The sell-off in UK long-dated bonds “reflected concerns that further tax increases from already high levels could damage growth, add to inflation, and still leave a sizeable hole in the public finances”, said Mark Dowding, chief investment officer at RBC BlueBay Asset Management.
The UK’s 30-year borrowing costs have risen to their highest levels since 1998 today and the pound has fallen 1.24 per cent against the dollar to $1.34, a three-week low.
Dowding said: “Markets appear less focused on Treasury rhetoric and more on whether the government can present a credible plan to control spending.”
The rise in borrowing cost will put renewed pressure on the government, whose reshuffle of ministers in the Treasury and the appointment of a new economic adviser for the prime minister have done little to quell worries about the sustainability of the UK’s public finances.
Kraft Heinz approves plan to split
Kraft Heinz’s board has approved plans to split into two publicly-listed companies, one focusing on the sauces business and the other on groceries.
The company said the separation would provide both companies with more strategic and operational focus to help revive growth after years of muted sales.
Annual revenue has been around $26 billion since 2020 as the company has suffered as consumers turn to healthier, less processed food products amid the surge in use of weight-loss drugs, turning away from products like processed cheese and ready meals that were once mainstays of American pantries.
Global Taste Elevation will houses brands such as Heinz, Philadelphia and Kraft Mac & Cheese, while the other, North American Grocery, will consists of Oscar Mayer, Kraft Singles and Lunchables labels. The sauces unit made around $15.4 billion in sales in 2024, while the grocery business generated about $10.4 billion in sales.
The company said it was preparing to break itself up in July.
CityFibre boss steps down
Greg Mesch
TIMES PHOTOGRAPHER RICHARD POHLE
The founder and boss of CityFibre, the largest of the full-fibre networks that sprang up to challenge Openreach and Virgin Media O2, is to step down after securing a £2.3 billion funding deal.
Greg Mesch, 65, who founded CityFibre 15 years ago, has built the ‘altnet’ — alternative network provider — into a broadband infrastructure provider serving 4.5 million households and just over 620,000 customers.
The American executive will be replaced by Simon Holden, CityFibre’s chief operating officer, and a former Goldman Sachs dealmaker.
Mesch’s retirement comes less than two months after the company agreed a further £960 million in debt with lenders including ABN Amro, ING and Lloyds, alongside Britain’s new National Wealth Fund, as well as an additional £800 million facility that the company has the option to unlock to help finance its consolidation plans.
He will become vice-chairman of the company.
ECB not expected to cut rates after inflation comes in above target
Eurozone inflation rose to 2.1 per cent in August, up slightly from the 2 per cent rate of annual inflation seen in July increasing expectations that the European Central Bank will leave interest rates unchanged for a second-straight meeting when it meets next month.
The rate came in slightly above analysts’ expectations and it is also the first time that it has gone above the ECB’s 2 per cent target since April.
Core inflation, which strips the more volatile prices for food and energy, remained unchanged at 2.3 per cent.
Expectations of further rate cuts from the ECB have been scaled back since the European Union struck a trade deal with the US in July.
Whistleblower report led to Nestlé firing CEO
The inquiry that led to the departure of Laurent Freixe as the chief executive of Nestlé was triggered by a report made through the company’s whistleblowing channel, according to the BBC.
Nestlé’s Speak Up channel is its global, independently operated reporting system designed to allow employees and external stakeholders to report concerns about non-compliance confidentially and, if desired, anonymously.
Laurent Freixe departed after an alleged relationship with a colleague
GAETAN BALLY/KEYSTONE
Leanne Geale, Nestlé’s executive vice-president and group general counsel, says on the company’s website of the Speak Up system: “It gives every person the chance to report potential non-compliance with our values, corporate business principles or the Nestlé code of conduct. Whether you’re directly confronted with a non-compliant situation, or are witness to it, please do speak up.”
UK 30-year gilt yield rises to 5.69%
UK 30-year gilt yield has risen to a 27-year high, raising the cost of servicing the government’s debt and adding to the chancellor Rachel Reeves’ problems ahead of the autumn budget.
Thirty-year gilt yields rose to 5.69 per cent, up about 5 basis points on the day, the highest since May 1998. The yield moves inversely to prices.
UK borrowing costs are among the highest in the G7, due to persistent inflation and rising public debt.
Yields were higher across the board and came as the same time a strengthening in the dollar pushed the pound below $1.34.
FTSE 100 slides on jitters over economy
London’s leading share index has opened down with utility, retail and housing shares lower on caution about interest rates and the outlook for the economy.
The FTSE 100 fell 48 points, or 0.53 per cent, to 9,147.31. The energy company SSE, the housebuilder Taylor Wimpey and the retailer Marks & Spencer dropped 2.89 per cent, 2.67 per cent and 2.5 per cent respectively.
Shell and BP were the biggest risers, buoyed by a rise in the oil price closer to $70 a barrel. While a rise in the spot price of gold to a new high, lifted the precious metal miner Fresnillo.
Nestlé shares down after CEO dismissed
Laurent Freixe was dismissed after allegedly having a relationship with a colleague, which breached the company’s code of business conduct
FABRICE COFFRINI/AFP/GETTY IMAGES
Nestlé shares have opened lower after the Swiss consumer goods company dismissed its chief executive after a “romantic relationship with a direct subordinate”.
The shares fell 3 per cent, or 2.37 Swiss francs, to SFr73.12 in early trading.
The company said the departure of Laurent Freixe followed an investigation overseen by Paul Bulcke, chairman, and Pablo Isla, the lead independent director, into a undisclosed relationship with a direct subordinate that breached the company’s code of business conduct. Philipp Navratil has been appointed as his successor.
Top Ithaca investors raise £106m via placing
The Israeli energy investor Delek Group and the Italian oil and gas explorer Eni have raised about £106 million by selling their shares in the UK’s Ithaca Energy via a placing with instutitional investors.
The top two shareholders sold 49.6 million ordinary shares in the North Sea oil and gas producer through their UK units as part of an accelerated bookbuild at 213.75p a share, the bookrunner Peel Hunt, said. The sale, at a discount to Monday’s closing price of 237.50p, amounts to roughly 3 per cent of Ithaca’s outstanding stock.
Delek will now hold about 50.5 per cent of Ithaca and Eni nearly 36 per cent.
Two nuclear power stations to stay open for longer
Heysham 1 and 2 nuclear power stations
ALAMY
The British Gas owner Centrica has confirmed one-year extensions for two nuclear power stations in which it has a 20 per cent stake.
The Heysham 1 and Hartlepool power stations are now expected to generate electricity until March 2028, one year later than previously expected. The two stations provide enough electricity to power more than four million homes a year, according to Centrica.
Chris O’Shea, chief executive of Centrica, said: “The UK needs more reliable, affordable, zero-carbon electricity, so the extension of Heysham 1 and Hartlepool is great news. Our longstanding involvement in the UK nuclear industry is an investment in Britain’s energy independence and thousands of high-quality jobs.”
There was no change to the expected March 2030 closure date of Heysham 2 and Torness, announced last December.
Suntory chief submits resignation over cannabis claims
Takeshi Niinami
ISSEI KATO/REUTERS
The head of Suntory, the Japanese food and beverage company that owns Jim Beam whiskey, has tendered his resignation following a police investigation into whether he violated the law prohibiting possession of cannabis, the Tokyo Shimbun newspaper has reported.
Police questioned Takeshi Niinami, the Suntory chief executive and chairman, and searched his Tokyo home, according to the report. Niinami, a high-profile and outspoken business leader who often served as the face of corporate Japan at Davos and other international events, has denied breaking the law.
A Suntory spokesperson declined to comment on the report.
JOSE SARMENTO MATOS/BLOOMBERG/GETTY IMAGES
The FTSE 250 gene-sequencing company has said it is on track “to deliver 2025 guidance and … medium-term targets” alongside interim results. The actual numbers — revenues up 28 per cent to £105.6 million in the six months to the end of June — are in line with a comprehensive update in July.
Gordon Sanghera, the group’s long-standing chief executive, announced in August that he planned to step down by the end of 2026. There is no update on his replacement alongside today’s results beyond a boilerplate “search is underway” statement.
Shares in Oxford Nanopore, listed at 425p per share in October 2021. They soared following the float topping 700p within weeks, but have since fallen 74 per cent to close at 185p yesterday.
PRAKASH SINGH/BLOOMBERG/GETTY IMAGES
Tesla is struggling to make inroads in India, the world’s third-largest car market, with a report saying it has received orders for just over 600 cars since launching the country in mid-July.
The figure is short of the company’s own expectations and Bloomberg reports that the Elon Musk-led electric vehicle maker now plans to ship between 350 and 500 cars to India this year. That is around the number of vehicles Tesla delivered every four hours globally during the first half of the year.
The carmaker pays about 70 per cent import duty and other levies on its cars, as it does not meet the newly announced eligibility criteria for lower tariffs. Musk has repeatedly criticised India for imposing import tariffs of about 100 per cent on electric vehicles, which were in place to protect local manufacturers such as Tata Motors.
Tesla hoped to expand in India as sales in other parts of the world are falling, with figures yesterday showing that deliveries in August are down in some key European markets.
Spot gold extends gains for a sixth session
The gold price broke through $3,500 an ounce to a new high on Tuesday, extending gains to a sixth session, boosted by growing market bets of a US interest rate cut this month and concerns over the central bank’s independence.
Spot gold rose as high as $3,508.73 an ounce in early trading before easing back to $3,496.40 an ounce, up 0.57 per cent. US gold futures for December delivery gained 1.4 per cent to $3,564.40 an ounce.
Traders are currently pricing in a 89.7 per cent chance of a 25-basis-point Fed rate cut on September 17, according to the CME FedWatch tool. Non-yielding gold typically performs well in a low-interest-rate environment.
Christine Lagarde, president of the European Central Bank, warned that President Trump would inflict “very serious” damage on the US and global economy if he were to sack Federal Reserve chairman Jerome Powell or governor Lisa Cook.