Blow to Labour's growth hopes as savers hoard cash (2024)

Carpetright has been bought in a rescue deal by rival Tapi, but will shut more than 200 stores and cut more than 1,000 jobs.

Flooring retailer Tapi has agreed to buy the Carpetright brand, intellectual property, 54 stores and two warehouses in a pre-pack administration deal.

Administrators at PwC said the deal will save more than 308 current jobs at Carpetright.

However, the deal will not save the majority of the business, including its head office in Purfleet, Essex.

Carpetright employed 1,852 people and operated 273 stores across the UK before entering insolvency.

Administrators said it will retain workers at its head office for the short term as it winds down operations.

However, it said 1,018 workers will face immediate redundancy across its stores which were not part of the rescue deal.

Zel Hussain, joint administrator at PwC, said:

The sale of some stores and the brand to Tapi has allowed over 300 jobs to be saved, and gives the Carpetright brand the chance to continue and flourish under its new ownership.

Thanks for joining us on the blog today. Chris Price will return to cover the latest from the markets.

Microsoft was not directly to blame for the computer bug that caused last weekend’s IT meltdown, but it did not take long for the software giant to become the face of the incident. James Titcomb writes:

Huge screens at airports, hospitals and train terminals all flashed up with the “blue screen of death”, the trademark error screen that displays when Windows computers fail to load correctly.

News bulletins carried reports of a worldwide “Microsoft outage” delaying flights and breaking cash machines, while staff at the company’s Seattle headquarters rushed to issue guidance on fixing the issue.

Microsoft, the world’s second most valuable company with a market value of more than $3 trillion (£2.3 trillion), was quick to point at the root cause of the fiasco: the Texas security firm CrowdStrike.

CrowdStrike had issued an update containing faulty code to its Falcon cyber defence software that rendered Windows PCs and servers using it inoperable. “This was not a Microsoft incident,” Microsoft wrote in an online post at the weekend.

The company said CrowdStrike’s update had affected just 8.5m Windows machines, less than 1pc of the global total.

However, the bug disproportionately affected Windows computers, and Microsoft’s ubiquity among businesses and critical infrastructure providers meant the outage was more widespread than it might have been.

Read the full article...

European shares closed up this afternoon, recouping some of the steep losses clocked last week, with technology and financials leading gains. Ryanair led a rout amongst airlines after reporting a quarterly profit slump.

The pan-European Stoxx 600 index closed 0.9pc higher, coming off a five-day losing run, a streak last seen in October 2023.

Most sectoral indexes closed higher, with technology shares adding 1.8pc, coming off their worst weekly drop in over three years, as some chip stocks rebounded following the global selloff seen last week when investors fretted over the prospects of possible US trade restrictions.

China-exposed luxury firms such as LVMH, Kering and Hugo Boss jumped between 1.2pc and 4.3pc after Beijing surprised markets by cutting major short and long-term interest rates, its first such broad move since August last year.

Bucking the trend, Ryanair plunged 17.2pc to the bottom of the Stoxx 600 index after the airline’s profits slumped by almost half in the three months to the end of June as ticket prices fell 15pc from the same period last year.

Ryanair dragged the travel and leisure sectoral index down 2.4pc.

Abu Dhabi’s sovereign wealth fund has swooped on designer pushchair brand Bugaboo, seizing control of the business from its private equity owner. Daniel Woolfson reports:

Mubadala Capital, which is chaired by Manchester City owner Sheikh Mansour, announced a majority stake in Bugaboo on Monday.

Famed for its popularity among Britain’s middle classes with pushchairs costing hundreds of pounds, Bugaboo has been owned by Bain Capital since 2018.

Under the terms of the deal, which is still subject to regulatory approval, Bain will retain a minority stake in the business.

Antoun Ghanem, head of Mubadala Capital’s European private equity team, said the fund had “been waiting for the right opportunity” to enter the lucrative children’s products market.

Read the full story...

Berkshire Hathaway, the investment business led by Warren Buffett, has sold off more of its BYD shares, cutting its stake to less than 5pc. It owned more than 20pc two years ago.

Bloomberg reported that the firm now holds 4.94pc of the Chinese automaker, according to a Hong Kong exchange filing Monday, down from 5.06pc.

L Catterton, the private equity firm backed by luxury goods giant LVMH has approached American toymaker Mattel with an acquisition offer, sources familar with the situation told Reuters.

The move could prompt other potential suitors to consider bids for Mattel, including rival Hasbro, which has reportedly become aware of L Catterton’s approach and is discussing whether it should also submit an offer, one of the sources said.

Hasbro and Mattel have held unsuccessful merger talks over the years.

The sources cautioned that there is no certainty L Catterton’s approach will push Mattel into exploring a sale.

Mattel, L Catterton and Hasbro have been approached for comment.

Porsche has axed its ambitions for electric vehicle (EV) sales after finding that customer demand was lower than expected in Europe and China.

The company had previously said that EVs could account for over 80pc of car sales in 2023.

Porsche said in a statement seen by Bloomberg: “The transition to electric vehicles will take longer than we assumed five years ago”. The company said that sales will depend on demand and how EVs develop across the world.

Tesla will have humanoid robots in “low production” for the company’s internal use next year, chief executive Elon Musk said today, months after he announced a rollout by the end of 2024.

The carmaker will have the robots “hopefully” in high production for other companies in 2026, Mr Musk said in a post on social media platform X.

The billionaire had said in April that the Tesla robot, called Optimus, would be able to perform tasks in factory by the end of this year and could be ready for sale as soon as the end of 2025.

Humanoid robots have been in development for several years by Japan’s Honda and Hyundai Motor’s Boston Dynamics. Companies are betting on them to meet potential labour shortages and perform repetitive tasks that could be dangerous or tedious such as logistics, warehousing and manufacturing.

Kyiv said Monday it had struck a preliminary deal with international creditors to restructure government debt worth more than $20bn (£15.5bn), giving the war-torn country some financial breathing room.

Ukraine’s economy has been decimated by Russia’s invasion and the government is reliant on international aid to help it fund both its military and day-to-day government spending.

The government was up against the clock as a deal to freeze repayments on a series of international bonds - agreed after Moscow invaded the country in February 2022 - was set to end on August 1.

In a filing with the London Stock Exchange, the Ukrainian government said it had “reached agreement in principle” on a debt restructuring.

The deal will see creditors, a group that includes BlackRock, Pimco and other major institutional investors, write billions off the nominal value of their holdings, and agree to a new payment schedule on terms more beneficial to Kyiv.

Ukraine says it will save the country $11.4bn in debt servicing over the next three years.

Wall Street stock markets rose today despite Joe Biden’s decision to drop out of the US presidential race fuelling fresh uncertainty.

Biden on Sunday gave in to weeks of calls for him to step aside in the wake of a poor debate performance that amplified questions about his health, and endorsed Vice President Kamala Harris to succeed him.

The news has left traders wondering who will go head to head with Donald Trump in the battle to lead the world’s biggest economy, although Harris is now seen as the frontrunner to be the Democratic candidate.

Steve Sosnick of Interactive Brokers said:

We had, of course, enormous political news. But I don’t know that that’s really what’s driving things right now. “I think this is some bargain hunting after a rough week.

Stocks fell heavily at the end of last week following a crash in global computer systems that hit airports, airlines, trains, banks, shops and even doctors’ appointments.

It came at the end of a week where tech stocks had already taken a beating on a growing “Trump trade” as investors worried that the Republican nominee will ramp up a trade dispute with China.

Briefing.com analyst Patrick O’Hare said “uncertainty has not permeated the marketplace, at least not in an adverse way”, with tech stocks with large capitalisation rebounding following their losses earlier in the week.

The FTSE 100 closed up 0.5pc today. Rentokil Initial was the top riser, up 7.8pc, followed by Burberry, up 3.2pc. At the other end of the index, easyJet dropped 7.1pc, followed by British Airways owner IAG, down 3.4pc.

Meanwhile, the mid-cap FTSE 250 rose 0.3pc. The top riser was Ocado, up 12.1pc after a deal with a US retailer, followed by engineering firm Goodwin, up 4.7pc. Wizz Air was the biggest faller, down 10pc, followed by Hochschild Mining, down 3.5pc.

US stocks are rising this afternoon and clawing back some of the losses from their worst week since April.

The S&P 500 is up 0.5pc and on track to break a three-day losing streak. It would be the first gain for the index since it set an all-time high last Tuesday.

The tech-heavy Nasdaq Composite is up 0.7pc. But the Dow Jones Industrial Average of 30 leading US companies is currently flat.

Nvidia rose 2.5pc, and other Big Tech stocks likewise regained some of their sharp drops from the week before to support the market. They had sputtered amid criticism they’d grown too expensive after rocketing so high and being the main reasons for Wall Street’s run to records.

Two of them, Google-owner Alphabet and Tesla, will report on Tuesday how much profit they earned during the spring in a big test. Alphabet is up 1.6pc, while Tesla is up 3.5pc.

Heathrow is falling behind overseas airports as high passenger costs and a lack of investment strangle growth, the boss of the owner of British Airways has warned. Christopher Jasper reports:

Luis Gallego, the chief executive of IAG, said Britain’s largest airport was at risk of losing out to rivals such as Paris Charles de Gaulle and Frankfurt if it failed to reduce fees and improve efficiency.

He said: “What we want at Heathrow is to have a much more efficient airport because passengers here pay two or three times what they’d pay in other hubs in Europe.”

Speaking at Farnborough International Airshow, Mr Gallego said Iberia, IAG’s Spanish arm, is expanding capacity by 14pc this year, twice the pace of growth at British Airways.

Mr Gallego said that, unlike London, Madrid is “growing a lot” and becoming a “much more competitive hub for the south of Europe”.

Read the full story...

Boeing-owned Wisk Aero expects its pilotless air-taxi to begin carrying passengers “later in the decade” as it works with the US regulator to secure approvals, its boss said today, amid scepticism among industry analysts about certification timelines.

Wisk is one of several electric vertical take-off and landing (eVTOL) aircraft makers that have emerged over the last few years with a promise to provide an environmentally-friendly mode of transport in congested cities.

But the industry faces technological hurdles such as making batteries powerful enough for companies to make more trips on a single charge. They also need to convince regulators and the public that the aircraft are safe, a barrier that is higher when the aircraft is autonomous.

Wisk is developing a four-seater autonomous aircraft that will have a range of 90 miles.

Chief executive Brian Yutko told reporters at the Farnborough Airshow:

We are right now testing and producing the elements of this aircraft that we will hope to fly around the end of this year.

Wisk’s strategy is a departure from other major air-taxi makers, which are developing models that will require a pilot to fly the aircraft. The company has said operators of its aircraft will save on pilot costs.

But industry experts at Bain say a full autonomous passenger flight is not expected before the late 2030s and pilotless aircraft will face competition from autonomous vehicles on the road.

A union at Paris airport operator Aéroports de Paris (ADP) said today that it had filed a strike warning for Friday, the day of the Olympic Games opening ceremony, rubbishing a recent deal with management.

Last week’s accord that fended off a walkout by larger worker groups offered only “partial and modest gains”, said the Force Ouvriere (FO) union, which represents almost 12 percent of ADP staff.

Citing “a feeling of discontent” among workers, it filed a formal notice of a walkout from 5am on Friday to 7am on Saturday (local time).

As Friday is the day of the opening ceremony, no civilian flights will be allowed from 6:30pm to midnight in a 90-mile radius around Paris, limiting the potential impact of the strike.

The union is demanding an increase in a bonus agreed last week from 300 to 1,000 euros (£253 to £843) as well as other pay steps.

The Telegraph approached ADP for comment.

FO’s strike warning comes as smaller unions representing pilots and flight attendants at carrier Air France are also stopping work this week in protest at plans to quit Orly, one of the capital’s three airports.

The company “will operate its full programme of flights” despite the strike, according to a spokesman.

Demand for air travel has normalised after a multi-year boom following the pandemic. Executives from major airlines, at the Farnborough Airshow today, say that holidaymakers and travellers are baulking at higher fares.

Guliz Ozturk, boss of Turkey’s low-cost Pegasus Airlines, said the airline expected yields - a measure of average fare paid per mile by each passenger - to be flat as customers go “back to basics”.

Travellers are looking for the most cost effective way to travel, she said.

Air India chief Campbell Wilson said he expected the international market to moderate for the next six months, while the CEO of BA-owner IAG, Luis Gallego, said business travel was still recovering from the Covid crisis when travel almost ground to a halt with borders shut and planes grounded.

Mr Gallego said demand was still strong for flights within Europe, but yields were under pressure.

Joe Biden’s decision to withdraw from the US presidential election has made little difference to the markets because investors are waiting for new polling, an analyst has said.

Chris Beauchamp, chief market analyst at online trading platform IG, said:

Investors have had a weekend to digest the moves in markets last week, when a rotation to small caps finally seemed to be upon us.

At present there seems to be little impact from Biden’s decision to withdraw from the 2024 election, with investors likely waiting for the first real Harris v Trump polls to emerge.

Until then, it seems a ‘business as normal’ mentality prevails, given that Trump is still riding high after the attempt on his life and the Republican convention.

Sir Keir Starmer risks driving up inflation with big public sector pay rises and increases to the minimum wage, economists have warned. Tim Wallace reports:

Major settlements for teachers, doctors and other public sector workers could set off higher pay demands from private sector employees and unions, cementing Bank of England fears of a wage-price spiral, they said.

So far the independent pay review bodies for teachers and NHS workers have recommended wage rises of 5.5pc, well above inflation which is running at 2pc.

The remaining boards are expected to make similar recommendations for other public sector employees.

George Buckley, an economist at Nomura, said an increase to public sector pay could have repercussions across the wide labour market.

Read the full story...

The US dollar was slightly higher on Monday, capturing some safe-haven flows, as investors digested President Joe Biden’s decision to end his re-election campaign, which is expected to intensify volatility in the currency market.

Investors also looked to next week’s crucial monetary policy meetings at the Federal Reserve, which could signal when the first interest rate cut would be, and the Bank of Japan, which could raise interest rates.

But investors’ attention has been fixated on the US presidential race.

Helen Given, FX trader at Monex USA in Washington, said:

Any slight dollar gain is due to a small amount of haven bid after the big political news yesterday ... markets are largely shrugging it off, but it’s still a risk event that markets are trying to protect against.

Former President Trump, the Republican nominee, sits well ahead in betting markets.

The dollar is up 0.14pc against the euro, up 0.15pc against the pound, and up 0.1pc against the Chinese Yuan.

Athanasios Vamvakidis, head of global foreign exchange research at Bank of America, said:

There is a growing consensus that the dollar will be stronger if Trump wins due to tax cuts and tariffs, but it’s more complicated than that as Trump doesn’t want a strong dollar.

The quarterly earnings season in the US is about to take over from politics as the main driver of the markets, a broker has suggested.

Kathleen Brooks, research director at XTB, said:

This week we could finally see fundamentals replacing politics as a driver of markets.

Price action on Monday suggests that the market is taking the news that Joe Biden is leaving the presidential race and the likely nominee for the Democrats will be Vice President Harris in its stride. Stocks are higher in Europe and the at the start of this week.

The prospect of a Harris presidency is risk positive in our view, because Harris is likely to mean more of the same and a continuation of the policies that the Democrats pursued under President Biden.

These include the Inflation Reduction Act, funding for green technology and access to affordable health care. Under the Biden administration the US economy flourished, and stocks made record highs. Thus, the prospect of a similar political environment under a potential Harris presidency is not worrying markets.

However, VP Harris will not be confirmed as the Democratic candidate until next month. With so much uncertainty around the outcome of the US election, the focus is likely to shift to Q2 earnings season.

The peak of earnings season is this week, with more than 200 S&P 500 companies reporting earnings and there are some key releases in the UK and Europe.

FTSE 100 miner Anglo American is shrinking its commodities trading unit after fighting off a takeover approach from BHP.

According to a Bloomberg report, around 10 people in the group’s London and Singapore offices have left the week.

The report also said that Anglo has told staff it will no longer enter into long-term deals to buy commodities it does not already produce.

Boeing announced today a raft of orders on the first day of the Farnborough Airshow, shrugging off safety and production woes as the industry struggles to keep up with demand.

The embattled aviation giant swooped for a bumper deal with Korean Air, taking a firm order for 20 of its 777-9 wide-body jets and 20 of its 787-10 Dreamliners.

The purchase, including an option for 10 extra 787 aircraft, is worth more than £11bn at catalogue prices - although big discounts are usually applied to vast orders.

Held every two years, Farnborough is one of the industry’s biggest shows, a chance for companies to show off their latest defence hardware or lower-emissions aircraft.

Boeing also revealed an order from Luxembourg-based carrier Luxair for two 737 Max-10s.

US group National Airlines placed a firm order for four 777-200 wide-body cargo planes as it looks to tap into global e-commerce.

Samsung staff staged a rally at the company’s chip manufacturing site south of Seoul as negotiations in a pay dispute rumble on.

The National Samsung Electronics Union (NSEU) held the protest march at the Giheung campus, which a spokesman said would be attended by around 1,500 people.

Earlier this month, thousands of union workers staged a rally in the company’s semiconductor plant in Hwaseong.

The NSEU now has more than 30,000 members.

I’ll head off at this point and hand over blogging duties to Alex Singleton, who will keep posting live updates into the evening.

A Labour inheritance tax raid on investments could trigger a stock market sell-off, experts have warned.

Our senior money reporter Charlotte Gifford has the details:

Rachel Reeves, the Chancellor, has been urged to abolish inheritance tax relief for shares in fast-growing companies in order to raise an estimated £1.6bn a year for the Treasury.

Known as Business Property Relief, the tax break provides a 100pc exemption to the divisive 40pc duty on qualifying Aim (Alternative Investment Market) shares.

The Institute for Fiscal Studies has said there is a strong case for cutting the relief, which costs £1.4bn a year and is designed to help families pass on business assets free of tax.

Read why this would have knock-on effects for investors.

The shipbuilder behind the Titantic has been left scrambling to secure a rescue deal from the private sector after the Government ruled out state funding to secure its future.

Harland and Wolff will not receive emergency taxpayer cash because of the risk of losing public money, the Business Secretary has said.

In a written statement to Parliament, Jonathan Reynolds said it was “not easy” to decide the Government would reject both a bailout and the Belfast shipbuilder’s request for the Treasury to act as a guarantor on fresh lending.

He warned that such actions would “not necessarily secure our objectives and there is a very substantial risk that taxpayer money would be lost”.

Harland and Wolff, which famously built the Titanic, employs about 1,500 people at four sites - one in Belfast, Methil on the Firth of Forth, Arnish on the Isle of Lewis, and Appledore in north Devon.

In a statement confirming that the Government loan guarantee had been rejected, the company said it would seek alternative new debt facilities from current lender Riverstone Credit Management.

The company said it was also engaging an investment bank - Rothschild & Co - to assess “strategic options”.

The main US stock indexes opened higher after President Joe Biden withdrew from the race and endorsed Kamala Harris’s candidature.

The Dow Jones Industrial Average rose 126.96 points, or 0.3pc, at the open to 40,414.49.

The S&P 500 opened higher by 39.54 points, or 0.7pc, at 5,544.54, while the Nasdaq Composite gained 196.71 points, or 1.1pc, to 17,923.65 at the opening bell.

Real estate investor Hammerson has sold off its stake in the owner of Bicester Village shopping centre in a deal worth £1.5bn.

Shares in Hammerson have gained 3.9pc after it announced the sale of its Value Retail business to private equity firm L Catterton, which is backed by French luxury good giant LVMH (Louis Vuitton Moet Hennessy).

Hammerson, which also owns Birmingham’s Bullring, said the sale will generate around £600m in cash proceeds.

The firm told investors it will be able to reduce its debts, invest in other assets and hand up to £140m to shareholders through a buyback as a result.

It added that the deal would also help support its strategy to focus on urban retail real estate.

Hammerson owned almost 40pc of the business, which owns nine luxury shopping destinations, including sites near Barcelona, Paris and Milan.

Rita-Rose Gagne, chief executive officer of Hammerson, said: “This is a transformational deal for Hammerson, generating cash proceeds of around £600m whilst removing an overweight, low-yielding and minority stake, and positioning us for accelerated growth and value creation.”

Bitcoin has edged lower after Joe Biden’s exit from the US presidential race put the brakes on a Trump rally.

The digital currency surpassed $67,000 to reach its highest level in six weeks on Friday amid optimism that a second Trump presidency would boost cryptocurrencies.

Analysts think the Republican nominee would create a more favourable regulatory environment for digital assets.

However, bitcoin was last down 0.7pc to $67,720 after Mr Biden pulled out of the race for the White House and endorsed Kamala Harris.

Oil prices edged down suffering their biggest drop since June as investors waited to see the fallout from Joe Biden dropping out of the US presidential race.

Brent crude, the international benchmark, fell 0.7pc to $82 a barrell after a sharp decline on Friday driven by technical traders.

In Canada, a blast of heat across the Alberta oil patch has triggered a wave of wildfires. An estimated 348,000 barrels a day of production are at risk, according to local wildfire and Alberta Energy Regulator data.

US-produced West Texas Intermediate was down 0.6pc to less than $80 a barrel.

Microsoft has blamed EU rules for enabling a faulty security update to cause the world’s biggest IT outage.

Our technology editor James Titcomb has the story:

The software giant said a 2009 agreement with the European Commission meant it was unable to make security changes that would have blocked the CrowdStrike update that triggered widespread travel and healthcare chaos on Friday.

CrowdStrike’s Falcon system, designed to prevent cyber attacks, has privileged access to a key part of a computer known as the kernel.

This meant that a faulty update last week resulted in millions of Windows computers and servers being unable to load at all, leading to flight cancellations, contactless payments not working and GP surgeries being unable to make appointments.

Read how the disaster unfolded.

Hundreds of Carpetright stores are at risk of closure as part of a proposed rescue deal by the troubled retailer’s founding family.

Our retail editor Hannah Boland has the details:

Tapi, a rival company founded by Martin Harris – the son of Carpetright founder Lord Harris of Peckham – issued an announcement on Monday saying it was “desperately sad” that it was unlikely to be able to save more of the business.

Under the terms of the proposed rescue, Tapi has offered to buy the Carpetright brand, 54 stores and two warehouses, with the deal expected to save more than 300 jobs.

However, an initial press release confirming the deal was later withdrawn, leaving the status of the deal uncertain. It said the agreement had not yet been completed but sources said it could be finalised later on Monday.

Should it proceed, it means huge swathes of the business are expected to close, with around 200 Carpetright stores not included in the deal. This would put at least 1,000 roles at risk.

Read why the deal could also raise competition concerns.

Businesses must still be able to access global talent, bosses have warned, after the Prime Minister s insisted he would not be content to pull the “easy lever” of overseas labour.

Sir Keir Starmer has set out a plan to “fire up” the training of more British workers, saying young people in the UK have been “let down” by a lack of opportunity and a “fragmented and broken” skills system.

However, the British Chambers of Commerce (BCC) warned these changes would not happen overnight, meaning companies need access to migrant labour.

Jane Gratton, deputy director of public policy at the BCC, said:

The new government must work at pace to establish Skills England, reviewing and joining up skills initiatives across the departments, aligning with immigration policy, and working closely with the devolved administrations to drive impact for local communities.

Employers and the economy’s skills needs must remain at the heart of the system. Building on Local Skills Improvement Plans will help develop strong partnerships between employers, training providers and others - to ensure people get the skills and support they need.

But this will not happen overnight. As we transition to a better planned, high-skilled and high wage economy, we need to ensure firms can access global talent to fill urgent job vacancies.

This requires a more efficient and effective visa system that can support sectors of the economy when they’ve tried everything they can to recruit and train locally.

Price comparison site Moneysupermarket’s parent company enjoyed an 8pc bump in profit to £73m over the first half of this year, amid surging revenue from its insurance business.

Mony Group, which owns the website as well Moneysavingexpert, saw 14pc growth in its insurance comparison segment, which brought in £120m.

It said insurance switching had seen “exceptional growth” in 2023 which has carried over into the first part of this year, but it expects the trend to taper off in the second half of 2024.

The insurance business made up for weaker results across other areas. Revenue in its home services arm, which includes energy switching and broadband, was down 10pc to £16.7m.

In recent months it has seen “continued weakness in broadband and a softening of mobile switching, driven by lower levels of conversion as providers increased focus on customer retention”.

The US is to buy British-made decoy devices to protect Navy F-35 stealth jets from incoming missiles, in a boost to the UK’s defence industry.

Our industry editor Matt Oliver has the latest:

Around 1,000 to 2,000 of the BriteCloud devices, which are produced in Luton by Leonardo UK, will be purchased per year to begin with.

The expendable decoys, which are the size of a drinks can, are ejected from the back of an aircraft to draw away incoming missiles by mimicking the signals of the original target.

They are fired out of the aircraft’s flare dispenser in the same way as chaff or flares.

BriteCloud is also used by the Royal Air Force’s Typhoon fighter jets and has been cleared for use with the F-16 fighter jet in the US previously.

The US wants the devises for the West’s most advanced stealth fighter.

Porsche is considering taking a stake in troubled battery maker Varta to help it avoid insolvency and keep “key technology in Germany”, the luxury carmaker said.

The German company had already been eyeing a majority stake in Varta’s electric mobility unit, which makes lithium-ion battery cells.

But after Varta on Sunday said it was looking at ways to restructure its debt to “avert a possible insolvency”, Porsche said it was considering a larger participation. It said:

The aim of our commitment would be to keep this key technology in Germany.

As this requires a healthy financial basis of Varta, we could therefore, under certain circ*mstances, imagine to also participate in a financial reorganisation of Varta overall.

Talks were “still ongoing”, it added, while Varta said in its own statement that it was weighing various restructuring options with creditors and potential investors, including Porsche and other parties.

It said Varta needed a “high double-digit million euro” injection of funds to stay afloat.

Stocks are on track to rise when trading begins on Wall Street after Joe Biden quit the US presidential race.

The President said he was exiting the race on Sunday, and endorsed Vice President Kamala Harris for the Democratic ticket.

Megacap stocks rose in premarket trading, with Meta, Alphabet and Apple up between 1.1pc and 1.6pc, boosting the Nasdaq and S&P 500.

Shares of Trump-linked stocks such as Trump Media & Technology Group and software company Phunware rose 1.3pc and 0.6pc, respectively.

Paul Ashworth, chief North America economist at Capital Economics, said:

Donald Trump is still the solid favourite to win the presidential election, but betting markets suggest he has a slightly lower probability of beating Harris rather than Biden.

Harris will have a real chance to sell herself to the American public in the second presidential debate, currently scheduled for September 10, although the Trump campaign could withdraw, not wanting to go toe-to-toe with the ex-attorney.

Ahead of the opening bell, the Dow Jones Industrial Average was up 0.1pc, the S&P 500 had gained 0.5pc and the Nasdaq 100 had gained 0.8pc.

The volume of lending for buy-to-let house purchases more than halved over the course of last year, according to a banking and finance industry body.

UK Finance said the number of new mortgage deals being granted for buy-to-let fell from 25,280 in the fourth quarter of 2022 to 12,422 in the first quarter of this year.

Rapidly rising interest rates played a major role in this trend, making it harder to pass lenders’ affordability tests for those looking to buy a property to rent out, according to UK Finance.

It added that the stamp duty surcharge on second and subsequent properties, which came into force in 2016, and the progressive removal of higher-rate income tax relief on mortgage payments for rental properties have also made being a landlord more challenging and less attractive.

The buy-to-let mortgage market has shrunk, from 2.04m outstanding mortgages in the first quarter of 2023 to 1.98m in the first quarter of 2024.

The pound rose slightly ahead of closely-watched data that could influence the next interest rate decision by the Bank of England.

Long positions on sterling - where traders expect its value to rise - have increased for the third consecutive week to an all time high of $10.8bn (£8.3bn).

The pound was up 0.2pc at $1.293 after hitting $1.304 last week, its highest level since July 2023. The euro was flat at 84.2p.

The S&P Global Composite Purchasing Managers’ Index will be published on Wednesday, indicating how well the economy is doing.

Analysts flagged that sterling is more attractive than other “risky” currencies.

The pound is less dependent on the Chinese economy than the Australian dollar, and Britain has a less uncertain political outlook than the eurozone, with less concerns about fiscal discipline.

Chris Turner, head of forex strategy at ING, said:

The Bank of England’s broad trade-weighted sterling index is now barely 3pc away from the levels traded in June 2016, before the Brexit vote.

Some are no doubt making the case that this is a removal of the Brexit risk premium in sterling, aided by new Prime Minister Keir Starmer’s desire to engage more closely with Europe.

Sir Keir Starmer said he would work with the Migration Advisory Committee to identify where there are currently skills gaps and where these might appear in future, and introduce plans to tackle any shortages.

The committee is an independent, non-statutory, non-departmental public body that advises the Government.

The Prime Minister said:

From the get go, we will work with the Migration Advisory Committee.

We will identify current and future skills gaps, putting in place plans to address those gaps and reduce our long-term reliance on overseas workers.

He said the Government will also work to identify the right types of training.

Household savings have hit their highest level in 14 years, excluding the pandemic, in a blow to Labour’s hopes of stimulating growth in the economy.

Savers hoarded £338bn across Britain in the first three months of the year, squirrelling away 18.7pc of their total resources.

The value of excess savings increased rapidly during the pandemic as restrictions were placed on economic activity and physical movement.

Between the first quarter of 2020 and the last three months of 2021, excess savings reached £244bn, or 13.5pc of household total resources, as a result of diminished household consumption.

This figure has continued to grow in a blow to Labour, which has made expanding the economy its number one mission over the next five years.

David Pye of consultancy Broadstone said:

Households are clearly not rushing to spend the excess savings generated through the pandemic when consumption was slashed due to the unprecedented restrictions.

Unlike the US, households in the UK appear to be an outlier as they focus on maintaining savings to protect themselves against shocks like the cost-of-living crisis and in bringing down their debt as the cost of borrowing has risen sharply.

As we appear to be moving towards a more secure economic outlook, it will be interesting to see whether households are able to loosen the purse strings and increase consumption or whether caution rules.

Sir Keir Starmer said his Government “won’t be content just to pull the easy lever of importing skills” as he launched his new Skills England organisation.

In a speech at the Farnborough International Airshow in Hampshire, the Prime Minister said: “All too often young people in our country have been let down, not given access to the right opportunities or training in their community.

“And that’s created an over-reliance in our economy on higher and higher levels of migration.”

He added:

I do not criticise businesses who hire overseas workers and I certainly don’t diminish the contribution that migration makes to our economy, to our public services, and of course, to our communities - migration is part of our national story. It always has been, always will be.

And yet, if you stand back, as a system, it cannot be right that some people don’t get to feel the pride of making a contribution, that dignity of work, just because we can’t find a way of creating a coherent skills system. That can’t be right.

So I have to say that we won’t be content just to pull the easy lever of importing skills. We’re turning the page on that.

French billionaire Vincent Bolloré has confirmed plans to float his pay-TV business on the London Stock Exchange in a major boost to the ailing market.

Our reporter James Warrington has the details:

Vivendi, the media empire controlled by Mr Bolloré’s, said Canal+ will list in London “to reflect the company’s international dimension”.

Canal+ has a pay-TV operation in France and is behind blockbusters including Terminator 2, Bridget Jones’s Diary and Paddington.

It has more than 26m subscribers, close to two-thirds of whom are based outside France.

It comes as Mr Bolloré, who is a supporter of Marine Le Pen’s hard-Right National Rally, looks to break up Vivendi amid concerns the conglomerate is undervalued.

Vivendi today said advertising agency Havas will be listed in Amsterdam while Louis Hachette Group, a newly-named company that brings together the group’s publishing and distribution assets, will be listed in Paris.

Sir Keir Starmer has set out plans to reduce Britain’s reliance on foreign workers by improving skills training in England.

The Prime Minister will set out his approach in a speech today, promising a new body to address the “fragmented and broken” training system.

The Skills England organisation will bring together central and local government, businesses, trade unions and training providers to better understand the nation’s “skills gap”.

It will work with the Migration Advisory Committee to reduce reliance on workers from overseas by addressing areas where home-grown skills can be improved.

Sir Keir said:

Our skills system is in a mess, which is why we are transforming our approach to meet skills needs over the coming decades.

They will help to deliver our number one mission as a Government, to kickstart economic growth by opening up new opportunities for young people and enabling British businesses to recruit more home-grown talent.

From construction to IT, healthcare to engineering, our success as a country depends on delivering highly skilled workforces for the long term. Skills England will put in place the framework needed to achieve that goal while reducing our reliance on workers from overseas.

Ocado jumped to top the FTSE 250 after it announced a new deal with US partner Kroger.

The online supermarket and technology group was up more than 7pc after the American retailer placed an order for a “wide range of new automated technologies”.

Ocado has staked its future on being a technology company which develops automated warehouses, rather than an online retailer, where it presently generates most of its revenues.

Chief executive Tim Steiner said:

We are delivering a step-change in warehouse automation and new levels of efficiency to our partners as global supply chains are under significant pressure to manage higher volumes and greater complexity, as well as challenges in labour cost and availability.

Today marks another exciting milestone in our partnership with Kroger. Our current Customer Fulfilment Centres (CFCs) are already helping to deliver a game-changing quality of service to their customers across the USA.

We are excited for these latest technologies to further enhance that proposition, as well as the efficiency of Kroger’s operations in live and future CFCs.

The FTSE 100 rebounded in early trading after the global IT chaos triggered a sell-off on Friday.

The UK’s blue-chip stock index was up 0.3pc while the midcap FTSE 250 had gained 0.2pc.

Both markets had slumped on Friday as stock exchanges were disrupted by the worldwide IT outage that grounded flights, closed schools and hampered businesses.

EasyJet and Wizz Air plunged 6.5pc and 7pc respectively, making them the worst performers on the FTSE 100 and FTSE 250, after rival carrier Ryanair warned that its air fares would be “materially lower” over the summer.

Rentokil jumped as much as 15pc to top the FTSE 100 after reports that former BT chief executive Philip Jansen is in talks with private equity firms about buying the pest control business.

Entain jumped as much as 4.5pc as it named betting industry veteran Gavin Isaacs as its new chief executive.

Wholesale gas prices fallen to their lowest level in a week as a US plant restarted operations after the disruption from Hurricane Beryl.

Dutch front-month futures, the European benchmark, dropped as much as 3.2pc towards €31 per megawatt hour as the Freeport LNG facility in Texas began ramping up production following the storm earlier this month.

Florence Schmit, an energy strategist at Rabobank, said:

The outage clearly shows how prone the [European gas] market remains to upside risks, based on the ‘fear’ of not having enough supply.

This fear is still ingrained in the market even though at present there is enough supply to go by.

The UK equivalent contract dropped as much as 3.5pc towards 72p per therm.

Asian markets fell Monday as Joe Biden’s decision to drop out of the US presidential race fuelled fresh uncertainty.

Tokyo, Shanghai, Sydney, Seoul, Singapore, Taipei, Mumbai, Wellington and Manila all fell, though Hong Kong rallied thanks to healthy gains in Chinese tech companies.

Traders appeared unmoved by China’s decision to cut interest rates in a bid to boost its stuttering economy.

Market analyst Stephen Innes said in his Dark Side Of The Boom newsletter:

It’s as if the political game of chess has flipped its board, and investors are left picking up the pieces.

This unexpected twist has injected a hefty dose of political uncertainty into the market, leaving everyone scrambling to determine their next move.

Hebe Chen, an analyst at IG Markets, said:

Facing bombshell surprises for the second week in a row, the Asian market will be under intense scrutiny.

The accelerated wave of risk aversion could hit Asian stocks harder than the previous week as investors digest the unfamiliar political context. The forex market will also feel the heightened pressure.

Ryanair shares plunged by 13pc as trading began after the discount carrier warned that air fares will be “materially lower” over the summer as it battles to attract passengers.

The Irish carrier’s poor forecast hit airline shares across Europe, with FTSE 100 low cost airline EasyJet dropping 7.2pc.

Hungarian airline Wizz Air, which is a member of the FTSE 250, plunged 8.7pc.

The FTSE 100 opened higher after Joe Biden abandoned his bid for re-election as US president.

The UK’s benchmark stock index was 0.4pc higher at 8,188.67 while the midcap FTSE 250 rose 0.3pc to 21,122.50.

Government borrowing costs in the US and Europe have fallen after Joe Biden quit the US presidential race.

Eurozone bond yields were slightly lower as investors assessed what the decision might mean for financial markets and the global monetary policy outlook.

The President announced on Sunday he would be abandoning his re-election bid and face off against former president Donald Trump, under growing pressure from fellow Democrats as concerns mounted about his age and health.

Vice President Kamala Harris is now favourite to win the Democratic nomination and challenge Trump at November’s election.

In Asia trading hours, 10-year US Treasury yields fell nearly three basis points to 4.21pc.

Germany’s 10-year yield, the benchmark for the eurozone, was last down less than 1.5 basis points at 2.45pc.

Germany’s two-year yield, which is more sensitive to changes in monetary policy expectations, was little changed at 2.78pc.

The European Central Bank last week kept its policy settings unchanged, and its president, Christine Lagarde, said its next decision in September was “wide open”.

Regulators have fined BT £17.5m for failing to respond to the “catastrophic failure” of its emergency call system last summer.

Ofcom said that the telecoms giant suffered a network disruption in June 2023 that lasted 10-and-a-half hours and affected 14,000 emergency calls from 12,392 people.

The watchdog said BT did not have “sufficient warning systems” in place, that it did not have “adequate procedures” to assess the severity or impact of the outage, or to work out how to mitigate it.

Suzanne Cater, Ofcom’s director of enforcement, said:

Being able to contact the emergency services can mean the difference between life and death, so in the event of any disruption to their networks, providers must be ready to respond quickly and effectively.

In this case, BT fell woefully short of its responsibilities and was ill-prepared to deal with such a large-scale outage, putting its customers at unacceptable risk.

Ladbrokes owner Entain has appointed Gavin Isaacs as its new chief executive as it seeks to bounce back from heavy losses.

Mr Isaacs, who was previously chairman of Games Global and was on the board of Entain’s US rival Draftkings, will join the sports betting giant on September 2.

Entain, which also owns Coral and BetMGM, earlier this year pledged to carry out a review of its betting brands after posting a £879m loss in its most recent annual results.

Mr Isaacs said: “The company’s iconic brands, exceptional talent and ongoing execution of its refocused strategy will enable the business to return to a leadership position across all aspects.”

Stella David, Entain’s interim chief, will replace Barry Gibson as company chairman following his retirement on September 30.

Ryanair revealed its profits almost halved in its first quarter as it cut air fares and warned they would remain “materially lower” during the summer months.

Profit after tax dropped 46pc to €360m (£303m) in the three months to the end of June compared with 12 months earlier, Ryanair said.

Average fares per passenger fell 15pc in the quarter from a year earlier as the airline was forced to engage in “more price stimulation than we had previously expected,” according to chief executive Michael O’Leary.

The decline in profit come despite passenger numbers increasing 10pc to 55.5m.

The airline said it was impacted also by the timing of Easter this year.

Ryanair said the lower-fares environment had continued into its second quarter.

Mr O’Leary added that full-year traffic was expected to grow 8pc, or as much as 200m passengers, as long as Ryanair did not face further delay to deliveries of new Boeing planes.

Britain’s economy must grow three times faster than this year’s expected rate if Labour is to avoid being forced to put up taxes or increase borrowing, according to the IMF.

Rachel Reeves has made indicated she wants to use her position as Chancellor to create the most pro-growth Treasury in British history.

However, she has also signalled that she wants to be able to pay for inflation-busting pay rises for millions of public sector workers, fuelling Tory accusations she has caved in to “blackmail” by unions.

The IMF said that the UK’s gross domestic product (GDP) would need to grow by 2.6pc each year from 2025-26 to fill the gap in the public finances by 2028-29, according to analysis given to the FT.

Stock markets fell overnight in Asia after Joe Biden announced he was quitting the 2024 US presidential race.

Japan’s benchmark Nikkei 225 dropped 1.2pc to 39,582.13 and the pound strengthened against the dollar after the President endorsed Vice President Kamala Harris to take on Donald Trump in November, adding to uncertainties over the future of the world’s largest economy.

Australia’s S&P/ASX 200 stock index dipped 0.6pc to 7,924.40, while South Korea’s Kospi lost 1.4pc to 2,756.62.

Sterling added 0.1pc to $1.2921, with the dollar also losing ground against the euro and the yen.

Commonwealth Bank of Australia strategist Joseph Capurso said a decline in odds for a Trump win should see the dollar weaken, and vice versa. He said:

The bottom line is what the polls show this week.

Harris might be a stronger candidate, but is it enough to turn the polls?

Thanks for joining me. Asian markets slumped overnight after Joe Biden announced he would not seek re-election in November and endorsed Kamala Harris in the race for the White House.

Stock markets in Japan, South Korea and Australia all fell, while the pound strengthened against the dollar.

5 things to start your day

1) New Boeing jet chief admits turnaround may take years | Stephanie Pope vows to deliver ‘transformational’ change at crisis-hit airline

2) Roger Bootle: Fixing Britain’s archaic planning system will be Labour’s biggest challenge | Starmer faces a nation of homeowners with an inherent bias against development

3) Households braced for £190 jump in energy bills | Ukraine’s drawn out fight against Russia risks pushing up gas prices

4) Tempest fighter jet’s new design unveiled amid doubts over project | New concept revealed as Labour spending plans cause concern over programme’s future

5) How a single daily pill could soon be the future of losing weight | Fear of jabs has companies scrambling to be the first to launch a mass-market obesity pill

What happened overnight

The Hang Seng in Hong Kong added 0.8pc to 17,548.33 and the Shanghai Composite index dropped 0.7pc to 2,961.41 after China’s central bank unexpectedly lowered its one-year benchmark loan prime rate, or LPR, which is the standard reference for most business loans, to 3.35pc from 3.45pc.

The People’s Bank of China cut the five-year loan prime rate, a benchmark for mortgages, to 3.85pc from 3.95pc, aiming to boost slowing growth and break out of a prolonged property slump.

This came after the government recently reported the economy expanded at a slower-than-forecast 4.7pc annual pace in the second quarter.

Lynn Song of ING Economics said: “Chinese commercial banks’ net interest margins are already at a record lows and non-performing loans have been growing rapidly; rate cuts will likely add to the pressure on Chinese banks.”

On Friday, the S&P 500 fell 0.7pc and ended at 5,505.00, closing its first losing week in the last three and its worst since April. The Dow Jones Industrial Average dropped 0.9pc to 40,287.53, while the Nasdaq Composite sank 0.8pc to 17,726.94.

Friday’s moves came as a major outage disrupted flights, banks and even doctors’ appointments around the world.

Cybersecurity firm CrowdStrike said the issue believed to be behind the outage was not a security incident or cyberattack and that it had deployed a fix. The company said the problem lay in a faulty update sent to computers running Microsoft Windows.

CrowdStrike’s stock dropped 11.1pc, while Microsoft’s lost 0.8pc.