FTSE 100 rises 0.5pc despite fall in retail sales
Kallum Pickering: Britain’s economy will survive this tough winter
Petrol prices are set to hit an all-time high as soon as tomorrow as the price per litre hit 142.16p.
The previous record was 142.48p, set in April 2012, according to the RAC.
High oil prices, the weak pound and increased use of bioethanol have all contributed to the surging costs at pumps. Panic buying means sales in September were back above pre-Covid levels for the first time, adding to pressure.
The Petrol Retailers Association previously warned prices could hit a new record high by the end of the month.
That's all for today - thanks for following. We'll be back on Monday.
New York listing makes Babylon app founder $1bn
The founder of virtual doctor app Babylon has joined the ranks of Britain’s technology billionaires after the company listed on the New York Stock Exchange.
As my colleague Matthew Field writes:
Ali Parsa, who founded Babylon in 2013 and is chief executive, holds around 26pc of the company, which is now worth around $1bn (£730m) after the company floated at a valuation of $4.2bn. Shares in Babylon climbed to $11.50 in its opening trades.
The takeover, first announced in June, represents a substantial float for a UK healthtech company, although one that got away from City investors.
Babylon shunned a London float for a US listing via a US special purpose acquisition company, or Spac, a cash-rich blank cheque firm set up to target fast-growing companies.
Founded in 2013, Babylon provides video doctor services and a virtual diagnostics app. In the UK, it works with NHS GPs to provide video appointments. Mr Parsa said the majority of its work was now done in the US.
Goldman Sachs hands bosses special bonuses
Goldman Sachs has granted a bonus to its two top executives, which could see them gain more than $50m (£36m) worth of stock.
Goldman Sachs said it was awarding boss David Solomon performance-based stock worth $30m based on the current share price, coming just months after it docked his pay over the bank's role in a corruption scandal.
Johh Waldron, president of the company, was granted $20m worth of stock. Both awards will be paid out in five years' time, and are subject to performance and time-based vesting conditions.
The move has been taken to “enhance retention in response to the rapidly increasing war for talent", Goldman Sachs said.
Mr Solomon's annual compensation was cut by 36pc earlier this year to $17.5m for 2020, due to a penalty over the 1MDB bribery scandal at the company.
Sponsorship deal falls through at Beckham-backed esports company
Shares have slipped more than 8pc at David Beckham-backed gaming firm Guild Esports after it said a sponsorship deal with a European fintech firm had fallen through.
Guild said it had yet to receive any payments under the £3.6m contract with the unnamed company, which it had first announced in October last year. It said it had decided to terminate the three-year deal.
Guild said: "Under the terms of the agreement, the sponsor was due to commence payments from the date of their global brand launch and unveiling. To date, Guild has not been given any clear timeline for their launch and none of the amounts scheduled under the contract have been paid."
David Beckham was an early investor in Guild, and still holds a 4.7pc stake in the business. Filings by the company, published when it floated in London last year, showed he was being paid by Guild Esports as a social media influencer to support its work in person and on networking sites.
The filings show he will be paid a minimum of £15.3m by 2025.
Ryanair facing accusations of 'smear campaign'
Ryanair is being sued by a package holiday company over accusations that the airline is exploiting its market dominance in an “aggressive” pursuit against online travel agents.
As Bloomberg reports:
On the Beach Group accused the budget airline of monopolizing the market for booking services and not giving customers a “free and fair choice,” according to a London court filing.
A Ryanair spokesperson didn’t immediately respond to a request for comment. The airline is yet to file a defense to the claim.
“Ryanair wants, and has for some years, been aggressively seeking to eliminate competition from On the Beach - and other online travel agents - in the U.K. and throughout the EU,” the company’s lawyers said in the lawsuit filed at the U.K. High Court earlier this month.
The holiday booking agency alleged the airline of a “smear campaign” against it and other booking sites by blocking payments, preventing customers from managing bookings, and degrading customers’ experience, the lawyers said.
A spokesperson from On the Beach declined to comment.
That's all from me for today - Hannah Boland will take things from here. Have a great weekend!
Sterling dips after sluggish retail sales
Sterling has ended the week with a fall following disappointing retail sales figures, but remained close to recent highs as inflation fears persisted.
The pound was last down 0.2pc at $1.3763, below a one-month high of $1.3834 reached on Tuesday. Against the euro it traded 0.4pc lower at 84.60 pence , still close to levels last seen in February 2020 before the pandemic sparked widespread selling of sterling.
Official figures this morning showed retail sales fell 0.2pc in September – the fifth consecutive month of decline.
But sterling has been buoyed by expectations that the Bank of England will move to raise interest rates amid surging inflation.
The Bank's chief economist, Huw Pill, added fuel to the fire on Friday by saying inflation could pass a "very uncomfortable" 5pc.
Tesla shares hit record high
Tesla shares pushed up to a record high on Friday, taking Elon Musk's electric vehicle maker another step closer to joining the elite group of companies valued at $1 trillion.
Shares are up 1.7pc at $909 a pop, giving the company a market valuation of $910bn. That's just shy of Facebook's $917bn valuation.
Tesla has been on the climb since early June, spurred on by two sets of strong quarterly figures that showed the company is weathering the semiconductor shortage much better than its rivals.
The firm last week reported deliveries and margins well ahead of expectations for the third quarter.
Wedbush analyst Daniel Ives said: "While there are many competitors in the EV space, Tesla continues to dominate market share as evidenced again this quarter while battling through the chip shortage."
Snap's ad warning sparks $100bn social media sell-off
Snap's stark advertising warning is sending shockwaves through the wider tech sector, with investors dumping shares in the social media firm and its rivals.
On Thursday, chief executive Evan Spiegel said data collection rules introduced by Apple have made it difficult for advertisers to measure and manage their ad campaigns.
Snap dropped as much as 24pc – its biggest ever one-day fall – wiping out about $27bn of a market value that now sits around $93bn.
Contagion spread to Alphabet, Facebook, Twitter and Pinterest, which all fell between 2pc and 5pc each. All together, Snap’s warning wiped more $100bn of market value from the company and its rivals on Friday.
Beyond Meat plunges on falling demand
Shares in Beyond Meat have tumbled as much as 16pc after the plant-based food group cut its revenue forecasts for the third quarter.
Beyond Meat said it was facing reduced demand due to the Covid delta variant, as well as a decline in retail orders as restaurants reopened. It also blamed supply chain disruption caused by labour shortages at its customers.
The company now expects revenue of about $106m (£77m) in the period, down from its previous forecast of between $120m and $140m.
It's the latest setback for the maker of pea-based burgers and sausages, which is struggling with lukewarm demand and the return of dining out.
Shell looks to restart hurricane-hit oil platform
Shell is hoping to restart operations at its oil and gas platform in the US Gulf of Mexico as early as the first half of November, according to a Bloomberg report.
Ursa, which produces 100,000 barrels a day, and its other 60,000-barrel a day offshore platform Mars have been shut since Hurricane Ida disrupted the US oil industry in late August.
Shell had said their restarts are pending the completion of repairs to a transfer facility known as West Delta 143, or WD-143.
In a statement today the company said it expects the WD-143 facility to restart also in the first half of November. Once the facility is operational, the Mars Oil Pipeline is expected to resume normal operations as producers ramp up production.
The platforms are key to the production of crude oil that competes with supplies from OPEC nations such as Saudi Arabia and Iraq.
Hurricane Ida sparked a shutdown in offshore production, compounding wider supply issues.
Car parts giant Continental cuts outlook amid supply bottlenecks
German car parts giant Continental has slashed its outlook for 2021 as shortages in semiconductors and global supply chain disruptions weighed on the industry.
Continental said "negative effects from cost inflation for key inputs including electronics and electromechanical components", as well as raw materials, were becoming more significant.
It added that short supplies of semiconductors and "uncertainties related to the supply chain" meant the global car market would stagnate relative to 2020, when the industry was battered by the pandemic.
The group's sales for the entire year were now expected to sit between €32.5bn and €33.5bn (£27.4bn to £28.3bn) having previously been estimated at between €33.5bn and €34.5bn.
Continental also cut its forecasts for operating margin – a measure closely watched by investors.
It comes after both Volkswagen and Renault warned of lower production output this year as a result of the supply crunch.
Qantas moves forward plans to restart international travel
Qantas Airways has brought forward its plans to restart international travel from Sydney as Prime Minister Scott Morrison predicted tourists would be welcomed back to Australia this year.
Fully-jabbed Australian permanent residents and citizens will be free to travel through Sydney from Nov. 1 without the need for hotel quarantine on their return.
Two weeks ago, Morrison said Australians, skilled migrants and students would be given priority over foreign travellers in coming to Sydney. He predicted tourists would return in 2022 or later.
But while tourists will retain their low priority, Morrison now expects they will return this year.
Sydney-based Qantas announced services to Thailand, Singapore, South Africa and Fiji had been brought forward by weeks or months. A new service to New Delhi will begin in December, the first to India in almost a decade.
FTSE 100 pushes higher
Time for a lunchtime check-in on the FTSE 100, which looks set to end the week on a high.
The blue-chip index has pushed 0.5pc higher to 7,229 points as investors shrugged off sluggish retail data and took comfort from easing concerns over China's property market.
Miners are the biggest upward force, with Antofagasta, Evraz and BHP leading gains after Evergrande made an overdue bond payment, easing some concern about a global financial markets fallout.
London Stock Exchange Group is the biggest faller, down 5.4pc after it warned supply chain troubles could delay its tech investment plans. Holiday Inn owner InterContinental Hotels is trading 3pc lower after its trading update failed to impress investors.
The domestically-focused FTSE 250 was trading flat.
Expert reaction: Employment tax rise is a step too far
Commenting on NIESR's analysis, Kitty Ussher, chief economist at the Institute of Directors, said:
When the Government rushed legislation through Parliament to raise employers’ national insurance, it was unable to tell us the scale of its effect on the UK economy, beyond that the macroeconomic impact would be ‘significant’.
What we find is that the proposed tax rise acts as a dampener on investment that in the longer-run reduces GDP. It disincentivises skills investment. It will reduce UK international competitiveness by reducing the attractiveness of the UK as a location.
The firms that Covid hit the hardest will suffer the most, particularly distribution, transport, hotels and restaurants. The burden will fall on a combination of employees, firms, suppliers and consumers and also adds, in NIESR’s view, ‘unnecessary complexity’ to the tax system.
We are now looking for a recognition in Wednesday’s Budget that this flat tax on employment is a step too far. In the short term it has already had real and negative effects on the business climate; in the longer run it goes against the Government’s stated policy to encourage UK firms to invest and grow.
National Insurance rise 'will hurt Covid-hit sectors the most'
The government's planned hike to National Insurance will hit hardest the labour-intensive sectors that have suffered the most from Covid, according to new analysis.
The National Institute of Economic and Social Research (NIESR) said the levy, which aims to fund health and social care, increases the tax burden on workers relative to the retired, with the latter group also set to benefit most from increased health and social care spending.
Firms expected to suffer the most would be larger employers in industries where labour costs are a high fraction of total costs.
This includes distribution, transport, hotels, and restaurants, where there is still weak demand and therefore minimal ability to pass higher costs into prices, and which were the hardest hit by Covid.
NIESR added the move also added "needless complexity" to the tax system and disincentivised skill acquisition.
As taxes on self-employment incomes will rise by 1.25pc, instead of 2.5pc in total on employment incomes, the incentive to be self-employed increases, which increases tax administration costs and encouraging reduced firm size and economic efficiency, it added.
US futures dip as Snap warning weighs on tech stocks
Wall Street is poised to open lower this afternoon, with tech stocks weighing after a digital advertising warning from Snap.
The parent company of Snapchat tumbled 22pc in pre-market trading after it warned changes to the way Apple tracks data had hit advertising spend. The jitters spread to rivals Facebook, Google and Twitter, which were all trading lower.
Intel also plunged more than 10pc after missing third-quarter sales expectations, while its chief executive pointed to shortages of other chips holding back sales of the company's flagship processors.
The gloomy sentiment dragged futures on the tech-heavy Nasdaq down 0.2pc. The benchmark S&P 500 was largely unchanged, while the Dow Jones ticked up 0.2pc.
Ships stuck for 39 days as LA port crisis deepens
America’s shipping crisis is getting worse, not better, with a new record in the number of vessels moored off the key Port of Los Angeles, reports Alan Tovey.
According to data from VesselsValue, more than 100 ships are now at anchor off the California coast, awaiting berths at the ports.
More than 80 of the vessels are container ships, between them capable of carrying almost 600,000 standard 20ft shipping containers.
Pity the poor crew on the Zhong Gu Jiang Su, which has been waiting 39 days to go alongside.
The hold-ups come despite the Biden administration announcing last week that the port will operate 24 hours a day to clear the backlog, which is threatening supply chains in the run-up to Christmas.
S4 Capital drops after Snap warning
Sir Martin Sorrell's S4 Capital has slumped as much as 4.8pc after a gloomy trading update from Snap sparked jitters about online advertising.
Snap, the parent company of social media app Snapchat, missed expectations for the third quarter. It said changes to the way Apple tracks advertising – combined with supply chain troubles – was hitting ad spend.
The warning, which wiped around $100bn off Snap's market value, had a knock-on effect on social media rivals as well as advertising firms.
S4, which specialises in digital advertising, saw its shares fall further from their record high in September.
Petrol prices near record high
High oil prices, the weak pound and increased use of the more costly bioethanol have all contributed to the surging costs at pumps.
Both petrol and diesel are now closing in on record prices set in 2012.
Renault 4 marks 60th birthday with 'hotel suite' concept car
Alongside its downbeat forecasts this morning, Renault has also had a bit of fun.
To mark the 60th anniversary of the Renault 4, the French company has reinvented the vehicel with a makeover by designer Mathieu Lehanneur.
The result is "SUITE N°4" a concept car "inspired by a nomad hotel suite".
Turkish lira hits new record low after interest rate cut
The Turkish lira has slumped to a new record low a day after the country's central bank opted to slash interest rates despite soaring inflation.
The currency fell 1pc to a fresh low of 9.6581 to the dollar. On Thursday the central bank cut rates by two percentage points in what was widely seen as confirmation of its lack of independence from President Recep Tayyip Erdogan.
The Turkish president has been pushing for interest rate cuts to fuel economic growth, piling pressure on the lira.
Sentiment over Turkey was further hit by an international watchdog downgrading the country to a grey list for failing to head off money laundering and terrorist financing.
Volkswagen output slumps to 60-year low
There are further warning signs in the car industry today with reports in Europe that VW Group’s giant car plant at the company’s Wolfsburg base built just 300,000 cars so far this year, writes Alan Tovey.
That is the lowest output since 1958, and far off the 780,000 vehicles per year in the past decade. Three years ago VW said it wanted to hit 1m vehicles per annum at Wolfsburg.
Last week Reuters reported claims that VW was considering cutting 30,000 production jobs as it considered how to reshape to electric vehicles, which are far simpler to build than cars with conventional engines.
It comes after Renault said it will make half a million fewer cars than expected this year due to semiconductor shortages.
Sainsbury's ends talks to sell banking unit
Sainsbury's today said it's called off talks to sell its banking operations after concluded the offers it received did not offer value to shareholders.
Britain's second biggest supermarket starting exploring a sale of the unit a year ago as ultra-low interest rates and Covid-related disruption increased pressures on the business.
It received a number of offers in November 2020, with Barclays, Lloyds and NatWest reportedly among possible suitors.
Sainsbury's said: "Whilst the board of Sainsbury's believe that it was in the best interests of shareholders to explore these expressions of interest, it has concluded that these do not offer better value for shareholders than will be realised through retaining Sainsbury's Bank."
Wise slumps after founder sells £82m stake
Shares in Wise have tumbled as much as 5.4pc after co-founder Taavet Hinrikus sold a stake worth £81.5m.
An investment firm for the Wise chairman sold 10m shares in the digital payments provider at 815p each, according to terms seen by Bloomberg. The price represents a 4.1pc discount to yesterday's closing price.
Mr Hinrikus is also pledging as many as 39.6m shares in Wise – worth around £320m – to secure a loan from Goldman Sachs. He will use the funds to invest in early-stage tech companies.
The fintech founder had a $1bn stake in Wise when it listed on the London Stock Exchange earlier this year. He's already invested in more than 100 startups across Europe.
Petrol prices near record high
Fuel prices are creeping near a fresh record high as surging wholesale oil drives up costs at the pump.
Average petrol prices stood at 142.16p a litre today, just off the current record high from April 2012. Diesel is also closing in on its record of 147.93 a litre set in the same month.
It follows predictions by the Petrol Retailers Association that prices would reach record highs by the end of the month as oil prices hit a three-year peak of $85 a barrel.
Latest average pump prices released this morning:
⛽️Petrol: 142.16p a litre, against a record of 142.48p in April 2012
⛽️Diesel: 145.68p, against a record of 147.93p a litre in April 2012
⛽️Super unleaded: 153.95p a litre
— David Churchill (@David_Churchill) October 22, 2021
Eurozone growth slumps to six-month low
Meanwhile, things are worse on the continent, with business activity growth in the eurozone plunging to a six-month low in October.
The IHS Markit survey came it at 54.3, cooling from 56.2 in September and marking the worst level of growth since April.
The drop was most clearly felt in manufacturing as supply troubles weighed, though the service sector also posted a decline.
Production powerhouse Germany, which relies heavily on its manufacturing of high-value goods such as cars, was the biggest victim. Output there fell to its lowest level since February.
Much like in the UK, widespread shortages pushed up prices. An unprecedented input cost increase was recorded in manufacturing while service sector costs rose at the sharpest rate since September 2000.
Output growth across the Eurozone fell to a 6-month low in October (54.3 vs. 56.2 in Sept) amid increasing supply bottlenecks and survey-record rises in prices. Job creation notably quickened to the joint-highest in 21 years. Read more: https://t.co/XnLS9ApkEW pic.twitter.com/sJbFke2N2y
— IHS Markit PMI™ (@IHSMarkitPMI) October 22, 2021
More expert reaction: Higher inflation could hit demand
Rhys Herbert, senior economist at Lloyds Bank, says:
The data suggests that the economy is holding up well. Despite accelerated growth, there continues to be signs that supply chain issues, which have led to a backlog of goods at ports, are affecting output and are pushing up prices. There are also some early indications that this inflation is hitting consumer confidence.
There is little sign right now of the ongoing supply chain issues and bottlenecks easing. So, they will probably continue to constrain output, while faltering demand could be a further issue if higher inflation reduces the spending power of consumers.
The difficulty businesses are facing in recruiting staff are also adding to the pressures on them, although there are some very tentative signs that the end of furlough will make it a little easier for firms to fill vacancies.
Expert reaction: PMI figures will fuel inflation worries
Chris Williamson, chief business economist at IHS Markit, says:
The UK economy picked up speed again in October, but the expansion is looking increasingly dependent on the service sector, which in turn looks prone to a slowdown amid the recent rise in Covid-19 cases. Growth is also being accompanied by an unprecedented rise in inflationary pressures, which will inevitably feed through into higher consumer prices in coming months.
The news comes at a time when the Bank of England is already leaning towards hiking interest rates to safeguard against inflationary expectations becoming entrenched. The record readings of the PMI survey’s price gauges will inevitably pour further fuel on these inflation worries and add to the case for higher interest rates.
However, the economic growth signals from the PMI remain less convincing from a policy standpoint. The service sector is clearly in something of a sweet spot as the UK has seen more people’s lives and livelihoods return closer to normal. Some of the growth momentum will therefore fade as this rebound passes.
Moreover, rising Covid-19 case numbers pose a downside risk to growth in the coming months, potentially deterring some services-oriented activity among consumers in particular and potentially leading to the renewed enforcement of health restrictions as winter draws in.
PMI: Business costs rise at fastest rate on record
While the PMI figures cast a positive light over the economic recovery, there are clear signs that supply chain troubles and labour shortages are fuelling a sharp rise in prices.
The survey showed input price inflation at private sector companies rose at the fastest rate since the index began in January 1998.
Meanwhile the manufacturing sector saw its weakest output performance in eight months.
Goods producers widely commented on difficulties meeting customer demand due to capacity constraints resulting from lengthy supplier lead times and shortages of staff. Around 64pc of UK manufacturers reported worsening supplier delivery times in October, while only 1pc saw an improvement.
UK growth picks up thanks to service sector boost
Now for some unexpectedly upbeat data, with the latest PMI figures showing an acceleration in private sector business activity in October.
IHS Markit's flash index jumped to 56.8 this month, the highest since July and well above expectations of 54.
The pick-up in activity, which bucks a wider trend of data showing a slowdown in the UK's recovery, was led by strong activity in the services sector.
Service sector activity stood at 58.0, outpacing manufacturing production (50.6) by the widest margin since February 2009.
Trade secretary holds G7 supply chain talks
International Trade Secretary Anne-Marie Trevelyan is leading talks with G7 trade ministers at Mansion House this morning, with supply chain troubles the key topic of debate.
The Secretary of State is set to argue against protectionism and advocate measures such as better monitoring and cooperation to quickly identify and address bottlenecks where they arise.
The post-pandemic rebound has wreaked havoc through global supply chains, with major ports shuttered and driver shortages impacting deliveries. Shipping costs have increased fivefold since the start of the year, while air cargo has seen prices rise and capacity reduce.
International Trade Secretary Anne-Marie Trevelyan said:
Global challenges require global solutions. We have seen from the Covid-19 pandemic how fragile our global supply chains can be. The UK will work with our G7 and trade partners to build stronger, greener supply chains and a more resilient economy.
We will also send a clear message that digital trade should be open and free, with proper safeguards to protect workers, consumers and businesses, so it can raise living standards and support jobs as we build back better from the pandemic.
L'Oreal cashes in on post-lockdown make-up demand
More corporate news from across the Channel now, where L'Oreal has reported a jump in sales thanks to higher demand for make-up and perfume as society opened up again.
The beauty group posted a 13pc increase in revenue in the third quarter, well ahead of analyst expectations of 8.1pc.
Its consumer products division, which includes brands such as Maybelline New York, performed better than in the same period in 2019. Shares rose as much as 6.8pc on Friday.
L'Oreal has bounced back strong from the pandemic thanks to its diverse range of products. During lockdown the declining demand for make-up was partly offset by higher sales of skin creams made by brands such as La Roche-Posay and CeraVe.
Renault slashes production on chip shortages
Renault has said it will make around half a million fewer vehicles than anticipated this year due to the global semiconductor shortage.
The French manufacturer will make around 500,000 fewer vehicles – equivalent to nearly a fifth of last year’s output – due to a lack of components, it said on Friday. Renault previously predicted a shortfall of just 200,000 cars.
The global car industry has been hampered by supply chain bottlenecks that have led to shortages of chips and other crucial raw materials.
Renault sold just over 599,000 vehicles in the third quarter, down 22.3pc compared to the same period in 2020 when the industry re-emerged from months of pandemic-induced paralysis.
But the company still confirmed its forecast of reaching a full-year operating margin of 2.8pc.
Holiday Inn owner gets staycation boost
The owner of Holiday Inn has enjoyed a rebound in sales as global travel begins to open up and holidaymakers opt for staycations.
Intercontinental Hotels Group (IHG) said revenue per available room was up by two-thirds in the three months to the end of September compared with a year earlier. However, this was still 21pc down compared with pre-Covid levels.
The growth was particularly strong in the US during the summer holidays, with some hotels exceeding 2019 levels for occupancy levels.
IHG said domestic leisure demand was particularly strong, while demand for upmarket and luxury hotels in towns and cities lagged.
Shares in IHG dropped almost 2pc following the announcement, with analysts at Jefferies saying recovery for the hotel group was already priced in.
Pret launches self-service coffee machines
There's good new for fans of ubiquitous coffee shops this morning. My colleague Hannah Boland reports:
Pret a Manger is rolling out self-service coffee machines across the UK as it battles to reduce its reliance on London following a slump in footfall during the pandemic.
The sandwich chain has struck a deal with JDE Peet’s, the Dutch company which owns Jacobs Douwe Egberts, to launch its "Pret Express" coffee and tea machines in universities, hospitals, petrol forecourts and convenience stores across the UK.
The move is likely to put Pret in sharper competition with Coca-Cola owned Costa, which has more than 10,000 self-service coffee and tea machines across the UK.
The machines will mean Pret can expand into more sites outside city centres amid a wider push to diversify outside of metropolitan hubs which rely on commuters and tourists for footfall.
Pret has historically had more of its stores located in London, but recently unveiled plans to open 200 new stores, focusing on regional and suburban locations.
London Stock Exchange warns on supply chain troubles
It seems even the London Stock Exchange Group isn't immune from supply chain issues, with the exchange operator warning some of its tech spending plans could be delayed.
LSEG said supply chain pressures could impact timing of its spending, though it didn't change its overall cost and capital expenditure guidance. It also warned profit growth would slow in the fourth quarter due to strong comparisons in 2020.
Shares dropped 3.7pc following the update, leading the FTSE laggards.
It came as the company reported 7.6pc growth in third-quarter revenue to £1.7bn thanks to buoyant capital markets revenue. Equities revenue also rose 15.4pc, helped by high-profile listings for companies such as Wise.
LSEG said its integration of Refinitiv, which it acquired for $27bn in January, was on track. The deal means most of the group's revenue comes from data service.
David Schwimmer, chief executive of LSEG, said:
We are making excellent progress on the integration of Refinitiv and are comfortably on-track to achieve £125m of cost synergies in 2021, ahead of our original phasing. We continue to execute across a number of workstreams to deliver the target revenue synergies.
The group is well placed as we make targeted investments in product and technology enhancements to help us meet the needs of our customers and capitalise on the growth trends driving change across our industry.
FTSE risers and fallers
It's been a resilient start to the day for the FTSE 100, which is now up 0.4pc as investors shrug off an unexpected decline in retail sales.
JD Sports is the biggest riser on the blue-chip index, up 2.6pc after it announced a deal to buy 80pc of Greek retailer Cosmos Sport. Rio Tinto is also up 1.8pc, reversing yesterday's losses.
The biggest laggard is London Stock Exchange Group, which is down 3.5pc after warning supply chain troubles could delay some of its technology spending plans.
The domestically-focused FTSE 250 is trading flat.
Deutsche Bank whistleblower handed record $200m payout
Meanwhile, there's a big overnight story from the States, where a regulator has paid a record reward of nearly $200m (£145m) to a whistleblower who provided information for a case involving the rigging of crucial financial benchmarks.
The US Commodity Futures Trading Commission (CFTC) announced the award in a statement on Thursday, but did not disclose the recipient or details about the case or the precise amount.
Over the past decade, authorities globally have levied multibillion-dollar fines and pursued criminal charges against banks – including Deutsche – and traders for banding together to rig global benchmarks, most notoriously Libor.
Law firm Kirby McInerney, which represented the whistleblower, said its client scored the record bounty after providing extensive information and documents in 2012 that "catalysed" investigations by the CFTC and a regulator into benchmark manipulation.
Consumer confidence slumps
In further signs of the faltering recovery, a key gauge of consumer confidence released overnight showed household optimism has fallen to its lowest level since the depths of winter lockdown.
Tom Rees and Tim Wallace have more details:
Gaps on supermarket shelves and the prospect of a cost of living crunch sent GfK’s consumer confidence gauge sliding for the third consecutive month in October.
The indicator slipped from minus 13 last month to minus 17, the lowest level since February, after a gauge tracking how households view the economic outlook for the next 12 months tumbled. It measures the difference between households feeling pessimistic and optimistic on the economy and their personal finances.
Joe Stanton at GfK said: “The financial mood of the nation has changed. After six months of robust recovery in the first half of 2021, UK consumer confidence has taken a turn for the worse with all vital signs weakening.”
It came as industry bosses and economists sounded the alarm on the impact of ministers turning to a Covid "Plan B" plan this winter.
FTSE 100 opens higher
The FTSE 100 has started Friday on the front foot despite disappointing retail sales data and inflation warnings from the Bank of England.
The blue-chip index rose 0.1pc at the open to 7,197 points, having closed down 0.5pc on Thursday.
Plash PMIs from the UK and Europe later this morning are expected to show further signs of a slowdown.
More expert reaction: Numbers 'hide a multitude of sins'
Lisa Hooker at PwC said:
The headline flat retail sales numbers hide a multitude of sins. Not least with September’s spending patterns dominated by the petrol crisis, and the subsequent increase in fuel sales, which diverted attention away from the high street.
Grocery and clothing sales saw some pick-up as families stocked up ahead of both back-to-school and back-to-the-office. However, most other categories declined slightly, with home and household goods sales actually dipping below pre-February 2020 levels for the first normal trading month since the start of the pandemic.
Despite September’s slowdown, we are still confident about retail’s prospects ahead of the all-important Golden Quarter in the run-up to Christmas. Consumers still tell us that they have money in their pockets, with our most recent consumer sentiment survey ahead of the 2016-20 levels. Wage increases and lockdown savings should offset any short-term inflationary pressures. And, most importantly, people have told us that they plan to make Christmas more special this year after last year’s lockdowns and tier restrictions.
In fact, there are already signs that consumers are bringing forward their Christmas present buying plans, due to concerns of product shortages. Online sales have continued to ease back from their lockdown highs. So, high street retailers will have their fingers crossed that October and November exceed expectations - and that they are able to source sufficient stock to meet pent-up demand.
Expert reaction: Perfect storm brewing for retailers
Lynda Petherick, head of retail at Accenture UKI, said:
After enjoying a post-pandemic recovery for most of the year, September was a more challenging month for retailers as shoppers tightened their belts amid talk of a cost of living crisis. These figures will be no cause for celebration for the sector as we head into the crucial Black Friday and Christmas trading period.
There is a perfect storm brewing in the final months of the year as retailers are already facing staffing pressures and supply chain issues. Fuel shortages and wet weather may have dented consumer confidence last month, but the greatest concern will be whether retailers are able to get consumers the products they want – be that turkeys or toys – at a time when price increases may deter consumers from buying in the first place.
It can’t be ignored that there is also the looming spectre of rising Covid case rates, which could see people shy away from physical retail this winter. This reiterates one of the key lessons from the pandemic – the paramount importance of a seamless and well-prepared e-commerce offer.
Bank of England: Inflation could hit 5pc
The lacklustre sales figures come as the Bank of England's new chief economist warned inflation could rise “close to or even slightly above 5pc” next year.
The Bank has already said it expects inflation to top 4pc by the end of the year – double its 2pc target – but the comments from Huw Pill will spark fresh fears about price rises.
Inflation has been rising this year as the economy bounces back from the pandemic, compounded by soaring energy prices and supply chain disruption.
Mr Pill told the Financial Times there would be a "live" decision on whether to hike interest rates at a meeting of the Monetary Policy Committee on 4 November.
Fuel fright fails to stop sales decline
Broken down by category, the figures show a surge in fuel sales in September as motorists queued at forecourts. But this failed to offset declines in household goods.
Non-food stores reported a fall of 1.4pc in sales volumes in September 2021, because of falls in household goods stores, such as furniture and lighting stores, and other non-food stores such as sports equipment stores.
Automotive fuel sales volumes rose by 2.9pc in September 2021 as demand towards the end of September increased sales; volumes were 1.8pc above their pre-pandemic February 2020 levels.
Food store sales volumes rose by 0.6pc in September 2021 and were 3.9pc above pre-coronavirus pandemic levels in February 2020.
Despite relaxation of Covid-19 restrictions in summer 2021, in-store retail sales remain subdued; the proportion of retail sales online rose to 28.1pc in September 2021 from 27.9pc in August, substantially higher than the 19.7pc in February 2020 before the pandemic.
Retail sales fall again
Happy Friday. We start the day with some less-than-happy news for retailers, with sales falling for their fifth consecutive month.
The volume of retail sales in September fell 0.2pc on the previous month, according to the ONS. It's the longest period of back-to-back monthly declines on record.
The numbers highlight dented consumer confidence as the UK's economic recovery falters, with a surge in fuel sales due to panic buying failing to offset the wider decline.
Despite the fall, sales were 4.2pc above their pre-pandemic levels in February 2020.
5 things to start your day
1) Sunak's tax raids push Britain further behind Germany and US: Britain is set to fall further behind Germany in the competitiveness of its tax system as a string of Treasury raids risk making it an increasingly unappealing business destination, a leading Tory think tank has warned.
The Centre for Policy Studies (CPS) said that the UK's outdated business rates system, combined with a planned corporation tax hike and National Insurance raid to fund social care, could derail Boris Johnson’s levelling up ambitions and throw economic growth off course.
2) Consumer confidence slumps as soaring prices hits households: Household confidence has fallen to its lowest level since the depths of the winter lockdown as a living costs crunch hits shoppers and hospitality bosses warn Covid “Plan B” will tip firms over the edge.
Gaps on supermarket shelves and the prospect of a cost of living crunch sent GfK’s consumer confidence gauge sliding for the third consecutive month in October.
3) GB News hires Sunday Express editor in post-Andrew Neil revamp: Michael Booker will become editorial director of the fledgling news network in an attempt to draw a line under last month's resignation of its chairman and lead presenter.
GB News has been hit by a string of high-profile resignations since launching four months ago.
4) Financial Times sinks to £35m loss as print sales dwindle: The Financial Times Limited reported a pre-tax loss of £34.5m for 2020, compared with a loss of £4.6m in the previous year.
Turnover was down by more than £25m to £320m, with print circulation declines outweighing what the FT said was a “very robust advertising performance, especially in digital advertising”. The losses also reflect a £15m increase in staff costs.
5) Eurostar tests facial recognition to replace passport checks: Travellers will have their face scanned twice at London St Pancras station, allowing them to skip long queues for ticket check-in and border control.
The Channel Tunnel rail operator will run a trial in conjunction with the Department for Transport for two weeks next month. Initially, some 200 people will be selected to participate.
What happened overnight
Tech stocks climbed in Asia on Friday, while Chinese property stocks rallied following a surprise interest payment by debt-ridden property developer China Evergrande Group.
Meanwhile cyclical stocks dragged amid worries that central bankers will need to tighten monetary policy into slowing growth in order to tackle persistent inflation.
Japan's Nikkei rose 0.7pc led by technology shares, while energy shares were the biggest drag. Chinese blue chips gained 0.3pc, with the CSI300 Real Estate Index rising 2.5pc. Hong Kong's Hang Seng rose 0.4pc, as an index tracking Hong Kong-listed mainland developers rallied 4.3pc.
Coming up today
Corporate: London Stock Exchange Group, InterContinental Hotels, Essentra (trading updates)
Economics: Retail sales (UK), manufacturing PMI (UK, EU, US), services PMI (UK, EU, US)