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Graeme Wearden (now) and Kalyeena Makortoff (earlier)

Arm shares soar 25% over IPO price in US stock market float; FTSE 100 posts best day of 2023 – as it happened

John Lewis the John Lewis Partnership United States IPO Sharon White Partnership Waitrose John Lewis Partnership SoftBank Susannah Streeter
Softbank's Arm is floating on the Nasdaq market today, in the biggest IPO of the year
Softbank's Arm is floating on the Nasdaq market today, in the biggest IPO of the year Photograph: Brendan McDermid/Reuters

Arm close 25% higher

And finally…. Arm’s shares have closed tonight at $63.59, a gain of almost 25% on the $51 at which Softbank sold equity in its UK chip designer.

That means Arm has ended its first day on the US stock market with a valuation of over $65bn.

That may encourage further technology firms to float in the months ahead, after a fairly dry year for IPOs (especially in Britain).

Thomas Hayes, chairman at Great Hill Capital LLC, says:

“The game is back on. Capital markets are open for business.

“You’re going to see so many IPOs in the next 12 weeks your head is going to spin.”

Here’s the full story, on a memorable day for the UK chip designer:

On that note, goodnight. GW

Updated

With less than 90 minutes trading to go, Arm is on track for a positive first day on the US market:

Full story: UK chip designer Arm soars on Nasdaq debut to notch $60bn valuation

The British chip designer Arm looked set to be valued at more than $60bn as it debuted on the Nasdaq stock exchange in the biggest US share listing of the year.

Arm set a price of $51 a share, valuing the company at $54.5bn on Wednesday. But as trading began on Thursday morning, investor appetite for the company’s initial public offering (IPO) pushed its share price up 10% to $56.10, valuing the company at just below $60bn.

It later rose by as much as 20% up, before settling back at 17% up, giving a valuation of around $64bn.

Founded in Cambridge in 1990 as Advanced Risc Machines, Arm supplies chipmakers with circuit designs and is the dominant supplier to the mobile phone market with its circuitry in 99% of smartphones. Japanese investment company SoftBank bought Arm for £24bn ($32bn) in 2016.

Arm’s share price in early trading gave the company a market capitalisation of $63.6bn based on shares outstanding, or nearly $66.2bn on a fully diluted basis, the Financial Times reports.

More here.

Wall Stret is rallying today, as investors take their lead from the gains in Europe earlier.

The Dow Jones industrial average is currently up 319 points, or 0.9%, at 34,894 points, with traders also cheered by Arm’s IPO.

George Sweeney DipFA, deputy editor at the personal finance comparison site, finder.com, reminds us that London missed out on the Arm IPO – with Softbank preferring to list in New York.

Sweeney writes:

A surprisingly strong start to trading for Arm has seen its share price break the $60 mark, substantially above what most analysts predicted. This could be partly due to the fact that the IPO became oversubscribed, providing leverage to demand a higher price. Even so, Owners of Arm (SoftBank) had been pushing for an even higher valuation after it paid $16bn to acquire 25% of Arm from one of its own venture capital funds, Vision Fund.

Although this is an exciting opportunity to invest in a chipmaker in its early stages, it will be a tough challenge for Arm to grow and keep pace with the more well-established global players. As an example, Nvidia grew 127% in their first year of trading back in 1999 and is now a much larger business than Arm. Retail investors should also be alert to the risk of Arm’s stock price falling back after this initial flurry of interest.

Amidst all the noise of this IPO, it’s worth remembering that listing on the FTSE could have been a logical move for the british-based firm and it would have been the one of the largest 14 constituents of the FTSE 100 based on its live market cap. Unfortunately, that wasn’t the case and is a reminder of the struggles that London is having post-Brexit.

Today’s jump in Arm’s share price, currently up 18% at just over $60, lifts the company’s value to over $60bn.

Here are the key points on today’s Arm stock market flotation, from Josh Warner, market analyst at City Index:

  • The Arm IPO was priced at $51 per share, giving it a $54.5 billion valuation.

  • Current owner Softbank has listed less than 10% of Arm’s float, and a large chunk of this is expected to have been snapped-up by major tech companies that are Arm customers.

  • Based on its most recent annual earnings, Arm is coming to market with a valuation multiple of around 98x – three-times the average on the Nasdaq 100.

  • Arm shares are rising in initial trade but are proving volatile.

  • Arm is underpinning its valuation on new prospects stemming from a shift in strategy that will see it design more comprehensive, advanced and financially-rewarding chips rather than the business as it is today.

  • Rising US-China tensions may cause concern for Arm as it threatens to disrupt its second largest market.

Following a heavily oversubscribed IPO, ARM has started its first day of trading with a bang, says Ben Barringer, equity research analyst at Quilter Cheviot.

This will delight Softbank, which still owns around 90% of Arm, and also the cornerstone investors from the big tech world who have backed the IPO.

Barringer adds:

“Now much of this is clearly hype and a bit of market froth, particularly as it has been starved of high profile IPOs in recent years. But with interest rates seeming to have peaked, growth companies are coming back into vogue at a time when artificial intelligence threatens to change the world as we know it.

With only 10% of the company up for grabs in this IPO, pricing in the early stages will be quite volatile, so we won’t know the true value for some time. For example, ARM’s Q3 results won’t be until 14th November. However, investors, and especially those in big tech, clearly recognise ARM’s unique status. Its licensing and royalty business model gives it clear sight of its earnings and will sustain it even in difficult environments. Not only that, it has invested heavily and diversified its offering since being acquired by Softbank and has also continued to have an entrenched and dominant position in smartphone processors.

Expectations are big for Arm, though, and growth is expected to accelerate quickly in 2024.

Barringer explains:

Margins could go as high as 60% in the long-term if it can continue to grow its market share, expand its offering and increases its royalty rates.

“There are clearly risks around ARM China and the Softbank’s 90% stock overhang. However, this is a strong start and will be a key indicator for more tech firms looking to come to the public markets. ARM will be the story to watch for the rest of the year and beyond.”

Arm’s shares are racing higher on the Nasdaq – they’re now up 20%, at over $61 per share.

Arm’s share price as it floats
Arm’s share price as it floats Photograph: Marketwatch

Updated

Arm shares jump 10% at the open

Newsflash: shares in Arm have opened sharply above the chipmaker’s IPO price, as Wall Street traders scramble for a piece of the UK chipmaker.

Reuters reports that Arm Holdings have opened at $56.10 each in its Nasdaq debut, a day after owner Softbank sold shares at $51 each.

That’s an increase of 10% on the IPO price, which was itself at the top of Softbank’s range, and valued the company at over $52bn.

Today’s opening price values Arm at $57.5bn, by my maths.

This strong interest is partly because Softbank, which acquired Arm in 2016, is only floating around 10% of the business on the US stock market.

My colleague Hibaq Farah writes:

The chip designer predicts on its website that 70% of the world’s population use Arm-based technology. Without its designs, the iPhone and other smartphones would not work. The global chip powerhouse employs more than 5,000 people.

Arm’s valuation is exceedingly high for a chip company when compared with other firms in its market, other than semiconductor-maker Nvidia, which is worth more than $1tn.

A billboard at the Nasdaq stock market is showing information about Arm Holdings’ initial public offering today:

A billboard at the Nasdaq stock market showing information about Arm Holdings' initial public offering in New York, New York, USA, 14 September 2023. The IPO, which was expected to be one of the largest of the year.

Rene Haas (centre), the CEO of ARM Holdings, with his corporate leadership team at the Nasdaq stock market today
Rene Haas (centre), the CEO of ARM Holdings, with his corporate leadership team at the Nasdaq stock market today Photograph: Justin Lane/EPA

FTSE 100 jumps 1.95%, best day of 2023

Newsflash: The UK’s blue-chip stock index has just posted its best day of the year so far.

The FTSE 100 index has closed 147 points higher at 7673 points, a gain of 1.95%.

That’s its biggest percentage jump since last November, and takes the Footsie to its highest closing level since the start of August.

The rally was led by mining companies such as Anglo American (+7.7%), Rio Tinto (+4.7%) and Glencore (+4.3%).

Shares soared today after China’s central bank cut the amount of cash that Chinese banks must hold as reserves, in an attempt to stimulate lending and support economic growth.

Investors were also cheered by hopes that the European Central Bank may have finished raising eurozone interest rates, following today’s hike.

Updated

Arm’s flotation (once its shares actually start trading…) will set the tone on Wall Street, points out New York Times writer Erin Griffith:

Arm Holdings indicated to open at $58/share

Arm shares are on track to jump sharply, as they make their debut on the tech-focused Nasdaq index today.

Reuters reports that Arm Holdings shares are currently indicated to open at $58.01.

That would be a 13% increase on the $51 per share which investors bought stock in its IPO.

Updated

Arm executives and CEO Rene Haas gathered as Arm holds its initial public offering (IPO) in New York
Arm executives and CEO Rene Haas gathered as Arm holds its initial public offering (IPO) in New York Photograph: Brendan McDermid/Reuters

The ECB is walking on “a very treacherous path right now”, warns Clémence Dachicourt, senior portfolio manager at Morningstar Investment Consulting France.

Economic growth in the Euro-zone has come to a halt, expectations for future growth prospects are bleak, yet core inflation remains stubbornly high and way significantly above the central bank’s 2% target.

While this draws the effectiveness of the ECB’s rate hikes into question, the central bank will certainly want to avoid errors of the past when it decided to raise interest rates in July 2008, at the same time as the global economy was heading into one of the biggest financial crises, or again in 2011 just before the Eurozone crisis.

Going forward, the European Central Bank may decide to be more considerate about underlying economic growth and pause interest rate hikes to avoid precipitating the zone into a deep recession.”

The euro continues to lose ground against the US dollar, now down three-quarters of a cent at $1.066.

Abrdn: ECB are continuing to hike rates into a recession

The European Central Bank is raising interest rates into a recession, fears Felix Feather, economic analyst at investment company abrdn.

Feather explains:

The decision comes despite very weak activity data in recent months. It is our belief that the ECB are continuing to hike rates into a recession that is probably already underway. The latest hike could make this downturn deeper and the recovery slower. Despite losing out in the rate decision, it appears the bank’s doves were able to secure a dovish framing in which the hike was delivered. Indeed, it appears the bank now considers its hiking cycle over (barring any big surprises).

We think this will indeed be the final rate hike of this cycle. However, we do expect cuts in 2024 when the effects of the upcoming recession on the labour market and consumer prices become apparent.”

Today’s ECB interest rate rise is a “dovish hike”, declares Mohit Kumar, chief European economist at Jefferies.

Kumar explains:

The statement reads like a one and done hike from the ECB.

Key statement change suggests that Governing Council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target.

Growth forecasts were lowered and more importantly inflation forecasts were lowered for 2024 and 2025.

But, Jeffferies does not predict interest rate cuts anytime soon, indeed not until the second half of next year.

Kumar adds:

We believe rate cuts will be a H2 24 story.

Arm rings Nasdaq opening bell to mark stock market float

Over in New York, executives from UK chip designer Arm have just rung the Nasdaq opening bell, to mark its stock market flotation.

Arm at the opening of the Nasdaq, 14 September 2023

Cambridge-based Arm, owned by Japanese giant Softbank, is joining the US stock market with a valuation of around $52.3bn.

Last night it priced its shares at the top of its expected range, $51 each, having seen strong interest from investors.

This makes Arm’s float the biggest IPO of 2023 so far – in a year when flotations have been relatively rare, due to market volatility.

Arm staff, celebrating its IPO
Arm staff, celebrating its IPO Photograph: Nasdaq

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, says all eyes in the equities world are on Arm today as it goes public, adding:

The company set its IPO price to $51 a share. It’s at the top end of the proposed price range, but still lower than the valuation of $64bn when Softbank bought out a stake from Vision Fund.

Updated

Today’s eurozone interest rate rise is the tenth consecutive time the ECB has tightened monetary policy. points out Victoria Scholar, head of investment at interactive investor.

She adds:

Meanwhile the central bank issued some gloomy forecasts on the economy, cutting its 2023-24 growth outlook and raising its inflation guidance for next year, suggesting price pressures will take longer to shake off than previously anticipated. Inflation is expected to be at 5.6% in 2023, 3.2% in 2024 and finally around target at 2.1% by 2025.

The ECB began tightening later than the Fed and the Bank of England, landing it behind the curve, which forced the central bank into acting more swiftly. But that aggressive policy has had consequences for the euro zone economy with Germany potentially heading into a recession. With sluggish growth and increased labour market slack, the more dovish ECB rate setters believed a pause would have been more appropriate, but the governing council decided to prioritise tackling inflation, even if it comes at a cost to the economy. Looking ahead, the recent rally in oil prices is likely to muddy the picture for the ECB by standing in the way of the eurozone’s disinflationary path.

Government bond yields in the euro zone fell despite another hike from the ECB. Price action in the bond market reflects the ECB’s signalling that it is probably at the end of this tightening cycle, even though inflation for August hit 5.3%, still sharply above its 2% target.

ECB President Lagarde said she expect inflation to fall in the coming months. And no doubt the governing council is also worried about a significant slowdown in the euro zone economy, given the weakness in recent indicators.”

“We are not saying that we are now at peak [interest rates],” Christine Lagarde adds.

Q: Is today’s interest rate increase a ‘dovish hike’ – is this the end of the rate hiking cycle, or do you leave the door open?

Christine Lagarde points to the line in today’s statement, that the ECB will take a data-dependant approach about how high interest rates should rise, and how long they should remain there.

Q: Did you discuss how long rates would have to stay at their peak level?

Lagarde says the ECB did not discuss how long would be long enough – because policymakers will remain ‘data dependent’.

Lagarde: Some policymakers would have preferred to pause today

Christine Lagarde, ECB president, is taking questions now, and reveals that today’s decision to raise interest rates was not unanimous.

Q: How did the discussion go, between the hawks and doves on the ECB’s governing council?

Lagarde says policymakers had “a lot of data”, and a lot of analysis from ECB staff, which was looked at “very closely”, at presentations lasting many hours.

But, she says, “some members did not draw the same conclusion”.

Some governors would have preferred to pause, to wait until they had “more certainty, more intelligence”, and seen the impact of previous interest rate hikes.

[that’s because monetary. policy acts with a lag – it takes time for higher interest rates to influence the real economy].

Lagarde says:

There was a solid majority of the governors to agree with the decision that we have made….

There are a few members in the governing council who would have preferred another one [another decision].

She insists it was not an adversarial discussion.

Updated

Here are the ECB’s new, downgraded, growth forecasts….

…. and its new, higher inflation forecasts:

ECB president Christine Lagarde is holding a press conference now, to explain today’s interest rate decision.

Lagarde tells reporters that the eurozone economy is likely to remain subdued in the coming months.

It broadly stagnated over the first half of the year, and recent indicators suggest it has also been weak in the third quarter.

Growth is being dampened by lower demand for eurozone exports and the impact of tight financing conditions, says Lagarde, adding that the services sector is now weakening.

But, she says economic momentum should pick up as real incomes rise (ie, wages rising faster than inflation).

After a brief jump, the euro has now fallen by half a cent against the US dollar to $1.0674.

Interest rate rises should, classically, boost a currency. But today, traders are noting the ECB’s point that interest rates are now high enough to make a ‘substantial contribution’ to bringing inflation down to its 2% target.

More economists are predicting that today’s ECB interest rate hike will be the last in this cycle.

Mike Bell, global liquidity market strategist at J.P. Morgan Asset Management, explains:

“With the business surveys indicating an imminent sharp slowdown in growth, the ECB are probably done hiking.

“The new orders component of the latest business surveys were very weak. Incoming new business for the service sector is contracting now, joining new orders for the manufacturing sector in the doldrums.

But while the ECB could hit the pause button now, eurozone households and companies may face a wait until rates fall.

Bell says:

“Against the weaker growth backdrop, the ECB can probably pause at the next meeting and if the growth outlook continues to deteriorate a pause could morph into a peak.

“However, unless unemployment rises sharply and rapidly, the outlook for Eurozone interest rates could end up looking like table mountain with rates on hold for quite some time.”

The fear of not getting inflation fully under control and the risk of stopping too early must have over-riden the rising recession risk in the eurozone and prompted today’s ECB interest rate rise, says Carsten Brzeski, ING’s global head of macro.

Brzeski adds:

The ECB only has one job and this job is to maintain price stability. The eurozone has not seen price stability in almost three years. And even if the inflation surge is mainly due to factors outside of the ECB’s direct reach, the Bank simply has to show its determination to stamp it out. That this approach will eventually push the eurozone economy into a more severe slowdown does not matter to the ECB, at least not for now.

Looking ahead, a further weakening of the economy and more traction in a disinflationary trend will make it very hard to find arguments for yet another rate hike before the end of the year. The remark in the official communication that “based on its current assessment, the Governing Council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target” shows that today’s rate hike looks like the last.

Today’s hike isn’t only a credibility booster, it will also be the last in the current cycle.

Today’s ECB announcement also contains a hint that eurozone interest rates are now at or at least near their peak.

The ECB says:

Based on its current assessment, the Governing Council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target.

The Governing Council’s future decisions will ensure that the key ECB interest rates will be set at sufficiently restrictive levels for as long as necessary.

The ECB adds that its Governing Council will continue to follow “a data-dependent approach” to determining the appropriate level of interest rates, and how long they stay in restrictive levels.

Updated

European Central Bank policymakers have also cut their forecast for growth in the eurozone, due to the impact of higher interest rates.

They say:

The Governing Council’s past interest rate increases continue to be transmitted forcefully.

Financing conditions have tightened further and are increasingly dampening demand, which is an important factor in bringing inflation back to target.

With the increasing impact of this tightening on domestic demand and the weakening international trade environment, ECB staff have lowered their economic growth projections significantly.

The ECB now expect the euro area economy to expand by just 0.7% in 2023, down from the 0.9% growth forecast in June.

Expected growth in 2024 has been downgraded to 1.0% from 1.5% three months ago, while 2025’s forecast has been trimmed to 1.5% growth from 1.6%.

UBS: This could be the last ECB hike in the current cycle

Today’s ECB decision has been seen as a knife-edge call, with some economists predicting that the central bank might have left interest rates on hold.

Dean Turner, chief eurozone and UK economist at UBS Global Wealth Management, predicts that today’s increase will be the last in the current cycle.

Turner explains:

The ECB didn’t blink in the face of growing speculation that it would hit pause on the rate-hiking cycle. To be sure, economic data have raised questions about the health of the economy, but it is clear that still high inflation trumps these concerns. We expect this to be the last hike from the ECB in this cycle, but that does not mean the era of tight monetary policy is over. Interest rates are likely to remain at these levels well into next year. Moreover, the ECB will continue to, and may even accelerate, the shrinking of its balance sheet.

The euro has been caught in the crosshairs leading up to this decision, and today’s hike should provide some short-term relief. But with investors stuck in the “will they, won’t they?” debate about the US Federal Reserve’s next move, this may not last.

We still see the euro higher against the US dollar next year, but investors will need more confidence that rates have peaked before they can look towards the next phase of the economic cycle, which should favour cyclical currencies like the euro.

European Central Bank lifts interest rates to record high

Newsflash: The European Central Bank has raised interest rates in the eurozone, as it continues its fight against inflation.

The ECB’s Governing Council has decided to raise the three key ECB interest rates by 25 basis points, or a quarter of one percent, after concluding that inflation will be higher than it had expected.

Announcing the move, it says:

Inflation continues to decline but is still expected to remain too high for too long.

This lifts the bank’s benchmark deposit facility rate, which is paid to commercial banks when they deposit money with the central bank overnight, to 4% from 3.75%, a record high.

The EBC’s main refinancing rate, which provide the bulk of liquidity to the banking system, has risen from 4.25% to 4.5%.

The marginal lending facility, charged when banks borrow from the ECB, has risen to 4.75%.

The ECB has also lifted its inflation forecasts for this year, and next year, saying:

The September ECB staff macroeconomic projections for the euro area see average inflation at 5.6% in 2023, 3.2% in 2024 and 2.1% in 2025. This is an upward revision for 2023 and 2024 and a downward revision for 2025. The upward revision for 2023 and 2024 mainly reflects a higher path for energy prices.

Updated

China accuses EU of ‘naked protectionist act’ on electric car probe

Tensions between Beijing and Brussels have escalated after the European Commission announced yesterday it would launch an anti-subsidy investigation into Chinese electric vehicles that are “distorting” the EU market.

China’s commerce ministry has warned today that the investigation, into Chinese electric vehicles believed to have benefited from state subsidies, will have a “negative” impact on economic and trade ties.

In a statement, the ministry said:

“China believes the investigative measures proposed by the European Union are in reality to protect its own industry in the name of ‘fair competition’.”

“It is a naked protectionist act that will seriously disrupt and distort the global automotive industry and supply chain, including the EU, and will have a negative impact on China-EU economic and trade relations.”

European Commission president Ursula von der Leyen announced the investigation on Wednesday, to examine if punitive tariffs should be introduced to protect EU producers from a “flood” of cheaper Chinese EV imports.

Missed UK direct debit payments rise by 14% annually

More UK households missed direct debit payments last month, as they came under growing financial strain.

The number of missed bill payments was 14% higher in August than a year ago, new 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% in July to 0.83% in August.

The UK direct debit failure rate
The UK direct debit failure rate Photograph: ONS

A year ago, in August 2022, the rate was 0.73%.

On a monthly basis, though, missed direct debit paymenrs have been “broadly unchanged since March 2023”, the ONS said.

In January, the rate hit 0.94%, as households ran out of money following Christmas spending.

Over in China, policymakers have just announced new measures to stimulate its economy.

The People’s Bank of China has cut the amount of cash which lenders must hold in reserve for the second time this year, as it tries to bolster the country’s economic recovery.

(This is Graeme Wearden taking over from Kalyeena).

Updated

Suspected fraud flagged on UK Covid loans jump 43%

The business department has released new quarterly data for the £77bn the total drawn value Covid loan schemes, which were meant to keep businesses afloat during the pandemic lockdowns.

Most strikingly, they show that commercial banks – which distributed the government-backed loans to firms – flagged around £1.69bn of those loans for suspected fraud.

That marks a 43% rise from the £1.1bn flagged three months earlier, and means that taxpayers could be on the hook for more than the government last estimated (based on the business department’s 2021-2022 annual report).

The figures are becoming clearer as businesses start to repay the loans.

And the fraud issue has been divisive.

While the government credits the programme with having saved 500,000 businesses and 2.9m jobs through the Covid crisis, it prompted former Cabinet Office minister Theodore Agnew to resign in protest in January 2022, citing the government’s “woeful” efforts to control potential fraud.

The business department’s last set of estimates suggested taxpayers will be left nursing about £1.1bn in losses due to error and fraud by scammers – including disqualified directors reported to have spent tens of thousands of pounds worth of government-backed loans on anything from a Range Rover to pornographic websites.

We’re still waiting on the business department’s latest annual report – which was tipped to be released today but may be delayed – to give some indication of the government’s own figures and forecasts for fraud and error.

Stay tuned.

Arm IPO: shares targeted at $59 each - New Street Research

Back to the hottest IPO of the year.

Some market players are expecting Arm shares to climb when they start trading on Wall Street this afternoon.

New Street Research, for example, has initiated a buy rating, setting a target price of $59 each.

That is compared to the $51 starting price, which was already at the top of Arm’s own range.

And no surprise, then, that Wall Street is expected to rise at the open, given the anticipation of Arm’s debut on the Nasdaq:

  • Nasdaq futures are up 0.33% at 15,605 points

  • Dow futures are up 0.26% at 35,009 points

  • S&P 500 futures are up 0.33% at 4,532 points

Updated

Key event

The European Central Bank (ECB) is expected to increase interest rates across the 20-member euro currency zone in a few hours time.

Speeches and question and answer sessions with ECB council members over rent months have shown a strong leaning towards tightening monetary policy to kill off any signs of inflation.

Analysts at UBS said they expect a 0.25 percentage point rate hike to 4% and for this to be the peak.

If we are wrong and the ECB leaves rates on hold, we would expect it to keep the door open for an October hike.

The key reason why we expect the ECB to deliver a final hike next week is that we anticipate the its new staff macroeconomic projections to show a 2025 inflation forecast that is still above 2%.

Like the Bank of England and the US Federal Reserve, the ECB’s policy makers say “price stability is best maintained by aiming for 2% inflation over the medium term”.

Updated

Over in the oil industry, refinery workers at the Fawley Esso oil refinery in Hampshire are balloting to strike over pay.

Around 300 engineering construction workers, who are employed as contractors to carry out essential repairs and maintenance, are being balloted, Unite the union said.

The contractors are angry that, even though oil industry profits have surged, the value of their pay has been falling progressively since the pandemic, Unite explained.

Workers have so far rejected a two-year deal, averaging 6% per year, for 2024 and 2025. If the ballot is successful, strike action is scheduled to start by late October.

Any strike action is expected to cause “significant disruption at the site”, the union said.

Unite national officer Jason Poulter said:

The anger amongst our membership is such that we are balloting for strike action. The Engineering Construction Industry Association must acknowledge that without a better offer, falling recruitment and retention for NAECI (National Agreement for the Engineering Construction Industry) roles will only get worse.

Any disruption caused by potential strikes lies squarely at their door – a much improved offer needs to be put forward if this dispute is not to escalate into industrial action.

On Christmas trading: John Lewis Partnership bosses said the consumer environment was still “reasonably tough” but they were hearing that people are very much looking forward to a good celebration at Christmas, and expected the shopping season to be a “good event” with “great availability.”

“We, as a team, feel we have the right skills and capability to deliver the performance that we need,” they added.

More on shoplifting: reporters have asked bosses about the impact of organised crime gangs, and whether there were any particular regions or stores being targeted.

John Lewis Partnership chair Sharon White said the partnership, and retailers more widely, have unfortunately seen much more organised crime – rather than opportunistic shoplifting or those linked to cost of living pressures.

That has resulted in gangs going store to store to shoplift. It’s “almost become a job” she said, and this was partly why her team have been calling for a change in legislation that would make it a criminal offence to abuse shop workers.

And that ends the JLP press conference.

Updated

No clear answer on whether the John Lewis Partnership is likely to make a full year profit.

Finance director Berangere Michel said that while John Lewis has a great autumn season ahead and is hoped to continue its success in fashion, they know customers “are feeling the pinch”.

Therefore it’s difficult to give more specific guidance in relation to numbers, Michel said.

The John Lewis Partnership said it also struggled from a jump in shoplifting.

Financial director Berangere Michel said that theft in the first half of 2023 was up by £12m year-on-year.

However, despite its ongoing losses, bosses said they are not considering shutting any Waitrose or John Lewis shopfronts.

While they will always review the format of their stores, and review their properties regularly, bosses insisted there are “no planned closures.”

Updated

John Lewis bosses have also been asked when they’ll appoint someone permanently to run department store John Lewis, given that Naomi Simcock is only serving in an interim basis.

But unfortunately, no update yet (including on whether Simcock could end up taking the role permanently).

John Lewis Partnership bosses: we'll swing profit before new turnaround deadline

John Lewis bosses have insisted that despite the delay to the turnaround plan deadline, they expect the group “will return to profit much earlier than that.”

But how much earlier, is still TBC.

Updated

Full story: Losses at John Lewis narrow as Sharon White suggests reasons for optimism

The owner of John Lewis and Waitrose remains in the red after it reported another loss for the first half of the year, and admitted that its turnaround plan will take two years longer to deliver.

The John Lewis Partnership made a pre-tax loss of £59m for the 26 weeks to 29 July, as it continued to face pressures from higher costs, and noted caution from shoppers during the cost of living crisis.

However, the retail group said its performance was improving, and its pre-tax loss was 41% lower than the £99m loss reported for the same period a year earlier.

Despite the challenging economic situation, shoppers continued to spend money on themselves, with sales of clothing, beauty products and “dine-in” meals all rising.

However, consumers proved wary about splashing out on “big ticket” items for their homes, such as technology products or sofas, the sales of which fell.

As a result, operating profit at the John Lewis department store chain fell from £295m to £277m. However, operating profit at the Waitrose supermarket improved to £504.4m from nearly £432m, despite IT problems earlier in the year, which affected product availability.

John Lewis sales fell 2%, while Waitrose sales were up 4%.

Read more here:

Turning to the John Lewis Partnership press conference call.

John Lewis bosses have been asked whether the delay to the turnaround plan is going to impact its goal to generate 40% of its profits outside retail, given there have been some reports about some delay to its housing schemes.

(A reminder that John Lewis plans to build 10,000 rental homes on its land).

Chair Sharon White said the 40% target remains long-term goal, and they will have to see whether that part of their profit proportion target “also has a bit of a delay to it”.

But White said it “remains as strong an aspiration as it did before.”

Updated

Not all is well among UK supermarkets.

The UK arm of German discount supermarket Lidl has swung to an annual loss, as attempts to keep prices low for customers, paired with higher costs and inflation, weighed on performance.

Lidl GB reported a £76m pre-tax loss in the 12 months to February, down from a pre-tax profit of £41m

Customers shop in a Lidl supermarket.
Customers shop in a Lidl supermarket. Photograph: Eric Gaillard/Reuters

That was despite a 19% rise in full-year revenues to £9.3bn, as its low prices attracted a greater numbers of shoppers.

Updated

John Lewis remains loss-making, delays turnaround plan

Disappointing news from the John Lewis Partnership this morning.

The partnership, which runs John Lewis department stores and Waitrose supermarkets, reported a £59m pre-tax loss in the six months to July.

While that is an improvement on the £99.2m loss reported during the same period last year, the company said it was still struggling due to the ripple effects of high inflation, which has racked up costs and resulted in customers being more cautious with their spending.

The partnership said inflation – which increased its costs by £179m last year – is also partly to blame for its failure to deliver on its turnaround plan, which is now going to be delayed by two years.

The retailer said:

A combination of inflationary pressures and greater than expected investment requirements for our transformation means it will take a further two years to deliver the Partnership Plan - to 2027/28 rather than to 2025/26.

That plan, originally announced in October 2020, was meant to see the John Lewis Partnership reach £400m profit by the end of the programme, including through making its operations and head office more efficient.

Despite the challenges, the JLP’s chair Sharon White, tried to strike a positive tone:

The Partnership is a unique model that has been tested and come through stronger many times in our 100 year history. While change is never easy - and there is a long road ahead - there are reasons for optimism. Performance is improving. More customers are shopping with us. Trust in the brands and support for the Partnership model remain high.

Introduction: Arm prices at top of range at $51 per share ahead of IPO

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

We start the day with news that UK chip designer Arm Holdings has secured a bumper $54.5bn valuation ahead of its first day of trading.

It comes after the Softbank-backed company priced shares at the top of its initial estimate, at $51 each, as investors scrambled for a piece of the action in the biggest initial public offering of the year.

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

Despite some concerns about the company’s exposure to numerous risks in China, it’s not stopped a juggernaut of enthusiasm, with the IPO oversubscribed multiple times, with interest from tech giants like Nvidia, Apple and Alphabet.

Given the eagerness from investors , it seems Arm could have pushed for an even higher price, but is playing it safe to try to ensure a surge in the share price once trading gets underway.

While enthusiasm is high for the company’s return to public markets, seeing the UK company list on the US Nasdaq rather than in London, is another embarrassment for the City.

But Streeter explains that there was no room for sentiment as Softbank pursued the best price for Arm’s return to public markets.

The fanfare surrounding today’s launch in New York will cement disappointment that London has been shunned, even though the decision was announced back in March.

Arm was very much seen as a British success story, but owner SoftBank is pulling no sentimental punches here and wants the biggest bang for its buck.

We’ll bring you further reaction, and Arm’s first market moves, in the hours ahead.

The agenda

  • 9:30am BST: UK Covid loan data

  • 1:15pm BST: ECB interest rate announcement & press conference

  • 1.30pm BST: US PPI, retail sales, and weekly jobless claims

  • 2:30pm BST: US markets open for trading

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