Oil hits $80 a barrel as Middle East tensions rise
The price of oil has surged by more than 3pc today after mounting tensions in the Middle East pushed a barrel above $80 for the first time since August.
Oil has experienced recent volatility, with Brent crude slumping to under $70 last month on concerns about weak demand as the Chinese economy stumbled.
Israel today marked the one-year anniversary of the October 7 attack, the deadliest in its history and one that sparked a devastating war in Gaza that has since expanded into Lebanon.
Israel is preparing its retaliation against Iran over its missile attack last week, raising fears of all-out regional war.
Beyond Middle East tensions, oil is also now being supported by hopes of stronger Chinese demand after Beijing recently announced major stimulus measures to boost its flagging economy.
Stephen Innes, an independent market analyst, said: “The oil market is on a wild ride, caught in a whirlwind of geopolitical tension, Opec+ strategy shifts, and a slowdown from its biggest customer, China.”
Shares in oil companies jumped on the back of higher prices, with Shell gaining 2.4pc and BP gaining 1.3pc. On Wall Street, Exxon jumped 0.9pc and Chevron rose 0.7pc.
Read the latest updates below.
06:06 PM BST
Signing off...
Thanks for joining us today.
Chris Price will be back around 7am tomorrow to cover the latest in the markets.
In the meantime, you can read all our latest business news and commentary here.
06:02 PM BST
European stocks eke out small gains
European stocks eked out small gains today, with Ørsted topping the pan-European Stoxx 600 index as Norway’s Equinor bought a stake in the offshore wind developer.
Gains, however, were limited by sectors sensitive to interest rates, such as property and utilities.
The Stoxx 600 index ended up 0.1pc.
German stocks dipped 0.1pc after industrial orders fell more than expected in August. Separately, the country’s economy ministry said the currency union’s largest economy is expected to contract by 0.2pc in 2024, its second year in a row in contraction.
Traders now see a bigger chance of a quarter percentage point Federal Reserve cut rate cut in November, a shift from last week when most were betting on a half point move. They have also nearly priced in another quarter point cut by the European Central Bank this month as inflationary pressures ease faster than policymakers had expected.
Investor morale in the euro zone unexpectedly rose in October after three months of decline, boosted by rising expectations even as dissatisfaction with the current situation hit a new low this year, a survey showed.
Among stocks, Ørsted shot up to the jumped 6pc after Equinor bought a stake valued at around £1.9bn in the Danish offshore wind farm developer. The Norwegian firm lost 3.4pc.
05:55 PM BST
US oil exports face potential distruption as hurricane intensifies
At least one oil and gas platform in the US Gulf of Mexico was shut this afternoon and Florida ports imposed restrictions on vessel navigation as Hurricane Milton rapidly intensified.
Most energy infrastructure on the US Gulf Coast, including oil and gas production facilities, liquefied natural gas (LNG) plants and refineries, is expected to be out of the storm path, but the closure of terminals could temporarily disrupt exports and imports.
US oil giant Chevron said this afternoon that all staff from its Blind Faith platform in the Gulf had left and the facility had been shut.
Blind Faith, located 160 miles (257.5 km) southeast of New Orleans, is Chevron’s deepest water development in the world. It produces oil from four wells and has two flow lines that route crude and gas to a platform moored in 6,500 feet of water.
Production from the other locations that Chevron operates in the Gulf of Mexico remained at normal levels, the company added.
05:22 PM BST
Jaguar Land Rover’s UK sales jump 29pc amid demand for pricest models
Christopher Jasper
Transport Industry Editor
UK sales at Jaguar Land Rover jumped 29pc in the three months through September, spurred by demand for the company’s priciest Range Rover and Range Rover Sport models.
The luxury SUVs, which retail for between £75,000 and £207,000, were also in demand in North America, helping to send sales volumes there 9pc higher compared with a year earlier.
The company prioritised scarce aluminium supplies for the two high-margin models, leading to a reduction in the availability of some less costly cars and sending sales down 22pc in mainland Europe, which favours medium-sized purchases such as the Range Rover Velar.
Sales across the full JLR range slipped 3pc in the quarter to just over 103,000 units.
The aluminium shortage, triggered by flooding at Swiss supplier Novelis, led shipments to showrooms to drop 10pc from a year earlier to 87,000 cars.
For September alone – traditionally the strongest month in Britain as a number-plate change spurs demand – UK sales at Land Rover increased by more than 45pc.
Jaguar failed to match the performance of Land Rover during the month, with UK sales down almost 10pc as the division ended production of the F-Type, XE and XF cars in May at Castle Bromwich in the Midlands to make way for a new range of electric models.
The move means that Jaguar is temporarily an SUV-only producer, with its lineup limited to the F-Pace, E-Pace and I-Pace models.
05:19 PM BST
Unilever to ramp up spending on factories as sales jump
Unilever is spending over €150m (£125m) to revamp the supply chain of its UK and European cleaning division, responsible for products including Persil, Domestos and Cif.
A senior executive told Reuters that it was aiming to make up for years of underperformance and tap into young, post-pandemic shoppers.
In a programme that will run until 2026, it is reportedly making improvements including building factories and adding new production lines to existing facilities.
Eduardo Campanella, head of Unilever’s global homecare business, said:
We are completely redesigning our supply chain in Europe...
We have not invested properly in Europe because we were not growing. So it’s a chicken and egg problem...
Europe was quite stagnant and then the [company-wide turnaround] came as a shock of culture into this organisation.
Unilever is now growing faster than the market. It increased sales by 13pc in the first half of the year compared with market growth of 3.7pc.
Mr Campanella said the company’s growth was down to new products responding to new consumer habits.
A washing detergent aimed at 15-minute washes had done well when added to 800 Tesco Express stores. Mr Campanella said the aim was to attract younger shoppers from smaller, urban households.
The Telegraph has approached Unilever for further comment.
04:52 PM BST
FTSE 100 closes up
The FTSE 100 closed up by 0.3pc.
The top riser was NatWest, up 3.5pc, followed by Shell, up 2.4pc.
At the other end of the index, Endeavour Mining lost 5.6pc and housebuilding giant Barratt Redrow fell 3.3pc.
Meanwhile, the mid-cap FTSE 250 closed down by 0.4pc.
The top riser was Ocado, up 4pc, followed by Burberry, up 3.6pc.
The biggest faller was insurance company Lancashire Holdings, down 8.2pc, followed by City firm CMC Markets, down 3.1pc.
04:34 PM BST
Brent crude hits $80 a barrel on Middle East tensions
The price of oil surged 2.7pc today, putting a barrel of Brent crude above $80 for the first time since August.
Oil has experienced recent volatility, with Brent slumping under $70 last month on concerns about weak demand.
Israel on Monday marked the one-year anniversary of the October 7 attack, the deadliest in its history and one that sparked a devastating war in Gaza that has since expanded into Lebanon.
Israel is preparing its retaliation against Iran over its missile attack last week, raising fears of all-out regional war.
Beyond Middle East tensions, oil is also being supported by hopes of stronger Chinese demand after Beijing recently announced major stimulus measures to boost its flagging economy.
Stephen Innes, an independent market analyst, said:
The oil market is on a wild ride, caught in a whirlwind of geopolitical tension, Opec+ strategy shifts, and a slowdown from its biggest customer, China.
04:10 PM BST
Oil prices fuel worries over inflation
Rising oil prices are continuing to gain are raising worries in the City about inflation - but stock markets are “calm”, an analyst has said. Chris Beauchamp, chief market analyst at online trading platform IG, said:.
Friday’s bumper jobs report has allayed any lingering fears of a US recession for now, and has helped stock markets to hold their ground despite the rising tensions across the Middle East. Investor calm is likely due to hopes that the delayed Israeli response to Iran means that Tel Aviv will avoid escalating the conflict much further.
Admittedly oil prices are continuing to rise on expectations of a much tighter outlook for supply and demand. Having had a couple of months focusing on US job market weakness, we could be pivoting back to inflation-watching.
04:04 PM BST
UK interest rates will settle above 4pc, says ex-Bank of England rate setter
Interest rates will not return to the low levels experienced after the financial crisis but settle at above 4pc, a former Bank of England economist has said.
Charles Goodhart, one of the original members of the Bank of England’s monetary policy committee, told Bloomberg that he “would not expect” a revival of the “very low interest rates” experienced before Covid.
Mr Goodhart believes the low levels of inflation since the early 1990s to be an anomaly, and believes rates will now need to be higher.
Traders are today betting that rates will average 3.66pc in three years’ time. But Mr Goodhart believes the long-term rates will be higher as a result of trends in the Chinese economy and the rise of deglobalisation, which will push prices upwards.
He told Bloomberg that the expectation that China will “go on producing ever cheaper goods won’t last” as a result of a shrinking working population.
China’s population fell by 2m last year, from 850,000 a year earlier, according to official figures, after birth rates hit a record low.
03:51 PM BST
Oil shares boosted by rising crude prices
Shell and BP are among the biggest risers in the FTSE 100 today, after the cost of oil jumped 1.7pc.
Brent crude is around $79.40 a barrel today as tensions escalated in the Middle East one year after the deadly Hamas attacks on Israel.
Shell is up 2.2pc, while BP is up 1.3pc.
It comes on the day BP reportedly has abandoned its target to cut oil and gas production by 2030, while Shell announced a fall in quarterly profit margins in its oil refining business (both covered on this blog earlier).
On Wall Street, ExxonMobil (the owner of Esso) is up 0.8pc, while Chevron is up 0.5pc. France’s TotalEnergies is up 0.8pc.
03:44 PM BST
Wall Street falters on rising government borrowing costs
US stock indexes have fallen this afternoon as rising US Treasury yields indicated that traders now expect a more leisurely set of cuts to interest rates.
US Treasury yields rose as investors reassessed the Fed’s rate path, with the yield on benchmark 10-year notes exceeding 4pc for the first time in two months.
The S&P 500 is down 0.3pc, while the Dow and the Nasdaq have both fallen by 0.4pc.
Wall Street’s fear gauge, the Vix, rose to its highest level in over one month as tensions in the Middle East raise concerns about potential distruptions to the oil supply.
Art Hogan, chief market strategist at B Riley Wealth, said:
[The] concerns that would keep people on the sidelines have to do with higher energy prices in the near term, [the] impact of that inflation and that yields which have been falling precipitously [have] now firmed up.
Thanks to Chris Price for his updates since this morning. I’m Alex Singleton and will be with you here until the early evening.
03:28 PM BST
Britain’s employers and staff pay more tax on earnings than Germany
British workers and businesses now pay more tax on their earnings than Germans following a series of stealth raids and tax hikes, official data show.
Taxes on income, profits and capital gains paid by individuals and corporations in the UK rose to the equivalent of 13.3pc of the economy in 2022, amid fears that Rachel Reeves will push the burden even higher in her maiden Budget on Oct 30.
This is the highest share since records began in 1990, according to data compiled by the Organisation for Economic Co-operation and Development (OECD), pushing the UK’s burden on earnings further ahead of Germany, Europe’s largest economy.
These three charts show how the UK’s tax burden is growing.
03:02 PM BST
TGI Fridays restaurants to shut with loss of 1,000 jobs
More than 1,000 jobs at TGI Friday will be lost after administrators agreed a partial rescue with the owners of Byron Burgers and upmarket restaurant chain D&D London.
Some 35 restaurants have been closed with immediate effect, resulting in 1,012 redundancies, after a takeover agreement with hospitality investors Breal and Calveton.
It means 51 of the American-themed restaurant chain’s sites will be saved, securing nearly 2,400 jobs.
Hostmore, the company that owns rights to the brand in the UK, collapsed into administration last month after an aborted American expansion.
Daniel Smith, senior managing director of administrators Teneo, said
The casual dining sector has been adversely impacted by well-publicised pressures on discretionary spend.
This transaction with Breal Capital and Calveton UK preserves a significant proportion of jobs and will hopefully provide the business with the stability and support it needs to recover and grow.
We thank all employees and other key stakeholders for their support at this difficult time.
02:40 PM BST
US stocks fall as investors reduce bets on rate cuts
Wall Street’s main indexes fell at the open as they were pressured by a rally in Treasury yields as investors redcued bets on large interest rate cuts this year.
The Dow Jones Industrial Average fell 63.2 points, or 0.2pc, at the open to 42,289.51.
The S&P 500 fell 13.3 points, or 0.2pc, at the open to 5,737.8​, while the Nasdaq Composite dropped 57.7 points, or 0.3pc, to 18,080.12.
02:16 PM BST
The Labour-run council that could become a thorn in Rayner’s side
The Government’s ambitions for a housing construction boom in the capital face an unexpected obstacle: the Labour-run Hammersmith & Fulham council.
The west London area is home to a growing number of empty or near-empty office blocks that developers view as prime targets for turning into flats.
Such projects are a win-win for property owners struggling to attract new tenants and locals facing housing shortages.
Yet Hammersmith & Fulham is steadily developing a reputation as a refusenik for such conversions, after rejecting a steady stream of applications in recent months.
Read how its stance appears at odds with the Government’s housing push.
01:55 PM BST
Gold edges down as large rate cuts off the table
Gold prices inched lower as traders reduced expectations that the Federal Reserve will announce large interest rate cuts in the coming months.
Bullion traded down 0.2pc near $2,640 an ounce as the expectation of higher borrowing costs boosted the dollar.
US Treasury yields are back at 4pc after Friday’s blowout US jobs numbers undercut chances of a big rate reduction by the Fed in November.
Money markets now betting an 88pc chance of a quarter-point move next month, compared to about a 40pc chance of a bigger half-point move a week ago.
Lower rates are often seen as a boosting factor for precious metals like gold.
Gold has rallied about 29pc this year — hitting a series of all-time highs — with recent gains fuelled by rate-cut optimism.
01:37 PM BST
Hard-pressed Germans buying bicycles instead of cars
Germans are buying more bicycles and fewer cars as the country’s economic slump prompts households to cut back on expensive purchases.
In what is a further blow to Germany’s troubled automotive industry, new research shows that car sales are slowing and unlikely to improve any time soon.
That is unlike bicycle sales, however, which have seen a recent uptick in demand.
Read why the country’s car manufacturing sector is struggling.
01:22 PM BST
Gas prices fall back despite Middle East conflict
The price of wholesale gas has fallen as traders took some profits after a rally caused by escalating conflict in the Middle East.
Dutch front-month futures, the continent’s benchmark, dropped as much as 3.7pc below €40 per megawatt hour after two days of gains following Iran’s missile attack on Israel.
Meanwhile, Israel has ramped up attacks on Gaza and Lebanon as it marks a year since the October 7 terrorist attacks.
European storage sites remain 94pc full heading into the colder period of the year.
12:49 PM BST
John Lewis to scrap chief executive role after departure of Dame Sharon White
John Lewis Partnership chief executive Nish Kankiwala will step back from the role by next March following the appointment of new chairman Jason Tarry, the group has announced.
The retailer, which runs the department store chain and Waitrose supermarket arm, said Mr Kankiwala will revert to the role of non-executive, advising the board.
Mr Tarry, who took over as chairman of the group from Dame Sharon White on September 16, will lead the board and day-to-day running of the group after a handover with Mr Kankiwala.
Mr Kankiwala has been chief executive since March 2023, when the role was created by Dame Sharon.
John Lewis Partnership’s outgoing chief executive Nish Kankiwala said: “I have every confidence in Jason taking the partnership from strength to strength in the next phase of our transformation and am delighted to continue to support him and the board in an advisory capacity going forward.”
12:10 PM BST
Wall Street poised to fall as traders rule out larger US rate cut
US stock indexes have fallen in premarket trading as investors reduced bets on the Federal Reserve making large rate cuts this year.
Investors are pricing in an 89pc chance of a quarter of a percentage point interest rate cut at the Fed meeting in November, having been hopeful of a second, outsized 50 basis point reduction just a week ago.
However, a bumper September non-farm payrolls report on Friday showed the economy unexpectedly added the most number of jobs in six months.
US Treasury bond yields rallied, with the yield on benchmark 10-year notes touching its highest since early August.
This has pressured rate-sensitive megacap growth stocks, pulling down Nvidia by 1.5pc, Amazon by 2.1pc and Apple 1.5pc ahead of the opening bell..
In premarket trading, the Dow Jones Industrial Average was down 0.4pc, the S&P 500 had fallen 0.5pc and the Nasdaq 100 had dropped 0.7pc.
11:47 AM BST
Elliott loses appeal against dismissal of London Metal Exchange case
A Wall Street hedge fund has lost an appeal against the dismissal of its lawsuit against the London Metal Exchange over billions of dollars of cancelled nickel trades.
Elliott Management lost in a written ruling after urging the Court of Appeal to overturn a ruling at a hearing in July this year.
The LME suspended trading and annulled $12bn (£9.2bn) in nickel trades in March 2022 when prices shot to records above $100,000 a metric ton in a few hours of chaotic trade.
Elliott sued the LME at the High Court and its case was dismissed in November 2023. Elliott’s bid to overturn that decision was rejected by the Court of Appeal today.
Judge Stephen Males ruled that the extreme price movement on March 8, 2022 was “a once in a generation event” and that the LME acted lawfully in cancelling the trades.
11:39 AM BST
Pension funds launch fresh attack on London Stock Exchange over standards
A group of local council pension funds has launched a fresh attack on the London Stock Exchange (LSE) for what it sees as a push to lower boardroom standards for listed firms.
The Local Authority Pension Fund Forum (LAPFF), which represents 87 local authority schemes, said it was “resolute” in its concerns about the stock exchange boss Dame Julia Hoggett’s recent push to reforming listing rules.
As well as being the LSE’s chief executive, Dame Julia leads the Capital Markets Industry Taskforce (CMIT), an industry group that has resisted attempts to strengthen the UK’s corporate governance code.
These include proposed rules to make companies report on Environmental, Social and Governance (ESG) metrics which were ultimately scrapped earlier this year.
Dame Julia has also publicly complained that chief executives on the stock exchange are not paid enough to attract the best candidates for top jobs, compared to outsized salaries and bonuses in the US.
This has led to concerns that governance rules on pay could be watered down, such as a requirement for companies to engage with investors when more than one-fifth of them revolt over directors’ remuneration.
Doug McMurdo, chairman of the group of local authority funds, wrote that the push “does not present the requisite analysis and/or evidence that would stand up to market rigour. It is on this basis we remain firm”.
The letter, dated August 30, is the third time the forum, whose members manage £350 billion of assets, has complained on the matter. LSE has been contacted for comment.
11:17 AM BST
US 10-year bond yield hits 4pc as traders expect smaller rate cuts
Bond yields have risen amid expectations that the Federal Reserve will lower interest rates at a slower pace amid signs the US jobs market remains resilient.
The benchmark 10-year Treasury yield rose to 4pc today for the first time since late August after last week’s labour market data dispelled fears of a recession and prompted traders to cut bets on interest rate cuts.
Markets have ruled out a 50-basis-point rate cut at the Federal Reserve’s next policy announcement on November 7 - which had been considered a 50pc chance a week ago.
That sent yields on government bonds higher, with the benchmark 10-year Treasury yield hitting 4pc for the first time in two months on Monday, up two basis points on the day and building on Friday’s 13 basis points surge.
Meanwhile, the yield on 10-year UK gilts was up six basis points to 4.19pc and the 10-year German bund yield had gained four basis points to 2.25pc.
Samy Chaar, chief economist at Lombard Odier, said: “What came out of last week is pretty obvious, if we just stick to the macro economic situation, there is no recession, no inflation, central banks are in a rate cutting cycle and, on top of that, China is contributing to this story too, so let’s enjoy.
“If you want to think about risks, the purely economic risks have passed - except for some less straightforward stories in Europe centred around Germany.
“But there’s geopolitics and the US elections are getting closer.”
And just like that, the yield on the 10-year US government bond, a global benchmark, is back at 4%.#economy #markets #investing #investors pic.twitter.com/ynpDxuDY42
— Mohamed A. El-Erian (@elerianm) October 7, 2024
11:00 AM BST
Oil rises as Hamas fires rockets at Israel
The price of oil is nearing $80 a barrel for the first time since late August after Hamas fired rockets from Gaza at Israel on the anniversary of the October 7 terrorist attacks.
Brent crude has risen as much as 2.2pc today amid concerns that Israel could escalate the conflict in the Middle East as its people mourn those killed and taken hostage a year ago.
Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management, said: “All attention is once again on the Middle East, especially whether there will be a military response from Israel following last week’s Iranian missile attack.”
10:41 AM BST
JD Sports-backed health brand to float on UK stock market
Sports health brand Applied Nutrition has confirmed it aims to float on the London Stock Exchange later this month in a move that could value the company at £500m.
The Liverpool-based company, which is backed by sportswear giant JD Sports, said it is planning to debut on the exchange’s main market.
Applied Nutrition said last week that a flotation would help increase awareness of the brand and allow it to ramp up expansion.
The company, which makes protein and other supplements, said its products are sold in countries around the world but that it wants to grow further.
The decade-old business mainly operates by selling its products to other businesses, including retailers, grocers, gyms and sports clubs, targeting consumers from professional athletes to people wanting to lose weight.
JD Sports acquired 32pc of the group’s shares in 2021 from founder and chief executive Thomas Ryder.
10:27 AM BST
Pound slumps as Bank of England expected to cut rates faster
The pound has fallen amid expectations that the Bank of England will cut interest rates faster than the US Federal Reserve.
Sterling was down 0.3pc against the dollar at $1.308 as money markets indicated that the Fed might not cut rates at both of its final two meetings this year.
Traders had priced in two cuts by the Fed by the end of the year but have reduced wagers after data on Friday showed the US economy added far more jobs than expected in September.
The pound had already taken hit after Governor Andrew Bailey said on Thursday that the Bank of England might become “more aggressive” about interest rate cuts.
It suffered its worst week in more than a year.
Sterling was also down 0.2pc today against the euro, which is worth 83.9p.
10:10 AM BST
Mining stocks slump as US expected to make smaller rate cuts
Mining stocks have dropped sharply on UK markets after strong US jobs figures reduced the likelihood of sharp interest rate cuts in the US.
The dollar held gains as traders scaled back bets on another bumper interest rate cut from the Federal Reserve, making precious metals like gold less alluring.
The US economy added 254,000 jobs last month, which was well ahead of forecasts, while the unemployment rate fell.
The reading was the best in six months and sharply higher than readings in July and August, which had sparked worries that the economy could be heading for a recession.
The dollar rallied as a result as investors lowered their expectations the Federal Reserve will cut interest rates 50 basis points for a second straight meeting when it gathers this month.
It sent precious metals miners down as much as 6.4pc across the FTSE 350 as gold was considered to be less alluring than the US currency.
Kathleen Brooks, research director at XTB, said: “Gold was an unreliable safe haven last week, even as geopolitical risks flared up.
“Gold was mostly flat, as a rising dollar weighed on the price of the yellow metal. Thus, if the dollar remains in demand, the gold price may struggle.”
09:55 AM BST
Britain’s largest landlord reveals jump in rents
The UK’s largest residential landlord has reported a jump in rents and predicted further growth over the year ahead as demand shows no sign of letting up.
Grainger, which has about 12,000 homes, reported like-for-like rental growth of 6.3pc for the year to the end of September.
While this is down from 7.7pc growth the previous year, Grainger said the rental market in the UK has been buoyed by a “rapidly accelerating growth in demand, whilst supply remains constrained”.
It said rental growth will ease back in 2024-25, but continue to be supported by high wage growth.
Helen Gordon, chief executive of Grainger, said: “Whilst we expect rental growth to ameliorate somewhat, we still expect levels to be above the long term historic average for 2024-25.
“Rental growth in 2024-25 will be underpinned by continuing high levels of wage growth throughout the UK and particularly in our target customer demographics and geographical locations.
“Affordability remains healthy and customer satisfaction scores remain high, demonstrating the sustainability of our rental income growth going forward.”
09:39 AM BST
Rio Tinto confirms takeover talks with US lithium producer
Rio Tinto shares fell after it confirmed a potential acquisition of the US-based lithium producer Arcadium Lithium.
The London-listed shares of the miner were down 0.2pc after it said it had approached the company regarding the potential “non-binding” acquisition.
Shares in Arcadium soared almost 50pc in Sydney. If the deal goes ahead, it would transform Rio Tinto into the world’s third-largest lithium supplier.
Australia is the world’s biggest supplier of lithium, which is used in a variety of products including hybrid and electric car batteries, laptops and phones.
09:28 AM BST
Shell profit margins hit by slowdown in oil demand
Shell has revealed a steep fall in quarterly profit margins in its oil refining business amid a slowdown in demand globally.
The energy major said its indicative refining margins fell to $5.50 (£4.19) a barrel in the quarter to September 30, down from $7.70 (£5.87) a barrel in the second quarter.
Oil refining businesses such as Shell’s have suffered a downturn in global demand recently across both consumer and industrial sectors.
The growing prevalence of electric cars, combined with economic slowdowns in major economies including China, have contributed to the drop.
That stands in contrast to recent years, when refiners enjoyed bumper profits driven by supply shortages caused partly by Russia’s invasion of Ukraine.
Shell said it expects “trading and optimisation” results for its chemicals and products business to be lower than the second quarter.
Elsewhere, the company lifted its guidance for liquefied natural gas production to 7.3m to 7.7m metric tonnes.
Shell’s third-quarter integrated gas profits are likely to match the second quarter, when it made $2.7bn (£2bn).
09:10 AM BST
FTSE 100 falls amid bets on smaller US rate cuts
The FTSE 100 rapidly turned lower despite US jobs figures at the end of last week indicating the American economy is in good health.
The blue-chip index was down 0.1pc having gained 0.4pc after trading began, while the mid-cap FTSE 250 was down 0.5pc.
Precious metal miners tumbled 4.3pc to the lowest levels in nearly a month amid increasing bets that interest rates will be cut by a smaller margin in November after strong jobs data.
Britain’s jobs market showed more signs of cooling in September as pay growth increased at the slowest pace in almost four years, likely reassuring the Bank of England as it considers whether to cut borrowing costs again.
Additionally, UK house prices rose in September at the fastest annual pace since November 2022, as expectations of further reductions in borrowing costs added to momentum in the property sector.
In company news, BP was up 0.5pc after reports that it has abandoned a target to cut oil and gas output by 2030.
Shell was up 0.7pc’s despite a sharp drop in refining profit margins in the third quarter from the previous three months.
08:31 AM BST
BP abandons oil and gas target as it prepares to target Middle East
BP has reportedly abandoned its target to cut oil and gas production by 2030 as its new boss scales back its efforts to switch to green energy and boost its share price.
Chief executive Murray Auchincloss will present his new strategy at an investor day in February, according to Reuters, having already heavily scaled back the energy giant’s pledge to cut output and switch to renewables by 2030.
The company announced in February that it was reducing its pledge to cut production by 40pc to reduce it by 25pc, which would have meant it was still producing two million barrels of oil a day at the end of the decade.
However, Mr Auchincloss has sought to distance himself from the approach of his predecessor Bernard Looney, who he replaced in January.
The London-listed company will instead target several new investments in the Middle East and the Gulf of Mexico to boost its oil and gas output, Reuters reported.
A BP spokesman said: “As Murray said at the start of year... the direction is the same – but we are going to deliver as a simpler, more focused, and higher value company.”
08:16 AM BST
Wage growth falls to three and a half year low as Budget slams brakes on hiring
Wage growth has slumped to a three-and-a-half-year low as Rachel Reeves’ Budget slams the brakes on hiring.
Tax rise fears prompted executives to put decisions on ice in September, with permanent salaries rising at the slowest pace since February 2021, according to the KPMG and Recruitment and Employment Confederation (REC)’s latest jobs report.
Jon Holt, UK senior partner KPMG, said: “The slowing of hiring activity seen in September is to be expected as businesses apply the brakes on recruitment ahead of the Budget and wait for clarity on future taxation, business, and economic policy.”
The Chancellor has made repeated warnings that tax rises are likely in her Autumn Statement on October 30 as she scrambles to fill a £22bn blackhole in the public finances.
Labour ruled out increases in income tax, National Insurance, VAT and the headline rate of corporation tax on the election campaign trail, fuelling speculation that changes to capital gains tax and inheritance tax are coming.
Neil Carberry, chief executive of the REC, said: “This is a picture of a jobs market waiting for a signal. Recruiters report that projects in client businesses are ready to go, but confidence is not yet high enough to push the button.”
The KPMG and REC index of permanent salaries fell for the third month in a row, down from 54.4 in August to 52.8 in September. Anything above 50 signals growth, while below represents a contraction in average salaries.
08:10 AM BST
UK markets open higher
London’s stock markets have begun the week higher as figures showed house prices rose to their highest level in two years.
The FTSE 100 rose 0.3pc to 8,302.66 while the midcap FTSE 250 gained 0.1pc to 20,927.76.
07:47 AM BST
House prices surge amid Budget tax fears
Homeowners have raced to put their properties on the market ahead of potential tax rises in the Budget, according to estate agents and mortgage lenders.
Matt Thompson, head of sales at Chestertons, said: “Lower interest rates and sub-4pc mortgage products saw more house hunters start their property search in September.
“The uplift in buyer activity, and looming changes to capital gains tax in the upcoming Autumn Budget, also motivated sellers to put their property up for sale.”
Andrew Montlake, managing director at Coreco, said: “People have a spring in their step. The focus now is on the autumn Budget and the hope is that it doesn’t undo all the momentum that has grown over the summer and put us back where we started.”
Stephen Perkins, managing director at Yellow Brick Mortgages said: “Demand remained resilient in September as borrowers looked to initiate their home moves before the autumn Budget potentially takes the wind out of their sails.”
House Price Index YoY in the United Kingdom increased to 4.70 percent in September from 4.30 percent in August of 2024.https://t.co/gvX8oyi6Pv pic.twitter.com/aeLatKWp6T
— TRADING ECONOMICS (@tEconomics) October 7, 2024
07:32 AM BST
House prices to rise 5pc over next year, say economists
House prices will rise by another 5pc over the next year as the Bank of England cuts interest rates quickly, according to economists.
Ashley Webb, UK economist at Capital Economics, said the latest rise in house prices has confirmed that house prices rose in the third quarter of this year amid interest rate cuts by the Bank of England.
He said:
Despite the small uptick in interest swap rates (which fixed rate mortgages are priced off) in early October, there is still scope for mortgage rates to decline further and house prices to rise by another 1.1pc quarter-on-quarter in Q4.
What’s more, our view that the Bank of England will cut interest rates by more than most expect, from 5pc now to 3pc by early 2026 rather than the trough of 3.5pc as investors anticipate, may mean house prices grow by an above-consensus 5pc in the year to the fourth quarter of 2025.
07:23 AM BST
First time buyers paying £1,000 less than two years ago
While house prices are just £108 from their record highs, all is not lost for first-time buyers.
The Halifax data shows the typical property price for people shelling out on their first home has risen to £232,769, its highest level since May.
However, this is still about £1,000 less than the amount paid by first-time buyers two years ago, when prices stood at £233,760.
Amanda Bryden, head of mortgages at Halifax, said:
While improved mortgage affordability should continue to support buyer activity – boosted by
anticipated further cuts to interest rates – housing costs remain a challenge for many.As a result we expect property price growth over the rest of this year and into next to remain modest.
07:18 AM BST
Northern Ireland house prices grow fastest in UK
House prices rose at the fastest pace in Northern Ireland, surging by 9.7pc in September compared to the same month last year to make the average home worth £203,593.
Wales also recorded strong growth, with prices up 4.4pc compared to the previous year to reach £224,119.
In Scotland, a typical property now costs £205,718, which is 2.1pc more than the year before.
The North West once again recorded the strongest house price growth of any region in England, up by 5.1pc over the last year to £234,355.
London continues to have the most expensive property prices in the UK, now averaging £539,238, up 2.6pc.
However, this is still some way below the capital’s peak property price of £552,592 set in August 2022.
07:17 AM BST
House prices near record high as interest rates fall
The average UK house price has come within a whisker away from a new record high as mortgage rates have become more affordable.
Property values rose by 4.7pc in September compared to the same month last year, according to the Halifax house price index, which was the fastest pace of growth since November 2022.
It showed that prices rose by 0.3pc compared to August, leaving the average home worth £293,399, just shy of the record high of £293,507 set in June 2022.
Amanda Bryden, head of mortgages at Halifax, said:
While the typical property value has risen by around £13,000 over the past year, this increase is largely a recovery of the ground lost over the previous 12 months.
Looking back two years, prices have increased by just 0.4pc (£1,202).
Market conditions have steadily improved over the summer and into early autumn. Mortgage affordability has been easing thanks to strong wage growth and falling interest rates.
This has boosted confidence among potential buyers, with the number of mortgages agreed up over 40pc in the last year and now at their highest level since July 2022.
07:10 AM BST
Good morning
Thanks for joining me. House prices came within a whisker of setting a new record high last month as cheaper mortgage rates helped boost buyers.
The Halifax house price survey showed house prices rose 4.7pc in September compared to the same month last year to £293,399.
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What happened overnight
Asian markets rose on Monday morning after a blockbuster US jobs report soothed any concerns about the world’s largest economy, while the dollar held gains with traders scaling back bets on another bumper interest rate cut.
Oil prices edged down as traders await Israel’s response to Iran’s missile barrage last week amid ongoing fears about a region-wide war in the Middle East.
The stronger dollar against the yen boosted Japanese stocks, with the Nikkei 225 climbing almost 2pc, while Hong Kong extended its recent rally fuelled by China’s raft of economic stimulus measures.
There were also early gains in Sydney, Seoul, Singapore, Taipei and Manila.
Hong Kong’s Hang Seng Index was up 1.2pc while Shanghai was closed for a holiday.
US stocks rallied last Friday after a surprisingly strong report on the US job market raised optimism about the economy.
The S&P 500 climbed 0.9pc and got close to its all-time high set on Monday. The Dow Jones Industrial Average rose 341 points, or 0.8pc, to set its own record, while the Nasdaq composite clambered 1.2pc higher.