Business news and markets: live

Business news and markets: live

Home Retail Group has had a stronger second quarter with like-for-like sales up 2.7pc at Argos and 11pc at Homebase.

The John Lewis Partnership has also released first half results: like-for-like sales are up 5.1pc at John Lewis and 6.9pc at Waitrose. Adjusted pre-tax profits for the group are up 3.9pc to £115.8m. Charlie Mayfield, the chairman of the partnership which is seen as a bellwhether for the economy, told Radio 4 this morning that Waitrose has seen a million more customers from last year. Even so he still thinks the economic recovery “will be a long one.”

In other company statements, Amec has said it is no longer considering an offer for Kentz Corporation.

Imperial Tobacco has appointed Oliver Tant, former vice chairman of KPMG, to replace Bob Dyrbus as finance director.

Trinity Mirror has said it has “been notified” that police are at an “early stage in investigating whether MGN is criminally liable” for phone hacking by employees.

08.19 A lot of corporate news (aside from Royal Mail) this morning.

The supermarket group Wm Morrison says it is making “significant progress” in its attempts to fight back against rivals despite a fall in like-for-like sales.

Our retail correspondent Graham Ruddick has the details:

Dalton Philips, chief executive, said that the company is “working at pace” to build its convenience and online businesses, which are the fastest growing parts of the grocery market.

Morrisons now has 33 M Local convenience store and intends to have 100 by the end of the year. It has also agreed a tie-up with online retailer Ocado to launch an online service by January.

However, in the half-year to August 4, Morrisons saw like-for-like sales fall 1.6pc and pre-tax profits drop from £440m to £344m.

The retailer has suffered from being significantly smaller than its main rivals such as Tesco and Sainsbury’s in the fast-growing convenience store sector, and also has no online presence at present. It has also been hit in its heartland of northern England by the rise of discount retailers such as Aldi.

Morrisons saw like-for-like sales fall 1.6pc and pre-tax profits drop from £440m to £344m in the last six months

08.08 It’s a fairly muted start to trading today, with both the benchmark FTSE 100 and the mid-cap FTSE 250 essentially flat in early dealings.

Supermarket group Wm Morrison is the biggest blue-chip riser in the wake of its first-half results, with the shares up 2.3pc.

08.05 Labour MP and shadow business secretary Chuka Ummuna has tweeted to say the privatisation “makes no sense”.

08.01 Fallon says the government is targeting a majority sale.

QuoteWe want lots of people to own this business.

It won’t be for the government to run this business.

Asked why the minimum investment is £750, he says this is “pretty standard in offers like this”.

It is still not clear how much will be sold, but if 10pc of shares will go to workers, then at least 41pc of the company will be floated for a majority sale but it could be higher.

Fallon says the government will see what the investor demand is before it states how much of Royal Mail will be sold.

07.57 Fallon says he doesn’t see that strike by the unions is necessary.

QuoteThere is a generous pay offer on the table.

There are also free shares on offer as well, so see no reason for a strike

07.54 Business minister Michael Fallon on BBC Radio 4 now.

He says now is the “right time” to allow Royal Mail to “invest in capital markets” and to “modernise”.

QuoteIt needs to face the future and raise the money like any big business.

07.47 Business Minister Michael Fallon has told Sky News that Royal Mail will still deliver the post six days a week. Says it is protected in law, only parliament could change it.

Fallon denies that the sale will lead to heavy job losses, and notes that that 50,000 positions have been cut over the last decade as “ministers dithered”.

07.36 Royal Mail will pay a dividend to its shareholders – it has proposed a final dividend only, which will be paid in July 2014 and will total £133m.

The company said this represents two-thirds of the £200m that it believes it would have had to pay for the full 2014 financial year.

It adds:

QuoteIn subsequent financial years Royal Mail intends to pursue a progressive dividend policy.

07.29 Business secretary Vince Cable says the privatisation of the Royal Mail will secure the “healthy future” of the company.

07.25 Royal Mail chief executive Moya Greene will meet 1,200 union representatives at a private meeting in Birmingham at 11am on Thursday in a last-ditch bid to win their support for the move and avert a crippling nationwide strike in the run-up to Christmas.

A ballot for industrial action by the Communication Workers Union (CWU) is expected to be launched next week after union officials give formal notice of their plans for a vote tomorrow.

Consumer affairs editor Steve Hawkes thinks if the flotation can happen quickly the government will be the unions.

The company’s 150,000 staff have been promised a 10pc stake in the business, roughly equal to £2,000 each at a valuation of £3bn.

07.19 The flotation is expected to happen “in coming weeks”.

ITV New’s business editor Laura Kuenssberg has been tweeting some of the details.

However, the strike by the Communication Workers Union (CWU) is still expected to go ahead.

The full details of the share offer can be found here.

07.15 Government launches Royal Mail sell-off

The Government has given the go-ahead for a stock market flotation of the Royal Mail, the most ambitious privatisation for a generation and one that could anger postal workers.

Our consumer affairs editor Steve Hawkes reports that the Government plans to sell share in the world’s oldest postal service in the next few weeks in a sell-off that could value of the company at £3bn.

Confirmation of the float on Thursday, seen by Business Secretary Vince Cable as vital to drawing in the funds necessary to securing the future of the postal operator, comes just a day before unions launch a push for a nationwide postal strike.

07.10 A few things to keep an eye out for today.

Bank of England governor Mark Carney will be in front of the Treasury Select Committee along with Paul Fisher and David Miles to give testimony in regard to the recent inflation report.

It is also likely that the governor will face some questions about his forward guidance in light of the continuing improvement in economic data.

In Europe, the only economic data of note out of Europe today is the latest Italian and eurozone industrial production for July.

The European measure is expected to decline 0.3pc after a positive number in June.

Italian industrial production is expected to rise 0.3pc, while the recent rise in Italian bond yields could well see this morning’s 15 year bond issue by the Italian treasury fetch its highest yield in several months.

The European Central Bank also publishes its monthly report. ECB president Mario Draghi is also expected to give a speech later in the afternoon.

Over in the US, the latest weekly jobless claims are expected to edge up slightly from last weeks 323k, coming in at 332k, which would be a deviation away from the recent trend which has been for progressively lower numbers.

Given the recent direction of travel with respect to the weekly jobs data, any downside surprise can be expected to be greeted with frenzied speculation with regard to next week’s keenly anticipated Fed meeting, despite last weeks hugely disappointing payrolls numbers, says Michael Hewson, senior market analyst at CMC Markets.

Bank of England governor Mark Carney

07.08 The Independent is reporting that angry shareholders in collapsed Yellow Pages publisher Hibu are urging City watchdogs and the Business Secretary Vince Cable to investigate the conduct of the company’s directors.

The Independent has learnt that the Hibu Shareholders Group (HSG), which claims to represent 30 per cent of the shares, has written to the Financial Conduct Authority (FCA) and persuaded a string of MPs to take an interest. HSG has also recruited Barry Dearing, the solicitor who successfully represented investors in failed doorstep lender Cattles.

The Times reports that Vodafone’s bid for Germany’s largest cable television business was on a knife-edge last night.

The British company needed to secure 75 per cent of the shares in Kabel Deutschland by midnight or face the prospect of its £6.6 billion offer lapsing.

The Financial Times reports that Brussels has ditched its plan to put the scandal-mired Libor lending rate under the direct control of a European supervisor in Paris, in a concession that removes a serious political nuisance for Britain.

Early drafts of the European Commission regulation, which is to be unveiled next week, called for shifting direct supervision of Libor from London to the European Securities and Markets Authority, based in France.

A revised version, seen by the Financial Times, waters down the reforms so that London remains the primary authority for Libor, able to implement its wide-ranging review to restore faith in the flagship interest rate benchmark.

07.05 Top story on our finance page this morning is news the Treasury has opened up a significant rift with the Business Secretary over the Government’s controversial Help to Buy scheme, saying that the mortgage support policy would go ahead despite Vince Cable’s concerns, writes James Titcomb and Kamal Ahmed.

The move came after the Liberal Democrat Business Secretary suggested that the second stage of the policy should not be launched if fears over a growing bubble in house prices proved correct.

Antony Jenkins, the chief executive of Barclays, also joined the debate over house price rises, warning that the market could become hard to control.

Treasury sources made it clear that there was no chance that the policy would be reconsidered.

“We are doing it, it is Government policy,” a source said.

“The Chancellor made a clear and thorough argument about the housing market at the beginning of the week. Time limited and targeted help is appropriate.”

Elsewhere, Lloyds Banking Group has been told it must provide support to new lender TSB to boost its profits by £200m over the next four years, writes Harry Wilson.

Over night more than $ 20bn was been wiped off the value of Apple as the launch of two new iPhones failed to reassure investors that the company could claw back market share from rivals, writes Andew Trotman.

07.00 Good morning and welcome to our daily business and markets live blog, your one stop shop for all the breaking business stories of the day.

Finance News – Business news from the UK and world


Leave a Reply

Your email address will not be published.