Coal power will help keep the lights on across Britain tonight as the National Grid fired up back-up plants amid plunging temperatures.
One of EDF’s two West Burton A coal power stations in Lincolnshire will begin generating electricity today after the grid failed to secure an adequate buffer to keep the lights on.
Earlier, National Grid issued a second-stage warning that the margin between electricity supply and demand would be tight today.
Demand has increased after a cold snap hit the UK just as generation from Britain’s wind farms fell to 14pc of national output.
People in the north of England and Scotland woke up to snow as temperatures dipped to minus 7.6C in the Scottish Highlands overnight.
Tonight could be the coldest night of the year so far with the mercury plunging to minus 15C in some isolated Scottish glens.
People in southern England and South Wales can expect to wake up to snow on Wednesday but it is unclear whether it will settle, the Met Office said.
Read the latest updates below.
08:26 PM
Network Rail ‘relieved’ after strikes called off
Further updates on all aspects of the national rail dispute will be shared in the coming days, according to an RMT spokesman.
Network Rail chief executive Andrew Haines said:
“We are relieved for our people, passengers and freight customers that industrial action in Network Rail has now been suspended. We look forward to further information on plans for a referendum.”
08:20 PM
Musk: Twitter could become ‘cashflow positive’ this year
Elon Musk expects Twitter to become “cashflow positive” in the second three months of this year, after revealing he thought it would go bankrupt within four months.
“I think we’ll be there in Q2. I definitely don’t want to count chicks before they hatch but I think we’ve got a shot at being cashflow positive next quarter,” Mr Musk said at the Morgan Stanley Conference.
“It’s been a very difficult four months, but I’m optimistic about the future.”
This will partly depend on income from advertising, which Mr Musk hopes to boost through performance-based ads and ‘key word’ advertising.
Twitter was making a $3bn loss in December and faced going bankrupt within four months, he said.
The social media company has since managed to cut costs by closing one of its three data centres and significantly reduced its expenditure on cloud services.
Twitter will focus less on the number of daily active users and more on the hours which people are spending on the platform, according to Musk.
He noted that while other social media platforms have more daily users, they don’t have “the smartest, most influential people on earth” spending as much time on their platforms.
Mr Musk added that he didn’t buy Twitter because it was a “lucrative gold mine” which has seen him “being dumped on everyday”. Instead, the multi-billionaire is hoping to platform can strengthen freedom of speech.
“Without free speech, I fear for the future of civilisation if we don’t have this,” he said.
07:56 PM
RMT suspends Network Rail strikes
The National Union of Rail, Maritime and Transport Workers (RMT) has suspended Network Rail strikes after receiving a new pay offer.
The industrial action over rail workers’ pay was scheduled for March and April.
07:45 PM
Bank of England admits Brexit makes City easier to regulate
The Bank of England has admitted that Brexit is making the City easier to regulate despite issuing warnings against the Government’s plan to axe swathes of red tape.
Banking correspondent Simon Foy explains:
Vicky Saporta, executive director at the Bank, said: “Leaving the EU produces opportunities for us to manage our financial system in a way that’s more appropriate.
“We can tailor things to UK circumstances to facilitate competition and competitiveness but also, given that we have a massive financial system in a medium sized economy, we can be flexible when we see risks arising and not be constrained by a harmonised [EU] system.”
The comments came despite the Bank being locked in a tussle with the City and Treasury over the speed and scope of post-Brexit rule changes.
07:15 PM
WeightWatchers enters prescription weight-loss drugs market
WW International, formerly WeightWatchers, is moving into the surging market for prescription weight-loss drugs in hopes of boosting its business.
The New York company has bought Sequence, an online health platform which offers clinical access to prescription medication designed at accelerating weight loss.
The $132m (£112m) deal sees WW International expand beyond its subscriber meal plans and diet programmes in hopes of boosting its slumping revenue.
“WeightWatchers does not participate in fads or quick fix trends that we do not view as healthy or sustainable, even when they are highly popular,” said chief executive Sima Sistani.
She continued: “But we view the use of certain prescription weight management medications under the guidance of a medical professional very differently.”
The business, which recorded 3.5m subscribers last year, aims to generate $235m in global turnover this quarter.
06:49 PM
TikTok meets GCHQ to soothe security concerns
TikTok is courting Britain’s most senior cyber security agency in a bid to reassure MPs it is not a national security threat.
The Telegraph‘s technology team has the latest:
Representatives from TikTok have held what it considers to be productive discussions with the National Cyber Security Centre (NCSC), an arm of GCHQ. The engagement comes as the Chinese-owned social media app fights global attempts to ban it over security fears.
NCSC is understood to be reviewing the app, though a government source stressed TikTok had not yet been given a clean bill of health by spooks.
TikTok executives have raised its engagement with the agency as a sign that the company does not pose a threat.
06:33 PM
Flights will get more expensive because of Hunt’s tax raid, airlines warn
Jeremy Hunt’s tax raid on airlines means passengers will have to pay higher air fares, bosses have warned.
British Airways, Virgin Atlantic, Ryanair and easyJet are among a coalition of airlines urging the Chancellor not to increase air passenger duty (APD) in line with the retail prices index (RPI) next month.
Chief business correspondent Oliver Gill has the story:
The tax, which is charged based on how far people travel, will rise based on September’s RPI, which was 12.6pc.
With the tax usually passed onto customers, airlines complain that the cost of flights departing from any UK airport will be “amongst the very highest in the world”.
Carriers believe that they are being unfairly treated in comparison to other parts of the transport sector and complain the Government is using an outdated measure.
RPI was scrapped as an official measure in April 2011 and deemed no longer compliant with international standards two years later.
In a letter to the Chancellor, airline chiefs said: “The Government has already acted to protect travellers by capping rail fares some 6.4pc lower than RPI, and by capping bus fares and by freezing fuel duty. Air passengers warrant similar protection.”
06:06 PM
Fed Chair warns against crypto risks
Interest rates wasn’t the only focus of Jerome Powell’s Congressional testimony. The Fed Chair also warned US banks against the risks of getting too involved in the crypto industry.
“We don’t want regulation to stifle innovation in a way that just favors incumbents and that kind of thing,” he said during the Senate Banking Committee hearing.
“But, like everyone else, we’re watching what’s been happening in the crypto space and what we see is quite a lot of turmoil, we see fraud, we see a lack of transparency, we see run risk.”
05:20 PM
In The Style shares plummet after private equity sale
Online womenswear retailer In The Style has agreed to be sold for just £1.2m to avoid collapsing into administration.
The fast fashion firm, known for its clothing line collaborations with Love Island stars, has been bought by private equity group Baaj Capital and will delist from London’s Aim index, less than two years after floating at £105m.
Share prices plummeted 78.57pc today after the sale was announced.
In a statement released earlier today, the Salford-based company said it will sell its only operating subsidiary, In The Style Fashion, to avoid entering administration.
It comes after In The Style launched a strategic review last December, which involved searching for potential buyers of the group’s business and assets.
Despite interest from a “significant number” of potential buyers, none of the proposals involved an offer for the whole company and some were not seen as “deliverable on an acceptable timescale”.
In The Style’s financial position has quickly deteriorated with its cash position falling from £3.2m in December to £0.9m last month.
The retailer was founded by now millionaire Adam Frisby, who quit his Burger King job in 2013 to launch the business with £1,000. Last month, Mr Frisby successfully defeated a £125m lawsuit claiming the business idea was stolen from his competitor.
The sale comes after online shopping rival Asos announced a survival plan after a slump in spending wiped millions of its stock market valuation.
04:51 PM
FTSE 100 closes in the red
The FTSE 100 has closed 0.13pc lower at 7,919.48.
Meanwhile, the domestically-focused FTSE 250 dropped 0.54pc to 19,956.61.
04:45 PM
US inverted yield curve deepens to early 1980-levels
The inverted yield curve between the US two-year Treasury and 10-year Tresury has deepened to levels not seen since the early 1980s.
Yields have jumped across the Treasury curve following Jerome Powell’s comments that the US central bank is likely to increase interest rates higher than previously thought.
In particulary, the US two-year Treasury yield has surged to its highest level since 2007 at nearly 5pc. Meanwhile, the 10-year yield, the benchmark for global borrowing costs advanced 3.98pc.
The gap between the two notes has widened by as much as 99 basis points, the deepest inversion since 1981.
04:33 PM
US bond traders bet on higher-than-expected interest rate rises
Bond traders are boosting bets that the Federal Reserve will increase interest rates by 50 basis points later this month, following Jerome Powell’s latest comments on inflation.
Interest rate swaps indicate that traders see a half-point increase slightly more likely than a quarter-point move.
Traders are also betting that the Federal Reserve will further increase interest rates by 100 basis points over the next four meetings, peaking just below 5.6pc.
04:18 PM
Goldman Sachs CEO: US economy has “meaningfully higher” chance of soft landing
The US economy has a “meaningfully higher” chance of a soft landing compared with six months ago, according to Goldman Sach’s chief executive.
“The chance of our having a soft landing here as we go ’23 into ’24 is even higher than I thought it was six months ago,” CEO David Solomon said at today’s RBC Capital Markets Global Financial Institutions Conference.
The comments, which were made before Fed Chair Jerome Powell’s prepared congressional testimony, echo the sentiments of his peers.
JP Morgan chief executive Jamie Dimon yesterday said that the US economy may have escaped a deep recession and “could still have a soft landing”, although noted the headwinds related to China tensions and Russia’s war in Ukraine.
04:09 PM
Gold loses value after Powell comments
The price of gold has fallen after Fed Chair Jerome Powell’s latest comments on interest rates.
A stronger dollar and rising Treasury yields are weighing down on the price of gold futures, which dropped as much as 1.65pc.
Commenting on the losses, US investment bank Morgan Stanley said:
“For 2023, we need to consider both macro and demand-side factors, but the new trendline suggests gold is likely to be more reactive to changes in yields than it was in 2022.
“Central bank purchases may slow down, but jewelry and technology demand could see a boost from China’s reopening.”
03:55 PM
Explainer: Why is the Fed Reserve so hawkish?
In case you’re wondering why the Fed Reserve is so eager to tackle inflation
03:35 PM
Handing over
I’m signing off now. Adam Mawardi will take you through all of the reaction on world markets to Jerome Powell’s comments on interest rates.
03:33 PM
World markets rocked by Fed Chair’s signals on interest rates
Jerome Powell’s hawkish comments on interest rates have had a massive impact on world markets.
The US two-year Treasury yield has surged to its highest level since 2007 at nearly 5pc:
03:26 PM
FTSE 100 slumps after Fed chair’s comments
The FTSE 100 has wiped out earlier gains and is now down 0.1pc following Jerome Powell’s hawkish comments on interest rates.
The blue chip index fell 0.6pc from its intraday highs after Jerome Powell’s comments to the Semiannual Monetary Policy Report to Congress.
He warned there is “little sign of disinflation thus far in the category of core services excluding housing”.
However, he added that despite the slowdown in growth in the US economy, “the labour market remains extremely tight”.
The US Federal Reserve began an aggressive campaign to raise interest rates a year ago, moving to a range now of 4.5pc to 4.75pc.
However, Mr Powell said: “It will take time, however, for the full effects of monetary restraint to be realized, especially on inflation.”
Warning that the “ultimate level of interest rates is likely to be higher”, he added: “To conclude, we understand that our actions affect communities, families, and businesses across the country.”
03:14 PM
Pound plunges as US Fed Chairman warns rate rises to go higher
The pound has fallen 1.1pc against the dollar after the Chairman of the US Federal Reserve said officials may accelerate interest rate increases after the strong and sustained economic activity since the start of the year.
Jerome Powell’s comments on the first day of testimony before the Senate Banking Committee have sent the three main US stock markets falling. He said:
Although inflation has been moderating in recent months, the process of getting inflation back down to 2pc has a long way to go and is likely to be bumpy.
The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated.
If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.
The pound has slumped below $1.19.
02:57 PM
National Grid stands down demand reduction scheme
Although the National Grid has begun drawing power from one of its back-up coal power stations, it will not pay people for their electricity from tomorrow.
The electricity system operator has decided against invoking its so-called Demand Flexibility Service.
The programme pays some households with smart metres to use less energy at peak times to avoid blackouts.
02:53 PM
Tightness in electricity supply ‘triggered by strikes in France’
This is the first time that the National Grid Electricity System Operator has had to call on its coal contingency contracts that were put in place last year to extend the life of coal-fired power plants this winter.
The plant at West Burton A has started generating electricity from coal and will be producing for the next 10 hours.
Shivam Malhotra, a consultant at energy analysts LCP Delta, said:
These contracts are only intended to be used when all commercial options have been exhausted by National Grid.
Concern on the tightness of the system has been triggered by strikes in France which is reducing confidence in securing electricity from the interconnectors, along with low wind output in GB, and forecast high demand at 6pm.
02:47 PM
Tentative open on Wall Street
US markets were mixed after the opening bell as traders await US Federal Reserve Chairman Jerome Powell’s testimony to Congress.
The Dow Jones Industrial Average slipped 0.1pc to 33,410.11 while the S&P 500 traded flat at 4,047.54.
However, the tech-focused Nasdaq Composite rose 0.2pc to 11,699.52.
02:26 PM
National Grid fires up back-up coal power stations for first time
Coal power will help keep the lights on across Britain tonight as the National Grid fired up back-up plants amid plunging temperatures.
One of EDF’s two West Burton A coal power stations in Lincolnshire will begin generating electricity today after the grid failed to secure an adequate buffer to keep the lights on.
Earlier, National Grid issued a rare second-stage warning that the margin between electricity supply and demand would be tight today.
This morning it put out the so-called electricity margin notice for 4.30pm to 8.30pm, which effectively tells the market that the grid wants more generation to come online this evening.
The risk of blackouts is understood to be low but a spokesman said it was adding extra capacity in an effort to be “prudent”.
Demand has increased after a cold snap hit the UK just as generation from Britain’s wind farms fell to 14pc of national output.
People in the north of England and Scotland woke up to snow as temperatures dipped to minus 7.6C in the Scottish Highlands overnight.
Tonight could be the coldest night of the year so far with the mercury plunging to minus 15C in some isolated Scottish glens.
People in southern England and South Wales can expect to wake up to snow on Wednesday but it is unclear whether it will settle, the Met Office said.
02:03 PM
Dyson sales climb to record £6.5bn but rising costs hit profits
Dyson profits dipped last year despite demand for its high-end hair dryers and vacuum cleaners driving up sales to a new record.
Technology editor James Titcomb has the details:
Sir James Dyson’s engineering group grew revenues to £6.5bn in 2022, up from £6bn in the previous year.
The total was boosted by a higher proportion of direct sales via the Dyson website, with no cut of revenues for third-party retailers.
It came as Ebitda, a measure of operating profits, fell from £1.5bn to £1.3bn. Dyson’s full statutory accounts for the year are not yet available.
The company, which is headquartered in Singapore with engineering operations in Britain, closed its Russia business last year and said higher shipping and logistics prices had cost it £120m last year.
Read what chief executive Roland Krueger is planning after “one of the toughest years that Dyson has faced”.
01:38 PM
French general strike hits British travellers
Thousands of British travellers have been hit by disruption caused by the start of a general strike in France.
Dozens of flights and trains were cancelled and ferries were delayed due to French workers taking industrial action in protest at President Emmanuel Macron’s plan to raise the pension age from 62 to 64.
Air traffic controllers and rail staff were among those who walked out.
EasyJet and British Airways cancelled at least 18 and 13 flights respectively between the UK and France, affecting passengers flying to and from Bristol, Gatwick, Heathrow and Luton Airports.
Air France axed four flights between Heathrow and Paris.
Under consumer law, affected passengers were entitled to be re-booked on to alternative flights or offered a refund, but will not be eligible for compensation because the cause of the disruption is outside the airlines’ control.
Eurostar cancelled 16 of the 26 trains scheduled between London St Pancras and Paris, warning passengers that the general strike “could extend beyond” Tuesday.
There are no cross-Channel trains from St Pancras after a 2.31pm departure to the French capital. A further six trains due to run between St Pancras and Brussels were also cancelled.
01:22 PM
Oil slips from four-week highs
Oil has fallen slightly but remains close to its highest level in four weeks ahead of testimony to Congress from Federal Reserve Chairman Jerome Powell later today.
Brent crude has gained 5.3pc from its intraday low set on February 24 but is down 0.5pc today below $86 a barrel after hitting highs last seen on February 13.
Meanwhile, US produced West Texas Intermediate traded above $80 a barrel after advancing for five sessions.
Mr Powell will begin two days of testimony before Senate and House committees in Washington later today.
It will likely be his last public remarks before the Federal Open Market Committee meets to set interest rates on March 21 to 22.
12:59 PM
Grid may pay households again to save energy
Households may be paid to turn off electrical appliances during peak hours tomorrow as the National Grid faces a squeeze on demand.
The cold weather hitting the UK is putting pressure on power supplies, meaning the operator may trigger its so-called Demand Flexibility Service.
This would mean households could earn up to £10 for the session by reducing energy usage.
National Grid will confirm if it will enforce the notice at 2.30pm.
Britain’s power plants have already been told to generate more electricity and emergency coal generators have been warmed up to help guard against the risk of blackouts this evening.
12:51 PM
US markets poised to edge higher
Wall Street is expected to open slightly higher as as Treasury bond yields hold below the key 4pc mark.
However, investors are waiting to see what policy message Federal Reserve Chairman Jerome Powell will deliver at his Congressional testimony later today.
In premarket trading Meta was the most notable mover, rallying on news the Facebook-owner is preparing to cull thousands more employees.
The next key event will be Friday’s monthly jobs report which could show if the labour market is starting to cool.
An outsize reading for January saw investors ramp up bets on further Fed policy tightening, with markets now factoring peak US rates around 5.4pc.
S&P 500 futures rose 0.1pc while Nasdaq 100 futures were up 0.2pc. The Dow Jones Industrial Average is on track to be little changed.
12:17 PM
Gas prices to fall 20pc, says Morgan Stanley
Households facing rising energy bills have been given another boost as Morgan Stanley drastically cut its outlook for wholesale prices.
The investment bank has slashed its expectations for European natural gas prices by more than a third as it forecasts weakening demand.
Dutch front-month futures, the continent’s pricing benchmark, are expected to average at €35 per megawatt hour in the second quarter of this year, down from forecasts made last month of €55.
That would be a reduction of about 20pc on present prices, which have already dropped by 85pc since last year’s peak.
Such a change would likely deliver a boost to households as it would allow Ofgem to lower the maximum that energy suppliers can charge under its price cap.
This will drop to £3,280 from April and is then already forecast to fall to £2,165 in July and £2,190 in October, according to Investec.
11:58 AM
Spirent hit as firms cut back on network and cybersecurity testing
Spirent Communications has dropped to the bottom of the FTSE 250 as tech services business said the economic slowdown had hit demand for its tools.
The telecoms network testing company said it had seen some customers exercise caution at the end of last year and said the trend had continued into 2023.
It warned its outlook for the first half of the year is weak and said momentum would only pick up in the second half of the year if customers follow through with their intention to install 5G infrastructure.
Its shares slumped as much as 17pc to an intraday three-year low today.
11:34 AM
Britain should launch own version of Biden’s green subsidies, says IoD
Britain should launch its own version of Joe Biden’s controversial green subsidies to avoid being “left behind in the accelerating race to lead the green economy”, according to business leaders.
The $454bn Inflation Reduction Act, approved by senators last August, gives substantial financial subsidies to companies investing in green technologies that are based in the US.
It has drawn criticism for being protectionist but Dr Roger Barker, director of policy at the Institute of Directors (IoD), called it a “game changer which cannot be ignored by UK policy makers”.
Nearly eight in ten businesses surveyed by the IoD backed a British version of the scheme. Mr Barker said:
In 2021, Prime Minister Boris Johnson announced that the UK’s strategy was to ‘lead the world in ending our contribution to climate change’. However, we have now reached a situation in which that rhetoric needs to be converted into substance.
A particular concern is that short-term budgetary concerns will override the strategic imperative of establishing market leadership positions in green business.
It’s imperative that government and the private sector work together, otherwise the UK will find itself left behind in the accelerating race to lead the green economy.
The UK deserves nothing less than its own version of the Inflation Reduction Act – to ensure that the UK becomes the global location of choice for all forms of green investment.
11:21 AM
European consumers expect inflation to fall ‘significantly,’ ECB data show
Consumers expect inflation in the eurozone to recede “significantly” over the next three years, according to the European Central Bank.
In January, people thought inflation will fall to 2.5pc over the next three years, down from 3pc in December, the ECB said in its monthly survey.
Over the next year, it is expected that prices rises will fall back from 5pc to 4.9pc.
Next week, policymakers are expected to raise interest rates by half a point to 3pc, with the markets pricing in a peak of 4.06pc by October.
11:04 AM
Elon Musk questions work ethic of disabled employee sacked by Twitter
Elon Musk has publicly questioned the work ethic of a disabled Twitter director who was forced to contact the billionaire personally to ask if he’d been sacked.
Senior technology reporter Matthew Field has the details:
Haraldur Thorliefsson, an Iceland-based Twitter designer, made contact with the Twitter owner after he was locked out of his account without being told if he still had a job.
Mr Thorliefsson, who uses a wheelchair, sent a Tweet to Mr Musk asking: “[Nine] days ago the access to my work computer was cut, along with about 200 other Twitter employees.
“However, your head of HR is not able to confirm if I am an employee or not. You’ve not answered my emails.”
Read how Mr Musk responded on Twitter.
10:49 AM
German factory orders deliver surprise rise
German industrial orders climbed for a second straight month in January, official data showed today, as Europe’s top economy weathered the fallout from Russia’s war in Ukraine better than expected.
New orders, which provide a foretaste of industrial output, rose 1 percent compared to the previous month, federal statistics agency Destatis said.
The figure surprised analysts, who had predicted a decline in factory orders for January.
Destatis said the increase was driven by large orders in aircraft and spacecraft construction from outside the eurozone.
The manufacturing data added to signs “that the current phase of economic weakness will be mild”, the economy ministry said in a statement, noting the “improved business climate in recent months”.
Germany’s economy has proved unexpectedly resilient to the shocks from the Ukraine war, partly thanks to government measures to cushion the impact of higher energy costs and efforts to diversify gas supplies.
10:31 AM
Pound slips after Bank of England official’s warning
The pound has edged lower following comments from Bank of England policymaker Catherine Mann suggesting that sterling could weaken.
Ms Mann warned that there may be “more to go” in the depreciation in the pound as markets adjust to higher forecast rises in interest rates from the US Federal Reserve and the European Central Bank.
However, the reaction has been fairly muted, with the pound down 0.2pc against the dollar at $1.20.
The pound is flat against the euro and is trading near 89p.
10:24 AM
Early retirees facing pension cash crunch, warns Bank of England official
Over-50s who retire early will have to return to the workforce to top up their pensions, a Bank of England policymaker has warned.
Catherine Mann, a member of the monetary policy committee, said people retiring at the age of 55 faced a challenge to make sure their retirement savings “match your longevity”.
She also warned it would be “more difficult” for them to return to the labour force a few years down the line.
She told Bloomberg TV: “There’s a challenge to making sure that your retirement savings are going to match your longevity.
“And so I’m worried that a couple of years down the line, we’re going to see people trying to come back into the labour force and that’s going to be much more difficult.
“Now we have seen just a little bit of an indication that the people who have taken early retirement might be coming back for part time positions. But it’s early days on that.
“And as I say, I worry that people are going to find that their pensions are not sufficient for their preferred lifestyle and are going to want to come back.”
She warned that there would “perhaps not” be a meaningful number who return to boost the economy.
Meanwhile, Ms Mann said supply issues in the UK economy will limit how much it can grow.
She said that it is “really is striking how slow growth is in the UK”. She said:
The concern that I have is… the supply side.
We did a supply stock take that we outlined in our monetary policy report for the February edition and it really is striking how slow growth is in the UK.
It is much slower than what we observed for the US and euro area.
The supply side sets the speed limit for how much the economy can grow without generating inflation and so I really worry about the supply side of the UK economy.
She said Brexit “is a factor” on both the supply side and pricing power.
10:08 AM
‘More revival’ coming for housing market, says Bank of England chief
The housing market faces “more revival” in prices as more competition returns to the mortgage market, according to a Bank of England chief.
Monetary policy committee Catherine Mann did not suggest that the housing market faces a heavy downturn this year, as some analysts have predicted.
She told Bloomberg TV:
There are a lot of different factors on the housing market that we need to consider.
One of the important questions is about the wealth effect. A lot of prices have appreciated dramatically in the past couple of years so there is some price depreciation but it is really not much compared to how much prices appreciated over the last couple of years.
So we have to take into account what the starting point was as well as the dynamics of the current pricing power.
We see a reduction in mortgage rates from the high point last fall. We see more competition in terms of products coming from various lenders.
That suggests to me that there’s more revival in the process as opposed to a continued downward momentum.
09:58 AM
Pound could fall further, warns Bank of England chief
Bank of England policy maker Catherine Mann said the pound could weaken further in the coming months as the US Federal Reserve and European Central Bank raise interest rates.
The member of the Bank’s monetary policy committee told Bloomberg TV:
There has been a quite a hawkish tone coming from the Federal Reserve and ECB.
An important question in regards to the pound is how much of that existing hawkish tone is already priced into the pound.
If Fed hawkishness is not priced in, the pound could fall further.
She warned that there may be “more to go” on the depreciation in the pound.
09:48 AM
Inflation may rise as consumers willing to accept higher prices, warns Bank chief
Consumers being willing to pay higher prices for goods have could stoke inflation further, a Bank of England chief has warned.
Catherine Mann, a member of the monetary policy committee, said she was “concerned” about the “strong pricing power off firms” and that many consumers had shown “acceptance of those higher prices”.
She also said she felt vindicated for pushing for interest rate rises earlier last year but acknowledged “that the external forces were going to be there anyway” driving inflation, she told Bloomberg TV.
On inflation, she said:
The part I’ve always been concerned about is the extent to which there is strong pricing power of firms, there is acceptance of those higher prices by a lot of consumers.
Even in the face of the cost of living crisis there still are a lot of people out there who are willing to pay higher prices and firms are willing to set those prices high.
09:39 AM
Lego profits rise despite inflation impact
Lego has revealed that its revenue and profits rose last year as demand for its plastic bricks remained strong despite inflationary headwinds.
For 2022, net profit at the Danish firm rose 4pc to 13.8bn kroner (£1.6bn) while sales jumped 17pc to 64.6bn kroner (£7.7bn).
“These results were delivered despite extraordinary inflationary pressures on materials, freight and energy costs,” the company said in a statement.
Excluding currency effects, the sales gain was 11pc. The privately-held company did not provide unit sales.
The firm, in which the holding company of Denmark’s Kirkbi family owns 75pc with the rest being held by the Lego Foundation, said sales improved in all markets and its market share grew globally.
“The company expects single digit revenue growth in 2023, ahead of the global toy market and will continue to accelerate investments in strategic initiatives,” it said.
It has been buoyed both by sets based on franchises such as Star Wars and Harry Potter as well as home-grown hits like Lego Friends and Lego Technic.
09:19 AM
Housing slowdown to last all year, Foxtons warns
The property sales market will be hit through the majority of this year, Foxtons has warned, as it more than doubled pre-tax profits.
The London estate agent’s chief executive Guy Gittins, who has been in the job for six months, said the “macroeconomic backdrop remains uncertain”.
The company increased revenues last year by 11pc to £140.3m and boosted pre-tax profits by 115pc to £11.9m.
However, while it said the outlook for the rental sector remained resilient as demand outstrips supply, the company was more cautious about the sales market.
Mr Gittens said: “The overall outlook for 2023 is expected to be more challenging than 2022, due to the highly uncertain macroeconomic backdrop, including significantly higher interest rates and inflation levels than in prior years impacting the sales market.
“In sales, we entered 2023 with a smaller under-offer pipeline than the prior year as a result of sales market volatility following the September mini-Budget.
“With the typical property purchase taking over four months to complete, we expect sales revenue to be adversely impacted through the majority of 2023.”
Foxtons’ share price has risen 1pc as it said trading in January and February this year was in line with forecasts.
It revealed it more than doubled annual profits a day after announcing the £7.4m acquisition of Atkinson McLeod.
The estate agent said the deal – which adds another 1,100 tenancies and annualised revenues of around £3m – would enhance its earnings this year.
Lettings are expected to remain resilient as demand for rental properties outstrips supply in the near term.
However, it said rental price growth would likely normalise over the course of the year, while its outlook for the sales market was more gloomy.
Mr Gittens said: “While it remains extremely difficult to forecast the sales market, recent reductions in mortgage rates are encouraging buyer enquiries which may result in a more favourable sales market in the latter part of the year.”
08:48 AM
FTSE 100 inches up as Ashtead boosts forecast
The FTSE 100 snuck higher amid losses in material stocks following lacklustre economic data from top commodity consumer China.
The large-cap index was up 0.1pc to 7,937.87 as an upbeat performance by equipment rental giant Ashtead helped lift the market after it forecast strong annual numbers.
However, industrial metals miners shed 0.1pc after trade data from China pointed to continued weakness in demand for the country’s products during the January-February period.
Lifting the industrial goods and services sector, shares of Ashtead Group rose 2.9pc after the company forecast annual results ahead of its estimates and also raised capital spend outlook for the next year.
The FTSE 250 has risen 0.2pc to 20,094.38.
Later in the session, Federal Reserve Chair Jerome Powell is expected to testify before the Senate Banking Committee and markets will scrutinise his remarks for clues on the direction of US interest rates.
08:42 AM
Germany to build hydrogen-operated gas power plants
Germany will build new gas-fired power plants to be operated with hydrogen, German Chancellor Olaf Scholz has revealed.
Europe’s biggest economy is looking to boost its climate-friendly energy sources and also move past the huge fluctuations in energy prices experienced since Russia invaded Ukraine.
Mr Scholz said in a speech: “We are not losing sight of the goal of decarbonisation: in order to stabilise supply, we will build new gas-fired power plants which can be operated with hydrogen in the future.”
In a prepared text of the speech, he said the capacity of the new plants would be 17-21 gigawatts.
08:37 AM
Soaring cost of newsprint hits Mirror-owner’s profits
The publisher of the Daily Mirror and Express newspapers has revealed that annual profits tumbled by more than a quarter as it saw costs surge by 40pc and a drop in advertising demand.
Reach, which also owns the Daily Star and a raft of regional titles across the UK, posted underlying pre-tax profits down by 28pc to £103.3m.
Underlying operating profits dropped 27pc to £106.1m.
It said soaring inflation – largely due to rising newsprint costs – pushed up its operating costs by around £40m over the year and hit demand from advertisers.
Reach saw ad revenues plunge 15.9pc in the year to Christmas Day, while circulation fell 1.7pc with falls limited by cover price increases in the second half of 2022.
Reach warned that trading remains “challenging” into 2023, with ongoing falls in demand for digital advertising.
08:31 AM
Wood Group surges after rejecting fourth takeover bid
Wood Group is topping the FTSE 250 once again after it rebuffed a fourth takeover offer from Apollo Global Management, saying it undervalued the business.
The 237-pence-a-share offer comes after the engineering consultancy said it had rejected three unsolicited proposals from the private equity giant last month.
Wood’s stock fell nearly 30pc last year but has rallied 63pc in 2023. The Scottish group said:
The board believes this latest proposal continues to undervalue the group and is therefore minded to reject.
The board will continue to engage with its shareholders and intends to engage further, on a limited basis, with Apollo.
Takeover rules mean Apollo must either announce a firm intention to make an offer or say it does not intend to bid by 5pm on March 22.
Wood Group shares have risen 12.3pc to 218p in early trading.
08:23 AM
Gas prices rally as cold weather sets in
European natural gas prices rebounded amid signs that colder-than-usual weather will extend into April, posing a potential pressure point for the continent’s supplies.
Benchmark futures gained as much as 3.2pc today after slumping to the lowest since August 2021 on Monday.
Temperatures across northwest Europe and the Nordics are forecast to stay below seasonal norms until mid April, according to the month-ahead outlook of the European Centre for Medium-Range Weather Forecasts.
Full storage units have saved the region from the worst of the energy crisis this winter.
However, icy conditions this month have already increased withdrawals from gas storage sites, which will need to be refilled over the summer.
It comes as competition for liquified natural gas is intensifying amid re-emerging demand in Asia.
Dutch front-month futures, Europe’s gas benchmark, were up 1.2pc to €42.65 a megawatt-hour.
08:02 AM
Tepid open on the markets
Markets were mixed at the open as traders geared up for this week’s release of key US jobs data and Federal Reserve chief Jerome Powell’s testimony today.
The FTSE 100 was flat at the open at 7,929.02 while the domestically-focused FTSE 250 rose 0.5pc to 20,022.63.
08:00 AM
Valentine’s Day helps retail sales hold up in February
Retail sales held up better than expected in February as consumers proved they are still ready to celebrate events such as Valentine’s Day despite the-cost-of living crisis.
Total UK retail sales were up 5.2pc in February against an increase of 6.7pc for the same month last year – below the three-month average of 5.5pc and above the 12-month average of 2.4pc, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor.
Food sales increased by 8.3pc over the three months to February and non-food sales were up 3.2pc while online non-food sales fell by 3.1pc against a decline of 28.4pc last February.
BRC chief executive Helen Dickinson said:
While the cost-of-living crisis has made customers increasingly price-sensitive, they are still ready to celebrate special occasions.
This helped deliver strong sales of fragrance and jewellery for Valentine’s Day. Energy-saving appliances also continued to sell well, but the rush for warm coats and boots subsided as the January sales splurge satisfied customer appetite.”
The economic backdrop means retailers face volatile trading conditions. Many consumers will be concerned as they prepare for further energy price and tax rises in April.
07:53 AM
Extra power plants told to fire up in safeguard against blackouts tonight
National Grid has issued a rare second-stage warning that the margin between electricity supply and demand will be tight today as a cold snap sweeps Britain.
The shortfall is as much as 980 megawatts, which is larger than the current contingency requirement of 700 megawatts.
The so-called “margin notice” effectively tells the market that the grid wants more generation to come online this evening.
Issued by the grid manager’s control room, it goes beyond the automatic warnings which have already been triggered several times this winter. The notice said:
An electricity margin notice (EMN) has been issued to the market.
This is a routine tool that we use most winters, and means we are asking generators to make available any additional generation capacity they may have.
The EMN does not mean electricity supply is at risk.
It comes as the grid warmed up four of its five back-up coal power stations as temperatures in London fell to as much as 5.1C below normal overnight.
Meanwhile, wind generation slumped to provide just 14pc of the nation’s power capacity. It presently sits at around 25pc.
07:45 AM
Housing market ‘near the end of a long hangover’
Annual house price growth stood at 2.1pc in February for the third month in a row, according to the Halifax house price index.
Average house prices in London have fallen by 0.9pc over the past year – possibly affected by the capital’s large proportion of flats, Halifax said.
Nathan Emerson, chief executive of estate agents’ body Propertymark, said:
Year on year, estate agents across the UK have seen a small drop in the number of sales being agreed whilst the number of new properties coming to market has remained the same.
Increases to interest rates have caused buyers to rethink their budget and haggle on price, but the drive evidently still remains to see their purchase through and move home.
Tom Bill, head of UK residential research at estate agent Knight Frank, said:
The UK housing market appears near the end of a long hangover from the mini-budget rather than on the verge of a price plunge.
Activity stopped well before Christmas due to the mortgage market turmoil but has picked up this year as people come to terms with where rates are settling.
07:33 AM
Mr Kipling maker boosts profit forecasts
Mr Kipling cake firm Premier Foods has hiked its annual profit guidance as sales growth remains in double digits thanks to a strong performance in its grocery arm.
The group, which also owns a raft of well-known brands such as Oxo cubes and Bisto, said it is on track for sales in its fourth quarter to be at least 10pc higher than a year ago.
This is putting it on track to beat earnings expectations, with underlying pre-tax profits now set to be around £135m over the year to April 1, which will be about 10pc higher than 2021-22.
Trading profit is expected at around £155m, also about 10pc higher.
07:29 AM
Cost-of-living crisis boosts Greggs sales
Greggs has revealed its sales jumped by nearly a quarter last year as it said the cost-of-living squeeze has led more consumers to rely on low-cost meals.
The bakery chain reported total sales of £1.5bn over 2022, a 23pc increase on the £1.2bn reported the previous year.
It opened a record 186 new shops and extended opening hours for around 500 to 8pm or beyond, which it said had led to a wave of consumers coming to Greggs for hot evening meals.
The group’s pre-tax profit lifted by just 1.9pc over the year, however, after it was hit by steep cost inflation and the withdrawal of the Government’s pandemic support.
07:20 AM
Differences in Halifax and Nationwide data
The latest data from Halifax, which is based on mortgage approvals, is markedly different from figures from Nationwide for February, which follows the same metric.
Mortgage approval data are considered to offer a more concrete indication of the agreed sale price of properties, and are considered particularly reliable and up-to-date.
It is raising some eyebrows:
07:10 AM
House prices rise as falling mortgage rates boost confidence
House prices increased last month, according to an influential index, as reductions in mortgage rates and improving consumer confidence helped stabilise the market.
The average sale price stood at £285,476 in February, a rise of 1.1pc from £281,684 in January, according to lender Halifax.
The annual rate of house price growth has sped up to 2.1pc, up from a rise of 0.2pc in January and a fall of 1.3pc in December.
Kim Kinnaird, director, Halifax Mortgages, said: “Recent reductions in mortgage rates, improving consumer confidence, and a continuing resilience in the labour market are arguably helping to stabilise prices following the falls seen in November and December.”
It comes after lender Nationwide said house prices suffered their worst slump in 11 years last month.
It said annual house prices declined on an annual basis by 1.1pc, which was the market’s worst performance since November 2012.
The property market has come under pressure after a surge in mortgage rates following the mini-Budget last September and the Bank of England raising interest rates for ten consecutive months to 4pc in an effort to bring down inflation.
House prices actually fell on a quarterly basis, according to the Halifax, but this came after falls in November and December.
Kim Kinnaird, director, Halifax Mortgages, said:
When comparing to January, there was a 1.1pc increase in house prices through the month of February, although overall prices are flat compared to three months ago.
Recent reductions in mortgage rates, improving consumer confidence, and a continuing resilience in the labour market are arguably helping to stabilise prices following the falls seen in November and December.
Still, with the cost of a home down on a quarterly basis, the underlying activity continues to indicate a general downward trend.
In cash terms, house prices are down around £8,500 (-2.9pc) on the August 2022 peak but remain almost £9,000 above the average prices seen at the start of 2022 and are still above pre-pandemic levels, meaning most sellers will retain price gains made during the pandemic.
With average house prices remaining high housing affordability will continue to feel challenging for many buyers.
07:05 AM
Good morning
House prices have grown 2.1pc in February compared to the same month last year as lowering mortgage rates improve the outlook for the market.
House prices were up 1.1pc on January, according to the Halifax house price index, and stood at £285,476.
5 things to start your day
1) Emmanuel Macron’s Olympic dreams threaten more post-Brexit border delays | Continued use of manual passport checks could see Britons stuck in long summer queues
2) Andrew Bailey hits out at post-Brexit reforms to protect City | Overhaul increases the risks of insurance failure by a fifth, Bank of England Governor warns
3) Twitter hit by biggest malfunction since Musk deal | Images and links break after website overhaul has ‘unintended consequences’
4) National Grid warms up emergency coal plant ahead of cold snap | Energy network braces for surge in demand
5) CBI boss steps aside following complaint about unsolicited messages | Tony Danker apologises for causing ‘completely unintentional’ offence
What happened overnight
Asian shares were mostly higher in muted trading, as investors tried to digest a slew of economic data and awaited moves by the US Federal Reserve.
Japan’s shares closed higher, with the benchmark Nikkei 225 index gaining 0.3pc to end at 28,309.16, while the broader Topix index climbed 0.4pc to 2,044.98.
Australia’s S&P/ASX 200 gained 0.5pc to 7,366.90. South Korea’s Kospi added 0.3pc to 2,471.02. Hong Kong’s Hang Seng jumped 1.2pc to 20,850.18, while the Shanghai Composite edged up 0.2pc to 3,327.35.
The Reserve Bank of Australia decided to raise its key rate, cash rate target, 0.25 of a percentage point to 3.6pc. It said that although global inflation remains high, inflation in Australia is starting to subside. The hike was expected.
Wall Street stocks were mixed yesterday while bond yields stabilised, as investors await Fed Chair Jerome Powell’s congressional testimony later this week which will set expectations for the US central bank’s upcoming policy meeting.
The Dow Jones Industrial Average closed 0.1pc higher at 33,431.44. The S&P 500 closed up 0.1pc at 4,048.42, while the tech-rich Nasdaq Composite dipped 0.1pc lower at 11,675.74.
The yield 10-year Treasuries, the benchmark for global borrowing costs, advanced three basis points to 3.98pc.
Source: https://finance.yahoo.com/news/ftse-100-markets-live-news-070613880.html