The Bank of England has raised interest rates to 1.25% in its fifth consecutive rate rise as it warned that inflation would exceed 11% in October (The Times £).
UK interest rates could rise to 3% by the end of the year, financial markets believe, as the Bank of England has to ramp up its measures to fight inflation (The Times £)
The Bank also said it was ready to “act forcefully” if required, signalling further rate rises in the coming months (The Guardian).
The FTSE 100 slumped 3.1%, or 228.43 points, to 7044.98 points, wiping £60bn off the value of Britain’s biggest listed companies, following a gloomy update from the Bank of England (The Mail).
Shares in Asia followed Wall Street lower after the UK and Switzerland raised interest rates, adding to concerns that tighter monetary policies from central banks could undercut a global economic recovery (The Financial Times £).
After a relief rally on Wednesday when investors welcomed the US Federal Reserve’s aggressive move to raise rates by 75 basis points — its biggest since 1994 — two further rounds of policy tightening in the UK and Switzerland led investors to focus on the prospect that economic growth could slow dramatically, damaging consumer confidence as the cost of borrowing rises (The Times £).
UK consumers are trading down and trimming spending as the cost of living crisis puts pressure on household budgets, business leaders have warned (The Times £).
Two investment groups that had raised the possibility of making bids for ecommerce retailer THG said on Thursday they had no plans to do so, presenting a fresh setback for the company’s shareholders (The Financial Times £).
A consortium fronted by Belerion Capital, which is run by Iain McDonald, who has been an early backer of THG and a non-executive director since 2010, confirmed this morning that together with King Street Capital Management it “does not intend to make an offer for the company” (The Times £). Three and a half hours later Nick Candy, the property tycoon, also said that he did not intend to make an offer.
Candy previously made two fully funded bids for THG but both were rejected by its shareholders, according to sources close to the matter (The Mail). A third offer was thought to have been in the works, but Candy had been forced to pull out when THG declined to give him access to the information needed to perform due diligence checks.
The announcements sent THG shares tumbling by another 29% to 74.4p on Thursday, meaning their value has plunged by 85% since floating on the London Stock Exchange in September 2020 (The Mail).
Overweight England struggles to break the ‘junk food cycle’ (The Financial Times £). “Boris Johnson’s new health strategy is undermined by stress on ‘individual responsibility’, experts say.”
The Financial Times (£) asks in an opinion column following a recent crackdown from the ASA on Tesco: “Does the consumer world need to tone down the green talk, for its own good?”. “There is a risk that, even as regulators crack down on greenwashing, consumers become more cynical.”
Morrisons mistakenly listed a bottle of Glenlivet Caribbean Reserve whiksy for £2.50 online, a 93% discount from its usual price of £36 (The Guardian). The retailer identified the pricing error on its website before any bottles were sold.
The US cosmetics group Revlon has filed for bankruptcy protection after battling supply chain problems and failing to compete with celebrity-backed and social media-savvy upstarts (The Financial Times £).
The New York-based company said that on court approval, it expects to receive $575m (£469m) in financing from its existing lenders, which will allow it to keep its day-to-day operations running (The Guardian).
Severe weather sweeping through the US midwest has forced the plant that produces much of America’s baby formula to shut down again, once again putting a chokehold on the country’s struggling baby formula supply chain (The Guardian).
McDonald’s has agreed to pay €1.25bn to settle a dispute with French authorities over claims the fast-food chain diverted income abroad to cut its tax bill (The Financial Times £).
Pandemic dividend fades into a distant memory for ecommerce, writes The Financial Times (£). “Online shoppers have been more than happy to get back to the stores.”
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