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We warned Kwarteng about mini-Budget, says top civil servant
Former chancellor Kwasi Kwarteng was told that his mini-Budget could push up borrowing costs, the head of the Debt Management Office has disclosed.
Sir Robert Stheeman told the Treasury Committee that officials from his department “were in close contact with colleagues and the Treasury officials” in the run up to the statement on September 23, warning that it was “likely to result potentially in higher borrowing costs.”
Markets had expected the Government to borrow between £10bn to 15bn for the fiscal statement, Sir Robert said, but the actual figure turned out to be £72bn.
“We were informed by the Treasury about a week or so beforehand that the number was going to be considerably larger,” the DMO chief told MPs.
“Our role is about ultimately advising ministers on how best to design the remit based on whatever number we are asked to raise. And of course, that means advising on market conditions.”
While Sir Robert said officials had told Treasury officials that borrowing costs were likely to rise, he admitted that he was surprised by the scale of the market reaction to the statement.
“I would happily say it was a surprise. And I would guess that it was a surprise to virtually every market participant as well. Because otherwise, every market participant would have been able to make rather a lot of money because they would know exactly what's going to happen.”
Government borrowing costs have retreated from recent highs after Kwarteng’s successor at the Treasury, Jeremy Hunt, reversed almost all the policies in the mini-Budget.
However, Sir Robert said government borrowing costs could rise again as a result of the Bank of England's quantitative tightening programme, which will see it flood the market with billions of pounds of gilts bought during the financial and Covid crises as it tries to shrink its balance sheet.
"We now have a situation where net issuance to the market will be the highest in history,” he said.
"How that plays out normally, you would expect that to be a question of supply and demand. And if there's a lot of supply, well then theoretically, you will need the price to fall and yields have to potentially rise."
Despite this, markets are much more confident in the Government now compared to a few weeks ago and concerns about the credibility of UK institutions have largely receded, he said.
Sir Robert also said he was “very confident” that the DMO could sell the UK’s debt without any problems although there could be “the odd bump along the road”.
Sir Robert said uncertainty around the energy price guarantee played into the turmoil. Liz Truss has originally announced untargeted support for businesses and households for two years, effectively leaving the Government at the mercy of global gas prices for 24 months.
The World Bank on Thursday warned that it is too expensive for governments to help everyone with soaring energy bills.
David Malpass, the bank's president, told the BBC: "Governments are saying we will take care of everyone, which is just too expensive."
Covid support schemes had not been targeted enough and the debt will take decades to pay off, Mr Malpass said, adding that the same approach was being taken to tackle the energy crisis.
Boeing loses $2.8bn from soaring cost of new Air Force One and defence projects
US aerospace and defence manufacturer Boeing is going through some tough times, as industry editor Howard Mustoe reports...
Soaring labour and manufacturing costs on projects including the President’s new Air Force One jet have saddled US aerospace giant Boeing with a $2.8bn loss.
The company said several projects had become loss-making due to soaring inflation, which pushed it into the red for the three months to the end of September.
Boeing had agreed fixed prices for various defence projects but the price of components from steel to computer chips have risen since Russia attacked Ukraine.
Programmes affected by rising prices include its KC-46A Pegasus tanker, MQ-25 Stingray aerial refuelling drone and Boeing–Saab T-7 Red Hawk advanced jet trainer, as well as the replacement for Air Force One. The company has already suffered losses after a contract renegotiation by previous White House incumbent Donald Trump.
Debt Management Office had 10 days' notice of Truss and Kwarteng's mini-Budget
The head of the UK's debt management office has said it was given around 10 days to determine how much cash it needed to raise ahead of the former chancellor's mini-budget.
Robert Stheeman, who is in charge of overseeing the UK's £2.1tn Government bond market, echoed recent comments from the Bank of England that it was not fully briefed before the controversial fiscal plan was unveiled last month.
He said: "We normally have more warning before fiscal events. There are normally discussions between the Treasury and the Office for Budget Responsibility (OBR) to work out exactly what the costings of any measures are, and the number that we are given derives from those discussions.
"In this case, we were given a specific number, but the entire timetable to design a significantly different remit was compressed."
Mr Stheeman told the Treasury Committee that his office was given between 10 days and a fortnight to come up with a number for debt financing amid the then-chancellor Kwasi Kwarteng's sweeping tax-cutting plans.
US counter-inflation efforts are a risk to EU, says official
America's Inflation Reduction Act and soaring energy prices pose a risk to some of the political bloc's businesses, European Union competition commissioner Margrethe Vestager has said.
Joe Biden signed the $430bn anti-inflation bill into law in August, which includes state aid for certain industries such as the car sector.
The EU has said the new legislation, which makes tax breaks conditional on products including US-made content, puts EU car companies at a disadvantage, together with those producing batteries, hydrogen and renewable energy equipment.
"It is a combination of the energy crisis and the way that the Inflation Reduction Act is working that puts at risk part of the industrial base in Europe," Vestager said, as first reported by Reuters.
Apple has ‘no choice’ but to follow EU diktat on charging ports
Apple has “no choice” but to follow an EU diktat to change the charging ports on its upcoming iPhones, a company executive has admitted.
Matthew Field has more:
The European Union wants all portable electronic devices sold in the bloc to work with a standard USB type-C charger by 2024.
Brussels believes this will cut electronic waste by 11,000 tonnes annually and save consumers £217m a year.
USB-C chargers are already common on rival Android smartphones. However, Apple uses a special kind of charging cable, which it calls its “lightning” technology, on its iPhones and headphones.
Greg Joswiak, Apple’s senior vice president of marketing, said: “Obviously we’ll have to comply, we have no choice.”
He told a Wall Street Journal conference the decision will have the reverse effect of reducing e-waste as millions of current iPhone cables will gradually become useless.
"The approach would have been better environmentally and better for our customers to not have a government be that prescriptive,” he said.
Energy prices will slide 11pc next year, predicts World Bank
The World Bank has predicted that energy prices will slide 11pc in 2023 after a 60pc surge this year, with slower global growth and continued Covid restrictions in China helping to keep a lid on prices.
The bank projected a Brent crude average price of $92 a barrel in 2023, easing to $80 in 2024 but well above the five-year average of $60.
It said Russia's oil exports could drop by as much as 2m barrels per day due to an EU embargo and restrictions on insurance and shipping.
A proposed G7 oil price cap could affect the flow of oil from Russia, but needed the participation of large emerging market, developing economies to be effective, it said.
Nasdaq tumbles as sluggish tech results fuel recession fears
The Nasdaq slumped 2pc at the opening bell as disappointing results and warnings from Microsoft and Alphabet sparked losses for tech firms and raised fears of slowing economic growth.
The benchmark S&P 500 lost 0.9pc, while the Dow Jones slipped 0.3pc.
US goods trade deficit widens for first time since March
The US merchandise-trade deficit widened in September for the first time in six months as imports grew and some exports plunged.
The shortfall widened 5.7pc to $92.2bn (£79.8bn) last month, according to the Commerce Department. The figures, which aren’t adjusted for inflation, are larger than economists had expected.
Exports declined 1.5pc to $177.6bn, while imports rose to $269.8bn.
Inbound shipments of consumer goods rose 1.4pc to $69bn. While imports of consumer merchandise have fallen from a record earlier this year, they remain well higher than the pre-pandemic average.
The Federal Reserve’s most aggressive monetary tightening since the early 1980s has sent the US dollar surging, with the currency strengthening for a fourth straight month in September.
While that lowers the cost of imports, it also weakens demand in international markets for US-produced goods.
Grant Shapps gets power to cap income from renewables
The new Energy Prices Bill has become law, giving new Business Secretary Grant Shapps fresh powers to limit the revenues of renewable electricity generators.
The Government is attempting to address what it called the "extraordinary profits" that some renewable producers are making from high power prices.
Energy firms have said the measure it harmful to investment and are waiting to see if the new Government will provide any relief from the policy.
The law will also allow ministers to override energy regulator Ofgem by capping revenues of electricity generators and regulating suppliers.
The industry has warned that the measures could upend the stable regulatory environment in Britain.
Quality businesses forced to sell for less in 'worldwide sale', says activist investor Nelson Peltz
Good businesses are selling at knock-down valuations in a “worldwide sale”, activist investor Nelson Peltz has said, as fears about recession weigh on prospects.
Hannah Boland reports:
Mr Peltz, the billionaire investor behind New York-based Trian Fund Management, said it was a good time to "have the ability to invest" given current prices.
"We're entering a time today that you can really start to buy quality businesses at reduced prices. There's a worldwide sale going on, it's not quite a fire sale like we had in the 70s, but it's a sale."
Global markets have sunk this year in response to the knock-on effects of war in Ukraine. Interest rates have climbed, energy costs have soared and recessions now loom around the world.
The Dow Jones is down 12pc since the start of the year, Germany's Dax has fallen by 20pc and the FTSE 100 is down around 6pc. The FTSE 250 is down over a quarter.
The dollar has surged in value this year as investors have fled to “safe haven” assets, leading to speculation that US investors could take advantage and buy up overseas businesses cheaply.
Rishi Sunak hints at reversal of fracking green light
Rishi Sunak has suggested he will reverse the green light Liz Truss gave to fracking as he claimed he "stands by the manifesto on that".
The Prime Minister's comments came after Green Party MP Caroline Lucas asked him in the Commons: "The Prime Minister's reckless predecessor took a wrecking ball to nature, prompting millions of members of the RSPB, the National Trust and the Wildlife Trust to rise up in opposition. Yesterday, he promised to fix her mistakes as well as to uphold the party's 2019 manifesto.
"So, if he is a man of his word, will he start by reversing the green light she gave to fracking since it's categorically not been shown to be safe, and instead maintain the moratorium that was pledged in that very manifesto that he promised to uphold?"
Mr Sunak replied: "I have already said I stand by the manifesto on that. But what I would say is that I'm proud that this Government has passed the landmark Environment Act."
UK needs to plug £35bn fiscal hole, warn officials
Chancellor Jeremy Hunt is trying to fill a fiscal shortfall of £35bn when he delivers his autumn statement next month, officials have said.
The Treasury has drawn up a list of 104 options to cut spending as they try to get the public finances back on a sustainable footing, the officials told Bloomberg.
Tech giants drag down Wall Street
Wall Street looks set to open in the red this afternoon, dragged down by major tech stocks after disappointing earnings.
Futures tracking the tech-heavy Nasdaq tumbled 1.5pc after figures from Microsoft and Google owner Alphabet failed to impress investors.
The S&P 500 looks set to fall 0.6pc, while the Dow Jones was little change.
Real wages tumbled at fastest pace since 2010 financial crisis
UK wages have fallen at the fastest pace since the global financial crisis in 2010, highlighting the pressure on household budgets as the cost-of-living crisis deepens.
Real wages adjusted for inflation fell 2.6pc in the year to April, according to the ONS. That's the sharpest drop since a 3.3pc decline in 2010/2011, which coincided with a recession.
Inflation has surged to its highest level in four decades and is eating away at the 5pc increase in the headline level of wages.
That's adding to the pressure on the Bank of England to raise interest rates and fuelling calls for the Government to provide further support for households.
The ONS's survey of earnings put the median UK wage at £640 in April, up from £610 the previous year. This was driven by the post-pandemic rebound of hospitality industries.
Bond yields rise after fiscal plans delayed
UK bonds fell after Rishi Sunak delayed the fiscal plan to November 17, prolonging the uncertainty gripping markets.
The yield on 30-year bonds rose as much as 14 basis points to 3.81pc after the announcement was pushed back from its original date of monday.
While markets have calmed since a reversal of the mini-Budget and Liz Truss's departure, investors are still keen to see the final numbers.
The pound trimmed its gains against the dollar but was still trading 0.7pc higher at $1.1558.
Sunak says delay gives time to make 'right decisions'
Rishi Sunak has said the delay to the fiscal statement will give him more time to make the "right decisions" on managing the economy.
In a readout from this morning's Cabinet meeting, the Prime Minster said: “It is important to reach the right decisions and there is time for those decisions to be confirmed with Cabinet.
“The Autumn Statement will set out how we will put public finances on a sustainable footing and get debt falling in the medium term and will be accompanied by a full forecast from the Office for Budget Responsibility.”
Rishi Sunak delays fiscal statement until November 17
Rishi Sunak has pushed back the Government's fiscal statement until November 17.
The Treasury said the announcement of the UK's spending plans, originally scheduled for Monday, will be an "autumn statement".
It will be delivered by Chancellor Jeremy Hunt and accompanied by OBR forecasts, which were notably lacking in Liz Truss's disastrous mini-Budget.
The Treasury added: "It will contain the UK’s medium term fiscal plan to put public spending on a sustainable footing, get debt falling & restore stability."
IMF chief: I expect Sunak to stick to fiscal discipline
IMF boss Kristalina Georgieva has said she expects Rishi Sunak to steer Britain towards fiscal sustainability, adding he was right to warn the public of difficult decisions ahead.
Ms Georgieva welcomed what she said was Mr Sunak's clarity and constructive attitude that she knew from his time as Chancellor
She expects to speak to new Chancellor Jeremy Hunt in the coming days.
The IMF chief told Reuters:
The new prime minister comes with a platform that he has shaped during his days as a chancellor, and it is one of being very prudent in bringing fiscal discipline in the UK.
I listened carefully to him talking to the British people, and this is a message that should resonate across the world. These are tough times, and tough times require tough decisions.
WPP raises sales forecast but warns on wage pressures
WPP has lifted its forecasts for full-year sales despite the risk of an advertising recession, but trimmed its margin expectations as it grapples with higher costs.
The advertising group, which owns agencies including Ogilvy, Grey and GroupM, said revenue excluding pass-through costs will rise by between 6.5pc and 7pc this year. That's up from a previous minimum of 6pc.
However, WPP revised down its operating margin forecasts from a 50 basis point rise to between 30 and 50bp. Shares slid 3.6pc.
It comes as the company tries to keep a lid on rising costs, including its wage bill, and continued investment in its business.
Advertising agencies have so far proved resilient to inflation and a looming recession, with rivals Publicis and Omicron both beating expectations for the third quarter.
Mark Read, chief executive of WPP, said:
WPP continues to show strong momentum, reflecting broad-based growth across our agencies, markets and industry sectors and the investment by our clients in marketing, ecommerce and digital transformation.
Our performance on a three-year basis has continued to improve each quarter during 2022.
Heineken slumps as beer sales go flat
Shares in Heineken fell sharply this morning after the brewer's third-quarter beer sales missed estimates amid a squeeze on drinkers' wallets.
The world's second-largest brewer tumbled 9.2pc – its biggest fall since March 2020 – after it reported an 8.9pc rise in beer volumes. That was well below the 11.8pc expected by analysts.
Rising costs hit the company's margins, while higher prices discouraged some customers as the cost-of-living crisis deepens.
Dolf van den Brink, chief executive of Heineken, said: "We increasingly see reasons to be cautious on the macroeconomic outlook, including some signs of softness in consumer demand."
Banks upbeat on house prices despite rising rates
Barclays is among a handful of banks predicting that the UK house price boom will continue despite rising interest rates.
The bank said that while higher rates are expected to hit housing markets in major economies, house price growth should remain “positive over the forecast horizon”.
It comes after HSBC yesterday said its central scenario was for UK house prices to keep rising over the next two years.
Jose Garcia Cantera, chief financial officer of Santander, also said he doesn't expect to see significant UK house price drops in the coming years.
He told Bloomberg: “Provided the labor market remains strong, we believe that house prices will hold relatively well.”
Google shares drop as YouTube suffers first ever fall in advertising sales
Here's a catch-up from last night's big tech results, courtesy of Gareth Corfield and Simon Foy:
Google’s parent company suffered a sharp fall in its share price after revealing the first ever decline in advertising revenues at its YouTube video streaming service.
YouTube ad sales fell 1.9pc to $7.1bn (£6.2bn) in the three months to 30 September, compared to a year earlier, in the latest sign of a slowdown in the global economy.
Alphabet, the owner of YouTube and Google, had been expected to report around $71bn (£61.9bn) in overall revenues for the period, or growth of around 12pc - but instead sales were $69.1bn. Profits of $13.9bn were also below what had been expected.
Shares fell 5.7pc in after-hours trading immediately after the results were unveiled, wiping around $7.6bn off one of the world’s biggest businesses.
It came as Microsoft revealed a slowdown in sales in its cloud computing arm, and the music streaming service Spotify announced that advertising revenue was growing more slowly than expected.
Sundar Pichai, Alphabet’s chief executive, said: “Financial results for the third quarter reflect healthy fundamental growth in search and momentum in cloud, while affected by foreign exchange. We’re working to realign resources to fuel our highest growth priorities.”
Pound jumps 1pc to hit six-week high
Sterling has continued its advances and hit a six-week high as the appointment of Rishi Sunak as prime minister helps to ease turbulence in markets.
The pound jumped as much as 1pc against the dollar to $1.1620.
Mr Sunak has overhauled his Cabinet after taking over office, keeping Jeremy Hunt as Chancellor in an effort to avoid further disruption. However, there are suggestions that the UK's fiscal plan could be delayed beyond its planned date on Monday.
Foreign Secretary James Cleverly said a short delay wouldn't necessarily be a bad thing if it gave the Government time to "get it right".
The dollar also slid against the euro as the European Central Bank prepares to announce a big interest rate hike tomorrow.
FTSE risers and fallers
The FTSE 100 is treading water in early trading as a stronger pound and disappointing Wall Street tech results dampened sentiment.
The blue-chip index slipped at the open, before regaining ground to trade flat.
Reckitt Benckiser was the morning's biggest faller, sliding 3.5pc despite nudging up its sales growth target. WPP fell 3.3pc after it trimmed its profit margin forecast amid slowing ad demand.
AstraZeneca bucked the trend, rising 2pc after issuing a positive update on its breast cancer drug.
The domestically-focused FTSE 250 was up 0.1pc. Bytes Technology dropped more than 6pc following a trading update.
Reckitt upbeat on sales outlook as price rises
Reckitt Benckiser has raised the lower end of its sales growth target for the year after it was boosted by rising prices and higher demand for baby food in the US.
The maker of Strepsils and Durex now expects like-for-like sales growth of between 6pc and 8pc, up from a previous range of 5pc and 8pc.
It came after Reckitt reported better-than-expected sales in the third quarter thanks to higher prices and some customers switching to more expensive products.
However, volumes declined slightly in a sign that record high inflation in many key markets is starting to affect consumer spending on consumer items.
Shares fell 2.6pc after the update.
Rishi Sunak may delay fiscal statement
It's looking like Rishi Sunak may delay next week's planned fiscal statement.
The new Prime Minister is meeting Chancellor Jeremy Hunt today to discuss his proposals to increase taxes and cut public spending, the Times reports.
The statement could also be delayed by a couple of days so it is presented before November 3, when the Bank of England is due to announce its decision on interest rates.
It could even be pushed back again and turned into a full Budget, according to the report.
Speaking to the BBC this morning, Foreign Secretary James Cleverly said a short delay wouldn't be a bad thing if it gave the Government time to "get it right".
He said: "What we want to do is make sure that we get that right. If that means a short delay, in order to make sure that we get this right, I think that that is not necessarily a bad thing at all."
Made.com stops taking orders as it teeters on brink of collapse
Made.com has said it won't take any new orders from customers as the online furniture retailer teeters on the brink of collapse.
The company said it had decided to "temporarily suspend new customer orders" to preserve value for its creditors after it failed to find a buyer. Its website was down this morning.
It added: "This decision remains under review and a further announcement will be made as appropriate."
Made.com yesterday said it was asking for its shares to be suspended after talks over a buyer or further funding failed.
Read more on this story: Made.com on brink of collapse as no bidders emerge for struggling furniture retailer
Barclays warns on economic uncertainty after profits rise
Barclays has unveiled a 10pc jump in net profits for the third quarter, but also revealed rising impairment charges due to an "uncertain economic environment".
The British lender, which is one of a string of major banks reporting today, reported pre-tax profit of just over £1.5bn in the three months to the end of September, up from £1.4bn last year.
Much like its rivals, Barclays has benefited from a recent rise in interest rates. However, impairment charges set aside for expected bad loans more than tripled to £381m as the outlook darkens.
Barclays chief executive C. S. Venkatakrishnan said:
We are ready to provide support for customers and clients facing an uncertain economic environment and higher cost pressures.
Whether helping retail customers to manage their finances or corporate clients navigate markets volatility, we will continue to be focused on meeting their needs.
Heathrow to remove passenger cap from Sunday
Heathrow has said it will remove its cap on passenger numbers from October 30 as the travel chaos that blighted air travel over the summer continues to ease.
The airport said it will end the 100,000 passenger limit – which first came into effect in July – but said it was working with airlines to agree a system to "align supply and demand" on peak days in the run-up to Christmas.
It said this would encourage demand into less busy periods in a bid to avoid cancellations.
Heathrow said demand had grown over the summer but had not fully recovered. The airport expects total passenger numbers of between 60m and 62m in 2022 – around 25pc fewer than in 2019.
The company warned the war in Ukraine and global economic crisis meant air travel demand was unlikely to reach pre-pandemic levels for a number of years, except at peak times.
Heathrow said underlying losses had increased to £400m in the year to date, adding to the £4bn in the previous two years.
Zara owner sells Russian business to UAE group
Zara's parent company has agreed a deal to sell its Russian business to a Middle Eastern retail group.
Inditex said the deal with Daher will preserve a "substantial number of jobs" in Russia and the buyer will pick up most of its rental contracts.
The Spanish company, which is the world's largest textile retailer, expects provisions made in the first half of the year to cover the impact of exiting Russia.
In June, it said it had taken €216m (£188m) provision for shutting operations in Russia and Ukraine.
Under the agreement, Daher will operate in Russia under its own brand, but the deal allows for a possible return to the country by Inditex through franchises.
Daher is based in the United Arab Emirates and has links to Azadea, a Lebanese company that operates Inditex franchises in the Middle East.
Energy bill support for all households is too expensive, warns World Bank
The World Bank has warned that it's too expensive for governments to help everyone with soaring energy bills.
The bank's president said Covid support schemes had not been targeted enough and the debt will take decades to pay off, adding that the same approach was being taken to tackle the energy crisis.
David Malpass told the BBC: "Governments are saying we will take care of everyone, which is just too expensive."
He said it was pushing global debt to record levels and hitting the poorest people in society hardest.
Separate research suggested the UK's energy support – which limits average bills to £2,500 – is too expensive in its current form.
The National Institute of Economic and Social Research said the scheme could cost around £30bn because it was untargeted.
Borrowing costs recover from mini-Budget chaos as Sunak readies spending cuts
The Government’s borrowing costs have fallen back to levels last reached before Liz Truss's disastrous mini-Budget, handing Rishi Sunak a potential boost as he prepares to set out plans to confront the economic crisis gripping Britain.
Sterling rallied and yields on 30-year bonds dropped sharply as Mr Sunak, the new Prime Minister, promised to “place economic stability and confidence at the heart of this Government’s agenda”.
The Treasury can now borrow for three decades for 3.67pc, well below the more than 5pc peak after Ms Truss's plan for unfunded tax cuts set off a wave of fire sales in parts of the pensions market.
The pound buys $1.148, up 1.8pc on the day, meaning sterling is also trading above its pre-mini-Budget level.
Read the full story by Tim Wallace here
Google shares drop as YouTube suffers first ever fall in advertising sales
Google’s parent company suffered a sharp fall in its share price after revealing the first ever decline in advertising revenues at its YouTube video streaming service.
YouTube ad sales fell 1.9pc to $7.1bn (£6.2bn) in the three months to 30 September, compared to a year earlier, in the latest sign of a slowdown in the global economy.
Alphabet, the owner of YouTube and Google, had been expected to report around $71bn (£61.9bn) in overall revenues for the period, or growth of around 12pc - but instead sales were $69.1bn. Profits of $13.9bn were also below what had been expected.
Shares fell 5.7pc in after-hours trading immediately after the results were unveiled, wiping around $7.6bn off one of the world’s biggest businesses.
Read the full story by Gareth Corfield and Simon Foy here
Good morning
Britain's new prime minister Rishi Sunak is set to meet with continuing Chancellor Jeremy Hunt today as they work to fill the multi-billion pound fiscal black hole inherited from the Truss administration.
Mr Sunak said on Tuesday he would place "economic stability and confidence at the heart of this government’s agenda."
The coming days are likely to bring further details of what policies Mr Sunak might pursue alongside Mr Hunt. The fiscal statement is still scheduled for October 31, but there is speculation that date could shift.
5 things to start your day
1) Borrowing costs recover from mini-Budget chaos as Sunak readies spending cuts - Bonds recover from chaos under Liz Truss as Government braces for bleak OBR forecasts
2) Civil service warned ministers that energy bailout created risk of fraud - Newly published letters request a ministerial direction to implement the scheme
3) Anger in Brussels as it emerges EU may subsidise cheap power for Britain - Low prices on the continent could see electricity vacuumed up by export markets
4) Adidas cuts ties with Kanye West after rapper goads: ‘I can say anti-Semitic things, and Adidas can’t drop me’ - German sportswear giant warns it will take a €250m hit from ending the partnership
5) Jeremy Warner: Nicola Sturgeon’s latest independence bid is nothing more than magical thinking - In economics there is no such thing as having your cake and eating it too
What happened overnight
Asian shares climbed higher on Wednesday as investors clung to hopes that the pace of US and global rate hikes would start to slow. Although, US futures dropped after disappointing results from tech giants Alphabet and Microsoft.
E-mini futures for the S&P 500 dropped 1pc in early trade after Google-owner Alphabet posted softer-than-expected ad sales after the bell and Microsoft missed expected revenue forecasts.
Meanwhile, MSCI's broadest index of Asia-Pacific shares outside Japan was up 1pc, led by a bounce in Hong Kong, while Japan's Nikkei edged up 1.1pc by mid-morning.
The mainland Chinese benchmark index grew 1pc, while Hong Kong stocks jumped 2pc.