Bitcoin hits $70,000 in new record high

Thanks for joining us today. Chris Price will be back on Monday morning ahead of the London markets opening. In the meantime, here’s the latest from our economics editor Szu Ping Chan on how working parents face 90pc tax rates in a new child benefit trap:

Thousands of middle class parents face punishing tax rates of up to 90pc after Jeremy Hunt’s changes to child benefit opened a new tax trap for high earners.

The Chancellor announced in the Budget that people earning up to £60,000 a year will receive child benefit of up to £25.60 a week in full from April. This is up from the previous threshold of £50,000.

Parents who earn above £60,000 will have the amount of child benefits they receive tapered until it is taken away completely when they earn £80,000.

However, when combined with the tapering of other benefits, income tax and changes announced in the Budget, some parents could see themselves losing almost 90p for every additional £1 they earn above the £60,000 threshold.

Analysis by Policy in Practice showed someone earning between £60,000 and £80,000 with three children who also receives universal credit for housing or childcare costs now faces a so-called effective marginal tax rate of 88.9pc.

Read the full story...

Belgian brewer Duvel has insisted it will have enough beer to keep supply flowing after it was hit by a cyber attack that brought production to a standstill. Daniel Woolfson reports:

The company, one of the best-known Belgian beer brands, was hit by a suspected ransomware attack on Tuesday night that shut down five of its production facilities, four of which are in Belgium along with one in Kansas City, Missouri.

Duvel has launched an investigation into the attack and managed to bring one of its Belgian breweries back online, but the other four remain at a standstill.

A spokesman for Duvel played down suggestions the issue could lead to a shortage of beers. “To our knowledge, we just should have more than enough beer,” he said.

The company said it shut down its IT systems as soon as it became aware of the attack, which caused production at its facilities to stop.

Read the full story...

TSMC, the Taiwan Semiconductor Manufacturing Company, is to win more than $5bn in grants for a US chip plant, Bloomberg has reported.

The company, along with other major chipmarkers, have been in talks to secure money from a pot of about $28bn of subsidies as President Biden seeks to boost American semiconductor manufacturing.

The Nasdaq Composite index and the S&P 500 have fallen as a rally in chip stocks lost some steam, while a mixed jobs market report showed that employers added more jobs than expected in February though the unemployment rate unexpectedly rose.

The two indexes briefly hit record highs earlier in trading before gains were wiped out.

AI darling Nvidia fell 4.4pc after hitting a fresh record high, while the Philadelphia Semiconductor Index, made up of 30 leading semiconductor companies, also came off a record peak, down 2.4pc today.

Dennis Dick, a trader at Triple D Trading, said:

We’re just at a point where investors maybe have chased these stocks too much and they need to cool off a bit.

What you’re seeing is profit-taking. People may be nervous going into the weekend.

A merger between Mondi and DS Smith that will create a FTSE 100 packaging giant lacks clarity on the numbers which is bizzare, a leading investment firm has said.

Steve Clayton, head of equity funds at Hargreaves Lansdown, said:

The groups say they can see substantial synergies from combining operations, but bizarrely at such a late stage in a deal’s progression, they have not yet quantified these synergies.

That will come later, and in the meantime investors in both companies are left to figure out if they are going to be sufficient to merit DS Smith investors giving up control of the group and Mondi investors roughly halving their exposure to the assets they currently own.

This does not look like a deal-making trend that is likely to catch on.

Andrew Bailey has awarded an inflation-beating pay rise to Bank of England staff, despite repeatedly telling workers they should not demand large wage increases. Eir Nolsøe reports:

The Bank’s 5,000 staff will receive an average salary boost of 4pc in the 12 months from March this year.

This is significantly higher than Threadneedle Street’s own forecasts for inflation, which it expects to fall to 2pc in spring before rising slightly again and ending the year at 2.75pc.

Mr Bailey has previously faced criticism for telling workers they should not ask for a big pay rise, despite the cost of living crisis. The Bank’s chief economist Huw Pill also landed in hot water after suggesting Britons had to accept they were poorer following the energy crisis. 

Only last month, Mr Bailey warned that wages were still rising too fast for inflation to fall back to target.

Continue to the full story...

The FTSE 100 dropped 0.43pc today, with DS Smith the biggest riser, up 5.17pc (it has agreed to a takeover in principle from Mondi). It was followed by medical products company ConvaTec, up 3.77pc. The biggest faller was betting group Entain, down 5.44pc, followed by aerospace manufacturer Melrose, down 2.49pc.

The FTSE 250, however, closed up by 0.09pc. The biggest rise was equity release and financial planning provider Just Group, up 13.68pc, followed by ITV, up 3.16pc. The biggest faller was Tullow Oil, down 3.81pc, followed by Harbour Energy, down 3.67pc. 

Shares in a US technology firm which supplies wireless components for the iPhone have dropped today after it revenues disappointed.

Bloomberg reported that Broadcom’s semiconductor division delivered quarterly revenue of $7.39bn (£5.75bn), missing the $7.7bn analysts expected. However, in line with a previous forecast, the chipmaker remains on track for $50bn in sales during its current financial year, which ends in October.

Last year, Broadcom entered a new multibillion-dollar deal with Apple to produce 5G radio frequency components for Apple. The company also supplies technology that is widely used in home broadband routers.

A Revolut shareholder has written billions off the company’s valuation as the wait for Britain’s most valuable fintech to gain a UK banking licence drags into its fourth year. James Titcomb reports:

US tech investor TriplePoint Venture Growth slashed the value of its stake by 18pc at the end of last year, accounts show. The reduction implies the company is worth $23bn, down from $28bn a year ago.

It marks the second time TriplePoint has slashed its internal valuation of Revolut, which was worth $33bn at its peak. TriplePoint was among the first investors to question that valuation, which Revolut secured in 2021, when it wrote down the value of its stake by 15pc last year.

The combined reductions amount to a 30pc decline in Revolut’s value since it was crowned Europe’s most valuable fintech company after an $800m investment from backers including SoftBank.

Read the full story...

Bitcoin has reached an all-time high, breaching $70,000 this afternoon, as investors become more confident of interest rate cuts by the US Federal Reserve.

The cryptocurrency has risen 215pc over the past year, in part because investors expected the US authorities to extend its appeal by making it easier for retail investors to buy the currency.

In January, the Securities and Exchange Commission (SEC) authorised the trading of a number of Bitcoin exchange traded funds. This meant popular fund providers in the US, including BlackRock and Fidelity, could sell Bitcoin-related funds. 

However, despite the move, the SEC’s chairman Gary Gensler issued a warning, saying: “Bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing.”

Lower interest rates make assets such as cryptocurrency, which do not pay interest or dividends, more attractive. Investors rely solely on future buyers valuing them more highly in order to get a return.

Investors fuelled record-breaking stock rallies on Friday and pushed yields on US Treasury bonds to their lowest in a month after US jobs data supported the idea that the Fed will begin cutting by the middle of the year.

Lindsey Bell, chief strategist with 248 Ventures, said: 

It really kind of solidifies what chair [Jerome] Powell was saying this week, about the confidence he had in the potential to begin the rate cutting cycle this year. So the market should be pleased with this report.

The economy’s doing fine. Its slowing in an orderly manner, not too quickly. Its doing what the Fed needs.

Argentina’s monthly inflation rate likely slowed to 15.3pc in February, still painfully high but down sharply from a peak in December, as new libertarian President Javier Milei’s tries to get a grip on runaway prices.

The forecast, the average from a Reuters poll of 13 analysts, would mark a slower pace of price rises from over 20pc in January and 25pc the month before when Mr Milei took office and sharply devalued the peso currency.

Mr Milei’s government, battling the highest inflation rate of any major economy worldwide with annual price rises running at over 250pc, is trying to stem the flood with a major cost-cutting drive and tight monetary policy to mop up pesos.

That has helped strengthen the currency, put the brakes on prices and buoyed markets that are keen on Mr Milei’s pledge to overturn a deep fiscal deficit. But it has come at the cost of growth, with stalling consumption and production.

I will pass the baton at this stage to Alex Singleton, who will guide you through to the weekend.

Before I go, take a look at this comment from Bill Weatherburn, commodities economist at Capital Economics, who thinks the recent rally in the price of gold has room to run:

The rally in the spot price of gold this week to a new record high of over $2,170 per ounce was the result of several financial and macro drivers that should generally keep prices elevated over 2024.

Investors grew more confident that the Fed would begin cutting rates from June, helped along by an increase in the unemployment rate in February. 

That said, the change in outlook was minor, particularly in comparison to the change in the gold price.

The roughly 1pc depreciation in the US dollar against several major currencies would have also helped to lift prices, making gold cheaper in local-currency terms. 

But similarly, the softening was not enough alone to explain the almost 5pc weekly rise in gold prices.

China’s demand for physical gold has been supportive for prices as well. The central bank added 390,000 troy ounces of gold to its reserves last month, the 16^th consecutive month of purchases.

The price of gold has continued its upward march, rallying higher off the back of the latest US jobs figures.

The yellow metal has risen as much as 1.3pc today as it surpassed £2,185 for the first time as money markets priced in a first interest rate cut by the Federal Reserve in June.

It comes after new data from the Labor Department indicated the American economy is weaker than expected as US hiring was significantly lower than previously thought in December and January, while unemployment hit a two-year high.

The spot price of gold has risen by nearly 9pc since the middle of February.

HelloFresh shares dropped as much as 48pc in trading today after it warned investors of lower sales for its meal kits amid a “softer trading environment”. They are currently down about 30pc.

The Berlin-headquartered food company suffered its biggest drop on the Frankfurt Stock Exchange since its flotation in 2017.

HelloFresh’s margins are also under pressure. The company said that its chosen measure of “adjusted” earnings before interest, taxes, depreciation and amortisation in the final quarter of 2023 dropped to 6.1pc from 8.5pc the year before.

Overall sales also dipped 0.8pc from £1.875bn to £1.859bn.

The group said that the meal kits for which it became famous are “coming off a period of artificially high growth and profitability”, especially in “mature markets”.

It is now trying to expand its supermarket ready meal range but said that it would have to spend more on marketing to support this.

HelloFresh saw its business bloom during the pandemic when restaurants were closed, but as inflation squeezed household budgets, the company has found it more challenging to attract new customers for its delivered boxes of ingredients.

Andrew Hunter, deputy chief US economist at Capital Economics, said:

The 275,000 rise in non-farm payrolls in February may, at face value, add weight to the Fed’s view that there is no rush to start cutting interest rates, but the downward revisions to previous months’ gains leave recent growth looking less strong than previously thought. 

Alongside the rise in the unemployment rate to a two-year high and a much weaker rise in wages, there is less reason now to be concerned that renewed labour market strength will drive inflation higher again.

Money markets are also increasing their bets on the Bank of England and European Central Bank reducing interest rates this year, following the US jobs figures.

Derivatives trades imply that the Bank of England will cut rates by 68 basis points this year, compared to 62 basis points before the latest data. That is equivalent to more than two quarter of a point rate cuts to 4.75pc.

Traders are betting that the European Central Bank will cut rates by a full percentage point to 3pc this year, having previously bet rates would fall by just below a full percentage point.

Wall Street mainly opened higher after data showing a rise in the unemployment rate and moderation in wage gains boosted expectations that the Federal Reserve could begin cutting interest rates by the middle of this year.

The S&P 500 opened higher by 7.10 points, or 0.1pc, at 5,164.46, while the Nasdaq Composite gained 48.73 points, or 0.3pc, to 16,322.10 at the opening bell.

The Dow Jones Industrial Average fell 14.55 points, or less than 0.1pc, at the open to 38,776.80.

Charles Hepworth of GAM Investments said the latest US jobs data “raises the likelihood” of interest rate cuts in June.

He said:

The US Jobs Report on Friday in the US saw another strong reading on the face of it. Expectations were for 200,000 new jobs being added over the month of February, but instead we saw 275,000 new additions. 

However, muddying the picture was an uptick in unemployment to 3.9% from 3.7% and slower wage growth than expected of 0.1pc against 0.2pc expected. 

December and January’s non-farm employment change were revised down by quite some margin though (by 167,000) which are quite large by historical standards further complicating the apparent strength of the labour market. 

If we are genuinely seeing the unemployment rate having troughed and moving higher and wage growth slowing, then it obviously pushes the door for rate cuts open wider. 

This was a softer than expected jobs report and raises the likelihood of the Federal Reserve cutting rates in June.

The pound will continue to outperform other major currencies, according to a Wall Street bank, as a cocktail of factors will push the Bank of England to hold interest rates higher than its American and European peers.

Bank of America predicts that sterling could rise as high as $1.31, having traded as low as $1.20 in October.

Analysts said the Bank of England “will cut rates in August at the earliest,” as money markets predict that the Federal Reserve will make its first cut in June.

In a note to clients, the analysts predict that increases in the National Living Wage and upgrades to UK growth predictions to add to inflation pressures, forcing policymakers to keep interest rates at their 16-year highs of 5.25pc for longer.

They added that the Budget this week would make Bank of England rate setters “more hawkish,” meaning they are more likely to want to keep rates higher.

The pound has leapt to its highest level against the dollar since July as the pace of hiring in the US proved much lower than previously estimated.

Sterling was up 0.6pc against the greenback to nearly $1.29, and has gained 1.7pc during its strongest week since November.

Traders are betting that interest rates will fall in the summer after the latest US jobs figures indicated that hiring is slowing down across America.

Money markets are pricing in a first quarter of a point interest rate cut by the US Federal Reserve by June after data showed hiring is moving at a much slower pace than previously thought.

Non-farm payrolls increased by 275,000, according to the US Labor Department, which would have been a significant drop from blockbuster gains of 333,000 in December and 353,000 in January.

However, those past numbers were revised down by 43,000 and 124,000 respectively to 290,000 in December and 229,000 in January, signaling that the US economy is performing much worse than previously thought.

Futures for the S&P 500 turned positive after an uptick in the unemployment rate and slowing wage growth boosted expectations that the Federal Reserve could begin cutting interest rates by the middle of this year.

The unemployment rate rose to 3.9pc against expectations it would remain steady at 3.7pc, while average hourly earnings rose 0.1pc on a monthly basis compared to expectations of 0.3pc growth.

The Labor Department’s report also showed non-farm payrolls rose by 275,000 jobs last month.

This was against expectations of an increase of 200,000 but previous estimates of hiring were revised down, sending stocks higher in premarket trading.

Ahead of the opening bell, the S&P 500 was up 9.5 points, or 0.2pc, and the Nasdaq 100 was up 25.5 points, or 0.1pc. The Dow Jones Industrial Average remained down 23 points, or 0.1pc. 

The number of being hired in the US ticked up last month but revisions to past data have increased expectations that the US Federal Reserve will begin cutting interest rates soon.

Non-farm payrolls increased by 275,000, according to the US Labor Department, which would have been a significant drop from blockbuster gains of 333,000 in December and 353,000 in January.

However, those past numbers were revised down by 43,000 and 124,000 respectively to 290,000 in December and 229,000 in January, signaling that the US economy is performing much worse than previously thought.

The unemployment rate increased slightly to 3.9pc in February, marking the 25th straight month below 4pc — the longest such streak since the 1960s.

The Budget was the major financial event of the week in Britain but analysts think the strength of the pound this week is more to do expectations about inflation in the UK compared to the US and Europe - and what that means for interest rates.

Federal Reserve chairman Jerome Powell sounded more confident about cutting interest rates in coming months, while the ECB’s governing council has begun to discuss a suitable timeline for easing monetary policy after keeping rates on hold at 4pc on Thursday.

Karsten Junius, chief economist at J Safra Sarasin Sustainable Asset Management, said: 

We think the Bank of England is likely to wait somewhat longer than the Fed and the ECB to start easing policy. 

The main reason for this delayed reaction is that so far, the fall of services inflation and wage growth has been very limited, suggesting that underlying inflation might be stickier than elsewhere.

Money markets are pricing in a Bank of England interest rate cut by August, according the LSE Group data. Markets see a first Fed cut in June, according to CME Group.

Oil prices have eased as a brief outage on North America’s Keystone pipeline failed to shake up the market. 

Global benchmark Brent earlier rose toward $84 a barrel, before erasing those gains. It was last down 0.8pc and heading towards $82.

US benchmark West Texas Intermediate has slipped 0.8pc towards $78. 

Pipeline operator TC Energy confirmed Keystone’s integrity, adding that service was temporarily suspended “as a precautionary measure” and that no crude was released.

Oil has traded in a tight band this year, with even less volatility this week, confining Brent prices to their narrowest price range since September 2021. 

Cutbacks by Opec+ and rising tensions in the Middle East and Red Sea have been balanced by surging supply from producers outside the cartel including the US. 

Barclays analyst Amarpreet Singh said: “Geopolitical risk remains elevated but is not reflected in the price, in our view.”

When Google opened its latest “campus” in Silicon Valley in 2022, it boasted about the building’s space-age design and high-tech features including a roof made entirely of solar panels.

But employees at the office have a more prosaic complaint: the internet giant’s WiFi does not work.

Our technology editor James Titcomb has the details:

Multiple employees speaking to Reuters complained for several months that their laptops had been unable to connect to WiFi.

Some staff have suggested the issues are related to the building’s billowing roof, which is made up of a “dragonscale” design of 90,000 silver solar panels and may be responsible for trapping wireless signals.

Employees are able to plug into wired internet connections at their desks on the ground floor, designed for “focused work”. 

But read how spotty connection at its Silicon Valley HQ has jeopardised efforts to get staff back to office.

The chief executive of Aviva has been named as a senior independent director at BP in the first major boardroom shakeup since the departure last year of former boss Bernard Looney.

Dame Amanda Blanc, who became Aviva’s first female chief executive in 2020, joined the oil giant’s board as a non-executive director in September 2022. 

She is a member of both BP’s people and governance committee and its remuneration committee.

Dame Amanda will take up her latest position after BP’s next annual general meeting in April, replacing Paula Reynolds, who is coming to the end of her nine-year term.

Meanwhile, Tushar Morzaria will be appointed as chair of the BP remuneration committee on an interim basis.

It follows a period of turmoil for BP following the sacking of its former chief executive Mr Looney last year, who it emerged today has paid back about £420,000 of previous bonuses to the company.

Some wise words from Gita Gopinath, the first deputy managing director of the IMF, on International Women’s Day:

US stock indexes were subdued in premarket trading as investors braced for a crucial jobs market report that could determine the Federal Reserve’s interest rate cut path.

The figures from the Labor Department, out at 1.30pm UK time, are expected to show that the nation’s economy produced another month of healthy hiring in February, once again brushing aside the effects of high interest rates.

Economists predict it will show that employers added a solid 200,000 jobs in February, according to a survey by FactSet.

This would be down from the blockbuster gains in December (333,000) and January (353,000) but still outpace population growth and keep the unemployment rate near a 50-year low.

The benchmark S&P 500 index closed at a record high on Thursday after Federal Reserve chairman Jerome Powell said the central bank was “not far” from gaining the confidence that inflation is falling sufficiently to begin cutting interest rates.

In premarket trading, the Dow Jones Industrial Average was down 0.1pc, the S&P 500 was up 0.1pc and the Nasdaq 100 was flat.

Wholesale gas prices are poised to rise for a second consecutive week as Europe begins rebuilding stockpiles ready for next winter.

The benchmark contract on the Continent has risen as much as 3.1pc today to trade around €26 per megawatt hour.

It comes after prices dropped to the lowest level in nearly three years at the end of February as Europe ended the mild winter with record-high storage levels for the time of year. 

Prices remain significantly below the record highs reached after Russia’s invasion of Ukraine.

The UK equivalent contract has gained as much as 3pc today to trade around 67p per therm.

Gold has risen for an eighth consecutive day to hit a fresh record high and is enjoying its best week in five months.

Spot gold prices have gained 0.5pc to break $2,170 an ounce for the first time as expectations of falling interest rates triggered a push towards safe haven assets.

Analysts at Citi think the yellow metal could top £2,300 in the next six to 12 months.

TikTok is urging millions of Americans to protest against a proposed US ban of the Chinese-owned app over national security fears.

Our senior technology reporter Matthew Field has the details:

The video sharing service, which is owned by Beijing-based Bytedance, sent notifications to its 170m users in the country calling on them to “stop a TikTok shut down”.

The notification said: “Congress is planning a total ban of TikTok.”

It urged posters to “speak up now before your government strips 170m Americans of their Constitutional right to free expression”, adding that a block would “damage millions of businesses [and] destroy the livelihoods of countless creators across the country”.

The page includes a link allowing the user to call the office of their local Representative.

The notification comes days after the White House signalled its support for a cross-party bill that threatens to block TikTok in the US.

The pound has risen to its highest level in seven months amid hopes for US interest rate cuts.

Sterling has gained 1.4pc against the dollar this week and tipped over $1.28, touching its highest level since August today.

The pound has been boosted after the chairman of the Federal Reserve - the US equivalent of the Bank of England - told a congressional hearing that policymakers are “not far” from having the confidence to cut interest rates.

Traders seized on Jerome Powell’s comments, with the S&P 500 and Nasdaq chalking up records on Wall Street on Thursday, while Paris and Frankfurt also closed at all-time highs. 

Focus is now on the US non-farm payrolls figures due later today, which analysts said will have a big bearing on markets.

The eurozone economy stagnated at the end of last year, according to the latest official estimates, avoiding recession by the thinnest of margins.

The single currency bloc’s gross domestic product (GDP) was flat in the fourth quarter, having previously contracted by 0.1pc in the previous three months.

A technical recession is defined as two consecutive quarters of declining GDP.

The new boss of BP was paid a little over £8m last year, the company revealed.

Murray Auchincloss was given more than £1.5m in salary, benefits and money in lieu of pension. On top of that he got a £1.8m bonus and a little under £4.7m in shares linked to performance.

Mr Auchincloss took over from former boss Bernard Looney in September after Mr Looney was found to have misled the board over past relationships with colleagues. 

Mr Auchincloss was appointed to the position permanently in January.

Mr Looney’s total pay for 2023 was minus £1.8m, the oil major said. 

Mr Looney was forced to hand back some of the money he had previously been paid as part of £32.4m which was denied to him because of his actions.

The former boss of BP has begun repaying the annual bonus paid by his former employer after the oil giant’s board found he knowingly misled them about a string of romantic affairs he had with colleagues.

Bernard Looney resigned in September after admitting he had not been “fully transparent” about his past relationships when previously quizzed about the matter.

In its annual report today, BP said he had repaid 50pc of the cash portion of the annual bonus awarded to him for 2022, worth £420,000.

In effect, he suffered a £1.8m hit to his total compensation last year after BP clawed back his entitlements.

BP’s board said in December that it was cutting short his 12-month notice period and sacking the former executive with immediate effect after concluding his actions amounted to “serious misconduct”.

It means he lost his entitlement to pay and benefits amounting to a maximum value of £32.4m, including his salary, pension contributions and performance-linked bonuses.

Mondi has agreed to buy DS Smith for £5.1bn in a deal which will create one of the world’s largest packaging makers.

Under the 373p per share deal, DS Smith investors will receive a 33pc premium on the company’s share price before the initial approach from Mondi was announced.

The tie-up, if it is completed, is the latest in a wave of consolidation in the packaging industry. Smurfit Kappa agreed last year to acquire WestRock.

Mondi shareholders would own 54pc of the combined company, with DS Smith shareholders getting the rest.

DS Smith shares remain at the top of the FTSE 100, up 6.9pc, while Mondi is near the bottom of the blue-chip index today, down 2.2pc.

The Competition and Markets Authority (CMA) said T&S and Tereos UK & Ireland only face competition from one other company - British Sugar - in the supply of packed sugar to a range of businesses, including supermarkets. 

It said the loss of competition from the deal could lead to supermarkets paying more for packed sugar and shoppers could see higher prices for packs of sugar on shelves as a result.

Sorcha O’Carroll, senior director of mergers at the CMA, said:

The supply of sugar to grocery retailers in the UK is already highly concentrated. 

This deal would bring together two of the three players in the UK sugar sector, reducing competition and choice further for people and businesses.

It’s now up to TLS and Tereos to find a way to address our competition concerns to avoid the deal being referred to an in-depth Phase 2 investigation.

UK shares dipped ahead of key US jobs data that could help shape investor expectations on interest rate cuts globally.

The FTSE 100 was down 0.2pc, while the mid-cap FTSE 250 lost 0.3pc, after rising to a three-month high in the previous session.

Markets now await a crucial US jobs report due later in the day Jerome Powell told a congressional hearing that policymakers are “not far” from having the confidence to cut interest rates.

DS Smith led gains on the FTSE 100 as it climbed 7.2pc after Mondi reached an agreement in principle for an all-share offer to buy the company for £5.1bn.

However, Mondi has dropped by 2.3pc.

Energy shares helped limit losses, up as much as 0.6pc after oil prices gained on growing demand from the US and China.

Industrial engineering stocks slumped as much as 1.7pc amid a 2.3pc slump in Spirax-Sarco after Stifel downgraded the company’s shares to “sell” from “hold.”

Among other stocks, Informa climbed 2.2pc after the events organiser raised its earnings forecast for the current year and posted upbeat 2023 profit.

Tea drinkers are at risk of paying higher prices for sugar, regulators have warned, as they threatened to block a merger involving the company behind Tate & Lyle.

The competition watchdog has said that it might block the tie-up between T&L Sugars and the maker of the Whitworths brand if they cannot allay its concerns that the deal could lead to higher prices for customers.

The company behind Tate & Lyle announced its plan to purchase Tereos UK and Ireland’s business-to-consumer packed sugar unit in November.

However, the Competition and Markets Authority (CMA) said that it believed competition could be harmed by the plan, as it gave the two companies five working days to offer remedies or face a second-phase investigation by the watchdog.

TLS refines and distributes sugar and similar products to supermarkets, wholesales, hotels and cafes in the UK.

The part of Tereos it plans to buy packages and distributes sugar from its Normanton, West Yorkshire, factory to UK buyers. One of its brands is Whitworths.

The billionaire owner of the B&M discount store chain has sold his London mansion at a 30pc loss as demand weakens in the capital’s luxury property market.

Bobby Arora, trading director of budget retailer, sold a townhouse in the exclusive Belgravia district for £23.5m in November, according to Land Registry data obtained by Bloomberg News.

A separate filing showed the property — nestled between Hyde Park and Buckingham Palace — was bought by Mr Arora for £34m about a decade ago.

It comes as property prices have fallen in London’s high-end postcodes amid higher interest rates and the prospect of higher taxes on rich residents.

Jeremy Hunt announced in his Spring Budget that he would scrap the non-dom regime and instead make foreign nationals living in Britain pay taxes on overseas income and capital gains after four years of living in the UK.

A South African developer sold a housing site in Kensington for about £80m at the end of last year, Bloomberg added, amounting to a discount of roughly £30m from the price paid in 2017.

The FTSE 100 has not joined the party in global markets after US Federal Reserve chairman Jerome Powell indicated policymakers were “not far” from cutting interest rates.

The UK’s blue chip index was down 0.1pc after trading began at 7,681.80, while the midcap FTSE 250 was down 0.1pc at 19,573.23.

The Conservatives’ ambition to eliminate employees’ national insurance contributions could take “several parliaments” to achieve, a minister has admitted.

Gareth Davies told Sky News: 

The starting point is that we think there’s a fundamental unfairness that if you work in a job you pay two types of tax, you pay income tax and you pay national insurance contributions.

So what we want to do, what we’ve demonstrated at the last two fiscal events, is that we want to get national insurance contributions down to the extent that we remove the unfairness over time.

The long-term ambition, it may take several parliaments, but the long-term ambition is to remove that unfairness.

Asked whether the Government wanted to merge income tax and national insurance, he said: “We keep all these things under review, but we want to remove the unfairness of having two taxes for those in work.”

Matchesfashion will be put into administration after “consistently” missing its targets and making “material losses”, its parent company Frasers has said.

The online retailer, which was only bought by Frasers in December for a cut-price £52m, would need “too much change” to restructure it. 

Sports Direct owner Frasers said that the money that Matches needs to continue to operate would be “far in excess” of what it considers viable.

Frasers said: 

In light of this, Frasers has been informed that the directors of Matches have taken the decision to put the Matches group into administration.

Frasers remains committed to the luxury market and its brand partners.

Frasers bought Matches from its private equity owners Apax Partners amid a slowdown in the luxury sector. 

Apax bought the company in 2017 and reportedly invested up to £600m, although challenges led to Matches posting losses of £33.5m last year. 

European markets are poised to open higher after the chairman of the US Federal Reserve indicated that interest rates are close to being cut in America.

Jerome Powell told a congressional hearing that policymakers are “not far” from having the confidence to cut interest rates in his strongest hint yet that monetary policy could ease in the coming months in the US.

US stocks climbed to fresh records on Thursday and Asian shares were mostly higher overnight, with Australia’s S&P/ASX 200 closing at an all-time peak.

European markets are on track to open higher when trading begins shortly, while the pound rose against the dollar above $1.28.

Mr Powell told the Senate Banking Committee: “We’re waiting to become more confident that inflation is moving sustainably at 2pc. 

“When we do get that confidence — and we’re not far from it — it’ll be appropriate to begin to dial back the level of restriction.”

Traders think June is the likeliest starting point for US to start cutting interest rates, which are at their highest level since 2001.

Policymakers at the Federal Reserve - America’s equivalent of the Bank of England - have faced criticism for waiting too long before raising interest rates when inflation was accelerating.

Chairman Jerome Powell faced questions from the Senate’s banking committee about the possibility that the Fed could now be too late in cutting rates, which would cause undue pain because high rates slow the economy.

He told the the Senate Banking Committee: “We’re well aware of that risk, of course.”

He said if conditions continue as expected, including a strong job market and cooling inflation, cuts will come later this year. Cutting rates too early could risk a reacceleration of inflation.

Thanks for joining me. European markets are poised to open higher amid signs that the US Federal Reserve may soon begin cutting interest rates.

It comes after Federal Reserve chairman Jerome Powell said in testimony on Capitol Hill that the central bank is “not far” from delivering the cuts to interest rates that Wall Street and global stock markets crave. 

He said again that the Fed is just waiting for additional data to confirm inflation is cooling.

5 things to start your day 

1) Hunt’s NI pledge ‘not worth the paper it’s written on’, says IFS | A leading think tank says National Insurance is simply too big a cash generator for the Government to forego

2) Frasers puts Matchesfashion into administration with hundreds of jobs to go | The move comes weeks after Frasers bought the luxury online retailer and puts hundreds of jobs at risk

3) Sir Richard Branson to get £400m in Nationwide takeover of Virgin Money | Acquisition to create second-largest mortgage and savings business in Britain

4) Selfridges tycoon files for insolvency | Rene Benko’s decision comes four months after his property empire Signa collapsed

5) Ambrose Evans-Pritchard: The political tragedy of Emmanuel Macron | The incomprehensible President’s falling star is no cause for celebration

What happened overnight 

Chinese shares rallied following better-than-expected import and export data, signaling increased demand that could support Beijing’s effort to rev up the economy.

The Hang Seng Index added 1.1pc to 16,405.94 in morning trading, led by the tech index, which advanced 1.8pc as China senior officials announced their focus on supporting research and industries to attain breakthroughs in key technologies, including computer chips, during the National People’s Congress.

The Shanghai Composite Index gained 0.2pc to 3,032.82, and the smaller market in Shenzhen rose 0.5pc.

Tokyo stocks ended higher after rallies on Wall Street led by tech stocks.

The benchmark Nikkei 225 index was up 0.2pc, or 90.23 points, to end at 39,688.94, while the broader Topix added 0.3pc, or 8.26 points, to 2,726.80.

In America, the Dow Jones Industrial Average rose 0.3pc, to 38,791.35. The S&P 500 gained 1pc, to 5,157.36, a record high close. The Nasdaq Composite narrowly missed a closing record to end up 1.5pc, at 16,273.38.

The yield on benchmark 10-year Treasury bonds dipped to 4.08pc from 4.11pc late on Wednesday.