BUSINESS LIVE: John Lewis narrows losses to £55m

Just before close, the FTSE 100 was 2.02% up at 7,677.99.

Meanwhile, the FTSE 250 was 1.23% higher at 18,790.17.

Google announced another round of layoffs Wednesday, cutting staff members from its global recruiting division.

The latest move in the ‘tech wreck’ comes nine months after the company cut 12,000 jobs, about six percent of its workforce, back in January.

M&C Saatchi swung to a first-half loss following a significant decline in spending by the ad group’s technology clients in the UK and US.

The advertising agency posted a £5.1million statutory pre-tax loss for the six months ending June, compared to a £305,000 profit in the same period last year.

THG shares tumbled over 24 per cent on Thursday after the group unveiled widening pre-tax losses and dwindling revenues.

The group’s pre-tax losses widened from £108million to £133million in the six months to 30 June.

More than £2billion was wiped from BP’s share price as investors reeled over the shock departure of disgraced ex-boss Bernard Looney.

Mr Looney quit the oil giant on Tuesday after he admitted misleading the board over past relationships with colleagues.

(AP) – U.K. chip designer Arm Holdings is scheduled to start trading on the Nasdaq Thursday, in what is the largest initial public offering of shares in nearly two years.

The shares have been priced at $51, giving Arm a market value of $54.5billion. The opening trade could be much higher, given the interest among investors in the offering.

Most consumers use at least one product that contains Arm’s chips, though many people may not be familiar with the company itself. Its chip design is used in virtually all smartphones, the majority of tablets and digital TVs.

More recently, Arm has expanded into artificial intelligence, smart devices, cloud computing, the metaverse and autonomous driving.

Arm’s offering is an important development for the IPO market, which has seen relatively few companies go public the past two years.

It’s also a key moment for the Japanese technology investor Softbank, which acquired Arm in 2016, as well as investments banks such as Goldman Sachs that recently have taken in far less revenue from underwriting and advisory fees.

Softbank will retain a nearly 90% stake in the Arm. It´s the biggest IPO since the electric truck maker Rivian debuted in November 2021 with a market value of more than $66billion.

The European Central Bank has hiked interest rates to an all-time high of 4 per cent.

Richard Carter, head of fixed interest research at Quilter Cheviot, reacts: The European Central Bank has, it appears, decided that 4% is the level it feels comfortable with allowing interest rates to climb to and help bring inflation down.

Many market participants expected it to hold today and move into a wait and see pattern with the data, but it clearly sees the need to hike once more now before joining the Federal Reserve in an extended pause.

Given where inflation is across the Eurozone, it is perhaps not a surprise it has chosen to once again raise rates. Inflation is not expected to return to target until 2025 and as such the ECB will be looking to put enough pressure on the economy, businesses and consumers to dampen demand.

Car makers have been accused of refusing to bring small, affordable electric cars to market because they want to prioritise expensive battery-powered SUVs that make them bigger profits.

Manufacturers could sell compact electric vehicles (EVs) built in Europe for £21,000 and still pocket a profit but instead are focusing on large SUVs that are ‘too big and bulky for British roads’ but offer greater margins, says Transport & Environment.

Hilton Food Group shares soared on Thursday after the FTSE 250 group signed a deal with Walmart to supply the retail giant’s Canadian hypermarket stores.

The food packaging business revealed it would build a new manufacturing plant in Eastern Canada that will deliver various meat products, beginning with beef, lamb, pork and seafood, to Walmart ‘supercentres’.

The European Commission has launched an investigation into the Chinese electric vehicle (EV) sector in the wake of concerns from EU car makers that they are gaining an unfair ‘competitive edge’ thanks to their government-subsidised cheaper prices.

A raft of new Chinese brands have entered the European car market in recent months and their cut-price costs mean their battery cars are often less expensive than equivalents from brands in the bloc.

Britain saw a 14 per cent rise in missed bill payments last month, hitting the second highest rate on record and pointing to growing financial strain on households, fresh data from the Office for National Statistics shows.

The percentage of failed direct debits – mostly used for utility bills or mortgage and credit card repayments – rose from 0.82 per cent in July to 0.83 per cent in August, the second highest rate in monthly records, which started in January 2019.

A year earlier, in August 2022, 0.73 per cent of direct debits failed. The peak in the series was in January, at 0.94 per cent, reflecting a post-Christmas spike as households ran out of money in their current accounts.

The British arm of German discount supermarket Lidl sunk to a £75.9million loss in its last fiscal year, having been stung by higher costs and wages.

In the year to 28 February, Lidl GB saw its revenue rise by 19 per cent to £9.3billion, claiming to have added 1.5million customers in the process.

London-listed Hipgnosis Songs Fund will sell some catalogues featuring tracks from the likes of popstar Shakira in efforts to boost the investment trust’s share price.

The music catalogues investor will see the portfolio of songs to a partnership between its investment adviser and funds advised by Blackstone for $465million (£372million).

Trainline shares soared on Tuesday after the group revealed a £50million share buyback following better-than-anticipated growth in the first half.

The digital railcard platform’s net ticket sales increased by 23 per cent to £2.65billion for the six months ending August, while turnover rose by nearly a fifth to £197million.

The way we spend our money is changing. While Britons may be spending more using debit cards, there has been a surprise resurgence of cash – but cheques are on life support.

Bank trade body UK Finance said there were 45.7billion payments in total in 2022, of which 39.5billion were made by consumers and the rest by businesses.

Housebuilder MJ Gleeson profits have been hammered by economic volatility and worsening consumer confidence.

In the year to the end of June, the group’s pre-tax profit fell by 43.2 per cent to £31.5million, while revenue slipped 12.1 per cent to £328.3million.

A guarantee is only as good as the people giving it to you.

This consumer advice truism explains in part why the triple lock is in such a muddle.

Victoria Scholar, head of investment at Interactive Investor:

‘The cost-of-living crisis with a softer consumer backdrop means John Lewis shoppers are holding off from spending on expensive big-ticket items like white goods and technology. However, they are still spending on cheaper items like fashion and beauty.

‘In Waitrose, inflation has been responsible for the rise in sales with average prices rising by 9% whereas the volume of goods sold dropped by 5%.

‘Profits have been struggling at John Lewis for a number of years amid high costs relating to its vast store estate and the rise in cheaper e-commerce rivals like Amazon.

‘Waitrose has struggled as customers become increasingly price sensitive amid the elevated inflation, rising interest rate environment, as well as stiff competition from cheaper rivals like Aldi and Lidl.

‘Focus will be on the all-important festive period when John Lewis typically enjoys a seasonal boost. Dame Sharon White has a daunting task at hand to revive John Lewis’ fortunes at a challenging time for retail more broadly, laid bare by the recent collapse of Wilko.’

Footwear brand Birkenstock is following the trend for New York listings as it prepares to go public in a move that could value the firm at over £6billion.

The private equity-owned shoemaker is planning to launch an initial public offering (IPO) in the US next month.

The price is yet to be set but it is expected to give the firm a valuation of £4.8billion to £6.4billion.

The FTSE 100 is trading higher this morning after US inflation data bolstered bets that the Federal Reserve will keep interest rates steady next week, while Melrose and Unite Group have fallen in ex-dividend trading.

The European Central Bank is set to decide later today whether to raise its key interest rate to a record high in what should be its final step in the fight against inflation, or take a break as the economy deteriorates.

Shares of real estate firm Unite Group, product testing company Intertek Group and aerospace supplier Melrose have declined between 0.5 and 1.5 per cent as they traded ex-dividend.

Shares of Hipgnosis Songs Fund have soared 5.9 per cent after the music catalogues investor said it would sell 29 catalogues and a portfolio of non-core songs to Hipgnosis Songs Capital for $465 million as it looks to fund a share buyback programme.

BP’s new boss insisted yesterday that its strategy has not changed – after its green energy revamp was thrown into doubt by the abrupt departure of chief executive Bernard Looney.

The oil giant stunned the City late on Tuesday when it revealed that Looney had quit with immediate effect amid a probe into his past personal relationships.

Richard Hunter, head of markets at Interactive Investor:

‘UK markets mirrored the overnight trading action elsewhere, with the FTSE100 opening marginally higher.

‘With a sideways glance towards an interest rate decision later by the European Central Bank where a further rise is possible, the update will provide another reminder if it were needed that the battle against inflation remains live.

‘Unite Group, Melrose and Intertek were marked lower having gone ex-dividend today, while a tentative risk-on approach to the mining sector was in evidence, bolstered by broker upgrades to both Anglo American and Rio Tinto.

‘With the possibility of price action being driven from elsewhere over the course of the day, there is the potential for UK markets to drift, with the FTSE100 being unable to add much to its gain of 1.2% in the year so far off its own bat.’

The John Lewis Partnership narrowed its first half losses and forecast an improvement in its full year outcome, despite an uncertain economic outlook.

The group also admitted that it will take two years longer than planned to complete its transformation.

The retailer said higher costs due to inflation and a need for greater investment had hit its turnaround schedule.

British chip designer Arm will begin trading on Wall Street today in what is expected to be the biggest US public listing of the year.

The semiconductor firm has secured enough backing from investors to hit the top end of its £37.60 to £40.80 per share price range, which would value Arm at more than £40billion.

Just 10 per cent of shares in the Cambridge-based company are scheduled to start trading in New York today, raising about £4billion for Japanese owner SoftBank, which will retain a 90 per cent stake.

John Lewis Partnership losses narrowed in the first half from £66.6million last year to £54.5million, as the retailer forecast an improvement in its full year outcome despite an uncertain economic outlook.

Nish Kankiwala, chief executive, said:

‘Our transformation to modernise our business is well under way, and I want to thank our Partners for their efforts to give customers great service, quality and value when they shop with us in store or online.

‘There are no brands better placed than Waitrose and John Lewis to provide customers with what they need right now – to help them feel good and eat well.’