World No 1 Jannik Sinner WITHDRAWS from Paris Olympics due to tonsillitis - shortly after suffering with an illness at Wimbledon - and admits it's a 'huge disappointment' to miss the Games

World No 1 Jannik Sinner has withdrawn from the Paris Olympics after suffering with tonsillitis. 

The Italian recently struggled with dizziness and went off court for a medical timeout during his quarter-final defeat to Daniil Medvedev at Wimbledon.

Now, the 22-year-old has been forced to miss out on the upcoming Games in the French capital and confirmed the news via a post onto his social media. 

Speaking on X, Sinner wrote: 'I am saddened to inform you that unfortunately I will not be able to participate in the Paris Olympic Games.

'After a good week of clay training I started to feel unwell. I spent a couple of days resting and during a visit the doctor found tonsillitis and strongly advised me against playing.

'Missing the Games is a huge disappointment as it was one of my main goals for this season. I couldn't wait to have the honor of representing my country in this very important event.

'Good luck to all the Italian athletes who I will support from home. Forza Italia'.

The tournament takes place from 27 July to 4 August.

Earlier this month, after his defeat to Medvedev, Sinner admitted he was struggling with dizziness.

'Already this morning I didn't feel great. Had some problems. Then with the fatigue… it was tough,' said the 22-year-old. 'I was not feeling great. I didn't vomit but took some time because I was dizzy.

'It was not easy. I tried to fight with that what I had today.'

Sinner had been one of the favourites to win gold at the competition but, following his withdrawal, Novak Djokovic is now the number one seed.

Meanwhile, Andy Murray has confirmed that the Paris Olympics will be the 'last-ever tennis tournament' of his illustrious and tenacious career. 

The 37-year-old is calling time on an incredible career which has seen him win three Grand Slams, 46 ATP Tour singles titles, and two Olympic gold medals. 

Murray had hoped to enjoy a full swansong at Wimbledon earlier this summer but a back injury forced him out of the men's singles draw and Emma Raducanu withdrew from their mixed doubles arrangement with a wrist problem. 

He wrote on X: 'Arrived in Paris for my last ever tennis tournament. 

'Competing for Great Britain have been by far the most memorable weeks of my career and I'm extremely proud to get do it one final time

Barbora Krejcikova beats Jasmine Paolini to win Wimbledon and end three-year wait

2023 was declared the year of the 'Barbie girl summer' thanks to the release of the movie. But Barbora Krejcikova revived the Barbie name 12 months later as she lifted her second Grand Slam singles title at Wimbledon.

More than three years after her first victory at the French Open, Krejcikova got her hands on the Venus Rosewater Dish, continuing the legacy of Czech success at SW19.

The world No. 32, who has struggled with injuries and illness in recent months, completed an incredible redemption arc at Wimbledon, beating Jasmine Paolini 6-2 2-6 6-4.

Just five weeks after losing her maiden Grand Slam final at the French Open, Paolini had the chance to redeem herself at Wimbledon. The Italian won only three games against Iga Swiatek in Paris and it was another tough start at the All England Club as the 31st seed immediately broke her.

Paolini was clearly feeling the heat as she hit two unforced errors in her opening game and Krejcikova took it on a winner. The Centre Court fans spurred on the world No. 7 as she stepped up to serve again and there was a massive cheer when she won just her second point of the final to go 15-30. And Paolini survived a 14-point game to get herself on the board.

With Krejcikova serving at 2-1, they played an incredible 15-shot rally that left spectators screaming as it looked like the point should've been over multiple times. Five-foot-four Paolini lobbed Krejcikova but came out on the losing end and she went on to lose four of the next five games as the former French Open winner raced into a 6-2 lead.

The seventh seed took a brief bathroom break after dropping the opener and was greeted with cheers when she returned to Centre Court. Krejcikova stopped a point in the first game of the second set to challenge. It was yet another thing that went her way in the final but Paolini got on the board, much to the crowd's delight.

The momentum suddenly shifted and Krejcikova played a sloppy game, spraying errors to give Paolini her first break as the spectators collectively cheered in her favour. She was back under pressure in the next game, sending a volley wide to give her opponent a break-back point. But she held on and extended her lead to 3-0 while the Czech star was left unhappy when fans celebrated mid-point.

As Krejcikova served to stay in the set, Paolini enjoyed a stroke of luck when the ball touched the net tape and dribbled over. The 31st seed returned it but Paolini challenged and was successful, giving her a set point. And a Krejcikova unforced error sealed the deal for the world No. 7, who roared as she forced a decider.

 

Paolini sent a statement as she started the third set with a love-hold, throwing in her third ace of the day. But Krejcikova responded with a love game of her own, setting the tone for the decider. The Italian was the first to find herself in trouble, trailing 0-30 in the seventh game. On break point, she hit her first double fault of the final to hand Krejcikova a crucial advantage.

Cheers and applause rang out through the stands as Paolini got herself on the board again and sat down at 4-5, forcing the world No. 32 to serve it out herself. It became a rollercoaster final game. Krejcikova saved a break point with a winner but Paolini earned a second and the fans were on their feet, willing her on to produce a miracle.

But Krejcikova silenced them with a 108mph serve as Paolini's return went flying out of the court, sealing victory for the 31st seed. It means more Czech success in the women's field at Wimbledon, as Krejcikova follows the likes of Jana Novotna, Martina Navratilova and last year's champion Marketa Vondrousova by lifting the title.

US stock market tumble as Tesla and Google results spark sell-off

US stocks suffered their worst sell-off in more than a year on Wednesday after disappointing results from Tesla and Google-owner Alphabet fuelled fears that the high valuations of the large technology companies.

The tech-rich Nasdaq Composite index finished down 3.6 percent for its worst day in two years, while the S&P 500 dropped 2.3pc for its fifth drop in the last six days and the steepest one day fall in over a year. The Dow Jones Industrial Average of 30 leading American companies lost 1.3pc.

Tesla plunged 12.3 percent after reporting a 45pc drop in profit for the spring and missing earnings estimates.

Its chief executive, Elon Musk, touted progress on robotic and artificial intelligence technology but analysts said the results added to worries about weakening profit margins amid ebbing demand for Tesla’s electric vehicles. 

Tesla is one of Wall Street’s most valuable companies not just because of its electric vehicles but also because of its AI initiatives, such as a robotaxi. According to UBS analysts the “challenge is that the time frame, and probability of success is not clear.”

Meanwhile Google-owner Alphabet fell 5pc even though it delivered better profits for the latest quarter than expected. 

Analysts pointed to some pockets of weakness underneath the surface, including weaker growth in advertising revenue for YouTube than expected. They also said increased AI investments and other spending could crimp how much cash it generates.

The sell-off affected a wide range of companies that are betting on artificial intelligence for future growth. Britain’s Arm Holdings dropped 8.2pc on the Nasdaq, while rival chip designer Nvidia fell 6.8pc.

Tesla and Alphabet are among the so-called “magnificent seven” technology stocks that investors have piled into in recent years, sending their valuations to new heights.

Profit expectations are high for the companies which have been responsible for the majority of the S&P 500’s run to records this year, when many other stocks struggled under the weight of high interest rates. But some analysts have questioned whether these stocks are now too expensive.

“There may be a little AI fatigue, just because some of these investments that the Big Tech companies have made in AI may not be paying off in the time period that investors had in mind,” said Neville Javeri, portfolio manager at Allspring Global Investments.

Some investors have been moving their money away from Big Tech to smaller companies.

The Russell 2000 index of smaller US stocks had leaped at least 1pc in seven of the last 10 days, though it was also hit on Wednesday, dropping 2.1pc.

Read the latest updates below.

06:27 PM BST 

06:26 PM BST

Billions wiped from Gucci-owner and LVMH amid luxury slowdown

Billions of euros have been wiped off the value of Gucci-owner Kering and its larger rival LVMH, as luxury giants are struck by a spending slowdown.

Shares in French group Kering, which also owns brands including Boucheron and Balenciaga, plunged to their lowest level since 2017 on Wednesday.

Louis Vuitton maker LVMH fell to a six-month low. The two companies’ market capitalisation dropped by around €1.7bn (£1.4bn) and €16.6bn respectively.

It came amid concerns over weaker demand for designer products. The latest sell-off was sparked by a trading update from LVMH on Tuesday.

The company, which is the world’s largest luxury group, warned over a slowdown in demand in Asia, with its sales growth missing analyst forecasts.

The update was viewed as a sign that Chinese customers are still reining in spending on couture pieces and expensive handbags after a boom in sales in the country ran out of steam.

It dragged shares in rival luxury companies down on Wednesday, with Kering ending the day around 4.5pc lower ahead of its own trading update. Cartier owner Richemont and Prada also were hit by the sell-off, with shares falling 1.7pc and 5.5pc respectively.

After the markets closed, Kering fired a fresh warning shot over its trading. It said profits could plunge by almost a third in the second half of the year, following a 42pc drop in the first half of 2024.

Kering said the fall came amid fragile consumer confidence across regions.

However, the French group has also been battling to revive demand for Gucci, its biggest brand, over the past year. Gucci accounts for around two thirds of its profits.

Last year, Kering bought in Sabato de Sarno as the brand’s new designer in a bid to boost appetite for Gucci products.

It followed a period where the brand had gone after younger, more aspirational US and Chinese shoppers, which critics argued had eroded the exclusivity of Gucci.

Kering said sales at Gucci were down by a fifth in the first half of 2024. This compared to a 7pc sales decline at Kering’s Yves Saint Laurent and 3pc sales growth at Bottega Veneta.

François-Henri Pinault, Kering’s chairman and chief executive, said: 

In a challenging market environment, which adds pressure on our top line and profitability, we are working assiduously to create the conditions for a return to growth.

06:07 PM BST

World’s most luxurious superjumbo jets saved from scrap heap

The world’s most luxurious fleet of A380 superjumbo jets has been saved from the scrap heap after operator Qatar Airways opted to upgrade them amid a boom in long-haul travel. Christopher Jasper reports:

Eight of the Airbus behemoths, which can carry more than 500 passengers, will be kept operating to maximise capacity at airports such as Heathrow instead of retiring as they approach 10 years of age.

The superjumbos, already among the most luxurious in the skies, will now undergo a series of modifications to prepare them for more years of use, Badr Al Meer, the Qatar Airways chief executive, said at the Farnborough International Airshow.

The work will begin with an upgrade of the fleet’s onboard wi-fi, which is too slow and patchy, he said, before progressing to an overhaul of passenger cabins.

That could open the way for installation of a new version of the airline’s super-luxurious Q Suite business class seats unveiled this week.

Read the full story...

05:55 PM BST

Another fire at Novo Nordisk extinguished

Danish drugmaker Novo Nordisk, the maker of popular weight-loss drug Wegovy, said a minor fire broke out earlier today at its research center in Maaloev, northeast of Copenhagen, and that the fire was later put out.

A Novo Nordisk spokesperson said:

We can confirm that the fire brigade was called to our site in Maaloev earlier today. Smoke was observed coming from the basement of one of our buildings. Everything is now under control.

This is a minor incident, and not to be compared with the previous.

The fire at the Maaloev research centre, Novo’s largest, happened just over a month after a fire broke out at the company’s headquarters in Copenhagen on June 18.

A fire was also reported at a Novo construction site in the Danish city of Kalundborg on May 16 and one of its office buildings, in Bagsvaerd, was hit by a fire on May 22.

05:54 PM BST

Future of copper coins in doubt as card payments increase

The future of 1p and 2p coins is in doubt after the Treasury reportedly did not order any new ones this year and does not expect to order any in the coming years.

The Evening Standard said that officials are believed to be considering scrapping 1p and 2p coins altogether as one of a range of options as the use of cash declines.

A HM Treasury spokesperson said:

The Royal Mint produces coins according to expected demand, existing buffer stocks, and orders placed by industry. We are confident there are enough coins in the system, with estimates of approximately 27 billion in circulation in the UK. The Treasury has no current plans to change the mix of UK coins.

05:41 PM BST

European shares end lower as profits disappoint

European shares closed lower on Wednesday, dampened by luxury stocks after dour results from LVMH weighed on the sector, while a raft of lacklustre corporate earnings in other parts of the market like banks also added to the downbeat mood.

The pan-European Stoxx 600 index closed 0.6pc lower, with technology the top sectoral decliner with a 2.4pc loss, as Dutch chip-making equipment supplier ASM International dropped 9.4pc.

The French benchmark Cac 40 index lost 1.1pc, underperforming other regional European bourses. Germany’s Dax is down 0.9pc.

05:37 PM BST

Abu Dhabi invests $100m in British microchip champion

Abu Dhabi has invested $100m (£77m) in one of Britain’s biggest microchip companies as the Gulf state seeks to become a major player in artificial intelligence (AI). Our technology editor James Titcomb has the story:

Fortress Investment Group, owned by Abu Dhabi’s wealth fund Mubadala Capital, has backed Imagination Technologies with a loan that can convert to equity in the company over time.

Imagination, which supplies microchip technology to companies including Apple, is currently owned by a private equity business linked to the Chinese state.

Its Chinese ownership has been controversial since the company was taken off the London Stock Exchange in 2017 in a £550m deal. In 2020 the Commons foreign affairs select committee intervened in a board takeover by the Chinese investor.

Fortress’s backing is the first new investment in the company since the takeover. Terms of the deal have not been disclosed but it is unlikely to trigger national security scrutiny as Fortress is acquiring a minority holding in the business.

05:26 PM BST

Nasdaq hits one-month low

The Nasdaq fell nearly 3pc to a one-month low this afternoon after Tesla and Alphabet disappointed with lackluster earnings, prompting investors to question if the Big Tech and AI-fueled 2024 equity rally was sustainable in the long run.

Tesla and Alphabet dragged the S&P 500 Communication Services and Consumer Discretionary sector indexes down more than 3pc each.

Tom Plumb, chief executive and portfolio manager at Plumb Funds, said:

There was obviously nothing positive [in the results] and this market requires something to exceed expectations to keep itself going.

The benchmark S&P 500 dropped to a three-week low, pulled down by a 3pc drop each in Apple, Microsoft, Amazon, Meta Platforms and Nvidia.

The blue-chip Dow hit a nearly two-week low, with Visa dropping 4pc after its third-quarter revenue growth fell short of expectations.

Wary of the high valuation of these companies, market participants started shifting to underperforming sectors in mid-July.

05:22 PM BST

London shares weighed down by luxury stocks and downbeat US tech earnings

UK shares finished lower this afternoon under pressure from weakness in luxury goods stocks and disappointing US tech earnings, while Aston Martin surged after its half-yearly earnings update.

Quarterly earnings from US megacap companies Alphabet and Tesla failed to impress investors, dampening risk appetite for investors globally.

In the UK, luxury group Burberry slipped 2pc after the world’s biggest luxury group LVMH’s sales growth slowed in the second quarter.

Dan Coatsworth, investment analyst at AJ Bell, said:

Weak results from LVMH and Remy Cointreau suggest the malaise in the luxury goods sector is yet to abate and this puts further pressure on battered British fashion brand Burberry.

Aston Martin jumped 6.4pc, recording its best day in nearly two months, after the luxury carmaker reported its half-yearly results.

Meanwhile, precious metal miners rebounded with a 3pc rise, as gold prices firmed.

05:20 PM BST

Germany plans heavy reliance on hydrogen imports

Germany will have to import at least 50 percent of the hydrogen it needs to meet its own green energy targets, the economy ministry said Wednesday.

The country is betting heavily on hydrogen and its derivatives as it looks to reduce carbon dioxide emissions by 65pc by 2030 and achieve net zero by 2045.

But economy minister Robert Habeck said Wednesday much of that will “have to be covered by imports from abroad”.

Between 50 and 70 percent of Germany’s hydrogen is expected to come from abroad by 2030, Mr Habeck said as he presented the government’s roadmap for obtaining supplies.

Hydrogen use is then expected to rise further and “we can expect the proportion of imports to continue to rise after 2030”, he said.

05:05 PM BST

Lammy arrives in India to push free trade deal

British foreign secretary David Lammy is attempting to reinvigorate a stalled push for a free-trade agreement with India after arriving in New Delhi for his first official visit.

The two countries have spent more than two years negotiating what would be an important milestone for Britain as it seeks alternative markets following its 2020 exit from the European Union.

Mr Lammy is travelling to India less than three weeks after taking office following the Labour Party’s election win under new Prime Minister Keir Starmer.

He said:

India is the emerging superpower of the 21st century, the largest country in the world with 1.4bn people and one of the fastest growing economies in the world.

Our free-trade agreement negotiations is the floor not the ceiling of our ambitions to unlock our shared potential and deliver growth, from Bengaluru to Birmingham.

Indian Prime Minister Narendra Modi said on social media platform X that he welcomed “the desire to conclude a mutually beneficial” free trade agreement.

05:02 PM BST

Gucci owner posts 11pc drop in sales

French luxury group Kering reported a bigger-than-expected drop in second-quarter sales and forecast a weak second half of the year, as it struggles to revive its key label Gucci and worries grow about a prolonged downturn in high-end spending.

Sales at the group which owns labels Gucci, Boucheron and Balenciaga, fell to €4.5bn (£3.6bn), an 11pc drop on an underlying basis, which strips out currency effects and acquisitions.

The figure was below analyst expectations for a 9pc drop, according to a Visible Alpha consensus.

It also said second-half operating income could fall by around 30pc, following a 42pc drop in the first half.

Sales at Gucci fell 19pc, showing no improvement from the first quarter, and below analyst expectations for a 16pc decline.

Kering has been revamping Gucci, the century-old Italian fashion house which accounts for half of group sales and two-thirds of profit.

Minimalist designs from new creative director Sabato de Sarno, which began trickling into stores earlier this year, are key to the design reset and push upmarket, in a bid to cater to wealthier clients who are more immune to economic headwinds.

But the efforts have been complicated by a downturn in the global luxury market, while China’s rebound - traditionally Gucci’s most coveted market - was clouded by a property crisis and high youth unemployment as Western markets came down from a post-pandemic splurge.

04:58 PM BST

US stock markets drop amid Big Tech worries

Drops for Big Tech are dragging US stock indexes lower this afternoon after Tesla and Alphabet delivered profit reports that hit Wall Street with a thud.

The S&P 500 is down 1.6pc and on track for its fifth loss in six days. The Dow Jones Industrial Average is down 0.9pc, and the Nasdaq Composite is 2.6pc lower.

Profit expectations are high on Wall Street, but particularly so for the small group of stocks known as the “Magnificent Seven”, made up of Google owner Alphabet, Amazon, Apple, Facebook owner Meta, Microsoft, Nvidia and Tesla.

The hope on Wall Street is that if momentum does flag for the Magnificent Seven, more stocks outside them can rise to support the market. Conditions may be improving at the right time. Hopes for imminent cuts to interest rates have helped smaller stocks in particular to jump in recent weeks.

The Russell 2000 index of smaller stocks has leaped at least 1oc in seven of the last 10 days, though it slipped 0.1pc this afternoon.

04:53 PM BST

Footsie closes down

The FTSE 100 closed down 0.2pc. Endeavour Mining was the top riser, up 4pc, followed by Informa, up 3.7pc. At the other end of the index, Rolls-Royce fell 2.4pc, followed by investment trust Scottish Mortgage, down 2.9pc.

Meanwhile, the mid-cap FTSE 250 fell 0.7pc. The top riser was business information gro7up Ascential, up 25.8pc, followed by Aston Martin, up 6.5pc. The biggest faller was manufacturer TI Fluid Systems, down 6.3pc, followed by Ocado, down 4.6pc.

04:47 PM BST

Oil prices rise amid lower inventories

Oil prices edged up today on a day the US Energy Information Administration (EIA) said the inventories of of oil in America had fallen.

Brent crude, the international benchmark, rose 0.9pc to $81.86.

US-produced West Texas Intermediate was up a similar percentage to $77.84

The EIA said US inventories were down by 3.7m barrels to 436.5m barrels.

04:30 PM BST

Partners at ‘magic circle’ law firm take home more than £2m

Partners at Clifford Chance have enjoyed paydays of more than £2m, as high-profile cases, including the trial of tech tycoon Mike Lynch, led to record profits. Lucy Burton reports:

The elite “magic circle” law firm paid its equity partners £2.04m for the year to April, mirroring the payouts by rivals including Linklaters and A&O Shearman in recent weeks following a deal-making surge.

Clifford Chance cashed in on a string of high-profile cases this year, including the defence of Mike Lynch, who was cleared of fraud over the $11bn (£7bn) sale of his software company Autonomy to Hewlett Packard. The charges would have carried a potential prison sentence of up to 25 years.

The law firm, which advised on 224 takeover deals during 2023 worth $208bn, also acted for EE in a £1bn case brought by Phones 4U. Administrators for the collapsed retailer Phones 4U alleged that mobile operators colluded to force it out of business in 2014, but the High Court rejected all claims of breach of competition law.

Like other members of London’s magic circle, Clifford Chance is racing to expand in America’s lucrative legal market by aggressively poaching lawyers from US firms.

04:26 PM BST

Mexican president says Musk comment about Mexico ‘isn’t serious’

Mexican president Andres Manuel Lopez Obrador said on Wednesday that Elon Musk’s comment on the possibility that Tesla will not invest in Mexico “is not serious.”

He “must have another business plan”, Mr Lopez Obrador said during his regular morning press conference.

Tesla had previously detailed plans to open a megafactory in Mexico’s north.

Mr Musk said yesterday night that the electric car maker was being cautious over its plans for manufacturing in Mexico. “I think we need to see just where things stand after the election ...

“Trump has said that he will put heavy tariffs on vehicles produced in Mexico so it doesn’t make sense to invest in Mexico.”

04:16 PM BST

Remy Cointreau too concentrated in cognac, investors say

Remy Cointreau investors say the company needs to diversify further as its reliance on cognac sales in the US and China leaves it among the worst-hit by a global spirits downturn.

The maker of Remy Martin cognac has already signalled it wants to grow sales in other markets and invest in its portfolio of other drinks, including Cointreau liqueur and The Botanist gin.

The company makes some 70pc of sales from cognac, with the vast majority of those in the US and Chinese markets. Its performance has been hurt by destocking in the United States. Meanwhile, China’s recovery from the pandemic has also been slower than hoped.

Three Remy investors told Reuters it had become increasingly important for the company to diversify its business from cognac to cushion the blow when its major markets falter.

“The risk is that they are just so exposed to cognac,” said Fred Mahon, fund manager at Remy investor Church House, adding while Remy does hold other brands its portfolio lacks exposure to popular spirits such as tequila.

“We’d like to see more acquisitions, more diversification,” Mahon continued, adding however this has to be done well and Remy should focus on smaller, quality targets.

Remy’s shares hit their lowest level since 2016 on Wednesday after its first-quarter sales missed estimates.

All spirits makers are enduring a sharp slowdown in growth following a post-pandemic boom. But Remy’s rivals like Pernod Ricard’s and Diageo’s operations are more balanced across different products and markets.

04:11 PM BST

EasyJet jumps 3.5pc amid strong package holiday boost

Shares in easyJet are up 3.5pc after the company said it remains on track for a record summer performance (as reported this morning).

Adam Vettese, an analyst at investment platform eToro, said:

EasyJet’s update reads pretty well with a 16pc rise in profit and demand looking strong for the important July to September period.

This comes just a couple of days after a very concerning update from Ryanair with missed forecasts and more price savvy consumers putting pressure on fares.

Whilst a race-to-the-bottom in prices would certainly not be favourable for easyJet either, the firm doesn’t have the same exposure to Boeing-related issues that Ryanair does and is also benefiting from strong performance in package holidays, which is again an advantage over its peer.

The package deals have brought in an almost 50pc bump in profit in comparison to last year and could well be the difference maker if pressure on fares continues.

04:04 PM BST

US stocks slide as Tesla and Google earnings pull the market down

Wall Street fell this afternoon, with the tech-heavy Nasdaq leading declines after lackluster quarterly results from Tesla and Google owner Alphabet raised questions about the sustainability of the Big Tech and AI-led share rally.

Tesla slumped 11.5pc and was set to lose over $83bn in market value from Tuesday’s close, if losses hold, after the EV maker reported its lowest profit margin in more than five years and missed second-quarter earnings estimates.

Google parent Alphabet, too, shed around 3.7pc despite posting a second-quarter earnings beat, as investors focused on a slowdown in advertising growth and the company flagged high capital expenses for the year.

Alphabet’s losses underscored the high earnings bar for the so-called Magnificent Seven, a set of megacap tech stocks that have notched double and triple-digit percentage gains so far in 2024, riding on the optimism around AI adoption and expectations of an early start to the US Federal Reserve’s interest-rate cuts.

David Morrison, senior market analyst at TradeNation, said:

I can’t help thinking [that] if the tech sector does sneeze, the whole market could catch it ... If money comes out of the tech sector, it’ll come out quite dramatically. I don’t think the first reaction of those investors is going to be to immediately redeploy those funds into mid and small-cap stocks.

04:00 PM BST

US goods trade deficit narrows

The American trade deficit in goods narrowed in June amid a broad rebound in exports, but that probably was insufficient to prevent trade from remaining a drag on economic growth in the second quarter.

The impact on GDP from the trade gap is, however, likely to be offset by a rise in inventories at wholesalers and retailers in June. The US government is scheduled to publish its advance estimate of second-quarter GDP growth on Thursday, which is expected to show a pick-up in activity, thanks to a spurt in consumer spending in June.

Oliver Allen, senior US economist at Pantheon Macroeconomics, said:

The hit to second-quarter GDP growth from net trade will probably be offset by inventories and investment.

The goods trade gap contracted 2.5pc to $96.8bn (£74.9bn), the US Commerce Department’s Census Bureau said.

03:57 PM BST

Vimto owner says profits to beat expectations

Vimto maker Nichols has said it is set for higher-than-expected profits after a slowdown in cost inflation.

Shares in the Merseyside-based company jumped in early trading as it also announced a £20m special dividend for shareholders.

Andrew Milne, chief executive of the drinks firm, said he was “pleased to report further strategic progress in the first half”.

Nevertheless, Nichols reported that group revenues dipped 1.8pc to £84m over the first half of 2024, compared with the same period a year earlier.

It said the dip was partly driven by walking away from a number of unprofitable contracts in its so-called “out of home” division, which provides drinks to venues.

However, the group said UK packaged revenues grew by 5.3pc to £45.4m due to strong sales volumes.

Meanwhile, it saw a 6.9pc decline in revenues from its international packaged business, which it linked to the timing of shipments to the Middle East and lower volumes in Africa.

Its stronger UK trade helped to drive a 5.8pc increase in pre-tax profits to £11.8m for the half-year, as it was supported by easing cost inflation.

Nichols shares are 11.5pc higher today.

03:46 PM BST

CrowdStrike to overhaul software updates after causing global IT outage

The US cyber security business blamed for last week’s global IT outage has pledged to overhaul how it issues critical software updates. Matthew Field and James Titcomb report:

In a “post-incident review” of the IT blackout, CrowdStrike said it would reform how it tests and sends out future upgrades.

The bug last Friday was found to have originated in a rogue file sent out to customers globally at 5.09am. CrowdStrike routinely sends out software updates for its Falcon product, which is designed to detect and protect against new hacking threats.

However, the “rapid response” change included a broken file which caused Microsoft’s Windows operating system to crash in a so-called blue screen of death.

CrowdStrike admitted it had since uncovered a fault with its “content validator” technology, a piece of software that is used to test code before it is sent out to customers, which failed to stop the bug.

It added that the file tweaked a previous upgrade, which had until that point run smoothly.

 

03:42 PM BST

Tesla shares down 12pc

Tesla shares sank more than 12pc today as its shrinking car-sales margins disappointed investors despite boss Elon Musk hyping the company’s investment plans for AI and self-driving technologies.

The electric carmaker’s profit margin that fell to a five-year low in results released yesterday and its earnings missed estimates for a fourth straight quarter.

Its market value before trading opened on Wednesday was $785bn (£607bn), far exceeding any other global car company, but that valuation is based on it profiting from technologies that are not expected to bear fruit for some time, analysts said.

Jeff Osborne, of investment bank TD Cowen, said:

All of Musk’s enthusiasm [last night] on the call, outside of (energy) storage, were for products that don’t exist.

Joseph Spak, a UBS analyst, said:

Tesla is not being priced on auto [electric cars], but autonomy and AI ... We believe any payoff from [Tesla’s AI] initiatives are further out.

03:35 PM BST

Tortilla shares tumble on sales hit from move off Deliveroo

Shares in restaurant chain Tortilla Mexican Grill tumbled following a profit warning after seeing sales hit since removing itself from Deliveroo.

The group said sales dropped £1.2m to £31.5m and were 5.9pc lower on a like-for-like basis in the first half of the year after announcing in February that it would focus solely on the Just Eat and Uber Eats platforms to cut down on delivery commission charges.

It made the move to “improve profit conversion and increase focus on in-store revenue” but admitted the benefits of its strategy overhaul “will be slower than originally anticipated”.

The burrito and tacos chain cautioned that the sales impact of this and an “ongoing challenging trading environment” would leave full-year underlying earnings lower than first thought, sending shares down by nearly a quarter at one stage in trading today.

Shares are currently down around 17pc.

Tortilla - which has over 80 stores in the UK, about 30 outlets in France and eight sites in the Middle East - now expects underlying earnings of £5m for 2024, or £4.5m including its Fresh Burritos business.

03:33 PM BST

Bank of Canada cuts interest rates to 4.5pc

Canada’s central bank lowered interest rates to 4.5pc saying that slowing inflation justified lowering borrowing costs for a second straight meeting.

The Bank of Canada said: “With broad price pressures continuing to ease and inflation expected to move closer to 2pc, Governing Council decided to reduce the policy interest rate by a further 25 basis points.”

The central bank began hiking rates from a record low of 0.25pc in March 2022 in a bid to tame soaring inflation.

It eventually held the rate for almost a year at 5pc, the highest level in two decades, before initiating a cut in early June.

With that, I will head off for the day - but don’t go anywhere as Alex Singleton will be posting live updates into the evening.

03:22 PM BST

Oil prices rise amid falling US stocks

Oil prices have risen after an industry report indicated that US crude stockpiles fell for a fourth week.

Brent increased by 0.5pc above $81 a barrel after shedding almost 5pc over the previous three sessions amid concerns over demand from China.

US-produced West Texas Intermediate was up 0.6pc to more than $77 after the industry-funded American Petroleum Institute reported stockpiles shrank by 3.86m barrels.

If confirmed by official US government figures later today, the decline would be the longest stretch since September.

03:07 PM BST

Tesla and Alphabet drag down US stock markets

Tesla and Google parent company Alphabet are dragging Wall Street lower after the Big Tech giants delivered earnings that failed to impress.

Tesla was one of the heaviest weights on the market after falling 9.9pc after the electric vehicle maker said its profit for the spring fell 45pc from a year earlier.

The Nasdaq Composite was 2pc lower as Tesla’s earnings fell short of analysts’ forecasts.

Alphabet dropped 5.2pc even though it delivered better profit and revenue for the latest quarter than expected. 

The S&P 500 was down 1.1pc in early trading and on track for its fifth fall in six days. 

The Dow Jones Industrial Average was down 144 points, or 0.4pc.

02:51 PM BST

Labour could raise taxes by £25bn, warns former Bank of England policymaker

Rachel Reeves could use her review of the state of Britain’s public finances to raise taxes by up to £25bn, according to a former Bank of England policymaker.

Michael Saunders said the Chancellor will “kitchen sink” the bad news in the review to “allow her to announce corrective measures to return the public finances to a sustainable path”.

The senior adviser to Oxford Economics, who was a member of the interest rate setting Monetary Policy Committee from 2016 to 2022, said Ms Reeves would then be able to use her first Budget as Chancellor to raise taxes and “blame it all on the failings of her Conservative predecessors”.

He said the Reeves review of the public finances could be “used to justify significant extra tax hikes, perhaps an extra £10bn to £25bn”.

This would likely target capital gains and inheritance taxes, or result in the reduction of tax reliefs, he said.

Mr Saunders said the tax rises could be announced alongside “a less aggressive squeeze on public spending and perhaps a tweak to the debt rule”.

Sir Keir Starmer declared the “crisis” in the UK’s public finances was “more severe” than he had expected as he held his first Prime Minister’s Questions since winning the election.

02:36 PM BST

Wall Street stocks plunge after Tesla blow

US stock indexes dropped sharply as trading began in New York after a weaker than expected set of results from Tesla raised concerns that the AI boom has been overblown.

The Dow Jones Industrial Average fell 147.46 points, or 0.4pc, at the open to 40,210.63. 

The S&P 500 opened lower by 49.90 points, or 0.9pc, at 5,505.84, while the Nasdaq Composite dropped 263.44 points, or 1.5pc, to 17,733.91.

02:23 PM BST

Thames Water ‘committed to seeking new equity funding’

After Moody’s downgraded one of its bonds to junk status, Thames Water released the following statement:

Thames Water Utilities Limited (“TWUL” or the “Company”) notes the rating downgrades published today by Moody’s Ratings (“Moody’s”). 

Moody’s has downgraded its corporate family rating (“CFR”) to Ba2, Class A debt rating to Ba1 and Class B debt rating to B3.  All these ratings maintain a negative outlook.

TWUL alerted Ofwat to the possibility of potential credit rating downgrades in April 2024 and continues to work with Ofwat to maintain the ongoing financial resilience of the business.  

Management is engaging with investors and its creditors and remains committed to seeking new equity funding and exploring all options to extend its liquidity runway.

Increasing our financial resilience and securing an investible PR24 determination is a critical priority for the business. 

In the meantime, it’s business as usual for our customers and our teams on the ground who will continue to supply our services and remain focused on the delivery of our turnaround plan.

02:12 PM BST

Thames Water bonds cut to junk amid fears of collapse

A key bond issued by Thames Water has been downgraded to junk status amid doubts over its ability to avoid collapse.

Credit rating agency Moody’s cut the senior secured debt of the utility company to Ba1 status and also reduced its classification for a series of other bonds as it told investors the credit outlook for the company is negative.

Moody’s said proposals by regulator Ofwat to limit its bill increases would make it harder to attract the £2.5bn in new equity it needs to keep the business running.

Thames Water is battling to stave off special administration after it said earlier this month that it risked running out of cash in less than a year amid an increase in its debt pile. A collapse is not thought to be imminent.

The supplier is also bracing for an avalanche of fresh fines running into the hundreds of millions of pounds for a catalogue of mistakes and scandals including unsanctioned dividend payments, sewage dumping, and missing basic performance targets.

Thames Water said it was aware that the debt could be downgraded to junk status after shareholders declared its business plan was “uninvestable”.

The company said it is still seeking new equity investment and was looking to build its liquidity after posting its first pre-tax profit in four years, although net debt rose to £15.3bn in the year to March.

An Ofwat spokesman said: “This downgrade reinforces our position that a comprehensive financial and operational turnaround in Thames’ operations is essential.”

02:06 PM BST

Missed credit card payments rise amid cost-of-living squeeze

More borrowers are missing credit card payments in a sign the squeeze on family finances is not over despite the fall in inflation.

Our deputy economics editor Tim Wallace has the latest:

Just over 2pc of accounts missed a payment in May, according to data provider FICO, the most for any May since the pandemic.

Debts on the plastic are mounting. The average credit card balance now stands at £1,780, up from just above £1,550 two years ago.

Those who have missed one payment have an average debt of £2,225, rising to £2,685 for those with two missed payments. Borrowers who have missed three payments have an average credit card balance of £3,030.

FICO warned these are “signs of financial stress”, which mark a stark turnaround from the position after the pandemic.

The average household slashed borrowing during lockdown, when incomes supported by furlough but families had few chances to spend their money. As a result, missed payments plunged from more than 3pc of accounts pre-Covid to a low of 1.85pc in May 2022.

However not everyone benefitted. Office workers saved money on commuting, for example, when healthcare, construction and manufacturing employees still had to spend to get to their place of work. Similarly those on high incomes were able to pay down debts and build up savings, while those with smaller pay packets struggled more when inflation rose to a peak of more than 11pc in 2022.

01:49 PM BST

Events giant buys FTSE 250 rival for £1.2bn

Events giant Informa has sealed a deal to buy rival Ascential for £1.2bn.

Shares in Ascential, which owns the Cannes Lions advertising festival, jumped by more than a quarter on the back of the deal to make it the biggest gainer on the FTSE 250.

FTSE 100 company Informa told shareholders it has agreed to buy its rival for 568p per share.

Informa, which is the world’s largest trade show operator, said it expects the deal to provide at least £12m worth of cost savings and efficiency improvements each year.

Meanwhile, Ascential’s proposed takeover comes after the company outlined plans to split off its operations last year, as it sold digital commerce division Flywheel to Omnicom for around £740m.

Stephen A Carter, chief executive of Informa, said the deal will allow the company to help grow some of Ascential’s key brands.

Philip Thomas, chief executive of Ascential, said: “This offer will not only deliver substantial value for our shareholders but also, together with Informa’s international footprint and extensive capabilities in data and analytics, will unlock further growth opportunities for our brands and our people.”

01:25 PM BST

England fans boost sales at Marston’s pubs

Pub group Marston’s has revealed the Euro 2024 tournament delivered a boost to sales as fans flocked to venues to support the England football team in the final.

The company, which runs about 1,370 pubs across the UK, said the football lift came after a period of wet weather put a dampener on summer sales.

It said like-for-like sales during the week of the semi-final and final matches jumped by 8pc, compared with the same period last year.

This helped to lessen the impact of unseasonably wet weather, and following particularly strong sales this time last year, Marston’s said.

The extra support for the hospitality sector during the European Championships generated nearly £1bn in additional revenue for local pubs and venues, according to estimates by the Night Time Industries Association.

Pubs and supermarkets benefited from a bumper weekend of sales before England’s defeat against Spain in the final, which was watched by some 24m across the BBC and ITV.

Shares in Marston’s were up by about 3pc.

01:11 PM BST

Heathrow urges Labour to scrap £10 transfer tax

Heathrow is urging Labour to scrap a £10 fee for transfer passengers as the airport scrambles to retain its status as a top global hub.

Our transport industry editor Christopher Jasper has the latest:

Thomas Woldbye, the airport’s chief executive, warned that travellers were being driven away by a rule that requires people who change planes at Heathrow without entering the UK to complete an online form and pay a £10 fee.

The airport is now lobbying Labour to overturn the rule, which was introduced under Rishi Sunak, and is increasingly hopeful of action.

Mr Woldbye said: “The competition for hub status among European airports is hard enough without making it more difficult for ourselves.”

12:30 PM BST

Pound gains as private sector output grows

Sterling gained against the euro after a closely watched survey showed British business activity was stronger than in eurozone economies this month.

The euro was last down 0.1pc on the pound at just over 84p not far from its two year low of 83.8p hit earlier in July.

UK business activity picked up this month, bolstered by the fastest manufacturing growth in two years and the strongest pace of new orders since April 2023, the S&P Global PMI survey showed.

In contrast, growth in euro zone business activity stalled.

The pound has been supported in recent months by better-than expected economic data, some stability from a new government, and also the Bank of England being slower to cut rates than some peers, including the European Central Bank.

The BoE next meets in August, and markets see around a 45pc chance of them cutting rates. 

The pound was flat on the dollar at $1.291.

12:02 PM BST

Clifford Chance partners enjoy £2m payday

Clifford Chance paid its partners more than £2m last year as the law firm increased global revenues to a record high.

The firm, which is part of London’s “Magic Circle” of major legal practices, increased worldwide revenues by 9pc to £2.3bn in a ninth-consecutive year of growth.

It launched a Houston office in June last year and also reported high single-digit growth in the UK, Europe and the Middle East.

Global managing partner Charles Adams said: 

If we carry on at this pace, we will be the size of a decent-sized US firm. 

We are not looking to become a US-only firm, we’ve got a balanced map with 22 jurisdictions that make up Clifford Chance’s offering.

11:43 AM BST

Wall Street poised for slump as Tesla profits fall

US stock markets are on track to open lower after Tesla revealed declining sales during the second quarter despite cutting prices.

Tesla slumped 7.7pc in premarket trading after reporting its lowest profit margin in over five years and missing second-quarter earnings expectations.

Investors are becoming concerned about the dominance of Big Tech stocks that have pushed Wall Street to all-time highs, with Google parent Alphabet also down 3.3pc despite better than expected second-quarter results.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said:

The first view on Big Tech earnings wasn’t inspiring.

Two of the Magnificent 7 stocks failed to create euphoria when they reported their Q2 results. The less-than-ideal set of earnings comes at a time when investors are questioning whether the AI rally has gotten ahead of itself.

In premarket trading, the Dow Jones Industrial Average was down 0.4pc, the S&P 500 fell 0.7pc and the Nasdaq 100 had fallen 1pc.

11:27 AM BST

TikTok fined £1.9m for failing to provide accurate data to Ofcom

TikTok has been fined £1.9m for failing to accurately respond to a formal request for information from Ofcom.

The communications and online safety regulator said it had requested information from the social media giant about the usage of TikTok’s parental controls to inform an its report around child online safety.

Ofcom said TikTok responded to the request in September last year, but then in December told Ofcom the data provided was not accurate.

In response, Ofcom said it launched an investigation which found a number of failings in TikTok’s data governance processes, including having insufficient checks in place to ensure accurate data was sent, and for being slow to alert Ofcom to the issue.

Ofcom said the delay meant it was forced to amend its report at a late stage.

The regulator said the incident has seen TikTok contravene its duties under the Communications Act to fully co-operate with a statutory request for information.

Suzanne Carter, Ofcom’s enforcement director, said: “When we demand data, it must be accurate and submitted on time.”

TikTok has been approached for comment.

11:10 AM BST

Why Labour is sending doctors to the front line of workless Britain

Doctors are poised to be ordered on to the front line of Britain’s worklessness crisis under plans proposed by Labour grandees, as the new Government seeks to bring millions of sick adults back into work.

Our economics editor Szu Ping Chan and deputy economics editor Tim Wallace have the details:

Liz Kendall, the new Work and Pensions Secretary, recently welcomed a report from the Pathways to Work Commission which called for a major break from Labour’s past policies on health and benefits.

“Breaking the link between ill health and economic inactivity is not seen as an NHS priority,” said Alan Milburn, a former Labour health secretary who led the review.

“A rethink is needed – the NHS has to become an engine for economic growth and not just as a recipient of the financial proceeds of it.”

His report blamed ill health for the sharp rise in worklessness among people of working age.

 

10:56 AM BST

Scottish Power owner’s profits boosted by increased charges

Scottish Power’s owner reported surging profits in the first half of the year as it increased UK network charges.

Our energy editor Jonathan Leake has the details:

Iberdrola said earnings rose by by 64pc to €4.1bn (£3.5bn), which it also linked to increases in renewable power output.

The Spanish company was boosted by higher tariffs granted by regulators in Britain, the US and Brazil.

Executive Chairman Ignacio Sanchez Galan said: “We are making good progress on delivering against the targets in our business plan to 2026.”

Scottish Power has about three gigawatts of renewable capacity including 38 onshore wind farms with 1,157 wind turbines.

It is also expanding offshore, with several windfarms planned, two of which will use floating wind turbines.

Meanwhile Norway’s state-backed Equinor saw its second quarter pre-tax profits fall by 4pc to $7.5bn (£5.8bn).

Equinor said oil and gas output remained strong at around 2.05m barrels of oil equivalent per day, slightly up on last year, helped by increased production from its UK Buzzard field.

10:38 AM BST

Euros ‘euphoria’ boosts German consumer confidence

Despite its private sector slump, German consumers were more optimistic heading into August, a key survey showed, amid “euphoria” caused by the European Championship.

The survey by pollsters GfK and the Nuremberg Institute for Market Decisions (NIM) found a “noticable” improvement among its 2,000 respondents as rising incomes appeared to compensate for recent high inflation.

The forward-looking indicator rose by 3.2 points in July to minus 18.4 points.

NIM consumer expert Rolf Buerkl said the improvement in the consumer climate was “primarily due to increased income expectations.”

He added that a “euphoria” created by the recent men’s European football championships, which were hosted in Germany, also “very probably” played a roll in boosting sentiment.

“It remains to be seen whether this effect is sustainable or just a short-term flare-up,” he said.

10:21 AM BST

German economy faces ‘serious problem’ as it drags down eurozone growth

Germany’s economy suffered a surprise slump in output this month, a closely watched survey showed, dragging down the eurozone’s private sector.

Europe’s largest economy suffered a drop in output for the first time in four months, the HCOB Flash Eurozone Composite PMI showed, amid a deep decline in manufacturing production.

Factory output levels fell at the quickest rate for nine months, while growth of services activity was the weakest since March.

It helped push the eurozone’s private sector output towards stagnation in July.

Dr Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said:

This looks like a serious problem. Germany’s economy fell back into contraction territory, dragged down by a steep and dramatic fall in manufacturing output. 

The hope that this sector could benefit from a better global economic climate is vanishing into thin air. With the composite PMI now below 50, our GDP Nowcast predicts that economic output will shrink by 0.4pc in the third quarter compared to the second quarter. 

While it is still early days and many data points are yet to come, the second half of the year is starting on a very weak note.

10:05 AM BST

Deutsche Bank suffers first loss in four years amid legal dispute

Deutsche Bank suffered a loss of €143m (£120m) in the second quarter, as it set aside €1.3bn for potential legal costs over an historic dispute.

The lender took the hefty charge related to the takeover of Postbank, which dragged down its bottom line and swung the bank to its first quarterly loss in four years.

Its revenues rose by 2pc from the same period a year ago, reaching €7.6bn.

Chief executive Christian Sewing pointed to Deutsche Bank’s “operating strength” and said it was “well on track towards meeting our 2025 goals and our distribution commitments to shareholders.”

Shares in Deutsche were down more than 6pc in mid-morning trading in Frankfurt.

 Juergen Molnar, an analyst at RoboMarkets, said the Postbank woes “overshadowed an otherwise successful second quarter”.

Deutsche Bank has undergone major restructuring in recent years, seeking to rely more on retail and corporate banking after an aggressive shift in the early 2000s into investment banking left it snared by multiple scandals.

The strategy has largely paid off, with the bank reaping greater profits.

09:41 AM BST

Private sector raises hopes for summer interest rate cuts amid slowing price rises

Britain’s private sector increased prices at the slowest rate in almost three and a half years, new figures show, raising hopes for a summer interest rate cut.

The closely watched S&P Global Flash United Kingdom PMI rose to 52.7 in July amid the sharpest upturn in new business for 15 months.

It showed Britain’s manufacturing sector expanded at its strongest pace in more than two years, with the upturn encouraging bosses to increase their staffing numbers at the quickest pace for 13 months.

Chris Williamson, chief business economist at S&P Global, said:

The first post-election business survey paints a welcoming picture for the new government, with companies operating across manufacturing and services having gained optimism about the future, reporting a renewed surge in demand and taking on staff in greater numbers. 

Prices have meanwhile risen at their lowest rate for three and a half years, further raising the prospect of a summer rate cut.

However, policymakers will likely take a cautious approach to loosening policy amid signs of inflationary pressures pivoting away from services towards manufacturing, where Red Sea shipping delays and higher freight prices are adding to costs again. 

The renewed hiring trend could also add to pay pressures, sustaining some stickiness of inflation in the coming months.

09:27 AM BST

Eurozone’s private sector nears stagnation

Private sector companies in the eurozone reported their lowest output in five months, a closely-watched survey showed, leaving the single bloc’s economy at risk of stagnation.

The HCOB Flash Eurozone Composite PMI dropped to a reading of 50.1 in July, barely above the 50 mark separating expansion from contraction as its economic recovery continued to wane.

New orders fell for the second month running and business confidence dropped to a six-month low.

Dr Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said it has become “unsettling how steadily companies in the manufacturing sector are slashing jobs month by month”.

Manufacturng output dropped to a seven-month low of 45.3 as “demand in the German manufacturing sector seems to have dragged down overall private sector output”. 

Mr de la Rubia said:

Is this the summer lull? It feels a bit like it as the eurozone economy barely moved in July, according to the HCOB Flash Eurozone PMI. 

But beside the fact that we are talking about seasonally adjusted figures, looking at the two monitored sectors the situation deteriorated significantly in the manufacturing sector and counteracted moderate growth in the services sector. 

09:10 AM BST

FTSE 100 slumps after disappointing Big Tech results

The FTSE 100 hit its lowest level in more than three weeks as investors digested results from US tech giants Tesla and Alphabet.

The blue-chip FTSE 100 index was down 0.4pc, while the mid-cap FTSE 250 lost 0.3pc.

Quarterly earnings from tech giants Alphabet and Tesla in the US failed to impress investors, impacting the appetite for share buying.

In London, Burberry slipped as much as 2.8pc after the world’s biggest luxury group LVMH’s sales growth slowed in the second quarter.

Meanwhile, precious metal miners rebounded as much as 2.3pc, as gold prices steadied. The sector is poised to snap a five-session losing streak, its longest since February.

Aston Martin was up 7.3pc after the luxury carmaker reported its half-yearly results and was set to log its best day since September last year.

EasyJet climbed as much as 9.7pc to top the FTSE 100 after the low-cost carrier reported a 16pc rise in third-quarter pre-tax profit.

Ascential surged 26.5 to the top of the FTSE 250 after Informa said it had agreed to buy the Cannes Lions Festival owner for £1.2bn.

09:03 AM BST

Santander profits hit by falling mortgage lending

Santander UK has seen half-year profits slump by almost a third after being knocked by shrinking mortgage lending and higher savings rates.

The Spanish-owned high street lender reported a 31pc drop in pre-tax profits to £804m in the first half of 2024.

Mortgage loans slumped by £4.4bn over the half year, while its net interest income - the difference between the interest it generates from loans and pays out to savers - fell 11pc.

This came after it forked out more to savers in the first three months of the year following interest rate increases.

But the group said it had since taken “pricing” action to make savings rates less attractive, which has seen customer deposits fall by £5.6bn.

This also helped profits increase by 6pc quarter-on-quarter to £413m in the three months to June 30, although the out-turn was 52pc lower than a year earlier.

Mike Regnier, chief executive of Santander, said: “Our first half financial results were in line with our expectations, with a more positive trajectory reflecting improvements in the second quarter.”

Lenders have seen profits fall back in 2024 from bumper returns seen in the past two years as competition in the mortgage and savings market has heated up.

08:37 AM BST

Louis Vuitton owner drops as wealthy shoppers cut back

The owner of Louis Vuitton, Christian Dior and Tiffany has suffered the sharpest drop in its share price since October as amid disappointing sales of its high-end brands.

LVMH dropped 5pc as trading began in Paris after sales growth slowed down in the second quarter.

The French luxury conglomerate said organic revenue at its fashion and leather goods unit — its biggest division — rose 1pc, which was half what analysts had expected and down from 21pc growth a year earlier.

Chief financial officer Jean-Jacques Guinoy said savvy Chinese shoppers were waiting for their next trip to Japan to buy LVMH goods to take advantage of the weaker yen.

Sales in the region including China were down 14pc during the quarter.

08:23 AM BST

Shoppers flock back to Waitrose as Asda loses customers

Shoppers are flocking back to Waitrose stores as rival Asda loses customers, new industry figures show.

Our retail editor Hannah Boland has the details:

Sales at Waitrose were up 3.6pc in the 12 weeks to July 13 on the same period last year, according to figures from NIQ. Its market share has grown to 3.8pc compared to 3.7pc a year earlier.

The rise will be seen as a sign that turnaround efforts at the middle class grocer are starting to pay off. Waitrose has been spending on improving customer service in its stores and slashing prices to win back customers.

However, other supermarkets have been struggling to make progress on their own revival efforts. 

The NIQ figures revealed Asda’s market share has dipped to 12pc from 13.1pc a year earlier. Its sales are 5.9pc lower than last year, making it the only major grocer where sales have been falling.

The billionaire Issa brothers have been battling to stem the slump with a radical management shake-up. It is currently on the hunt for a new chief executive to replace Mohsin Issa, who has been leading the supermarket since 2021.

The NIQ figures also revealed a wider uptick in grocery sales over the past four weeks. It said total till sales were up 3.6pc, having accelerated from last month thanks to the hotter end to June.

08:18 AM BST

Aston Martin jumps despite widening losses

Aston Martin shares have leapt as much as 10pc higher after it revealed revenues for first half of the the year that were higher than analysts were expecting.

Revenues slumped 11pc to £603m, which was better than the fall to £560.7m that had been predicted. 

For the second quarter, revenues were down 12pc to £335.3m, which was higher than forecasts of a fall to £228.1m.

Orwa Mohamad, analyst at Third Bridge, said:

Focusing on profitability recovery should be the top priority, followed by investing in new product line-ups and implementing cost-cutting measures. 

Halo products like the Valkyrie and the Valhalla are crucial to Aston Martin’s long-term success. Although only a small volume is sold, these vehicles command very high prices.

Aston Martin is falling behind in the electrification race and could face significant challenges in the mid-term. They need to invest now to see a payoff in three to four years.

08:04 AM BST

UK markets fall ahead of key data

Stock markets in London began the day lower ahead of closely-watched economic data out later this morning, which could indicate what the Bank of England’s next interest rate decision.

The FTSE 100 was down 0.7pc to 8,114.57 as investors await the S&P Global PMI figures - and amid a dampened mood after major company results in New York disappointed overnight.

The domestically-focused FTSE 250 fell 0.5pc to 21,039.37.

07:57 AM BST

Heathrow hits passenger record and returns to profit

Heathrow Airport said a record 39.8m passengers travelled through its terminals in the first half of the year.

That is up 7.3pc from 37.1m passengers during the same period last year. In the first half of 2019, before the pandemic, the total was 38.8m.

Despite a fall in half-year revenues of 2.9pc, Heathrow swung to an underlying profit of £178m, from a £139m loss a year earlier.

Heathrow chef executive Thomas Woldbye said: 

Serving record-breaking passenger numbers while continuing to deliver excellent customer service is no easy feat and is testament to the dedication of my hardworking colleagues.

In addition to the nearly 40 million passengers that flew through Heathrow during the first six months, so did 765 tonnes of cargo, supporting world leading British industries to access global export markets.

We are working hard to deliver economic benefits for all of the UK, but this needs to be supported by joined up policy making that prioritises global competitiveness and sustainable growth.

We are encouraged by the new Government’s recognition of Heathrow’s role in powering growth across the country, and look forward to working with ministers to ensure we are firing on all cylinders and retain our global standing.

07:41 AM BST

Reckitt Benckiser to sell-off Air Wick and Cillit Bang

Reckitt Benckiser is to sell off a slew of household name brands including air freshener Air Wick and cleaning product Cillit Bang, as part of an effort to focus the company on health products.

The London-listed firm said it would sell its portfolio of home care brands that are “no longer core” to the business, and which brought in £1.9b in combined revenue last year, by the end of 2025.

Instead, it will focus on its most profitable health products including Strepsils cough sweets, Nurofen painkillers and Durex condoms.

It comes as operating profit fell 4.3pc year on year to £1.7bn for the first half of 2024, while revenue fell 3.7pc to £7.2bn.

Kris Licht, chief executive of Reckitt Benckiser, said: “Today I am pleased to announce a set of actions to significantly sharpen our portfolio and simplify our organisation for accelerated growth and value creation.”

07:37 AM BST

EasyJet on course for record-breaking summer as profits take off

Budget airline easyJet has notched up a 16pc increase in third-quarter profits and said it remains on track for a record summer performance.

The carrier reported headline pre-tax profits of £236m for the three months to June 30, up from £203m a year ago.

It carried 8pc more passengers in the quarter to 25.3m and said trading was also boosted by strong demand for easyJet holidays, with the division seeing pre-tax profits jump to £73m from £49m a year earlier.

EasyJet now expects the holidays arm to deliver annual pre-tax profits of more than £180m, up over 48pc year on year.

Johan Lundgren, outgoing chief executive of easyJet, said the group’s profit hike came despite Easter falling outside of the quarter this year, “demonstrating the continued importance of travel”.

He said: “This means we remain on track to deliver another record-breaking summer, taking us a step closer to our medium-term targets.”

07:31 AM BST

Aston Martin ploughs £2bn into electric cars as losses deepen

Aston Martin has set aside £2bn for its switch to electric cars as it battles to halt widening losses at what its largest shareholder called a “pivotal moment” for the business.

The luxury car maker said it expected to invest the sum by 2027 in its “long-term growth and transition to electrification”.

It comes pre-tax losses deepened from £142.2m to £216.7m in the first half of the year as it sold fewer cars. Adjusted underlying profits fell by 23pc to £62.2m.

The company sold 1,998 vehicles, down 32pc on the same period last year, sending revenues down 11pc to £603m.

It sets out the scale of the challenge facing incoming chief executive Adrian Hallmark, the former Bentley boss who will join earlier than expected on September 1.

However, its results were in line with analyst estimates and the company maintained its profit outlook for the year.

Aston Martin executive chairman Lawrence Stroll, who is its biggest shareholder, said: “As we commence an exciting second half of 2024, Aston Martin is at a pivotal moment in its journey, with our immense product transformation supporting volume growth and sustainable positive free cash flow generation later this year, of which we have full confidence in achieving.

“In line with prior guidance, our execution in the first half of the year focused on the successful delivery of our new Vantage and upgraded DBX707 and we remain on track to deliver a strong second half performance.”

07:25 AM BST

Good morning

Thanks for joining me. Aston Martin will invest £2bn in its switch to electric cars after revealing widening losses in the first half of the year.

The luxury car maker revealed revenues fell 11pc to £603m as it delivered 1,998 vehicles, which was nearly a third lower than the same time last year. 

What happened overnight 

Asian stocks mostly fell on Wednesday as markets digested Japanese and Australian business data.

Japan’s benchmark Nikkei 225 slipped 0.2pc in morning trading to 39,508.84, with the Japanese yen trading at its highest level in months ahead of a Bank of Japan policy decision next week.

A business survey released on Wednesday showed Japan’s factory activity contracted in July, as weak demand weighed on the manufacturing sector. Services were on the rise, helping to drive growth in overall activity in Japan’s private sector.

Elsewhere in Asia, Hong Kong’s Hang Seng shed 0.6pc to 17,370.09, led by the Hang Seng Tech Index which dropped 0.9pc. The Shanghai Composite was nearly unchanged at 2,915.46.

Australia’s S&P/ASX 200 edged 0.1pc higher to 7,973.20 after its services sector saw weaker growth in July. Manufacturing improved slightly but remained in contractionary territory.

South Korea’s Kospi shed 0.3pc to 2,772.55, as heavyweight Samsung Electronics plunged 1.1pc after talks between the company and its largest workers’ union ended with no agreement. Earlier this month, the workers declared an indefinite strike to pressure the company to accept their calls for higher pay and other benefits.

On Wall Street, the S&P 500 lost 8.67 points, or 0.16pc, to 5,555.74 points, while the Nasdaq Composite lost 10.22 points, or 0.06pc, to 17,997.35. The Dow Jones Industrial Average fell 57.35 points, or 0.14pc, to 40,358.09.

Eight of the major S&P sectors ended in negative territory, with the energy index the worst performer, down 1.6pc, as US crude prices hit a six-week low.

The yield on benchmark US 10-year Treasury bonds gained 0.9 basis points to 4.246pc.