comes after Boohoo was plunged into turmoil over the summer after an investigation commissioned by the company found that bosses knew workers were being mistreated in its Leicester supply chain months before a "sweatshop" scandal exploded in the media. 

The investigation found no evidence Boohoo had broken the law, but said the company failed to take action fast enough and warned that its supply chain is likely to be riddled with bad behaviour.

Agenda: FTSE set to rise 

Good morning. The FTSE 100 is set to recover some of Wednesday's losses as businesses across the country await to hear what tier of restrictions they will be placed in post-lockdown. 

US markets are closed today for Thanksgiving. 

5 things to start your day 

1)  £30bn of tax rises or cuts needed to balance the books, watchdog warnsOfficials warn the Chancellor his borrowing plans are unsustainable and risk an interest rate shock that will trash the public finances

2) Thousands off pension incomes but changes delayed to 2030: Sunak cut future ­pension incomes for over 10m retirees and won't give compensation for inflation switch that will cost investors over £100bn.

3) Pubs face 'looming disaster' as bosses plead for help: Bosses of Britain's biggest pub chains have demanded the PM step in with urgent financial support or risk total collapse of thousands of pubs.

4) Slack shares soar on $17bn Salesforce offer report: Shares in work messaging service Slack rose almost 40pc on Wednesday following a report that Salesforce has held talks to buy the business.

5) Taxpayers to pay £6m a day to keep trains on track: The Treasury will pay out another £2.1bn of subsidies for rail operators in 2021-22. It has already spent up to £9bn on the railways this year.

What happened overnight 

Asian shares were mostly higher on Thursday, after Wall Street took a pause from the optimism underlined in a record-setting climb earlier in the week.

Japan's benchmark Nikkei 225 gained 0.7pc to 26,472.78 in afternoon trading. Australia's S&P/ASX 200 slipped 0.7pc to 6,636.40, but South Korea's Kospi edged up 0.6pc to 2,617.27. Hong Kong's Hang Seng rose 0.2pc to 26,726.50, while the Shanghai Composite was up nearly 0.2pc at 3,368.25.

US markets will be closed Thursday for the Thanksgiving holiday and open for half the day on Friday.

Coming up today

Corporate: Britvic (Full-year results); Severn Trent, Xps Pensions, Ted Baker, Jlen Environmental, Mulberry (Interim results); Aviva, CVS, Fuller, Smith & Turner, Bodycote (Trading update)

Economics: Nothing scheduled.