M&S claims high court victory in battle to demolish Marble Arch store – business live

Marks & Spencer has announced a breakthrough in its legal battle to demolish and rebuild its main store on Oxford Street in the West End of London.

The UK retailer says the high court has ruled that Michael Gove’s decision to block the redevelopment of its Marble Arch store was unlawful.

M&S brought a legal challenge against Gove, which was heard in the high court last month.

M&S operations director Sacha Berendji, says the court agreed with five of M&S’s arguments against the secretary of state for Levelling Up, Housing and Communities; Gove had disagreed with the recommendation from inspectors to approve the plans and refused permission.

Gove had refused permission for the demolition partly because it would “fail to support the transition to a low carbon future”, and would not encourage the reuse of existing resources, including the conversion of existing buildings.

Today, Berendji says:

Today’s judgment couldn’t be clearer, the Court has agreed with our arguments on five out of the six counts we brought forward and ruled that the Secretary of State’s decision to block the redevelopment of our Marble Arch store was unlawful.

The result has been a long, unnecessary and costly delay to the only retail-led regeneration on Oxford Street which would deliver one of London’s greenest buildings, create thousands of new jobs and rejuvenate the capital’s premier shopping district.

The Secretary of State now has the power to unlock the wide-ranging benefits of this significant investment and send a clear message to UK and global business that the government supports sustainable growth and the regeneration of our towns and cities.”

Opponents have said M&S’s project will release tens of thousands of tonnes of carbon into the atmosphere, and that refurbishment rather than outright demolition would be a better solution

The charity SAVE Britain’s Heritage had campaigned against M&S’s plan to demolish the Marble Arch store; they argue that repurposing and converting cherished buildings will save thousands of tonnes of CO₂ and is “a no brainer”.

Just in: Inflation across the eurozone was stickier than expected last month, which may dent hopes of early interest rate cuts.

Annual consumer price inflation in the euro area dipped to 2.6% in February, new data from Eurostat shows, down from 2.8% in January.

That takes eurozone inflation closer to the official target of 2%, but was higher than the 2.5% which economists expected.

Food, alcohol & tobacco is expected to have the highest annual inflation rate in February, at 4.0%, down from 5.6% in January.

Services inflation was little changed, at 3.9%, compared with 4.0% in January, while inflation in industrial goods slipped to 1.6%, from 2.0% in January.

But energy prices provided less of a deflationary effect – they were -3.7% lower year-on-year, compared with a 6.1% fall in January.

In February alone, consumer prices rose by 0.6%, lifted by higher energy prices than in January.

Joshua Mahony, chief market analyst at Scope Markets, says:

A 0.6% gain for the month of February alone does dent hopes of a sharp decline back down to target in the coming months, feeding off the back of yesterday’s concerning 0.8% reading out of France.

With both headline and core inflation coming in above estimates, traders will be keeping a close eye out for any change in stance from the ECB at Thursday’s monetary policy announcement.

While today’s data looks unlikely to lessen the chance of a June rate cut, it does dampen any calls for a speedy return to easing in April.

Despite the rise in this month’s UK Manufacturing PMI [from 47 to 47.5] the sector continues to contract, points out Michael McGowan, managing director of foreign exchange at Bibby Financial Services:

It’s clear that the pressure to tread carefully is bearing down on manufacturers as they look for ways to turn a profit.

“And geopolitical volatility isn’t making matters any easier. Whilst many may have hoped to see de-escalation in the Red Sea by now, the crisis drags on. For SME manufacturers in particular, events in the Middle East have only compounded the complex set of issues facing them at home – from inflation to high interest rates to the continued impact of Brexit on overseas trading.

Cara Haffey, manufacturing and automotive lead at PwC UK, says:

“Despite rising to a 10 month high of 47.5 in February, the UK Manufacturing PMI is still contracting and shows the ongoing disruption to global trade caused by events in the Red Sea and Suez Canal.

Manufacturers are continuing to do their best to circumvent these issues, as vendors and suppliers test the agility of their supply chains by sourcing alternate routes. However, rerouting supplies, such as around Southern Africa, as well as sourcing more local suppliers both carry added cost implications – which will not be welcome news for the sector.

Manufacturers continue to limp along after a full year of decline, says Fhaheen Khan, senior economist at Make UK, with the cost of living squeeze also hurting.

Manufacturers are now finding it is becoming increasingly more challenging to refill their orders pipeline, without which they will risk further cost cutting measures such as reducing headcount and investment to preserve their long-term viability.

It also reflects consumers shying away from spending with the higher cost of borrowing which rewards the cautious spender saving for a rainy day. The impact of this behavioural change, coupled with an increasingly stressed logistics sector due to ongoing tensions in the Red Sea has limited the access of materials and components and set the scene for a difficult year ahead for industry. Manufacturers will now need to be wary of potentially deteriorating economic conditions and act accordingly to shield against any further shocks.”

UK factories experienced supply chain disruption due to the Red Sea crisis last month, as activity fell again, a survey this morning shows.

UK manufacturing production fell for the twelfth month running in February, according to S&P Global’s monthly poll of UK purchasing managers.

New orders, output, employment levels and stocks of purchases all fell last month, as firms cut staff and also struggled with rising costs.

Some sought out alternative suppliers from more expensive markets closer to home, due to shipping firms avoiding the Suez Canal and taking the longer route around southern Africa.

Demand also remained weak, with new order intakes falling at the fastest rate since last October.

Overall, the S&P Global UK manufacturing PMI, which measures activity in the sector, rose to 47.5 in March, up from 47.0 in February. That’s better than the flash estimate of 47.1 recorded during last month, but still shows the 19th consecutive monthly drop in activity in the sector.

Rob Dobson, director at S&P Global Market Intelligence, says

“UK manufacturers faced challenging circumstances in February, as the ongoing impact of the Red Sea crisis delayed raw material deliveries, inflated purchase prices and impacted production capabilities. There were also knock-on effects for demand, as new export orders were hit by both supply disruptions and higher shipping costs. Production volumes subsequently contracted for the twelfth successive month while total new orders fell at the sharpest rate since October.

This dipruption also pushed up prices, Dobson points out, and caused delays:

Input cost inflation hit an 11-month high, leading to a further increase in selling prices. Average supplier lead times meanwhile lengthened to the greatest extent since mid-2022. Several manufacturers noted that they faced the difficult choice between accepting delays from re-routed shipping or facing the prospect of paying higher prices to source from closer to home.

This comes at a time of already heightened cost caution at manufacturers in response to weak demand, as highlighted by further cuts to employment, purchasing and inventories in February.

Any upward pressure on inflation will be a concern to policymakers, and may add to calls that it is too early to be confident on the timing of interest rate cuts, Dobson adds.

Euro zone manufacturing activity has contracted for the 20th month running,

The latest survey of purchasing managers at European factories shows that output fell again last month.

New orders and purchasing activity also contracted, but at the slowest rate since March 2023, according to data provider S&P Global.

This pulled the HCOB Eurozone Manufacturing PMI down to 46.5, from January’s 46.6, showing a faster contraction (50 = stagnation).

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

“The eurozone’s one-year industrial recession is not coming to an end. Output has declined again at the same pace as the previous month, mainly due to the heavyweights Germany and France. Spain, by contrast, is the first of the leading four euro countries to re-enter growth territory. On a slightly more positive note, the decline in new orders in the Eurozone has softened somewhat, offering a glimmer of hope for a potential demand recovery in the future.”

The survey also shows that Middle East tensions caused some delays to Europe’s manufacturing sector, de la Rubia adds:

“The attacks by the Houthis on commercial vessels in the Red Sea have had a temporary impact, leading to a brief lengthening of delivery times in January, followed by a subsequent reduction in lead times in February.

Consequently, the softer decline in input prices this month is unlikely to be wholly attributed to tensions in the Red Sea but rather to movements in commodity prices, such as the recent rise in oil prices. The fundamental trend of lower demand, which remains the primary driver of faster delivery times, continues to persist

Pearson, the London-listed digital learning group, has announced a further £200m share buyback and said it was well positioned to benefit from opportunities in artificial intelligence (AI) as it reported a 31% rise in full year adjusted operating profit of £573m in 2023, from £456m in 2022.

Pearson’s shares have jumped 4.4% to the top of the FTSE 100 leaderboard.

The company in recent years has transformed itself from a traditional textbook education group to focus more on digital and workplace training.

Omar Abbosh, a former Accenture executive and ex-president of industry solutions at Microsoft, who took over as chief executive of Pearson earlier this year from Andy Bird, said on a media call on Friday that Pearson had expanded generative AI study tools to help students and was well placed for future growth.

Abbosh said:

“The secret sauce for AI is data. In Pearson we have a vast array of data sets which will make us a winner in AI.”

…adding that the world was at an “inflexion point” with AI as more companies looked to train staff for jobs augmented by the new technology.

The company, which generates most of its earnings in the US, came under pressure last year from Cevian Capital, its largest shareholder, to move its listing from London to the US. The proposal comes at a time when London is fighting to keep listed companies after companies such as CRH, the building materials group, and Ferguson, the UK-based plumbing equipment supplier, decided to shift their primary listings from London to New York.

Abbosh was asked about the London listing and replied that his focus remained on shareholder value and organic growth. He said he would”listen very carefully to ideas” and “ would look at the pros and cons..” but had yet to begin his first investor roadshow.

Wincanton backs GXO’s £762m offer in takeover battle

Julia Kollewe

The takeover battle over UK haulage firm Wincanton has taken another twist this morning.

Wincanton’s board have thrown their support behind a £762m takeover offer from the American logistics company GXO and dropped their backing for a rival bid.

The Wincanton directors intend to recommend unanimously an offer of 605p for each Wincanton share made by GXO yesterday. They have withdrawn their backing for an “increased and final cash offer” from Marseille-based CEVA Logistics at 480p a share, announced earlier this week.

The GXO offer is pitched at a 29% premium to the all-time high share price of 470p reached during the period to 18 January, the last business day before Wincanton received a £567m bid from CEVA.

The Wincanton share price dipped 0.46% to 621.15p in early trading on Friday, but has risen sharply since 18 January, when it traded at 297p.

Although it billed its £600m offer as “final”, CEVA could come back with a higher offer. It has four business days from Thursday in which to table an improved bid…

In the City, shares in broadcaster ITV have surged 14% after it announced the sale of its stake in the BritBox streaming service.

BBC Studios, ITV’s joint partner in the venture, is buying the 50% stake for £255m.

ITV says it is focusing on its advertiser-funded streaming service, ITVX; it plans to return the cash from the sale of its Britbox stake to investors through a share buyback.

Carolyn McCall, ITV’s CEO says:

“The sale of 50% of BritBox International means ITV is focused on its core strategic goals of continuing to build on ITVX’s success and growing ITV Studios.

I would like to thank the BritBox International team for making the company such a success and particularly CEO Reemah Sakaan for her leadership, drive and vision.”

News of the sale has sent ITV’s shares surging to the top of the leaderboard on the FTSE 250 index of medium-sized stocks.

BritBox was launched by the BBC and ITV in 2019, as a rival to streaming services such as Netflix, Amazon Video, and Sky’s Now TV. It offers a range of classic UK shows, from Downton Abbey and Love Island to Grange Hill and Captain Pugwash.

February’s pick-up in house prices bolsters the view that the correction in property values seen in late 2022 and part of last year has ended, says Martin Beck, chief economic advisor to the EY ITEM Club forecasting group.

Beck explains:

An improving economic outlook has helped. Falling inflation and still-strong pay growth mean real wages are rising again, unemployment is very low, consumer sentiment has picked up and quoted mortgage rates are up to 150 basis points lower than the peaks of summer 2023.

“These factors contributed to mortgage approvals in January increasing to a 15-month high [the Bank of England reported yesterday], while surveys of buyer and seller activity have also picked up.

Very high inward migration, along with a continued under-supply of new houses, are also supporting property values.

A pick-up in borrowing costs could “restrain” the recovery in house prices, Nationwide adds.

Chief economist Robert Gardner says:

“Borrowing costs remain well below the highs recorded last summer but, if the recent upward trend is sustained, it threatens to restrain the pace of any housing market recovery.

“While the squeeze on household budgets is easing, with wage growth now outstripping inflation by a healthy margin, it will take time to make up for the ground lost over the past few years, especially given consumer confidence remains fragile.”

The money markets have dialled back their expectations of interest rate cuts this year, which is why borrowing costs have been inching higher.

At the end of 2023, the City expected as many as six interest rate cuts in 2024, bringing Bank of England base rate down to 3.75%, from 5.25%. Now, though, fewer than three quarter-point rate cuts are expected.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

UK house prices have continued to recover from their slide last year, with prices rising on an annual basis for the first time in over a year last month.

Lender Nationwide has reported that UK house prices were 1.2% higher than a year ago in February, having jumped by 0.7% during the month – the same monthly rise as in January.

This lifted the average price to £260,420, up from £257,656 in January, Nationwide reports.

Nationwides’s data is based on mortgages approved by the lender, and doesn’t capture cash buyers. It does suggest that the drop in mortgage rates following the surge last year is helping to bring buyers back to the market.

Robert Gardner, Nationwide’s chief economist, says:

“The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market.

Indeed, industry data sources point to a noticeable increase in mortgage applications at the start of the year, while surveyors also reported a rise in new buyer enquiries.

Gardner adds that “the near-term prospects remain highly uncertain”, partly due to ongoing uncertainty about the future path of interest rates.

He says:

After falling sharply in late December, swap rates, which underpin fixed rate mortgage pricing, have drifted back up.

Nationwide reports that house prices are now around 3% below the all-time highs recorded in the summer of 2022, once seasonal effects are taking into account.

February’s rise in prices follows a 0.7% rise during January, according to Nationwide’s data, which left prices 0.2% lower than a year ago.

Yesterday, Bank of England data showed that new mortgage approvals rose in January to their highest level since October 2022, although new lending was still subdued in historic terms:

Zoopla has reported this week that activity in the housing market has picked up; they forecast sales will rise 10% this year.

Also coming up today

We round off the week with a flurry of economic data, including the latest eurozone inflation reading and Brazil’s growth report. Factory surveys from across the world are expected to confirm another drop in activity in the eurozone and the UK.

China’s manufacturing downturn has continued, with activity shrinking for a fifth straight month in February.

This puts more pressure on Beijing to deploy new stimulus measures to support its economy.

Stock markets in Japan, Australia and India have all hit record highs today, as the equities rally continues.

The agenda

• 9am GMT: Eurozone manufacturing PMI for January

• 9.30am GMT: UK manufacturing PMI for January

• 10am GMT: Eurozone flash inflation reading for February

• 10am GMT: Eurozone unemployment report for January

• Noon GMT: Brazil’s GDP report for Q4 2023

• 2pm GMT: Bank of England’s chief economist Huw Pill: gives a speech at the Cardiff University Business School

• 3pm GMT: US manufacturing PMI for January

• 3pm GMT: University of Michigan’s index of US consumer confidence