Closing summary
The governor of the Bank of England, and his counterpart at the Central Bank of Ireland, who sits on the European Central Bank’s governing council, have pushed back against expectations of early interest rate cuts.
Andrew Bailey said it’s “too early” to talk about interest rate cuts.
Speaking at a conference hosted by the Central Bank of Ireland in Dublin, the Bank of England governor said:
It’s really too early to be talking about cutting rates… We are very clear, we are not talking about that.
Bailey said he is “optimistic” that inflation will come back to the 2% target within two years, but that rates will likely need to stay high for longer to make that happen.
Central Bank of Ireland governor Gabriel Makhlouf echoed those comments.
Bailey also called for greater cooperation on financial rule-making, warning that Brexit has affected the “openness of the UK economy”.
In an apparent swipe at those calling for the UK to develop a separate rulebook for banking and insurance activities, he said free trade needed strong regulation based on agreements with foreign watchdogs.
Our other main stories today:
Picasso sale to kick off art auction season expected to rack up £2bn in sales
A Pablo Picasso masterpiece of his “golden muse” is predicted to trigger a £100m-plus bidding war between billionaire art collectors on Wednesday night in the first big lot of an autumn auction season that is expected to sell more than £2bn of art.
The portrait, Femme à la Montre (Woman with Watch), will be sold at auction at Sotheby’s in New York at 6pm local time, with a sales estimate in excess of $120m (£98m).
The 1932 painting of Picasso’s secret lover, Marie-Thérèse Walter, was created during the artists explosive “year of wonders” as he prepared for his first large-scale retrospective in Paris at the age of 50 and is highly sought after by collectors.
“Picasso is all about passion, but this specific passion [for watches] is one that is not generally known about,” said Simon Shaw, Sotheby’s vice-chair for global fine arts. “He was an incredibly stylish man, very interested in his sartorial identity, and a great connoisseur of watches. Even photos of him wearing his watches are prized by watch collectors.”
Packaging strikes put Christmas deliveries at risk
A fleet of DS Smith lorry drivers delivering packaging cardboard and paper to major retailers, including Amazon, will strike over pay in the run up to Christmas, according to the Unite unnion.
The strikes will impact the ability of DS Smith clients, which also include Direct Wines, Cadbury and Haribo, to package items for mail order delivery to customers during the festive season.
An initial seven days of strike action is planned between 20 and 27 November, with strike action set to intensify throughout December if the dispute is not resolved.
The drivers, based in Launceston in Cornwall, Sittingbourne in Kent, Avonmouth in Bristol and Tuxford in Nottinghamshire, have rejected a 5% pay offer as too low. This is a significant real terms pay cut, given that inflation measured by the retail price index was 11.3% when the pay rise should have been implemented in May, Unite said.
The workers are employed by DS Smith Logistics, which a subsidiary of DS Smith Plc. That parent company made a pretax profit of £661m in 2022-23, a 71% increase on the year before.
Unite national officer Adrian Jones said:
DS Smith can avoid strike action but for this to happen they must properly engage in negotiations and put forward an acceptable pay offer. DS Smith is certainly not short of profits and can fully afford to pay these workers a fair wage increase that takes into account rising living costs.
The drivers also pick up recycling at distribution centres for Tesco, Morrisons, Aldi, Lidl, Coop, ASOS, Biffa and Veolia. A large pileup of uncollected cardboard recycling will cause significant disruptions to the operations of these companies, according to the union.
Nintendo and Sony making live-action film based on The Legend of Zelda
A live-action film based on the hit game franchise The Legend of Zelda is in the works, gaming giant Nintendo confirmed today.
The film will be directed by Wes Ball, who directed The Maze Runner series and the upcoming Kingdom of the Planet of the Apes. It will co-financed by Nintendo and Sony Pictures Entertainment.
Shigeru Miyamoto, Legend of Zelda creator and representative director at Nintendo, will produce the film with Avi Arad, producer of films including the Oscar-winning Spider-Man: Into the Spiderverse.
“I have been working on the live-action film of The Legend of Zelda for many years now with Avi Arad-san, who has produced many mega hit films,” Miyamoto said in a statement on X, formerly Twitter. “It will take time until its completion, but I hope you look forward to seeing it.”
Caramac fans are dismayed after the food multinational Nestlé confirmed that it was discontinuing the caramel-flavoured bar.
It will bring an end to more than 60 years of production of the confectionery, which has gained a dedicated following since its UK launch in 1959 but has recently suffered from declining sales.
“We are very sorry to disappoint fans of Caramac,” Nestlé said in a statement. “There has been a steady decline in its sales over the past few years and unfortunately we had to make the difficult decision to discontinue it.
“We know fans will be disappointed to see it go, but this change will enable us to focus on our best-performing brands, as well as develop exciting new innovations to delight consumers’ tastebuds.”
And our full story on the comment from Andrew Bailey:
The governor of the Bank of England has called for greater cooperation on financial rule-making, warning that Brexit has affected the “openness of the UK economy”.
In an apparent swipe at those calling for the UK to develop a separate rulebook for banking and insurance activities, Andrew Bailey said free trade needed strong regulation based on agreements with foreign watchdogs.
Speaking in Dublin at a financial services conference organised by the Irish central bank, he argued against trade protectionism and regulatory fragmentation.
“As a public official, I take no position on Brexit per se,” Bailey said. “That was a decision for the people of the UK.”
Here is our full Marks & Spencer tale:
Marks & Spencer regained its crown as the UK’s biggest womenswear retailer over the summer for the first time in four years, helping drive a much better than expected 56% increase in profits.
The retailer also confirmed it would pay out almost £20m to shareholders in January in its first dividend since 2019 as pre-tax profits soared to just over £360m, well ahead of analysts’ expectations.
M&S said underlying sales of clothing rose 5.5% in the six months to 30 September, with particularly strong performances in holiday wear and denim, while profit margins increased to more than 12% from 9.8% as fewer items had to be sold on discount.
Food sales at established stores rose almost 12%, as M&S said it had increased the number of item sold at a greater rate than the big supermarkets, helping it to gain market share. Sales of its budget range Remarksable soared 45%, with basic items such as butter and milk found in one in five customers’ baskets.
Ofwat faces calls to ban bonuses for water bosses
Ofwat has faced calls to completely ban bonuses for the bosses of water companies after it raised concerns over executive payouts at three English suppliers, the Guardian’s Alex Lawson and Helena Horton report.
The water regulator has said that, after assessing the bonuses paid over the last three years at 16 companies across England and Wales, it found that payouts at Severn Trent, South West Water and Portsmouth Water were not “substantially linked to stretching delivery for customers and the environment”.
However, it is not able to clawback the payouts to the trio of companies’ executives.
Water companies have been repeatedly criticised for paying out large sums to executives leading suppliers who have presided over leaky infrastructure and dumped sewage in Britain’s waterways.
The government and Ofwat have also faced anger for not acting sooner to tackle the crisis in the water industry.
Ofwat said in June that water companies will not be able to use money from customer bills to pay executive bonuses if “they have not been sufficiently justified”, from this financial year. It will also use new powers to block shareholder payouts if companies fail to hit performance and environmental targets.
Today, Ofwat said that, in the last financial year, senior executives of six companies refused a bonus for 2022-23, and at five other companies, executive bonuses were paid for by shareholders, not customers.
Ofwat chief executive David Black said:
It is welcome that a number of companies responded to our calls for a change in how bonuses are awarded. But we want to see more transparency around this and if companies do not meet the criteria we have set out, from next year we will intervene to block customers from paying for these bonuses.
Here is our analysis:
Modern Britain’s slow, contested moves towards facing the crimes of its past have two connected parts: acknowledging the history, and acting to repair it – making reparations.
The insurance titan Lloyd’s of London, multibillion pound cornerstone of the City’s wealth, power and renown, has taken steps since 2020 to admit its immense historic involvement in slavery, and has published powerful research on the evidence in its archives.
The chairman, Bruce Carnegie-Brown, followed the insurance market’s apology made in 2020 at the height of the Black Lives Matter campaigns with another, saying Lloyd’s was “deeply sorry for this period of our history and the enormous suffering caused to individuals and communities both then and today”.
But the initiatives Lloyd’s announced as its response, “Inclusive Futures”, focusing principally on a £12m programme to increase ethnic diversity in its workplace, and £40m profit-making investments in the African and Inter American development banks, has landed it in the increasingly heated argument about the scale of reparations needed.
Kehinde Andrews, a professor of Black studies at Birmingham City University, responded by pointing out that Lloyd’s’ centuries-long prominence in insuring, financing and profiting from the transatlantic slave trade was already “common knowledge”.
He pointed out that Lloyd’s status as a London home for slavery was covered with dishonourable mentions in Eric Williams’ landmark book Capitalism and Slavery, published in 1944, and argued that the reparatory initiatives on offer fell far short of substantial.
Lloyd’s says it has developed its response, and programmes to improve diversity at all levels including on the board, with “black experts and ethnically diverse colleagues across the Lloyd’s market to deliver meaningful, sustainable change in building a more inclusive marketplace and society”.
Lloyd’s of London accused of ‘reparations washing’ over response to slave trade review
Lloyd’s of London has been accused of “reparations washing” over its response to a self-commissioned review that lays bare its “significant role” in making the transatlantic slave trade possible.
Lloyd’s, founded in 1688 and the world’s largest insurance market, released findings on Wednesday from 18 months of academic research it commissioned to determine the depth of its ties to the slave trade.
It found that Lloyd’s members had:
insured the largest slave shipowners in the early 1800s;
used their personal experience with enslavement to work within the slave trade;
facilitated relationships between slave ship captains, shipowners, and insurance underwriters;
and actively protested against the abolition of the slave trade across the British empire in 1807.
The research, conducted by academics from Johns Hopkins and Brown universities, did not aim to quantify the financial wealth that Lloyd’s and its members amassed through the slave trade.
However, analysis of a single ledger from 1807 showed that one underwriter and Lloyd’s member, Horatio Claggett, alone insured about a third of all known slave ship voyages that left England in the final year that it was technically legal to trade enslaved people.
Lloyd’s – which formally apologised for its role in the slave trade in 2020 – said the researched proved the corporation “played a significant role in enabling the transatlantic slave trade and economy, forming part of a sophisticated network of financial interests and activities that made these activities possible”. However, it stopped short of offering reparations, which compensate the descendants of individuals affected by wrongdoing.
Instead, the insurance market – which reported a £769m loss in 2022 but made a profit of £2.3m a year earlier – said it was committing £52m towards a “programme of initiatives” including those that would help people from black and ethnically diverse backgrounds to “participate and progress from the classroom to the boardroom”.
Updated
Bank of England governor: 'too early' to talk about rate cuts
Andrew Bailey also said that it’s “too early” to talk about interest rate cuts.
Speaking at a conference hosted by the Central Bank of Ireland in Dublin, the Bank of England governor said:
It’s really too early to be talking about cutting rates… We are very clear, we are not talking about that.
Bailey said he is “optimistic” that inflation will come back to the 2% target within two years, but that rates will likely need to stay high for longer to make that happen.
Last Thursday, the Bank of England held interest rates at 5.25% for a second meeting, at a 15-year high of 5.25%, and signalled borrowing costs would stay high for an extended period as it tackles stubborn inflationary pressures.
However on Monday, the Bank’s chief economist Huw Pill said financial market expectations of a rate cut in August 2024 “doesn’t seem totally unreasonable, at least to me”.
Updated
In a veiled attack on Brexiters and their desire to break away and create separate regulatory regimes, Bailey warned of the costs of fragmentation, and the risk to financial stability:
We must be alert to the pressure for fragmentation, both in the global economy and financial system. The costs that go with such fragmentation are real and undesirable.
Turning to financial markets, he explained:
Just as reducing openness does the same thing to economic growth, so fragmentation damages financial markets. But it doesn’t just reduce the size of markets, it makes them inherently less stable. Fragmentation is a risk to financial stability.
Put simply, large markets and their infrastructures, which are run safely and to high standards, will support rather than endanger financial stability. A very good example of this is clearing and central counterparties. Fragmenting this type of market infrastructure creates rather than reduces risks in markets. It also increases the cost of market functioning.
Inevitably, with such financial infrastructures, they have to be located in a single place, and become the responsibility of that place in terms of their safety, soundness and stability. Yet they are, as the IMF has rightly said, a global public good.
So, the responsibility of those who operate and regulate such infrastructures is a large one, and one that must hold good at all times. This requires accountability and transparency. Likewise, it is important to have global standards for the operation and oversight of such infrastructures, and strong co-operation among the interested countries – not just where the operator is located but also those where firms which use the infrastructure and depend on it are located.
The UK – as home to multiple financial infrastructures which are systemic outside the UK, including some of the world’s largest clearing houses – takes these responsibilities very seriously. And we have recently enshrined in law our commitment to consider the effects of UK standards on the financial stability of countries where our clearing houses provide services.
Updated
Bank of England chief warns against trade protectionism and fragmentation in financial markets
The governor of the Bank of England has warned against trade protectionism, and regulatory fragmentation, as a “risk to financial stability”.
Speaking at a financial systems conference hosted by the Central Bank of Ireland in Dublin, Andrew Bailey said:
Today we live in a world economy which is experiencing fragmentation, and that is at risk of further such pressure. The World Trade Organisation has recently reported that the share of so-called intermediate goods in world trade – these are the goods that form inputs to the final product – fell to 48.5% in the first half of this year, compared to an average of 51% in the previous 3 years. This is an indicator of pressure on global supply chains.
Russia’s illegal and utterly reprehensible invasion and war on Ukraine has been a further source of economic disruption and fragmentation – notably in energy and food supplies – which has seriously disrupted supply chains and economic conditions.
He called for a “commitment to openness and free trade” following Brexit.
Let me also add a comment which relates to events nearer to home. As a public official I take no position on Brexit per se. That was a decision for the people of the UK. It has led to a reduction in the openness of the UK economy, though over time new trading relationships around the world should, and I expect will, be established. Of course, that requires a commitment to openness and free trade.
During a period of globalisation, when the world economy was opened up to increase trade flows and the flows of finance to support this trade, there was an “increase in interlinkages and dependencies around the world economy”. However, he added:
Some of those interlinkages turned out to be less resilient than we had expected.
We can’t ignore that for the sake of free trade idealism, because the threats that are behind it are sadly real. But, nor must we give up on openness. Diversifying supply chains to increase resilience does not need to involve protectionism.
Updated
ITV says demand for studio productions slows
Britain’s ITV said demand for its studio productions from free-to-air broadcasters is slowing and will lead to lower-than-expected revenue growth at the division.
It now expects revenues at the studios division to grow just 3% this year, down from its previous mid-single digit forecast, and compared with 19% growth last year. ITV, which recently broadcast the Rugby World Cup, has been expanding its studio business and ITVX streaming service to reduce its reliance on volatile advertising.
ITV Studios delivered programmes such as Fifteen Love for Amazon Prime, Love Island USA season 5 for Peacock, and World on Fire season 2 for the BBC. It said:
The global content market has been impacted by lower demand from free-to-air broadcasters, reflecting the challenging advertising environment, as well as the US writers’ and actors’ strike.
Overall revenues grew 1% to nearly £3bn in the first nine months of the year, with ad revenues down 7%, while ITV Studios revenue rose 9% to £1.5bn. The company predicted ad revenues would fall 8% over the year as a whole.
Chief executive Carolyn McCall said:
ITV continues to make good strategic progress despite the challenging macro environment which is impacting the advertising market and also the demand for content from free-to-air broadcasters in the UK and internationally.
It is evident that our strategy of growing the studios and media & entertainment digital business is helping ITV to offset the current headwinds and we remain confident in delivering our 2026 targets, when we expect two-thirds of revenue to come from these growth drivers.
Mirror and Express newspapers publisher to cut 450 jobs
The owner of the Mirror and Express newspapers has announced plans to cut about 450 jobs as it looks to slash costs further.
Reach, which also owns the Daily Star and regional UK titles including the Manchester Evening News, Birmingham Mail and Liverpool Echo, said the job losses are part of proposals to trim operating costs by 5% to 6% in 2024.
The group said the extra savings would help it invest in boosting its online offering.
The firm is battling against a slump in the online and print newspaper advertising market, with digital revenues hit by Facebook and other large media platforms moving to deprioritise news.
Reach has already cut costs by up to 6% this year. In January it announced a reduction of 200 roles in a £30m cost-cutting drive after a slump in the digital and print newspaper advertising market.
AI Pictionary and ‘robo-dog’ on hottest Christmas toy lists
Our consumer affairs correspondent Zoe Wood has looked at this year’s hottest toys for Christmas.
A new version of Pictionary that pits artist against artificial intelligence and a pet “robo-dog” with a wagging tail are among the toys destined to appear on Christmas lists this year as retailers pray for better sales during the key festive trading period.
With the cost of living crisis looming large over another year’s celebrations, the Toy Retailers Association’s annual DreamToys list of the 20 “hottest” gifts includes a dozen that are under £50. Among them is Pictionary vs AI (£24), a new version of the classic board game that pitches (terrible) human sketches against the might of AI processing power.
The cheapest toy is a £9 Squishmallow with the popular soft toys expected to sell in huge quantities again this year. At £90, one of the pricier options is “Dog-E”. With more than 200 sounds and reactions it is claimed to take “the world of robotic pets to a whole new level”.
Richard Hunter, head of markets at the investment platform interactive investor, said:
M&S continues its transformation at speed, with the bedrock of the food business providing a springboard for the revitalised clothing & home business.
Indeed, clothing & home is fast becoming the poster child for the new-look M&S. The lines and the look of the offering are clearly appealing to the new target market of the ‘modern mainstream customer’ as the company attempts to throw off the shackles of a previously dowdy and tired image. The store rotation programme is being accelerated and selected stores revamped to project a more fashionable and less cluttered experience than has been the case in the past.
The thorn in the side to the business remains the joint venture with Ocado, which has yet to establish itself in anything like the way the group had originally envisaged. Despite sales growth of 6.9% in the half and an increase in active customers due to promotions such as the “Big Price Drop” and an increased M&S range, the share of loss attributed to the venture was £23.4 million, compared to £0.7 million in the corresponding period and concerningly close to the £29.5 million for the entirety of the previous year.
The FTSE 100 index has slipped 0.2% to 7,397, though, and the rest of Europe is also in the red.
M&S shares just rose 10% to 248.8p, the highest level since January 2022.
Germany’s Dax has lost 0.35%, France’s CAC is down 0.5% and Italy’s FTSE MiB has edged nearly 0.2% lower.
Updated
M&S shares jump 7%, biggest riser on FTSE 100
Marks & Spencer is the biggest riser on the FTSE 100 index, with the shares jumping 7% to 241.3p. It will pay its first dividend since 2019, after announcing a surge in profits.
Michael Hewson, chief market analyst at CMC Markets UK, said:
Over a year ago the Marks and Spencer share price was at two-year lows and not far off its pandemic lows of 2020 as pessimism abounded about the UK economy.
Since then, the share price has more than doubled and while it has not recovered back to its 2022 peaks it’s not far off, returning to the FTSE-100 in the process, although in recent months the upward momentum has stalled.
The turnaround plan first initiated by previous CEO Steve Rowe has gone from strength to strength over new CEO Stuart Machin, controversial Christmas ads notwithstanding.
Food retail was once again a standout performer, with 11.7% increase in like for like sales, along with an improvement in operating margin, while in general merchandising like for like sales rose 5.5%.
The Ocado business also showed signs of an improvement customer wise, even though losses there increased to £23.4m.
He added:
There was a minor sting in the tail with management warning that H2 was looking increasingly uncertain even with the prospect of a positive Christmas trading period, and that pre-tax profit was likely to be weighted towards the last 6 months.
Having said that October trading momentum has been positive according to management, although the caution over the second half of the year is understandable given the combined impact of a higher interest rates environment, concerns about a slowing economy, and deflationary forces impacting consumer sentiment, along with an uncertain geopolitical outlook.
All in all, despite the heavy pessimism around the UK economy, the fact that we’ve seen positive updates from Next, Associated British Foods owner Primark and now M&S suggests that while the economic backdrop is difficult it’s not all bad news.
Something to hold onto perhaps as the nights get longer into year end.
'Brits have fallen back in love with M&S' – analyst
The M&S results show that “Brits have fallen back in love with M&S,” said Robyn Duffy, senior analyst at the consulting firm RSM UK.
With like for like sales for food up 14.7% and driving sales overall, investment into reviving the business has paid off. Last year’s acquisition of Gist – a deal geared to improve the food supply chain network - has enabled M&S to be more competitive on price without compromising on quality - appealing to today’s price sensitive consumer.
Clothing and home also performed strongly despite headwinds in the market and unseasonal weather in September which caused weak sales across the industry. M&S benefit from having a greater footprint in their clothing business, in terms of school uniforms and under-garments, giving them an edge at this time of year. Its laser-focus on full price sales during the period, coupled with refinements to ranges has also boosted margins. A crucial win for any retailer coming out the other side of a cost-crisis where margins have been squeezed.
The business is seeing more ‘normal’ trading patterns with stores now outperforming online. It still has a way to go in terms of improving its digital footprint.
Overall, M&S continues to be the darling of the high street and this looks set to continue into 2024 with anticipated robust year-end results, despite choppy economic waters ahead. Key investments have allowed M&S to meet their customers needs and a clearer ‘less is more’ strategy is paying off.
Updated
Analysts at Jefferies, led by Frederick Wild, said:
The exceptionally strong first half at M&S confirms the company is benefiting from the same trends as Next on the clothing & home side and Tesco/Sainsbury’s on food.
City veteran David Buik tweeted:
M&S 1st Half earnings - PBT £360.2m (2022 £205.5m) - Food sales +14.7%, clothes & merchandise +5.7%, Ocado retail sales +6.9%, but share loss £23.4m. Cost savings of £100m. Policy to close 67 stores in next 5 years to 180 from 247. Well done Messrs Norman, Machin & Bickerstaffe!
— David Buik (@truemagic68) November 8, 2023
Richard Lim, chief executive at the consultancy Retail Economics, said:
The retailer continues to showcase a mightily impressive turnaround of the business with these latest figures demonstrating significant improvements in sales and profitability. Their renewed product focus, investment in omnichannel and sophisticated use of data has been supercharged by a reenergised culture.
However, the outlook remains challenging with the combination of higher interest rates, weaker economic growth and geopolitical events creating significant uncertainty.
Charlie Huggins, manager of the quality shares portfolio at the Wealth Club, has looked at M&S.
In a difficult trading environment M&S has delivered excellent results, with notable progress in food and clothing and home, and both businesses outperforming the market. With momentum having continued into October, the turnaround plan to revitalise the brand and reignite growth is well on track and the group can look forward to the Christmas period with confidence.
The clothing and home division has been a problem child for M&S for many years. The new strategy, launched last year, aims to improve brand perception and designs, reduce discounting and improve the online offering, while taking a knife to costs and instilling a more entrepreneurial culture. Early signs are this plan is resonating with consumers.
However, pressure on the UK consumer could intensify heading into 2024 as the impact of higher interest rates really starts to bite. This, combined with tougher comparatives means M&S is striking a tone of caution looking ahead to the second half. This may disappoint investors.
Overall, M&S is delivering strongly on the things it can control and seems to be in a much better place now than it was a few years ago. However, it isn’t fully in charge of its own destiny and is heavily dependent on consumer confidence, where uncertainties still abound.
Marks & Spencer reinstates the dividend for the first time since 2019 as the food and clothing retailer makes progress with a decades-long turnaround https://t.co/w7rL5zZivC
— Bloomberg (@business) November 8, 2023
In Germany, inflation has slowed although consumers are still struggling with higher food and energy prices.
Inflation slowed to an annual rate of 3% in October, from 4.3% in September on the harmonised index of consumer prices, which is comparable to other EU countries. The federal statistics office confirmed a preliminary estimate.
Inflation measured by the consumer price index slowed to 3.8% from 4.5%, the lowest since August 2021.
Ruth Brand, president of the Federal Statistical Office, said:
Compared to the medium-term and long-term figures, the inflation rate remains high, however. In particular, consumers are still feeling the higher food and energy prices, which have risen during the extended period of war and crisis.
Currently, the price increase at consumer level is slowing down somewhat. The year-on-year rate of increase in food prices has continued to fall, and the prices of most energy products were even lower compared with the previous year.
Introduction: M&S posts better-than-expected 75% jump in profits
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Marks & Spencer has enjoyed much better-than-expected profits in its first half, but warned of an uncertain outlook.
M&S achieved the leading position in womenswear in the summer for the first time in four years, and took a 9.5% slice of the UK’s clothing & footwear market.
The department store chain reported a 75% jump in pretax profits excluding adjusting items to £360m for the 26 weeks to 30 September.
It also said it reduced the amount of items sold at discount. Sales of women’s denim and casual trousers climbed 17% while holiday wear was up 18%. Prices were frozen on school uniforms for the third year in a row, and M&S said improvements to kids’ casual clothes drove sales growth.
Food sales rose 14.7% while clothing & home sales were up 5.7%. M&S said its Christmas ranges were popular with customers.
The retailer said:
Trading momentum has been maintained through October and we are planning for a good Christmas, with customers already responding positively to our ranges.
However, as we enter 2024, we are not relying on the favourable recent market conditions persisting. The outlook remains uncertain with the probable impact on the consumer of the highest interest rates in 20 years, deflation, geopolitical events, and erratic weather.
Jeremy Hunt risks condemning Britain to a decade in the doldrums unless he uses this month’s autumn statement to announce a £30bn-a-year investment plan to upgrade public infrastructure, a leading thinktank has warned.
The National Institute for Economic and Social Research (NIESR) said the chancellor should ignore calls by Tory MPs for pre-election tax cuts and instead focus on measures to boost growth through improvements to transport, digital networks, skills and housing.
In their quarterly update on the state of the economy, researchers at the thinktank said Hunt had more scope for a bold package than generally believed, because the freezing of income tax allowances and thresholds at a time of high inflation had resulted in stronger-than-expected growth in government revenues.
Britain’s housing market is past “peak pain” and prices look likely to bottom out by next summer, according to the estate agency Savills.
The average UK house price is projected to fall by 3% in 2024, after a 4% drop this year, the upmarket estate agent and property advisory firm said in its five-year outlook.
Prices held up slightly better than expected in 2023, according to Savills, as mortgage markets settled over the spring and autumn months, after the chaos unleashed by Liz Truss’s mini-budget just over a year ago. Property values are estimated to be down a total of 7% since the autumn of last year to the end of 2023.
Savills expects the Bank of England to start cutting interest rates in the second half of 2024, reducing its base rate to 4.75% by the end of that year, from 5.25% now. The property company forecasts rates will fall to 1.75% in 2027.
The Agenda
10am GMT: Eurozone retail sales for September (forecast: -3.1%)
2.15pm GMT: US Federal Reserve chair Jerome Powell speech
Updated
