Apple saw more than $116bn (£88bn) wiped off its valuation in early trading after analysts warned about weaker than expected demand for its new iPhone as its push into artificial intelligence disappointed fans.
Shares in the world’s most-valuable company fell by 3.3pc after the assessment of pre-order sales of the new iPhone 16 series from Ming-Chi Kuo, an analyst at TF International Securities.
The device will include artificial intelligence (AI) tools, such as finding reviews and menus when pointing the camera at a restaurant, or identifying animals and plants.
However, the tech giant said it will bring its Apple Intelligence AI to the US in the coming weeks – in what it describes as a “beta” – before launching a “localised” version for the UK in December.
European countries and other markets will have to wait until 2025.
In a note to clients, Mr Kuo wrote that iPhone 16 series first-weekend pre-order sales are estimated at about 37m units, which is down about 12.7pc from last year’s iPhone 15 series first-weekend sales.
Mr Kuo said: “One of the key factors for the lower-than-expected demand for the iPhone 16 Pro series is that the major selling point, Apple Intelligence, is not available at launch alongside the iPhone 16 release.”
Meanwhile, JPMorgan analyst Samik Chatterjee said that while consumers continue to prefer Pro models, the orders for these flagship models are “starting off modestly slower vs. last year”.
Read the latest updates below.
06:13 PM BST
Signing off…
Thanks for joining us today on the Markets blog.
US stock indexes are drifting near their records as Wall Street gears up for the most anticipated meeting of the Federal Reserve in years.
The S&P 500 is 0.1pc lower in trading after flitting between gains and losses earlier this afternoon. It’s sitting just 0.8pc below its all-time high set in July.
The Dow Jones Industrial Average is up 0.3pc, after climbing above its record closing high earlier in the afternoon.
Meanwhile, the tech-heavy Nasdaq is down 0.8pc.
We will be back tomorrow morning, but in the meantime you can follow our latest business news here.
05:45 PM BST
Biden adviser says US has reached ‘turning point’ on economy
Top White House economic adviser Lael Brainard declared in a speech this afternoon that the US economy has turned the corner in bringing down inflation. Now, she said, it is time to focus on safeguarding recent progress in the labour market.
Two days before the Federal Reserve is expected to begin cutting rates, Ms Brainard told a Council on Foreign Relations event in New York that inflation was returning to normal levels without the considerable job losses and growth slowdown that some had predicted.
She said:
Today, we are at an important turning point. Inflation is coming back down close to normal levels, and it is important to safeguard the important labour market progress we have made.
Ms Brainard, the former Fed vice chair who now serves as the director of the White House National Economic Council, did not say what action the Fed should take on Wednesday, and her comments were in line with recent comments from Fed officials.
But she said President Joe Biden has emphasised the independence of the Fed, drawing a contrast with Republican presidential candidate Donald Trump’s frequent criticism of Fed monetary policy decisions during his presidency.
05:37 PM BST
City law firms urged to track employees’ sleeping patterns
City law firms have been urged to monitor the sleeping patterns of employees suspected of struggling with their mental health, as the profession grapples to solve its burnout crisis. Adam Mawardi reports:
The Mindful Business Charter (MBC), a mental health charity established to reduce unnecessary stress for staff, on Monday urged firms to check with lawyers at risk of overworking about how much rest and sleep they were getting.
The organisation said that law firms could detect which employees were vulnerable by introducing time tracking systems to alert bosses if employees were working long hours.
MBC, founded in 2018, also advised law firms to check how these employees switched off from work and how much “meaningful contact” they got with emotional support outside of work.
05:33 PM BST
European shares dip after tech shares lose ground
The pan-European Stoxx 600 index closed slightly lower this afternoon as losses in heavyweight technology shares weighed on the index.
The index ended 0.2pc lower.
Tech stocks in the index dropped 1.2pc, the biggest percentage decliner amongst major Stoxx sectors, following its near 5pc jump last week.
Retail led advances with a 0.9pc rise, boosted by a 3.1pc increase in clothes chain H&M.
05:25 PM BST
Union attacks Labour over ‘industrial vandalism on a mass scale’
The Unite union has lashed out against Labour, which it helps fund, after the owner of Scotland’s Grangemouth oil refinery announced it would close.
Unite, which represents the 500 oil refinery workers, has issued an angry press release saying that it “blasts government ministers over Grangemouth ‘false promises’ and ‘non-delivery’”.
General secretary of the union, Sharon Graham, said:
Scotland backed Labour at the ballot box but so far Labour has utterly failed to deliver for the Grangemouth workers when it needed them most. The SNP government has also shown itself to be irrelevant to the needs of working class communities. This is industrial vandalism on a mass scale.
Over the last few days, our members have witnessed government ministers condescendingly speaking about ready-made jobs being available. It is fantasy talk from people who have no clue about the realities on the ground. We need urgent action to support the workers of today not just warm words from ministers about the projects of the future.
The Department for Energy Security and Net Zero and the Scottish Government have been approached for comment.
05:10 PM BST
FTSE 100 businesses cut charitable donations by 34pc in a decade
Charity donations from the UK’s biggest publicly listed companies have not kept pace with their profits over the last 10 years, an analysis has found.
Research by the Charities Aid Foundation (Caf) found a 34pc decline in donations from FTSE 100 firms in real terms since 2014.
While the FTSE 100’s combined profits have increased by 49pc since 2014, their total donations have declined by 13pc in the same period, Caf said.
The report found that healthcare is the most generous sector in the FTSE 100, responsible for 22.9pc of the cash donated.
Neil Heslop, the chief executive of Caf, urged the Government to develop “a national strategy for philanthropy and charitable giving [that would help to renew a culture of giving throughout society, unlock vital charitable funds”. He added:
Reintroducing the mandatory requirement to report corporate giving in annual reports should improve transparency around corporate giving, and the new Government can explore ways to encourage companies to commit to supporting the communities they are part of.
04:54 PM BST
FTSE closes up after uncertain day’s trading
The FTSE 100 closed up 0.1pc after sinking during morning trading and spending the day failing to gain momentum.
The top riser was JD Sports, up 3.6pc, followed by M&S, up 2.9pc. Pensions giant Phoenix fell 5.3pc, followed by aerospace business Melrose, down 3.6pc.
Meanwhile, the FTSE 250 rose 0.2pc. The top riser was Playtech, up 15.1pc, followed by TI Fluid Systems, up 14.1pc.
Trustpilot was the biggest faller, down 3.7pc, followed by Oxford Instruments, down 3.6pc.
04:43 PM BST
Britain more attractive than EU rivals, says investment management giant
Investment giant Pimco has said that UK government debt is “very attractive”, compared with EU rivals, now that he country has put Liz Truss behind it.
Manny Roman, chief executive, told Bloomberg Television: “We like the UK and Australia. We think the UK fits very well.”
Pimco has more than $2 trillion (£1.5 trillion) invested globally.
04:27 PM BST
Boeing imposes hiring freeze in bid to conserve cash after strike starts
Boeing is pausing hiring and taking sweeping steps to conserve cash after about 33,000 workers went on strike on Friday.
These include considering temporary furloughs for many employees, managers and executives in the coming weeks.
Boeing’s finance chief Brian West said that the “strike jeopardizes our recovery in a significant way and we must take necessary actions to preserve cash and safeguard our shared future”.
In addition to a hiring freeze across Boeing at all levels, Reuters reported that the planemaker is stopping most staff travel, and suspending non-essential capital expenditures and facilities spending.#
It is also planning “significant reductions in supplier expenditures and will stop issuing the majority of supplier purchase orders on the 737, 767 and 777 programmes.”
04:21 PM BST
Euro zone yields slip as markets increase bets on Fed rate cut
Euro zone government bond yields slipped today as money markets increased their bets on a super-sized half a percentage point rate cut by the US Fed on Wednesday.
The Bank of England and the Bank of Japan will also hold their policy meetings later this week and are expected to keep rates at the current levels.
Money markets have fully priced in a quarter point rate cut from the US central bank and a nearly 60pc chance of a half point move, from around 50pc late last week, according to the CME FedWatch tool.
Paul Donovan, chief economist at UBS Global Wealth Management, said:
A rate cut of more than [a quarter of a percentage point] seems unlikely – while the Fed is late in cutting rates, a larger move might be taken as a sign of panic.
Higher frequency cuts rather than larger cuts seem most likely.
Germany’s 10-year yield, the benchmark for the euro zone bloc, was down at 2.12pc, from 2.15pc late on Friday.
Meanwhile, British 10-year gilt yields, which have been higher for most of today, are currently slighly down at 3.76pc from 3.77pc late on Friday.
04:13 PM BST
US stocks mixed as markets brace for interest rate decision
Major American stock indexes are mixed this afternoon – and the dollar stayed soft against its global peers – as all eyes looked to a Federal Reserve meeting later this week.
The meeting is expected to usher in a hotly-anticipated easing cycle.
Expectations have grown that the Federal Reserve could cut rates by as much as half a point this week.
The hope is that rate cuts will keep the world’s largest economy on course for a soft landing, while managing slowing jobs growth and moderating inflation.
The Dow Jones Industrial Average of 30 top US companies is up 0.4pc, while the S&P 500 is down 0.2pc.
Tech stocks weighed on the Nasdaq Composite index, where companies such as Nvidia, Microsoft and Tesla dipped. The index is down 1pc.
XTB research director Kathleen Brooks said markets would look past the size of any rate cut on Wednesday to understand the Fed’s rationale. She said:
If the Fed does start by cutting [by half a percentage point], but at the same time reiterates that it is doing so to preserve the economy’s soft landing, this is stock-market positive.
If it sounds like the Fed has to panic cut interest rates because of some grey cloud on the horizon, then expect stocks to sell off.
The dollar index, which measures the US currencies against peers including the pound, the yen and the euro, fell 0.4pc.
04:06 PM BST
Argentina’s markets cheer Milei’s zero deficit budget
Argentina’s sovereign bonds and stock index have climbed today, as investors cheered an ambitious 2025 budget plan from libertarian president Javier Milei.
The budget predicts robust growth and sticks to a “zero” fiscal deficit.
On Sunday Mr Milei had told Congress his 2025 budget would stick by his key pledge to establish a fiscal surplus and that he would veto any bills that threatened his zero deficit plan.
Milei, a free-market economist, has taken tough austerity measures to overturn years of fiscal deficits, tackle rampant inflation and stabilize the economy. He has called a balanced budget non-negotiable.
The draft budget foresees the economy expanding 5pc in 2025, inflation dropping from over 250pc now to some 18pc by the end of next year, and the exchange rate weakening to 1,207 pesos per dollar by end-2025 from 960 per dollar now.
Argentina’s flagship Merval stock index is up 1.2pc.
03:57 PM BST
Intel jumps on reports of US government contracts
Intel shares are up 4.5pc this afternoon after a report that the chipmaker has qualified for up to $3.5bn in US government grants.
Bloomberg said that the handout, part of a secretive programme called Secure Enclave, is to support Intel making cutting-edge chips for the US Department of Defense.
Secure Enclave is designed to curb America’s reliance on foriegn semiconductor suppliers.
03:48 PM BST
Former civil service boss to oversee BT’s fightback against price controls
One of the UK’s former top civil servants has joined BT’s board to oversee the telecoms giant’s fight against broadband price controls. James Warrington reports:
Sir Alex Chisholm, who served as chief operating officer of the civil service and Permanent Secretary for the Cabinet Office until earlier this year, has joined BT’s board as a non-executive director.
He will take up a newly created position overseeing BT’s relationship with regulator Ofcom.
It comes as Ofcom kicks off a major review of the wholesale broadband market that will set regulations for the next five years. The report, dubbed the Telecoms Access Review, is expected to examine the fees BT charges to internet service providers such as Sky and TalkTalk for the use of its network.
03:46 PM BST
Apple Watch gains approval for sleep apnea detection – half a year after Samsung
The US Food and Drug Administration has given approval for a sleep apnea detection on the latest Apple Watches.
Sleep apnea is when someone’s breathing stops and starts while they sleep.
The new Series 9 and 10 watches, along with the Ultra 2, will offer functionality.
The approval comes after Samsung secured it for its Galaxy Watch range in February.
03:31 PM BST
Pound rises as Bank of England expected to hold rates steady
The pound has continued to push higher as traders bet that the Bank of England will hold interest rates steady this week.
Sterling was up 0.6pc to more than $1.32 as money markets indicate that by contrast to Britain’s central bank, the US Federal Reserve is likely to cut rates by half a percentage point on Wednesday.
Peder Beck-Friis, economist at investment manager Pimco, said:
We believe the Bank of England is likely to maintain its policy rate at 5pc in the upcoming meeting on Thursday, unless inflation surprises significantly to the downside on Wednesday.
The August rate cut was a narrow call, and the BoE has not adopted as dovish a stance as other central banks. The market currently prices a 20pc chance of a cut this week.
We expect the next cut in November, with faster cuts thereafter. The global pandemic-related sugar rush has now faded, and recent developments reinforce our conviction that inflation will continue to decline.
With that, I will bid you good day and leave you in the ever-eager hands of Alex Singleton, who will post the live updates from here.
03:15 PM BST
Electric battery maker will not receive government rescue
Europe’s leading battery maker will not receive government investment despite announcing plans to slash jobs and scale back its commitments, the Sweish prime minister has said.
Northvolt, the Swedish company which raised £10bn to challenge China’s dominance of batteries, last week pledged to refocus efforts on improving its struggling factory in Skellefteå and cutting costs.
The news that it will carry out “a re-scope of operations and appropriate resizing of our workforce” sparked fears that Europe’s best shot at a home-grown electric vehicle battery champion may stall.
The company, which counts German car giants BMW and Volkswagen among its backers, has been seeking investment from outside partners in its energy storage business.
However Prime Minister Ulf Kristersson told a press conference: “There is no doubt that we are committed to Sweden being a good place for new technology that is needed in the green transition, but it is not relevant for the Swedish state to step in and take a stake.”
Its plans to scale back investment come as Volkswagen warned that it could be forced to close a factory in Germany for the first time and make large cost savings as it manages the transition away from petrol cars.
02:58 PM BST
Apple shares slump as Wall Street wavers
US stock markets wavered as investors cautiously awaited the US Federal Reserve’s first interest-rate cut since 2020.
In New York, the Dow Jones Industrial was up but the wider S&P 500 and the tech-heavy Nasdaq were lower shortly after opening.
The FTSE 100 was marginally higher but all the main European exchanges were slightly lower.
Investors widely expect the Fed to cut interest rates on Wednesday for the first time since March 2020. But markets are not sure whether to expect a 25 basis point cut or the more aggressive 50 basis point cut.
The dollar fell ahead of the rate cut announcement, while haven investment gold rose to a new record high.
Apple shares fell as much as 3.7pc amid concerns about demand for its new iPhone.
Briefing.com analyst Patrick O’Hare said: “Overall, the early action for stocks looks fairly muted. That should change as the week progresses.”
David Morrison, analyst at Trade Nation, added:
Investors appear to be pricing in a Goldilocks scenario of cheaper borrowing costs, with more rate cuts to come, in an economy which shows few signs of a hard landing or recession.
If so, they may prove to be over-optimistic. Traders should prepare themselves for some large price swings on Wednesday evening.
02:52 PM BST
iPhone demand fears wipe $116bn off Apple stock
Apple saw more than $116bn (£88bn) wiped off its valuation in early trading after analysts warned about weaker than expected demand for its new iPhone as its push into artificial intelligence disappointed fans.
Shares in the world’s most-valuable company fell by 3.3pc after the assessment of pre-order sales of the new iPhone 16 series from Ming-Chi Kuo, an analyst at TF International Securities.
The device will include artificial intelligence (AI) tools, such as finding reviews and menus when pointing the camera at a restaurant, or identifying animals and plants.
However, the tech giant said it will bring its Apple Intelligence AI to the US in the coming weeks – in what it describes as a “beta” – before launching a “localised” version for the UK in December.
European countries and other markets will have to wait until 2025.
In a note to clients, Mr Kuo wrote that iPhone 16 series first-weekend pre-order sales are estimated at about 37m units, which is down about 12.7pc from last year’s iPhone 15 series first-weekend sales.
Mr Kuo said: “One of the key factors for the lower-than-expected demand for the iPhone 16 Pro series is that the major selling point, Apple Intelligence, is not available at launch alongside the iPhone 16 release.”
Meanwhile, JPMorgan analyst Samik Chatterjee said that while consumers continue to prefer Pro models, the orders for these flagship models are “starting off modestly slower vs. last year”.
02:36 PM BST
Wall Street mixed ahead of Fed interest rate meeting
US stock markets were volatile at the start of the week as traders bet that there is a greater likelihood that the Federal Reserve will announce a hefty interest rate cut on Wednesday.
The Dow Jones Industrial Average was up 0.7pc to 41,663.00, while dropped 0.2pc to 5,617.41.
The tech-focused Nasdaq Composite sank 1pc to 17,499.60.
02:18 PM BST
Deliciously Ella bought by Swiss baby food giant
Deliciously Ella, the healthy eating brand founded by Ella Mills, has been bought by a Swiss baby food giant.
Our senior business reporter Daniel Woolfson has the latest:
The brand, whose products are sold across the major supermarkets, and its healthy recipe app have been bought by The Hero Group, a manufacturer based in Lenzburg, to the west of Zurich.
Ms Mills, who runs the company with her husband Matthew said the deal, for an undisclosed sum, came after multiple offers from potential bidders.
Originally started as a blog in 2016, Deliciously Ella claims it has now sold more than 100m products.
A separate restaurant and brand called Plants, run by the couple, will not be included in the acquisition.
01:54 PM BST
Darktrace to leave London Stock Exchange at end of this month
Darktrace shares are on track to stop trading publicly at the end of September, after the company set a timetable for its blockbuster private equity takeover to be completed.
The private equity group Thoma Bravo struck an almost $5.3bn (£4.3bn) deal to buy Darktrace in April.
It marks one of the biggest take-private deals for a London-listed company in recent years, and will see Darktrace, which uses AI to scan for hacks and data leaks, leave the FTSE 100 on October 1.
The newly published timetable shows the last day of dealings in Darktrace shares to be September 30, giving investors just two weeks before the company leaves public markets.
A clutch of companies have already left or opted against the London stock market of late.
Britain’s biggest chip company ARM floated in New York last autumn, in a move which was widely interpreted as a blow for the London Stock Exchange.
Irish building supplies group CRH also moved its stock market listing to Wall Street in June 2023, while plumbing equipment supplier Ferguson did the same in 2022.
Cambridge-based Darktrace was founded in 2013 by the late Autonomy founder Mike Lynch and outgoing boss Poppy Gustafsson.
01:39 PM BST
Wall Street poised for lacklustre start to the week
US stock indexes were subdued in premarket trading as caution prevailed ahead of the Federal Reserve’s pivotal interest rate decision later this week.
Ever since Fed Chair Jerome Powell hinted at an upcoming rate cut late last year, markets have witnessed a bull run, with the S&P 500 and the Dow now near record highs.
However, following mixed economic data in the last few weeks, traders have been left unsure about the size of interest rate cuts expected on Wednesday.
Odds for a half a percentage point – or 50-basis-point – cut are at 55pc from 24pc a week ago, according to money markets.
Deutsche Bank analyst Jim Reid said:
As important as the 25 vs 50 debate will be the communication from the Fed.
Would a 50bps be the start of 50s or a one off larger move to start the cycle? Would a 25bps mean the bar for subsequent 50s is high? There will be lots to digest.
In premarket trading, the Dow Jones Industrial Average was up 0.2pc, while the S&P 500 was down 0.1pc and the Nasdaq 100 had fallen 0.5pc.
01:28 PM BST
Titanic shipbuilder to collapse into administration
Titanic shipbuilder Harland & Wolff is preparing to go into administration after bosses admitted the troubled group is insolvent, putting up to 1,000 jobs at risk.
Our industry editor Matt Oliver has the latest:
The Belfast-based company confirmed reports that administrators at Teneo had been lined up to handle the process, which is likely to begin this week.
It said the move would lead to head office redundancies as well as the delisting from the London Stock Exchange. Shares in the company have been suspended since July.
The turmoil has also triggered fears about the company’s role in the Royal Navy’s £1.6bn fleet solid support (FSS) programme to build three supply ships.
Read what Harland & Wolff blamed for the development.
01:14 PM BST
TGI Fridays lines up administrators as chain scrambles to stay in UK
Administrators are on standby at the UK arm of TGI Fridays as the stricken restaurant chain reels from the collapse of ambitious plans to crack America.
Our associate editor Ben Marlow has the latest:
Hostmore, the company that owns the UK franchise, is scrambling to sell its 87 restaurants, prevent the TGI Fridays brand from vanishing from the high street and save thousands of jobs.
The desperate rescue effort comes after merger talks with TGI Fridays in the United States spectacularly fell apart last week.
A shock announcement revealing that discussions had ended wiped out more than 90pc of Hostmore’s share price, leaving it with a stock market value of less than £1m.
Read how restructuring experts at Teneo have been tasked with leading the hunt for potential buyers.
01:00 PM BST
Traders bet half-a-point Fed rate cut more likely than not
Traders are betting that there is more chance than not that the US Federal Reserve will cut interest rates by half a percentage point this week.
Overnight index swaps – a key derivatives trade – show that there is a 53pc chance that the Fed will lower rates from a range of 5.5pc to 5.25pc to 5pc to 4.75pc.
Fed funds futures traders – operating in a different money market – put the chances of a half point cut at 66pc.
The pound has risen 0.6pc against the dollar today as a result, tipping above $1.32.
Bond yields are also edging lower – easing government borrowing costs.
12:51 PM BST
Second-hand electric car prices falling at faster and faster rate
Electric vehicles (EVs) are losing value at an “unsustainable” rate as a slowdown in consumer demand sends used car prices tumbling, leasing companies have warned.
Our industry editor Matt Oliver has the details:
The British Vehicle Rental & Leasing Association (BVRLA) warned that so-called fleet operators, such as car leasing firms and rental companies, are having to swallow large losses when reselling EVs because of “accelerated, exceptional depreciation”.
In most cases, these companies buy new cars and own them for three years before selling them.
Consumers who lease cars during these three-year periods effectively cover the value of losses through monthly payments, which are calculated based on estimates of how much a vehicle is expected to depreciate.
But in the past two years, the typical amount of “residual value” left over at the end of a car’s lease has plunged from 60pc to 35pc, the BVRLA said.
Read how it is leaving leasing companies facing unexpected losses.
12:22 PM BST
VW workers march through Brussels
Protesters have taken to the streets in Brussels in support of Audi workers after Volkswagen warned it may close its site in the Belgian capital.
Here are some images from the demonstrations happening today:
12:08 PM BST
BAE Systems supplier’s shares plunge amid US factory issues
TT Electronics shares tumbled by nearly a third after the manufacturer warned about production issues at its US factories.
The Woking-based business, whose customers include BAE Systems and Thales, reported weak trading in August thanks to “operational efficiency issues” at two US sites, which it said were leading to higher production costs than it had been anticipating.
The group, which engineers and manufactures electronics for sectors including healthcare and aerospace, added it was expecting to get less money from sales this year than previously thought as a string of recent orders in its American components business were pushed into 2025.
The combination of higher production costs and fewer sales are set to impact its North American operating profit by between £13m and £18m, the group said.
Revenues over the second half of the year are also now expected to be about £15m to £20m lower than previously thought.
Shares were down as much as 36.8pc.
11:48 AM BST
Oil edges up despite China slowdown
The price of oil was steady at the start of the week despite signs that China’s economy is weakening.
Brent crude, the international benchmark, rose 0.4pc towards $72 a barrel while US-produced West Texas Intermediate was up 0.6pc to more than $69.
Industrial output in China was weaker than expected in August and is grappling with its longest slowdown since 2021.
Brent crude has dropped by about 17pc so far this quarter to near its lowest level in three years amid the deepening economic malaise in China, which is the world’s top importer of oil.
Prices have been supported by a weakening dollar ahead of expected interest rate cuts from the US Federal Reserve this week.
11:24 AM BST
VW may be forced to slash 15,000 jobs in bid to survive
Volkswagen plant closures this year could pave the way for more than 15,000 job losses, according to analysts.
The carmaker announced earlier this month that it could no longer rule out unprecedented plant closures in its native Germany – which would be the first in its 87-year history – as it seeks ways to save several billion euros.
VW bosses have warned that the company is missing out on 500,000 car sales a year, the equivalent of two plants.
Analysts at Jefferies said the company could close production facilities without needing approval from the powerful supervisory board, which supports workers.
Through Germany’s system of “Mitbestimmung”, workers at larger companies can choose representatives for supervisory boards that appoint executives and oversee strategy.
However, VW has already vowed to rip up a job security deal dating back 30 years, reneging on a pact to provide protections for all employees until at least 2029, bringing the timeframe forward until 2025.
Jefferies analysts said plant closures could save as much as €4bn (£3.4bn) in the final three months of the year.
VW is considering closing two to three facilities, with as many as five German sites considered, Jefferies said.
In a note to clients, the investment bank said:
Unions should feel pressure to reach new agreements while VW will be in position to force layoffs.
There is risk of plant disruption, but unions can only strike on pay, not plant closure or layoffs if the latter are not contractually protected.
VW declined to comment on the analysis.
11:02 AM BST
Gas prices fall as milder weather descends
Natural gas prices have dropped as milder weather ended a brief cold snap in Europe, helping to boost stockpiles.
Dutch front-month futures, the European benchmark, fell as much as 3.6pc towards €34 per megawatt hour, following a decline of 2.3pc last week.
The decline comes as the milder temperatures helped keep stockpiles at ample levels heading into the colder months.
Meanwhile, industrial production figures from China were weaker than expected, raising concerns about demand from the world’s second largest economy.
Florence Schmit, energy strategist at Rabobank, said:
With geopolitical risks easing and temperatures having risen from the first cold snap of this second half of the year,
the gas market is set to weaken further and so is the power market.The major upside risk at the moment remains the development of the weather over the winter period.
10:41 AM BST
Stock trading app Freetrade ‘breaking even’ as it moves past memestock craze
Stock trading start-up Freetrade has enjoyed a surge in revenues and claimed it is breaking even as its new chief executive hailed a shift towards supporting more experienced investors following the “memestock” craze.
Our senior technology reporter Matthew Field has the details:
Sales at Freetrade jumped in the first half of 2024 to £13.1m, up just over a third from £9.8m during the same period a year earlier, according to unaudited results shared with The Telegraph.
Freetrade also posted a small profit on an adjusted basis, compared to a loss of £5.6m a year earlier.
Viktor Nebehaj, Freetrade’s co-founder who was appointed chief executive in June, said the start-up was increasingly focused on targeting “the right customers” and shifting towards “experienced investors”.
He said the company’s mobile app had been an “easy entry point” for new investors, but that the company was looking to build tools for more seasoned savers.
Freetrade, founded in 2016 and known for its trading app, will be launching a web-based trading service as it aims to cater for investors with larger savings and products such as ISAs.
The business, which claims to have more than 1.5m registered users and offers commission free-stock trading, now has more than £2bn in assets under administration.
10:22 AM BST
Cost of a cup of coffee to jump as bad weather hits bean crops
The cost of a cup of coffee is poised to surge higher after drought conditions hurt crops and sent the price of beans to the highest level in 13 years.
Premium arabica beans contracts rose as much as 2pc to $2.6475 per pound today, which is the highest price since 2011.
Coffee prices have risen about 40pc so far this year as shortages of the cheaper robusta beans push up demand.
Coffee prices have risen amid drought conditions in Brazil, one of the world’s top producers.
Saxo’s head of commodity strategy Ole Hansen said:
Just like cocoa, orange juice and recently also sugar, coffee prices have been supported by persistent weather supply disruptions in the key production regions in Vietnam (Robusta) and recently increasingly Brazil (Arabica) where the production outlook is being lowered after heat and dryness hurt fields.
The worst drought in decades does not bode well for next season’s potential adding further tightness to a market underpinning prices amid worries that higher farmgate prices will not be enough to raise production as weather remains the main problem.
The cost of your cuppa will likely rise further, although it is worth remembering that only a fraction of the final cost is contributed by the actual cost of the beans.
10:07 AM BST
Gold hits fresh record ahead of Fed interest rate decision
Gold prices reached new record highs overnight in Asia as traders prepare for the Federal Reserve to cut interest rates.
Bullion rose to a high of $2,589.70 an ounce as markets adjust for a potential half-a-percentage-point reduction in borrowing costs on Wednesday.
Saxo’s head of FX strategy Charu Chanana said:
Gold typically gains during periods of economic uncertainty and falling interest rates.
Silver and platinum were the big winners, both rising around 10pc, amid additional support from a recovering industrial metal sector.
09:51 AM BST
Pound jumps amid growing bets on US interest rate cuts
The value of the pound has pushed higher amid growing bets that the US Federal Reserve will opt for a heftier half a percentage point cut to interest rates later this week.
Sterling was up 0.5pc against the dollar to $1.318 as traders priced in a rate cut and placed a 62pc chance on a jumbo move by American policymakers.
The pound was up 0.1pc against the euro at 84.4p.
09:34 AM BST
TI Fluid rebuffs £870m takeover approach
UK car parts supplier TI Fluid Systems has rebuffed a second takeover approach from a Canadian rival worth more than £870m.
The London-listed company confirmed it received a further unsolicited cash proposal from ABC Technologies, which is backed by US private equity giant Apollo Global Management, for 176p a share on September 4.
ABC had earlier put forward an approach worth 165p a share.
Shares in Oxford-headquartered TI Fluid surged as much as 16.6pc to top the FTSE 250 after it said its board had “unanimously” rejected the proposals.
It said: “The board of TI Fluid Systems considered the proposal in detail with its advisers and unanimously concluded that it significantly undervalued TI Fluid Systems and its prospects, and accordingly the proposal was rejected early last week.”
ABC Technologies, which is a Canadian distributor of components to the global car market, said it was leaving the door open to possible further advances.
It has until October 12 to announce a firm intention to make an offer or walk away under UK takeover rules.
09:17 AM BST
BP agrees $1bn deal with Apollo to fund gas pipeline
Apollo Global Management has struck a $1bn (£759m) deal with BP to fund its stake in the Trans Adriatic natural gas pipeline.
The private equity investor has bought a non-controlling stake in the oil and gas giant’s subsidiary company BP Pipelines TAP, which holds its 20pc stake in the project.
It covers the final 880-kilometre leg of the Southern Gas Corridor pipeline system that transports natural gas from the BP-operated Shah Deniz gas field in the Azerbaijan sector of the Caspian Sea to markets in Europe such as Greece and Italy.
The corporate financing deal through Apollo’s credit platform lets BP maintain its governance control over the entity, according to the statement.
Apollo partner Skardon Baker said: “We are pleased to partner with BP on an agreement that will provide our investors with long-term exposure to an industry-leading infrastructure asset with a stable cash flow profile, while allowing BP to meet its objectives of retaining control and executing on its capital efficiency strategy.”
08:56 AM BST
UK markets flat as rate cuts ‘on a knife edge’
Britain’s stock markets were subdued ahead of the Bank of England’s next decision on interest rates due on Thursday.
The FTSE 100 was little changed at 8,275.10 as investors wait to see the outcome of a series of major central bank policy meetings, beginning with the US Federal Reserve on Wednesday. The FTSE 250 was flat at 20,889.55.
The Fed will set the tone for financial markets as it is expected to announce its first rate cut in four years – but investors are split on whether it will announce a quarter of a percentage point cut or a heftier reduction of half a percentage point.
Money markets indicate there is a 62pc chance of a larger reduction from the present 23-year highs of 5.5pc to 5.25pc.
Deutsche Bank analyst Jim Reid said the Fed’s rate decision was “on a knife-edge, something that hasn’t often been the case by the time we ultimately arrived at each FOMC in recent years”.
He said: “Normally its been fairly obvious that close to the meeting or the Fed have found a way of guiding the market to the eventual outcome.”
In corporate news, Phoenix Group shares dropped as much as 4pc as it abandoned its plans to sell its SunLife insurance business.
08:26 AM BST
Wall Street banks cut forecasts for China growth
Two of Wall Street’s biggest investment banks have cut their forecasts for China’s growth as industrial output in the world’s second-largest economy slumped to a five-month low.
Goldman Sachs and Citigroup believe China’s economy will expand by 4.7pc this year, well below Beijing’s 5pc target.
Weak economic activity in August has ramped up pressure for its leaders to announce new stimulus packages to kick start growth.
Goldman Sachs had previously expected full-year growth for the economy at 4.9pc, while Citigroup had forecast growth of 4.8pc.
However, China’s industrial output in August expanded by just 4.5pc, slowing from the 5.1pc pace in July and marking the slowest growth since March, data from the National Bureau of Statistics (NBS) showed on Saturday.
Retail sales slowed from gorwth of 2.7pc to 2.1pc in August, which was well below analyst estimates of 2.5pc.
Goldman Sachs said: “We believe the risk that China will miss the ‘around 5pc’ full-year GDP growth target is on the rise, and thus the urgency for more demand-side easing measures is also increasing.”
Citigroup analysts added: “We believe fiscal policy needs to step up to so as to break the austerity trap and timely deploy growth support.”
08:04 AM BST
UK markers edge lower ahead of interest rate decisions
Stock markets in London have opened lower at the start of a major week for interest rates, which will see decisions from the US Federal Reserve, the Bank of England and the Bank of Japan.
The FTSE 100 began the day down 0.3pc to 8,249.83, while the midcap FTSE 250 dropped 0.1pc to 20,866.70.
07:58 AM BST
Phoenix Group abandons sale of life insurer SunLife
Retirement and insurance giant Phoenix Group has scrapped plans to sell its SunLife over-50s financial services business.
The group, which revealed in June that it was exploring the sale of the finance specialist, said it had decided to halt the process “given the current uncertainty in the protection market”.
Phoenix said that SunLife was a “valuable asset which contributes to the group’s new business growth” and it would instead look to “focus on enhancing the value it generates within the group”.
It came as Phoenix reported a 15pc rise in underlying operating profits to £360m in the first half of the year, boosted by pensions and savings business.
07:48 AM BST
Keywords Studios profits slump ahead of stock market departure
Keywords Studios has revealed a slump in profits ahead of its £2.2bn takeover by European private equity in the latest departure from the London Stock Exchange.
The video game company revealed adjusted operating profits dropped 9.6pc in the first half of the year to $57.4m (£43.6m), although revenues grew by 6.6pc to $440.4m (£334.6m).
It announced in July that it ahd reached a deal with Swedish private equity giant EQT worth £24.50 per share in cash.
The deal represented a 66.7pc premium on the May 17 closing price for the Irish company, which develops games, audio and art for Fortnite maker Epic Games and Call of Duty maker Activision Blizzard.
Chief executive Bertrand Bodson said the company “delivered solid growth in the first half despite the current mixed market backdrop” and thanked shareholders as it prepares to delist from the London market. He said:
The transaction represents an exciting new chapter for the business as we continue our journey.
There is no question that the long-standing support we received as a public company provided the fuel for our growth over the last ten years, and we wanted to take this opportunity to thank all of the shareholders who have supported us since we listed on AIM in 2013 with just €16m of revenue, many of whom are still on the shareholder register.
07:30 AM BST
Close Brothers boss goes on medical leave
Close Brothers has announced that its chief executive has taken a leave of absence for medical reasons.
It was not indicated when Adrian Sainsbury, head of the merchant banking group, will return from the temporary medical leave.
It said Mike Morgan, Close Brothers’ finance director, will take on Mr Sainsbury’s responsibilities in the meantime, including hosting its full-year results announcement on September 19.
Chairman Mike Biggs and members of the senior management team will also help take on the responsibilities, Close Brothers said on Monday.
The company said in a stock exchange announcement: “A further update will be provided in due course.”
07:19 AM BST
Factory bosses more confident despite falling production
Make UK said output from manufacturers had fallen, with the balance of output dropping from 9pc to -2pc.
Despite this, most firms were optimistic about the economy’s growth prospects and expected the Labour government to give more importance to industry, with ministers expected to unveil a new industrial strategy soon.
Three in five manufacturers believe the change in government will lead to better economic growth in the next year, the group’s research suggests.
Meanwhile, Make UK said it had upgraded its forecast for the economy overall in 2025 from 0.8pc to 1.8pc.
Fhaheen Khan, senior economist at the industry group, said:
This quarter presents a tale of two halves with output turning negative and recruitment taking a dip, yet investment remains positive and business confidence continues to climb.
With an Autumn Budget and Spending Review fast approaching, now is the time for Government to pick up the pace and deliver on pre-election promises, most notably the publication of a long-term robust Industrial Strategy.
07:13 AM BST
Firms are waiting to see what happens in Budget, warns REC
The REC said leisure and sports managers, travel agents and leisure and theme park attendants were among the roles with the biggest increases in job adverts in August.
There was also an increase in demand for restaurant and catering managers and chefs, according to its data published today.
But the REC said the total number of job adverts last month fell 2.4pc to 1.7m, suggesting the market was still weakening.
Neil Carberry, the group’s chief executive, said:
There is no doubt that the jobs market remains slow by comparison to previous years, with summer holidays also affecting the pace of hiring.
Firms are waiting for a clear signal on growth plans and the timing of potential additional cost challenges from the new government before making investment decisions, which makes the Budget next month a vital moment.
07:11 AM BST
‘Slow’ jobs market boost case for Bank of England rate cuts
Job vacancies fell last month as Britain’s factory output dropped for the first time in four years, in signs that the economy is slowing down after two months of no growth.
There were almost 720,000 new adverts in August, according to the Recruitment and Employment Confederation (REC), down 3.2pc compared to the previous month.
It came as separate data from Make UK also showed manufacturers were holding back from hiring as industrial output contracted for the first time since late 2020.
The figures will add to the case for cutting interest rates when members of the Bank of England’s monetary policy committee (MPC) meet this Thursday.
Rate-setters lowered the base rate from 5.25pc to 5pc last month, the first cut in four years.
However, the Bank’s governor, Andrew Bailey, has stressed that the MPC needs “to be careful not to cut interest rates too quickly or by too much” to ensure inflation keeps falling. Investors currently expect the Bank to hold rates unchanged this week.
06:52 AM BST
Good morning
Thanks for joining us at the start of a big week for interest rates, where the Federal Reserve and Bank of England will both outline their next moves.
The latest figures showing Britain’s job vacancies fell last month add to pressure on the Bank of England to cut rates again.
Policymakers will also be wary of data showing factory output slumped for the first time since the height of the pandemic in 2020.
5 things to start your day
1) Power shortage puts Labour’s data centre blitz at risk – Over a dozen projects are on hold as the National Grid struggles with capacity constraints
2) Rayner at odds with Business Secretary over workers’ rights reforms – Cabinet members in disagreement over how far new employment protections should go
3) Miliband urged by US nuclear giant to abandon large reactors in favour of mini-nukes – GE-Hitachi Nuclear boss says investors have ‘scars’ from large projects’ cost overruns
4) Agatha Christie hotel owner kills off £15m sale – Burgh Island Hotel, which inspired two of the novelist’s works, will now be refurbished
5) ITV launches online shopping tool in scramble to replace lost advertising sales – Broadcaster has a minority stake in the business behind discounting system Kerching
What happened overnight
The yen advanced past the key psychological level of 140 against the dollar as the Japanese currency extended its rally from the weakest point in nearly 38 years in July.
It appreciated as much as 0.6pc versus the dollar to 139.96 on Monday, its strongest level since July 2023. The yen has been the best-performing major currency this quarter, with a 15pc gain as investors position for a further narrowing of the interest-rate gap between the US and Japan. The Federal Reserve is expected to lower US borrowing costs on Wednesday with speculation centred on either an 0.25 or 0.5 percentage points cut.
Asian stocks shifted between losses and gains on Monday, with expectations for a Federal Reserve rate cut tempered by signs of enduring slack in China’s economy.
Hong Kong equities wore the brunt of declines, dropping the most in a week, after a string of poor Chinese data on Saturday left traders wondering if authorities will initiate forceful stimulus to buttress the economy. Japan, South Korea and mainland China were closed for a holiday, while Asian trading of Treasuries was also shut.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.3pc, after bouncing 0.8pc last week.
The Hang Seng Index was down 0.3pc at 17,318.16 at the break.
Japan’s Nikkei was shut but futures traded at 36,315 compared to a cash close of 36,581 as recent yen gains pressured exporters. S&P 500 futures were little changed, while Nasdaq futures dipped 0.1pc..
Central banks in Japan and the UK also meet this week, with both expected to stand pat for now, while a packed data schedule includes US retail sales and industrial production.
