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The Guardian - UK
The Guardian - UK
Business
Julia Kollewe

Flights begin taking off from Luton airport again after fire, as officials suggest blaze accidental – as it happened

Burned out cars are pictured in a charred section of car park, following a fire at London's Luton Airport on October 11.
Burned out cars are pictured in a charred section of car park, following a fire at London's Luton Airport on October 11. Photograph: Henry Nicholls/AFP/Getty Images

UPDATE FROM LUTON AIRPORT:

The runway is now open, and flights are beginning to arrive and depart.

Main roads around the area have also re-opened, but delays are expected on the airport approach.

For those arriving by car, the Long and Mid-stay car parks are fully operational, and a temporary drop-off area has been established in the Mid-stay car park.

For those travelling to the airport by rail, the DART shuttle remains out of service with replacement buses in operation.

Additional staff remain on hand to assist passengers across the airport.

Those with queries relating to a parked vehicle or future booking, in Terminal Car Park 2 and Terminal Car Park 1, should contact luton.customerservices@apcoa.com for support.

Updated

Closing summary

Our top story: Flights have resumed at Luton airport after last night’s huge fire at a multi-storey airport, but many are still delayed.

In New York, Birkenstock shares are due to start trading later today, as the German sandalmaker makes its stock market debut. More here.

Our other main stories today:

Thank you for reading. We’ll be back tomorrow. Take care! -JK

Updated

Russia and Saudi Arabia discuss effect on oil price of Hamas-Israel crisis

Saudi Arabia and Russia, the world’s top two oil exporters, met on Wednesday to discuss the global market amid fears the conflict between Israel and Hamas could drive crude prices to $100 a barrel.

Before the meeting, the Kremlin’s spokesperson, Dmitry Peskov, stressed the importance of Russia’s coordination with Saudi Arabia and other partners on global oil markets as the crisis in the Middle East escalated.

“Of course, the global oil markets are very sensitive to the events that are currently unfolding around the Palestinian-Israeli conflict, and of course, in this case, our coordination with the Saudis and our other partners ... is difficult to overestimate its importance,” he told reporters.

Russia’s deputy prime minister, Alexander Novak, the Kremlin’s top oil official, and the Saudi energy minister, Prince Abdulaziz bin Salman, met in Moscow ahead of Russia’s energy week conference.

Updated

Severe debt burdens thwarting progress on climate and poverty, says World Bank

Reducing poverty and hitting global net zero goals are being hindered by the severe debt burdens on poor countries, the president of the World Bank has said, amid growing concern that high interest rates could cause dozens of countries to default.

Ajay Banga, the new head of the Washington-based body, urged faster progress in providing debt relief but said there was no “magic wand” that could be waved to make the problem go away, at a press conference at the Bank’s annual meeting in Marrakech.

Indermit Gill, the World Bank’s chief economist, said the last time the Federal Reserve had raised interest rates as aggressively as it had recently was more than 40 years ago, and the result was that 24 countries went bankrupt.

Their comments came as the US treasury secretary, Janet Yellen, said she planned to meet the head of China’s central bank, Pan Gongsheng, for talks that would include possible closer cooperation on debt. Relations between Washington and Beijing are frosty but, amid growing pressures on indebted countries as a result of higher global interest rates, Yellen said more help was needed.

Updated

Luton airport reopens after huge fire

Luton Airport has reopened after a huge fire caused a car park to collapse, sparking disruption for tens of thousands of passengers.

The Bedfordshire airport suspended flights from when the fire happened at around 9pm on Tuesday until 3pm today. At least 150 flights due to take off or land at the airport were cancelled, according to the PA news agency. A further 27 arrivals were diverted to airports as far away as Cardiff, Liverpool and Manchester, while many other flights were delayed.

The figures suggest more than 30,000 passengers suffered disruption to their journeys.
The fire was declared a major incident, with firefighters working through the night and into the early hours of Wednesday to extinguish the blaze.

Bedfordshire Fire and Rescue Service said it received a report of a car fire on level three of the airport’s Terminal Car Park 2 at 8.47pm. Fifteen fire appliances and more than 100 firefighters were deployed. Three firefighters and a member of airport staff were taken to hospital suffering from smoke inhalation, and another firefighter was treated at the scene.

Andrew Hopkinson, the chief local fire officer, said:

On arrival my officers were faced with a severe and rapidly spreading fire involving a large number of vehicles that ultimately spread to multiple floors and involved a partial collapse of the car park.

He said the car park does not have sprinklers, and if it did they “may have made a positive impact”. He said up to 1,500 vehicles were inside the car park at the time of the fire. The blaze is believed to have started with a diesel-powered vehicle “and then that fire has quickly and rapidly spread”, he said.

AA technical expert Greg Carter said the most common cause of car fires is an electrical fault with the 12-volt battery system. He added that diesel is “much less flammable” than petrol, and in a car it takes “intense pressure or sustained flame” to ignite diesel.

A spokesman for the Association of British Insurers said drivers with fire damage are covered by comprehensive and third-party fire and theft policies. He added it is “too early to estimate the insured cost of the fire”.

A temporary ramp is being installed at the car park to enable undamaged vehicles to be removed.

Updated

A Ryanair flight headed to Cork in Ireland has just taken off from Luton Airport, and a Wizz Air service from Cardiff landed safely.

According to the Luton airport schedule on its website, several flights due to depart from the airport now are now estimated to leave at 5pm BST, including an easyJet flight to Agadir, delayed from 3:20pm BST, and a Ryanair flight to Dublin, delayed from 3pm.

I’ve tried to contact the press office for more info.

Updated

Birkenstock shares to start trading later

It is unclear when the Birkenstock shares start trading in New York, under the symbol “BIRK”.

The German shoemaker known for producing cork-soled sandals worn by Apple founder Steve Jobs and hippies raised about $1.48bn in an initial public offering, the company said yesterday. Birkenstock set the price of its shares at around the middle of its initial range at $46, valuing the company at $8.6bn.

The sandal brand shed its frumpy image and won the fashion world by storm.

After plodding away successfully for decades the Birkenstock brand hit the big time during the pandemic when the shift to home working saw shoppers seek out companies that offered both comfort and heritage. With workers now back in the office, more relaxed dress codes mean there has been no need to switch back to traditional work attire.

This helped Birkenstock shift 30m pairs last year, with sales up almost 30% to £1.1bn, resulting in a bottom line of £162m.

Mark Carney, the former governor of the Bank of England and now the UN special envoy on climate action and finance, has waded into the row over fossil fuels, saying it wouldn’t be right too shut down existing oil and gas capacity overnight.

Speaking on a climate change panel with the heads of the International Monetary Fund and World Bank at their annual meetings in Marrakech, Carney said:

In economies that have conventional assets - oil and gas - you can’t shut those down overnight. That’s not a just transition. You need to build up the alternatives, you need to work with the communities, train people to undergo the transition.

Carney is currently co-chair of the Glasgow Financial Alliance for net zero, a body which is trying to mobilise private sector capital to invest in net zero projects. The former Threadneedle Street governor said $150t of assets were available to be tapped and said private sector money was already making a difference.

Mark Carney takes part in a panel on the third day of the annual meeting of the International Monetary Fund and the World Bank in Marrakech.
Mark Carney takes part in a panel on the third day of the annual meeting of the International Monetary Fund and the World Bank in Marrakech. Photograph: Susana Vera/Reuters

Luton airport tweeted its latest update an hour ago, saying the first passengers were entering the terminal, and the first flights were due to depart from 3pm.

At Luton airport, Andrew Hopkinson, chief fire officer for Bedfordshire Fire and Rescue Service, has explained that the accidental fire was probably started by a diesel vehicle.

Travel expert Simon Calder tweeted:

Wall Street has opened cautiously higher as expected, while European shares are also drifting higher with the exception of the Paris bourse.

The French CAC has been dragged down by a 5.3% drop in the LVMH share price after the luxury goods giant reported lower sales of Hennessy cognac, and as analysts worried about falling demand as a result of global instability.

  • Dow Jones up 90 points, or 0.3%, at 33,827

  • Nasdaq up 64 points, or 0.5%, at 13,625

  • S&P 500 up nearly 14 points, or 0.3%, at 4,372

Stoltenberg: NATO will mount 'determined' response in case of deliberate attack on gas pipeline

Here is an update from Reuters on the leaking gas pipeline between Finland and Estonia.

NATO will discuss damage to a gas pipeline and data cable running between member states Finland and Estonia, and will mount a “determined” response if the cause is proven to be a deliberate attack, NATO Secretary General Jens Stoltenberg said today.

Stoltenberg told reporters in Brussels ahead of a meeting of the military alliance:

The important thing now is to establish what happened and how this could happen. If it is proven to be a deliberate attack on NATO-critical infrastructure then this will be, of course, serious, but it will also be met by a united and determined response from NATO.

According to some report, the pipeline won’t be back until April 2024

NATO Secretary General Stoltenberg and Ukraine’s President Zelensky hold a joint doorstep statement ahead of a two-day NATO Defense Ministers Council at the Alliance headquarters in Brussels, 11 October.
NATO Secretary General Stoltenberg and Ukraine’s President Zelensky hold a joint doorstep statement ahead of a two-day NATO Defense Ministers Council at the Alliance headquarters in Brussels, 11 October. Photograph: Olivier Matthys/EPA

Updated

With around 1,500 vehicles affected by the huge fire at a Luton airport multi-storey carpark, LV= General Insurance estimates that around 200 customers are affected.

As part of its support, the insurer is guaranteeing customers will get home and be provided with transport in the short term while arrangements are made to quickly settle their claim. In addition, the insurer will be waiving excesses, and promised no claims discounts won’t be impacted for customer. Where possible, LV= will also look to settle claims before customers return to the UK.

Once it’s safe to do so, a team from the insurer will be onsite at Luton airport to provide assistance to affected customers.

Martin Milliner, claims director at LV= General Insurance, said:

As a major insurer we’re here to support customers when the worst happens and we want them to feel supported and protected. That’s why we’re making our promises to ensure any affected customers get home safely and easily when returning to the UK.

Updated

Metro Bank gets bondholder support for refinancing

Metro Bank has received enough support from bondholders to push ahead with its debt refinancing plans as part of a rescue package.

The embattled UK lender said it had received more than 75% support commitments from bondholders for its plans to raise £325m in capital, including £150m of new equity from shareholders, and £600m in debt refinancing. The deal was announced late on Sunday.

The Colombian billionaire Jaime Gilinski Bacal is putting in £102m and will become the controlling shareholder with a 53% stake.

Chairman Anthony Thomson (L) and Vice Chairman Vernon Hill pose with a dog outside the first branch of Metro Bank in Holborn in central London July 29, 2010.
Chairman Anthony Thomson (L) and Vice Chairman Vernon Hill pose with a dog outside the first branch of Metro Bank in Holborn in central London July 29, 2010. Photograph: Toby Melville/Reuters

Updated

Global economic losses from extreme weather could hit $5 trillion

Global economic losses from extreme weather events leading to food and water shocks could total $5 trillion over five years, according to Lloyd’s of London.

The world’s biggest insurance market, in partnership with the Cambridge Centre for Risk Studies, modelled how a hypothetical but plausible increase in extreme weather events, linked to climate change, could lead to breadbasket crop failures and significant global food and water shortages. As the event plays out, societies around the world could see widespread disruption, damage and economic loss.

The research highlights that there is a significant climate risk protection gap, with estimates suggesting that only a third of the global economic losses caused by extreme weather and climate-related risks are currently insured.

Lloyd’s and the centre used a data tool that provides businesses, governments, and insurers with a data-driven, financial impact assessment of the most significant global threats facing society today consider the Gross Domestic Product (GDP) impact of extreme events across 107 countries and at three levels of severity (major, severe, and extreme).

Adilson Ferreira da Silva, 38, driver, wades through the water to buy medicine for his newborn son, in the flooded Canoas neighbourhood in Rio do Sul, Santa Catarina State, Brazil, on October 10.
Adilson Ferreira da Silva, 38, driver, wades through the water to buy medicine for his newborn son, in the flooded Canoas neighbourhood in Rio do Sul, Santa Catarina State, Brazil, on October 10. Photograph: Anderson Coelho/AFP/Getty Images

In addition to the global scenario, the data tool includes regional analysis.

As an example, if an extreme event such as this was centred on Greater China, the area which would feel the largest financial impact, it could lead to economic losses of $4.6 trillion over five years. This is followed closely by Asia Pacific at $4.5 trillion. As a percentage share of GDP, the Caribbean would be impacted the most by an event focused on its shores, losing 19% of GDP across the five-year period.

John Neal, the Lloyd’s chief executive, said:

Lloyd’s is committed to building society’s understanding and resilience around systemic risk and protecting our customers against increasing climate threats. It is critical that our market continues to collaborate with the public and private sectors to address this challenge at scale and ensure a sustainable future for all.

We will continue to use our convening power to support global risk resilience, providing risk transfer solutions to support companies and countries in their transition goals.

Dr Trevor Maynard, executive director of systemic risks at the Cambridge Centre for Risk Studies, said:

The global economy is becoming more complex and increasingly subject to systemic threats. We are delighted to work with Lloyd’s, and others, to help businesses and policymakers explore the potential impacts of these scenarios.

However, Lloyd’s has repeatedly come under fire from climate campaigners over its refusal to rein in insurers that are members of the market and still insure fossil projects.

For example, a recent report from the Insure Our Future campaign found that Lloyd’s and other big European insurers are underwriting almost a third of US coal production despite their net zero pledges, according to research, with the Lloyd’s market emerging as the second-biggest player globally.

US factory gate inflation jumps in September

Factory gate inflation in the US has picked up more than expected, according to official figures.

Producer prices rose 2.2% year-on-year in September, far above the 1.6% increase predicted by Wall Street economists.

The core measure, which excludes volatile items like energy and food, rose 2.7%, up from 2.5% and the highest since May.

“Bottom line, inflation is still too high for the Fed,” concluded Jesse Cohen, global markets analyst at Investing.com. He tweeted this handy summary:

Michael McDonough, chief economist at Financial Products, Bloomberg, tweeted this chart:

Revealed: thousands who bought ‘golden passports’ through Dominica’s $1bn scheme

Passports of the Caribbean: The Caribbean state of Dominica has sold citizenship to thousands of individuals including a former Afghan spymaster, a Turkish millionaire convicted of fraud and a former Libyan colonel under Muammar Gaddafi, the first detailed examination of the country’s controversial “golden passports” scheme has found.

The findings are from Dominica: Passports of the Caribbean, an investigation by the Guardian and 14 other international news organisations, in partnership with the Organized Crime and Corruption Reporting Project (OCCRP).

Dominica’s golden passports scheme – one of the world’s biggest – has according to official declarations raised more than $1bn (£822m) through its citizenship by investment scheme since 2009.

Its passports are in demand around the world, and a series of international agreements ensure its citizens travel visa-free to 140 countries, including most EU member states.

However, until now, the names of the individuals who have paid the price tag of at least $100,000 (£82,000) a head to acquire Dominican nationality – in many cases without setting foot on the island – have been difficult to obtain.

Updated

The UK technology secretary has summoned social media executives to demand the removal of violent content from their platforms related to the Hamas attack on Israel.

Michelle Donelan called the meeting as the European Union criticised Elon Musk’s X platform about coverage of the Israel-Hamas conflict on its platform including fake news and the use of repurposed historical footage.

Donelan posted on X on Tuesday night that she wanted to ensure violent content “fuelled by Hamas’ acts of terrorism” was removed.

“I’ve called an urgent meeting with social media companies to ensure action is taken to swiftly remove any violent content fuelled by Hamas’ acts of terrorism in Israel from their platforms,” she wrote. “We are taking action to stand in solidarity with Israel and our Jewish community.”

Here is our full story on LVMH:

Rising inflation, growing global instability and falling demand for high-end drinks have been blamed for a slowdown in growth at the luxury goods multinational LVMH, owner of Christian Dior, Louis Vuitton and Moët & Chandon.

The group, whose brands also include Stella McCartney, Tag Heuer watches and Bulgari and Tiffany jewellery, reported revenue of €20bn (£17.25bn) between July and September – a 9% rise. That compares with a 17% increase in the previous quarter.

One of the worst hit parts of LVMH’s business was its wines and spirits division, which includes Hennessy cognac, which fell 14% in the quarter.

The results released on Tuesday suggest the post-pandemic boom in luxury goods, which helped LVMH become Europe’s first company to reach a $500bn valuation earlier this year, is starting to ebb.

Updated

Government bond yields fall amid safe-haven rush

Eurozone bond yields have dropped to two-week lows and US Treasury yields also fell, as this week’s rush to safe-haven assets continued – ahead of US producer price data at 1.30pm BST, and the US Federal Reserve minutes of the last policy meeting this evening.

The yield (or interest rate) on Germany’s 10-year Bund, the benchmark in the eurozone, fell 7 basis points to 2.71%, its lowest since 22 September. On Monday, it fell 12.6bps as investors made a dash for investments regarded as safe, amid the war between Israel and Hamas. Yields move inversely to prices. Prices rose as demand grew for government bonds.

US Treasuries were closed on Monday for a holiday but the 10-year yield fell 12.7 basis points yesterday, and a further 10bps to 4.56% today.

Another factor are comments from central bankers on both sides of the Atlantic, suggesting interest rate hikes are over. The European Central Bank rate setter and Dutch central bank chief Klaas Knot said today that “policy at this moment is in a good place,” though he added:

We will remain vigilant and we stand ready to adjust interest rates even more if the disinflation process were to stall.

Yesterday, Atlanta Federal Reserve president Raphael Bostic was applauded when he told a room of bankers in Nashville:

I actually don’t think we need to increase rates any more.”

The UK competition watchdog is offering rivals and other interested parties the chance to submit views on the proposed merger of the British operations of Vodafone and the owner of Three, a deal that will create the UK’s largest mobile operator.

The Competition and Markets Authority (CMA) has said that it is providing an “early opportunity” for interested third parties to comment on what impact the merger of the two companies will have on the UK telecoms market.

The two companies are the UK’s third- and fourth-biggest operators respectively. The newly combined company will, if the merger is completed, have more than 27 million subscribers, leapfrogging EE, owned by BT, and Virgin Media O2, owned by Spain’s Telefónica and the US-listed company Liberty Global.

“Millions of consumers and businesses in the UK rely on Vodafone and Three’s mobile networks to stay connected,” said Sarah Cardell, chief executive at the CMA. “We will be carefully considering how this deal may affect competition in the UK, which could affect the options and prices available to customers. We will also assess how it may affect incentives to invest in the quality of UK mobile networks.”

The CMA, which blocked Three’s attempted takeover of O2 in 2016 arguing that it would have risked higher prices, will launch a formal investigation “once it has received the information it needs from the merging companies”.

The deal is likely to face close scrutiny from the CMA, although last year the UK telecoms regulator, Ofcom, changed its long-held stance, saying it was now more open to consolidation in the sector. It had previously argued that dropping to only three networks in a country could harm consumers.

The government is also likely to “call in” the deal for scrutiny under the National Security and Investment Act 2021, which allow ministers to block transactions linked to important national assets if they are deemed to harm national security.

Vodafone UK has a number of government contracts and Three UK is owned byHong Kong-based CK Hutchison, which may raise concerns about foreign joint ownership of a key national asset, particularly given the city’s status as part of China.

Vodafone at one of its stores in London, Britain, June 14, 2023.
Vodafone at one of its stores in London, Britain, June 14, 2023. Photograph: Toby Melville/Reuters

Updated

SFO opens criminal probe into funeral firm Safe Hands Plans

The Serious Fraud Office (SFO) has opened a criminal investigation into suspected fraud at Safe Hands Plans Limited and its parent company, after their funeral plan scheme collapsed last year.

Safe Hands Plans marketed pre-paid funeral plans, where customers paid instalments for plans priced up to over £4,000, so that funds would be available towards the costs of funerals. Approximately 46,000 plan holders had paid toward funeral plans before the company collapsed.

Today, Nick Ephgrave QPM, director of the SFO, sent notices to stockbrokers and financial institutions requesting information for its investigation. This follows similar requests made to UK banks and other potential witnesses issued last month. Non-compliance with these notices is a criminal offence.

Commenting on the SFO investigation, he said:

Thousands of individuals from all corners of the UK lost peace and security after being sold a product on the basis it would help reduce the burden on their loved ones upon their death.

Today, we have taken decisive next steps in our full criminal investigation into Safe Hands Plans.

The SFO’s criminal investigation is pursuing various lines of enquiry and may result in a criminal prosecution, which the SFO would then conduct using its powers as a prosecuting authority.

Updated

Here is our latest video on the Luton airport fire:

And here is our full story:

Wall Street futures tick higher as Treasury yields fall

US stock futures have ticked higher, pointing to a cautiously higher open on Wall Street later, as yields on US government bonds, known as Treasuries, continued to fall.

Investors are waiting for the minutes from the Federal Reserve’s last policy meeting, and producer price data for September.

Stock futures are indicating small gains of between 0.1% and 0.2% for the Nasdaq, Dow Jones and S&P 500.

Mark Haefele, chief investment officer at UBS, said:

Recent developments support our view that yields should move lower over the coming six to 12 months… we foresee further cooling in inflation and slower global growth.

Yields move in inverse relationship to bond prices.

The turmoil in the Middle East continues to weigh on global markets, as Israeli warplanes bombed Gaza ahead of a possible ground assault. European markets are mixed: the FTSE 100 index in London and the Dax in Frankfurt are flat, while slowing growth at luxury goods group LVMH has pulled the CAC in Paris 0.6% lower, and the FTSE MiB in Milan has edged up 0.2%.

You can follow the latest on the war between Israel and Hamas here:

Updated

OECD says international tax deal would raise up to $32bn from big firms

An international deal that would force the world’s biggest multinational companies to pay a fair share of tax moved a step closer this week after the body coordinating the plan said it should raise more money than expected for low and middle income countries.

The Organisation for Economic Cooperation & Development (OECD) said on Wednesday that a fresh analysis of its plan showed as much as $32bn could be raised, up from an estimate in 2020 that the tax would would raise a maximum $12bn.

Google, Facebook and Apple are among the 106 multinationals that would pay more tax to countries where they generate large revenues but have only a minimal physical presence.

Government ministers from many of the 140 countries that have signed up to the multinational deal are expected to discuss the latest research this week at the IMF and World Bank meetings in Marrakech ahead of an agreement next year.

Manal Corwin, director of the OECD centre for tax policy and administration, said there was “very broad consensus on the vast majority of the architecture” of the text put forward by the Paris-based organisation.

Wrangling over the details of the deal prevented the OECD from co-ordinating a signing ceremony last year, and sceptics believe the lobbying by low-tax jurisdictions like Ireland and Luxembourg and the digital business that will be hardest hit by the new rules will delay its implementation further.

The charity, Tax Justice Network, has argued that only the United Nations can co-ordinate an international tax plan that represents the poorest countries which currently receive minimal tax revenues from large corporations.

The latest estimates from the OECD are designed to head off this criticism by showing its plan would deliver higher tax revenues than previously expected and give poor countries are greater share.

It said that estimates in 2020 revealed revenue gains of $5-$12bn in the baseline scenario, while the revised estimates involve gains of $17.4-$31.7bn.

Back to the Birkenstock flotation, Michael Hewson, chief market analyst at CMC Markets UK, said:

Today’s listing will generate $1.5bn for the German-based sandal maker which has been in business since 1774, making what can be best described as leisure shoes, namely sandals or clogs.

Since 2010 the company has diversified into sleep systems, as well as natural cosmetics however that remains a small part of the overall revenue stream, which is primarily derived from the sale of high value sandals and clogs. The proceeds of the IPO will see some of the money returned to the private equity owners, with a third of the proceeds going to repay debt.

This seems an unambitious use of the proceeds at a time when the money could be used to improve the business, as well as help to diversify into new product areas.

He noted that in 2021, the private equity company L. Catterton and Financière Agache bought a majority stake in Birkenstock, with a view to expanding into the Chinese market. Both Financière Agache and L Catterton are backed by LVMH owner Bernard Arnault, valuing the business at the time at $4.3bn.

Curiously, the deal came in the aftermath of the Dr. Martens IPO, which took place two months previously in February 2021, although both companies have undergone rather differing fortunes since then. At the time Dr Martens had a valuation of £4.5bn which has slid to £1.3bn, raising the question as to whether Birkenstock is worth such a hefty price tag.

On the actual numbers themselves Birkenstock total revenues have risen from $728m in 2020 to $1.3bn in fiscal year 2022. Over the same period net income has doubled from $101.3m to $202.8m.

In its most recent financial statement Birkenstock reported that revenues were 21% higher in the nine months to 30 June at $1.2bn, putting the business on course for a record year for both revenues, as well as profits.

While that is welcome news it doesn’t necessarily justify a valuation that is four times greater than sector peer Dr. Martens, and with LVMH issuing a profits warning earlier today, the luxury sector could be about to enter turbulent times. This may be significant given that a typical Birkenstock sandal starts at £65, while more expensive items can go for as much as £160 and above, which isn’t exactly cheap.

That said investors may have other ideas as to whether Birkenstock offers good value given that valuations in the US tend to be higher than they are in London.

Updated

Luton airport fire appears accidental, says fire chief

A major car park fire that forced London’s Luton Airport to suspend flights on Wednesday appears accidental, authorities said.

The local fire chief Andrew Hopkinson told reporters:

We’ve got no intelligence to suggest it’s anything other than an accidental fire that started in one of the vehicles.

Can Birkenstock kick the IPO market into life?

Hargreaves Lansdown Lansdown analyst Susanna Streeter has also looked at the Birkenstock IPO in New York.

The shares will start trading when Wall Street opens. They were priced at $46, the middle of the initial range, giving the German orthopaedic sandal brand a market value of $8.6bn (£7bn). Streeter said:

Timing is everything for an IPO and Birkenstock wants to capitalise on being in the film and fashion spotlight. As the stylish set have put sales on the front foot, and the Barbie effect has boosted the brand further, it’s helped the company achieve this heady valuation. The company has been super-savvy over the past few decades and has turned sandals with hippy connections into ‘It’ shoes, helped by collaborations with fashion designers and endorsements by celebrities.

Thanks to the Barbie movie, sales of Birkenstock sandals have shot up. Barbie wears the classic Arizona sandal finished in a candy pink.

Streeter added:

However, it’s clear there is some caution among investors about the path ahead for the brand, as the price set of $46 a share was at the middle, not top end of the initial range. Although the IPO roadshow has started to get into gear again after almost grinding to a halt, and there is clearly intense interest in new offerings, other footwear companies like Allbirds and Dr Martens have had disappointing trajectories since their IPOs in 2021.

DOC shares have fallen by almost 70% since its launch, which was partly a function of a frothy valuation, but also raises questions about the long-term growth prospects for the famous shoe brand, which has been beset by distribution problems. While Birkenstock may be basking in the sales sunshine right now, it’s going to have to run fast to keep up in the stylish stakes. Counterfeit goods could also cause the company to lose its footing in the fast-moving fashion environment.

The company has flagged competition from knock offs as a risk in its prospectus. The worry is that if too many fake products flood the market, not only could that affect sales, it could also affect the prestige tag of the brand, and push it out of fashion. Investors who want to buy may have to buckle up for a potentially volatile ride ahead, given a spurt of uncertainty often follows high profile listings.

Updated

Travis Perkins warns on profit on UK housing market woes

Travis Perkins, Britain’s biggest supplier of building materials, has downgraded its annual profit forecast by as much as 27%, as it blamed tough conditions in the new-build housing and home renovation markets. Its share price fell 10% on the news.

The company said it experienced a “notable deterioration in market activity and sentiment” in September.

Nick Roberts, the chief executive, said:

Market conditions remain challenging with continued weakness across new build housing and domestic repair, maintenance and improvements.

However, Travis Perkins, which owns Toolstation, remains confident in the long-term outlook, saying Britain needs more homes while older houses and buildings will need to be revamped to make them net zero.

Travis Perkins, a timber and building merchants yard in St Albans.
Travis Perkins, a timber and building merchants yard in St Albans. Photograph: Paul Childs/Reuters

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said:

There are concerns creeping back in about higher energy prices, causing fresh inflationary pressures by pushing up fuel bills and potentially causing havoc with central bank forecasts. UK and European gas prices shot up over supply concerns, edging down only a little and still hovering around six-month highs. The jitters came after Chevron was told to shut down production at the Tamar natural gas field in Northern Israel due to the violence.

There are also worries about potentially deliberate damage to the Baltic connector gas pipeline between Finland and Estonia. Oil prices are settling, but a barrel of the benchmark Brent Crude is trading at just under $88 dollars a barrel, up sharply from the price before the attacks in Israel. Although initial supplies aren’t affected, there are still worries about potential knock-on effects if there is contagion across the wider Middle East region.

The UK’s second-biggest drugmaker GSK is one of the biggest risers on the FTSE 100 index, with the shares up 1.3%. It announced that it had reached a confidential agreement on a lawsuit in California which alleged that its discontinued heartburn drug Zantac caused cancer.

Analysts at JP Morgan said:

We believe any rally may be short-lived, given today’s outcome doesn’t allow us to lower our total Zantac liability – we have a 50% of a $5bn liability – and given GSK’s decision to again settle, suggest the company is likely to have to pay out on many of the outstanding cases.

Updated

Stocks down, oil prices up, gas prices retreat

In financial markets, the FTSE 100 index in London is broadly unchanged at 7,632, up just 4 points.

The other main European bourses are in the red, with Germany’s Dax down 0.3%, France’s CAC losing 0.8% and Italy’s FTSE MiB flat.

Oil prices are pushing higher on concerns that the war between Israel and Hamas and rising tensions in the region could affect the output of major producers. Brent crude hit $89 a barrel on Monday and is trading 0.6% higher at $88.17 a barrel at the moment. US crude is up 0.6% at $86.46 a barrel.

Gas prices have also retreated after yesterday’s spike, when UK gas jumped 15% and European gas soared 16% to the highest levels since June, after the gas pipeline “Baltic Connector” between Finland and Estonia started leaking.

Extensive damage to an undersea gas pipeline and communications cable connecting Finland and Estonia “could not have occurred by accident” and appears to be the result of a “deliberate … external act”, Finnish authorities have said.

UK natural gas for October fell 6.5%, while Dutch natural gas futures for November is down 5.5% this morning.

Updated

Flights at Luton airport suspended until 3pm

All flights at Luton airport are suspended until 3pm, the airport said in a statement.

It is Britain’s fifth-busiest airport after Heathrow, Gatwick, Stansted and Mancheter, and it handled 13.3 million passengers last year, according to the Civil Aviation Authority.

Sky news correspondent Matthew Thompson tweeted:

Updated

LVMH reports slowing growth

The French luxury goods giant LVMH (Moët Hennessy-Louis Vuitton) has reported slower growth, as it has taken a hit from rising inflation and growing global financial instability.

The company, whose brands include Christian Dior, Louis Vuitton and Stella McCartney fashion, alongside TAG Heuer watches and Bulgari and Tiffany jewellery, reported revenue of €20bn (£17.25bn) between July and September – a 9% rise. That compares with a 17% increase in the previous quarter.

Pauline Brown, the former chair of North America at the luxury group, said a number of factors are at play.

The issue we’ve had with inflation is not just that it is here, but that it came on quite suddenly, or quite quickly. And we, as a society, we got used to a few decades of, really, really low inflation. So it’s still hitting us as a bit of a shock.

But geopolitical developments, namely the war between Israel and Hamas, have become a bigger concern, she said.

If I were sitting on the board at LVMH, or any of the other luxury companies would really be rattling me is that geopolitical destabilisation around the world. And let’s just take what happened this last week in Israel. Why is that important here? Number one, because luxury goods and services is a psychological purchase. Nobody needs a glass of champagne. Nobody needs a watch or a diamond necklace. And in order for you to buy for yourself or as a gift, you really have to be in the right mood state. And when we see atrocities happening as we are right now, the appetite to spend on what might be perceived or experienced as frivolous, goes way down

And then on a more pragmatic level, you know, there was still very strong growth in Middle Eastern buyers, whether they were buying it locally, in Dubai and elsewhere in the region, or they were travelling and and the concerns that started in the Middle East are now spreading and changing the social dynamic, even within the Middle Eastern regimes. That’s going to lead to a slowdown in in how people spend and where they spend. And that is not the only corner of the world right now.

One of the worst hit divisions at LVMH is wines and spirits, which posted a 14% decline in sales over the quarter, as sales of cognac declined.

Unlike say champagne, cognac is really an aspirational consumers drink. Most collectors who might buy from Napa Valley or from Bordeaux, are less prone to be collecting cognac. That was hit hard in markets like China and North America. Because that aspirational consumer is just not spending with the same enthusiasm that the high net worth is, and the high net worth are continuing to spend even with some of the macro conditions that we’re all noting.

CEO of LVMH Holding Company, Antoine Arnault and his wife Russian model Natalia Vodianova pose during a photocall ahead of the Christian Dior fashion show as part of the Paris Fashion Week in September.
CEO of LVMH Holding Company, Antoine Arnault and his wife Russian model Natalia Vodianova pose during a photocall ahead of the Christian Dior fashion show as part of the Paris Fashion Week in September. Photograph: Julien de Rosa/AFP/Getty Images

Updated

Kyle Rodda, senior market analyst at Capital.com, has looked at the Birkenstock IPO.

Will the hipsters buy the stock of Birkenstock? If they don’t, the investment community certainly seems to want “in'’ on the brand loved by so many boujie 30-something-year-olds. The company is looking poised for a fully subscribed IPO - the fourth on Wall Street in the space of roughly a month.

It puts the company’s valuation around the top end of the $44 - $49 target range, or $10bn. Arguably, that’s pretty rich. Based on the company’s latest revenue release, the stock’s price-to-sales ratio is above 6, which is at the higher end of comparable consumer discretionary companies on Wall Street. In a higher interest rate environment, these multiples may be hard to sustain in the short term, especially if consumer spending slows as expected next year as interest rate hikes bite households.

Recent companies to IPO have seen their stocks surge on the day of listing, although the moves have proven short-lived. The Birkenstock IPO will be a good measure of broader market sentiment and sentiment toward consumer-sensitive stocks. It might tell us, too, whether cashed-up millennials like to buy the stocks of products they commonly find on the bottom shelf of their wardrobes.

Flights at Luton airport suspended until mid-afternoon after fire, Birkenstock to float in New York

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

Luton airport closed last night after a large fire, and all flights were suspended. Flights are not expected to resume until mid-afternoon at the earliest.

The fire ripped through a multi-storey car park, causing it to collapse. We’ll keep you posted.

Today Birkenstock, the orthopaedic 250-year-old German shoe brand, is to float on the New York stock market. The sandal maker, once seen as frumpy but now the go-to footwear of hippies willing to sacrifice style for arch support, priced its shares at $46 ahead of its first day of trading, giving the company a market valuation of $8.6bn (£7bn). The shares start trading later today.

Rural homeowners living near new electricity pylons and cables that are being rolled out as part of the UK’s shift to net zero could be offered home insulation, heat pumps and other energy efficiency measures by National Grid, the Daily Telegraph reported.

Ben Wilson, National Grid’s chief strategy officer, said the company wanted people living alongside pylons and cabling to benefit from the infrastructure. He told the paper:

I do think if you’re hosting the infrastructure, you should get a benefit in terms of your cost of energy, maybe help with energy insulation or helping to electrify your home in terms of heat.

He suggested National Grid could also establish training academies to boost employment in the areas most affected by new transmission lines.

Inflation in Germany has eased to an annual rate of 4.3%, the latest official figures show. Ruth Brand, president of the Federal Statistical Office, said:

The rate of inflation has dropped to the lowest level since the start of the war in Ukraine. It remains high, however. Consumers are still clearly feeling the higher food prices.

Also coming up

The annual meetings held by the International Monetary Fund and the World Bank in Marrakech, Morocco, are under way. Yesterday, the fund warned that the Bank of England will need to keep interest rates high into 2024 as the UK struggles with a combination of weaker growth and persistent inflation.

In its half-yearly update on the global economy, the IMF said growth had already slowed “fairly sharply” and painted a downbeat picture for the government as it enters what will almost certainly be an election year.

The Agenda

  • IMF/World Bank annual meetings in Marrakech

  • 1.30pm BST: US producer price index for September

  • 7pm BST: US Federal Reserve minutes of last meeting

Updated

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