Aldi plans to create 5,500 jobs as shoppers switch to discounters

Thanks for joining us today. Chris Price will be back in the morning, but in the meantime here are a few of our latest business stories from elsewhere on The Telegraph website:

• The West faces years-long battle to rearm, warns BAE Systems
• Global debt surges to record high as borrowing costs bite
• Saudi Aramco and FT accused of running misleading ‘sustainable’ fuel adverts

Mercedes-Benz plans to buy back up to €3bn ($2.6bn) in shares after its cash flow exceeded forecasts, the German carmaker announced today.

Mercedes told investors:

It is scheduled to commence immediately after the conclusion of the ongoing share buyback programme announced on February 16, 2023, and is expected to be completed before the expiry of the Annual General Meeting’s above-mentioned authorization.

Intel has won Microsoft as a customer of its Intel Foundry business, the company said today, as it seeks to grow its contract manufacturing business.

Microsoft is investing in its own chip designs amid strong demand for its cloud computing division’s services and desire by businesses to automate tasks with artificial intelligence.

Microsoft boss Satya Nadella said: 

We need a reliable supply of the most advanced, high-performance and high-quality semiconductors.

Intel, which rose to dominance in the PC era of the 1980s and 1990s, has faced much stronger competition in recent years, with smartphone processors typically based on chips designed by rival Arm. Meanwhile, Nvidia has riden a wave of excitement around artificial intelligence to become the world’s most valuable chipmaker.

The FTSE 100 closed down by 0.73pc today. The biggest riser was Holiday Inn owner InterContinental Hotels Group, up 2.35pc, followed by BA owner IAG, up 2.20pc. The biggest faller was HSBC, down 8.39pc, followed by British Gas owner Centrica, down 3.07pc.

On the FTSE 250, which rose 0.05pc, takeover targert Currys was the biggest riser, up by 4.30pc, followed by Octopus Renewables Infractruture Trust, up 3.85pc. The biggest faller was Bytes Technology, whose chief has just departed, which sunk by 10.72pc. This was followed by Close Brothers, down 8.29pc.

Apple is rolling out an upgrade to its iMessage texting platform to defend against future encryption-breaking technologies.

The new protocol, known as PQ3, is a sign that tech firms are bracing for a potential future breakthrough in so-called quantum computing that could make current methods of protecting users’ communications obsolete.

“More than simply replacing an existing algorithm with a new one, we rebuilt the iMessage cryptographic protocol from the ground up,” an Apple blog post published on Wednesday reads. “It will fully replace the existing protocol within all supported conversations this year.”

The iPhone maker says its encryption algorithms are state-of-the-art and that it has found no evidence so far of a successful attack on them. Still, government officials and scientists are concerned that the advent of quantum computers, advanced machines that tap in to the properties of subatomic particles, could suddenly and dramatically weaken those protections.

Late last year, a Reuters investigation explored how the United States and China are racing to prepare for that moment, dubbed “Q-Day,” both by pouring money into quantum research and by investing in new encryption standards known as post-quantum cryptography.

Washington and Beijing have traded allegations of intercepting massive amounts of encrypted data in preparation for Q-Day, an approach sometimes dubbed “catch now, crack later.”

IBM executive Ana Paula Assis has warned that quantum computing could cause a “cybersecurity armageddon.”

A moon lander built by Houston-based company Intuitive Machines reached lunar orbit today, headed for an attempt at the first US touchdown on Earth’s nearest celestial neighbor in more than 50 years, and the first ever by a private spacecraft.

The six-legged Nova-C lander, dubbed Odysseus, entered a circular orbit 57 miles above the lunar surface after firing its main rocket thruster for nearly seven minutes in an orbital insertion maneuver, the company said in an online statement.

Assuming all goes according to plan, the robot spacecraft is expected to gradually lower its orbit over the next 24 hours and land at crater Malapert A near the moon’s south pole 10:49pm (UK time) on Thursday, carrying a suite of NASA science instruments and technology demonstrations.

Odysseus was launched six days ago, on February 15, atop a Falcon 9 rocket built and flown by Elon Musk’s SpaceX from NASA’s Kennedy Space Center in Cape Canaveral, Florida.

It would mark the first “soft landing” on the moon ever by a commercially manufactured and operated vehicle.

Tonight’s Nvidia results will give us a guide to where American share prices will go next, Kathleen Brooks, research director of online broker XTB, has said:

The hype around these results is as big as before a Fed meeting and Nvidia’s earnings report may have a bigger impact on the overall stock market than the Fed!

This is because Nvidia is the best performing stock on the S&P 500 this year; 5 stocks have fueled 75pc of the S&P 500’s year to date gain.

Added to that, Nvidia stock price’s gain this year is more than the next two best performers – Meta and Microsoft – combined

Nvidia is considered the vanguard of the AI theme and as its chips have a 98pc share of the GPU industry.

However, Nvidia shares fell sharply on Tuesday and were down 4.35pc, they are also scheduled to fall another 1.5pc on Wednesday.

Since Nvidia is so important for the direction of overall stock markets, the outcome of this evening’s report could be decisive in where stocks go next.

We already expect a monster report, so the focus for this earnings release is what Nvidia forecasts for the future. Will it see more competition, and could this eat away at revenues in the future? If yes, then we could see a lot of volatility for markets in the coming days.

But, if Nvidia signals that the future is rosy, then we could expect another leg higher in the recent rally. 

A FTSE 250 housebuilder has defended its decision to raise the pay package of its boss despite shareholders revolting against the deal.

Vistry, which used to be known as Bovis Homes, said it recognised the concerns people have but was standing by the pay policy.

The company came under pressure in August when new proposals were narrowly approved by shareholders.

Some 45pc of votes were cast against the policy which more than doubles the annual bonus that the company’s chief executive can receive, and adds 50pc to potential long-term incentives.

It means boss Greg Fitzgerald’s maximum pay package will grow from £3.4m to £5.4m, provided he meets all his targets.

Mr Fitzgerald was paid £2.5m in 2022.

In an update to shareholders on Wednesday, Vistry said the remuneration committee, which is in charge of setting pay levels, “understands that the reasons for the number of votes cast against was primarily concerned with the step up in maximum opportunity for the CEO (chief executive officer) which was in excess of usual levels within the FTSE 250”.

It said the committee “acknowledges these concerns”, but maintains the view that the new policy is aligned with a “highly performance oriented” framework, with pay levels that incentivise bosses to create value for shareholders.

Shareholder adviser agencies ISS and Glass Lewis had both recommended that investors vote against the pay report at the company’s annual general meeting in May.

Vistry, which specialises in selling affordable homes, said higher interest rates and inflation had dampened demand in the property market throughout 2023, but that it was optimistic of conditions improving this year.

It sold about 5pc fewer homes last year compared with 2022.

A long-lasting HIV jab backed by GSK has been hailed as a success after trial results showed the injection worked better than daily pills for some patients. Hannah Boland reports:

An interim review of the Cabenuva treatment revealed the jab is better at suppressing HIV for patients who struggle to take a pill every day. 

This could include patients who do not have stable insurance policies or those who worry that taking pills could disclose the existence of their condition.

The NHS says people diagnosed with HIV typically take between one and four pills a day.

However, the Cabenuva treatment works through two-monthly injections and helps make the level of HIV in the blood undetectable, which significantly reduces the risk of transmitting the infection through sex. It is available in the UK on the NHS.

Dr Kimberly Smith, the head of research and development at GSK-controlled ViiV Healthcare, said: “The interim data indicating the superiority of long-acting therapy compared to daily oral therapy in individuals who have difficulty taking pills for HIV every day is a remarkable outcome.

“Optimising therapy for all people living with HIV, including those with adherence challenges, is critical to the effort to end the HIV epidemic.”

It comes as GSK pushes ahead with plans to bolster its long-acting HIV drug portfolio. 

It expects around 40pc of its HIV business to come from long-acting therapies within the next four or five years. 

Viiv Healthcare, which Pfizer also has a minority stake in, is currently working on making it possible for people to inject their treatments at home so that they do not have to visit clinics every month. 

It said last year it was planning to start clinic trials for a self-administered injection in 2026. 

It is also working on a potential cure for HIV that will essentially wake up the virus within people’s immune cells and then allow them to be targeted.

Shares in mining business Glencore have recovered a lot of this morning’s plunge. The shares fell as much as much as 6.4pc in morning trading but are now down by just 0.93pc. Matt Oliver has more on the news that caused City jitters:

The FTSE 100 company on Wednesday said core earnings tumbled from 2022’s record $34bn (£27bn) to $17bn last year, as the thermal coal boom that followed Russia’s invasion of Ukraine petered out.

At the same time, Glencore’s net debts have ballooned from $75m to nearly $5bn following its takeover of the coal division of Teck Resources last year.

Gary Nagle, the miner’s chief executive, said the company was now “managing the balance sheet” and would scale back returns to shareholders, cutting the full-year dividend from $6.5bn to $1.6bn.

For the first time in years, the company is also not launching any share buybacks. It follows the bumper returns of $7.1bn pledged to investors in 2023, however.

The slowdown comes after energy and commodity prices became less volatile than in the immediate aftermath of the Ukraine war’s outbreak, while Glencore’s deal to buy Teck’s steelmaking coal business is placing extra pressure on the company’s finances.

But Mr Nagle insisted that current market prices meant the business was expected to be  “highly cash generative” in 2024, which “augurs well” for future dividend payouts and buybacks”.

He added: “As the world moves towards a low-carbon economy, we remain focused on supporting the energy needs of today whilst investing in our transition commodities portfolio.”

It comes as Glencore is preparing to offer shareholders a choice on whether to demerge its consolidated coal assets into a separate business, following the Teck deal.

The company and Nagle have also been criticised by the activist investor Bluebell Capital, which claimed that the thermal coal and steelmaking coal businesses would only have limited compatibility.

That’s all from me today. Alex Singleton will provide all the latest updates from this point.

I’ll leave you with this aerial shot of Polish farmers blocking the highway linking Warsaw and Lublin as they continue their long-running protests.

Ukraine’s Volodymyr Zelenskiy has called on Poland’s leaders and European Union officials to come to the Polish-Ukrainian border for talks over repeated blockades by Polish farmers angry at what they say is unfair competition from Kyiv.

Polish farmers staged a major day of protest on Tuesday, blocking almost all traffic on the border with Ukraine, angering Kyiv, in an escalation from previous demonstrations.

Mike Ashley’s lawyers have accused a Wall Street bank of “snobbery” after it imposed an “inappropriate” $1bn margin call, court documents show.

Morgan Stanley’s actions were “class driven”, the retail tycoon’s lawyers have claimed, as a two-week trial got underway at the High Court.

The court battle will pitch the Sports Direct founder against an investment bank heavyweight that spurned him as a customer three years ago.

Mr Ashley’s Frasers retail empire is now suing Morgan Stanley for about €47m (£40m) over alleged costs and lost trading profits after the bank’s decision. 

The contested margin call, which is the collateral offered by investors to cover possible losses on a trade, was linked to the retailer’s stake in German fashion group Hugo Boss.

Adrian Beltrami, a lawyer for Frasers, said on the trial’s opening day that the Wall Street bank changed the purpose of its $915m margin call on May 28, 2021, after discovering that Frasers stood behind trades held by Denmark’s Saxo Bank.

Frasers, which traded Hugo Boss stock through Morgan Stanley client Saxo, alleges the decision to demand such collateral was capricious, in breach of market practice and designed to force it to close or move its positions and cause it harm.

In court filings quoting bank staff, Frasers said Mr Ashley was viewed as an “upstart”, who would have “zero respect to the norms of the way in which we do business”. 

Frasers said Morgan Stanley’s negative reaction when Mr Ashley tried to become a bank client was “class driven, no doubt about it”.

Morgan Stanley, which dismisses the claim as contrived and without merit, says it had no contractual relationship with Frasers, only with Saxo, and alleges a margin call based on a potential 400pc rise in Boss shares was designed to ensure it was properly protected from exposure to stock market bets.

A competition investigation into Vodafone’s £15bn merger with Three must be scaled up, MPs have said.

Our reporter James Warrington has the details:

In a letter to the Competition and Markets Authority (CMA), the Business and Trade Committee warned that “significant doubts” had been raised about the benefits of combining the two mobile networks.

They added: “As such, the committee believes that the CMA has a duty to launch an in-depth [phase 2] assessment.”

The CMA last month opened an initial phase one investigation into the tie-up between Vodafone and Three, which will create the UK’s largest mobile network with around 27 million customers.

The regulator has been gathering evidence since October and has up to 40 days to examine the deal in its initial review.

Read why committee chair Liam Byrne pointed to doubts above Vodafone and Three’s claims about the tie-up.

The pound held steady despite the Treasury reporting the highest ever monthly surplus in the public finances in January ahead of the Budget next month.

The Government ran a budget surplus of $16.7bn last month as self-assessment returns led to record tax income, according to the Office for National Statistics.

It was nearly double the £7.5bn surplus in the same month last year but below economists’ expectations of £18.4bn.

Kathleen Brooks, research director XTB, said the record surplus does not mean the economy is out of the woods and generating cash significantly faster than before. She said: 

Economic growth is still likely to remain sluggish, so today’s data is unlikely to factor into the Bank of England’s decision on when to cut rates. 

However, the question about tax cuts is now getting interesting.

The surplus meant that the Government has borrowed £9.2bn less than the OBR had forecast it would by this point in the financial year, handing Chancellor Jeremy Hunt potential room for giveaways in his Budget.

The pound was flat against the dollar at $1.26 and was also little changed against the euro at 85p.

Wall Street’s main indexes opened lower  ahead of chip designer Nvidia’s crucial earnings report that could potentially hinder or further fuel this year’s AI-led rally.

The Dow Jones Industrial Average fell 80.14 points, or 0.2pc, at the open to 38,483.66.

The S&P 500 opened lower by 12.48 points, or 0.3pc, at 4,963.03, while the Nasdaq Composite dropped 98.66 points, or 0.6pc, to 15,532.12 at the opening bell.

Sweden’s government has hit out at the country’s net zero “flight shaming” movement as it announced a £76m cash injection for the airline industry.

Our economics reporter Melissa Lawford has the details:

Infrastructure minister Andreas Carlson said the government would invest more than one billion kronor to support carriers as they struggle to recover from the pandemic, high energy prices and the economic toll from Russia’s war in Ukraine.

Mr Carlson told reporters: “There are few reasons to feel flight shame and as the [green] transition increases there will be even fewer.”

His words refuted the Swedish concept of “flygskam”. The movement, which began in 2018 and literally means “flight shame”, has led the public to forego air travel because of the guilt associated with the carbon emissions.

It was spearheaded by activist Greta Thunberg, who in 2019 took a two-week journey across the Atlantic on a 60-foot racing yacht so that she could arrive at the UN’s Climate Summit in New York without travelling by air.

Read how government policy has changed.

A policymaker at the Bank of England has warned that leaving interest rates at their 16-year highs of 5.25pc risks “scarring” parts of Britain’s economy.

Swati Dhingra was the only member of the Monetary Policy Committee to vote for a cut in interest rates at the Bank’s last meeting earlier this month.

She told the Market News International connect event today that there are “downside risks to living standards from keeping policy tight”. She said:

Despite an easing in inflation and some real wage recovery, consumption remains below its pre-pandemic level. 

This is in striking contrast to the euro area and the United States where consumption bounced back some time ago.

The evidence to err on the side of overtightening is not compelling in my view as it often comes with hard landings and scarring of supply capacity that would weigh further on living standards.

Aldi is to create 5,500 new jobs this year as the supermarket chain continues its expansion across the UK as shoppers switch to cheaper retailers.

The UK’s fourth largest supermarket group said it is hiring for roles including store assistants, manager and cleaners across new shops.

Aldi UK is also recruiting across its 11 regional distribution centres and for head office positions.

It comes as figures from Nationwide showed British shoppers spent 41pc more at discount stores by value in January this year than the same month in 2023.

Aldi said store and warehouse assistant will receive a starting salary of £12 an hour, rising to £12.95 nationally, with those within the M25 receiving £13.55, rising to £13.85.

It currently has more than 1,000 stores and employs more than 45,000 workers.

The business has said it plans to grow to 1,500 stores in the coming years, after previously setting a goal of 1,200 shops by the end of 2025.

It comes a week after committing to spending £550m on opening new stores and upgrading existing ones in the UK this year.

A senior MP has taken aim at the International Monetary Fund (IMF) for its refusal to allow the Government to analyse its predictions for UK economic growth.

The body predicted economic growth of just 0.6pc in the UK this year, the second slowest rate in the G7 after Germany.

The Treasury Select Committee will today question a panel of leading economic forecasters on the predictions which shape expectations around UK economic policy.

Chairman Harriett Baldwin said:

We also invited the OECD and the IMF to this session on economic forecasting.

I’m disappointed neither has accepted our invitation to come to Westminster ahead of the Spring Budget and discuss the assumptions which underpin their forecasts on the UK economy.

I am heartened, however, by the positive intent and engagement shown by the OECD during our discussions. We will continue to work with them to find a suitable time for a public session when schedules allow, to ensure proper democratic scrutiny of their work can be carried out.

On the contrary the IMF’s outright refusal to let us scrutinise their forecasts of the UK economy in public is infuriating. Yet they continue to utter public pronouncements about the UK from their perch in Washington. As the IMF is a public body partly funded by the UK as a shareholder, I find this incredible.

ChatGPT has bewildered users by answering questions in “Spanglish”, as the much-hyped artificial intelligence (AI) tool was struck by an embarrassing glitch.

Our senior technology reporter Matthew Field has the details:

Reports of the OpenAI-owned chatbot talking gibberish have emerged on social media, with the US tech giant admitting that users were receiving “unexpected responses”.

Among the bizarre responses were messages written in a mixture of English and Spanish, while others repeated the same word indefinitely.

One example said: “Let me encylopease me si there’s more wonderenda tu articulation’s hungry for!”

Read why Gary Marcus, an AI expert and emeritus professor at New York University, said ChatGPT had “gone berserk”.

US stock indexes are expected to come under pressure at the opening bell ahead of chip designer Nvidia’s high-stakes results, which could potentially hinder or further fuel this year’s AI-led rally.

Nvidia shed 1.4pc in premarket trading after a more than 4pc decline in the prior session ahead of the semiconductor company’s quarterly earnings, expected after markets close later.

The company, which has jumped 40.2pc so far this year, is expected to post a more than three-fold surge in its fourth-quarter revenue on robust demand for its chips that dominate the market for artificial intelligence (AI).

Analysts have warned that Nvidia’s lofty valuation could make it vulnerable to sharp declines if it delivers anything short of a blowout report and also spark a broader selloff among other technology firms that have benefited from bets on AI.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said:

Nvidia results could trigger a quake of a magnitude of $200bn, and a tsunami of tens and potentially hundreds of billion dollars across the market.

It almost feels like Nvidia earnings could be a decisive moment in the AI rally as many expect the AI bubble to burst at some point. 

In premarket trading, the Dow Jones Industrial Average and S&P 500 were down 0.2pc, while the Nasdaq 100 was down 0.4pc.

Oil prices have extended losses today amid growing expectations that cuts to US interest rates will take longer than thought.

International benchmark Brent crude fell by 0.5pc to below $82 a barrel, while US-produced West Texas Intermediate crude was down 0.5pc to $76.

The Brent and WTI contracts fell from near three-week highs on Tuesday, dropping by 1.5pc and 1.4pc, respectively.

Concerns that rate cuts by the Federal Reserve could take longer than thought have weighed on the outlook for oil demand. 

US inflation data last week pushed back expectations for an imminent start to the Fed’s easing cycle, with money markets pricing in a first cut by June.

That has strengthened the dollar, which is up 0.1pc against the pound at $1.26, making commodities more expensive.

However, Houthi attacks on commercial vessels in the Red Sea and Bab al-Mandab strait have continued to stoke concerns over freight flows through the critical waterway. Drone and missile strikes have hit at least four vessels since last Friday.

Petrol prices have risen by 3p in just three weeks raising concerns about inflation for the Chancellor as he prepares to hold his Budget next month, data show.

The price of a litre of unleaded has jumped by 3.2p from 140.2p to 143.4p, while diesel shot up from 148p to 152p between January 29 and February 18, according to the RAC.

The pump price increases, which have added around £2 to filling up a family car, have been brought about by a jump in the price of oil.

Brent crude has been trading above $80 a barrel for most of the last four weeks, having been well below that for the previous seven. It was last trading just below $82.

RAC fuel spokesman Simon Williams said:

News that fuel prices have bottomed out and are now on the rise again is bad news for drivers, and possibly the economy and future inflation rates, too.

While we’re not expecting prices to shoot up dramatically, it appears that oil is trading up, which in the absence of a stronger pound, means wholesale fuel costs more for retailers to buy in. The result is higher prices at the pump and more expense for the every-day driver.

The Red Sea attacks by Houthi rebels, which are forcing tankers to avoid the Suez Canal and instead go round South Africa’s Cape of Good Hope, are clearly playing their part, but so have global refinery maintenance closures, the start of America’s driving season and UK retailers buying more fuel stocks ahead of the Budget to protect against a possible fuel duty hike by the Chancellor.

The German government has drastically cut back its growth forecast for Europe’s largest economy as it battles the impact of high inflation and a likely recession.

The cabinet of chancellor Olaf Scholz’s administration today approved its annual economic report, which expects the economy to grow by just 0.2pc this year, according to Reuters.

It is far less than previous predictions of 1.3pc and comes after Germany’s economy shrank by 0.3pc last year.

Central bank the Bundesbank said it is “likely” that the country has fallen into a recession in the first three months of this year.

“The German economy continues to find itself in difficult waters at the beginning of the year,” said a draft of the report seen by Reuters.

It listed high inflation and a resulting loss of purchasing power among the challenges, as well as geopolitical crises and interest rate hikes.

Mike Ashley has arrived for a High Court trial between his retail empire Frasers and Wall Street bank Morgan Stanley in a row over the stock market trades.

Mr Ashley has accused Morgan Stanley of unfairly demanding exorbitant amounts of money to back up bets placed on Hugo Boss stock, forcing him into a costly restructure of his finances. Morgan Stanley denies it acted unfairly.

Morgan Stanley insists that Frasers’ claim is meritless and has promised a vigorous defence.

Households are being forced to switch their shopping destinations to discount retailers as they battle the increased cost of living, industry data shows.

British shoppers spent 41pc more at discount stores by value in January this year than the same month in 2023, according to customer data from Nationwide Building Society.

The figures showed people are turning to bulk buy and discount retailers such as Poundland and B&M as essential costs continue to increase.

Many people have also switched to cheaper supermarkets to make savings, with retailers like Lidl and Aldi seeing annual increases in spend of 10pc and 3pc respectively.

It comes as consumers grapple with rising debt payments, which increased by 7pc by value in January, while spending on rent payments in January was 28pc higher and mortgage spending increased by 11pc.

Nationwide’s payments strategy director Mark Nalder said: “Our data highlights how many households are being resourceful with their finances by spending smart. 

“But despite essential costs remaining high, there are potential green shoots of optimism, with non-essential costs up year on year – demonstrating that many are able to balance what they need with what they want.”

Cautious investors face a £9,000 penalty for choosing supposedly “safe” assets over “risky” stock market funds.

Our senior money writer Charlotte Gifford has the details:

After last week’s news that Britain had slipped into recession in 2023, many investors may be tempted by traditional “safe haven” assets such as gold and government bonds. 

These typically fare better during market downturns when stocks can run into trouble. 

But over the long term there can be a heavy price to pay for erring on the side of caution.

Read how they have delivered significantly lower returns.

Wholesale gas prices have dropped further as mild weather limits demand for heating.

Benchmark futures have fallen 1.5pc below €24 per megawatt hour and are heading towards their lowest levels in a year.

Prices have also been kept down by robust storage levels and weak activity from industry as Europe battles with a downturn that the Bundesbank said could mean Germany is in recession.

The UK equivalent contract is down 1.4pc to less than 59p per therm.

Defence giant BAE Systems has built up a record £70bn backlog of orders as Europe scrambles to re-arm in the face of Russian aggression. 

Our industry editor Matt Oliver has the latest:

British weapons maker BAE has said it won contracts worth £38bn in 2023, including deals related to the next generation of the UK’s nuclear deterrent submarines, the Aukus defence pact and combat vehicles being bought by central and eastern European countries.

Elevated spending comes as European members of Nato face growing pressure to re-arm amid the second anniversary of Russia’s attack on Ukraine, with Western countries still sending vast amounts of money and munitions to support Kyiv’s efforts to defend itself.

Global tensions have been further stoked by ongoing Chinese aggression towards Taiwan, as well as a warning by Donald Trump that the US may not defend European countries that spend less than 2pc of their budgets on defence.

BAE Systems shares have fallen 3.3pc.

Read what BAE boss Charles Woodburn said about the type of weapons in demand.

Mining group Rio Tinto revealed its profits slumped by 12pc last year amid weaker commodity prices.

Shares in the world’s biggest iron ore miner have slumped 1.8pc to a four-month low as it said improvements in supplies of metals meant it suffered $1.5bn decline in underlying earnings before charges compared with 2022.

Underlying profit fell 12pc to $11.8bn (£9.4bn) but the Anglo-Australian miner still increased its final dividend to $2.58 per share, compared with $2.25 in 2022.

Banknotes carrying a portrait of the King will be issued for the first time this summer.

The image of Charles III will appear on the existing designs of all four banknotes - the £5, £10, £20 and £50 notes - from June 5.

Polymer banknotes that feature the portrait of Her late Majesty Queen Elizabeth II will remain legal tender, and will co-circulate alongside King Charles III notes. 

The new banknotes will only be printed to replace those that are worn, and to meet any overall increase in demand for banknotes, in an effort to minimise the environmental and financial impact of the change.

The FTSE 100 has dropped amid disappointing earnings from HSBC and Glencore.

The UK’s blue-chip index slipped 0.7pc, while the mid-cap FTSE 250 index was flat at 19,115.36.

HSBC lost 6.6pc to hit the bottom of FTSE 100, after the lender missed market estimates for annual profit and reported a $3bn (£2.4bn) hit from its China division. 

Banks across the FTSE 350 dropped as much as 4.1pc.

Glencore shed 5.7pc as the miner said lower commodity prices had halved its earnings last year. It also slashed its dividend to investors, as the company saves to fund the acquisition of a 77pc stake in Teck Resources’ metallurgical coal business.

Base metal miners dropped as much as 2.9pc.

Investors will be waiting to see what is said by Bank of England monetary policy member Swati Dhingra and the Fed policy meeting minutes, for clues on the timing of interest rate cuts.

Church of England members have attacked Lyle’s Golden Syrup over a rebrand that “eradicates” the Christian messaging in its logo.

Our social and religious affairs editor Gabriella Swerling has the details:

The company has replaced the image of a dead lion being swarmed by bees with a more modern depiction of the animal’s face and a single bee, in its first rebrand in almost 150 years.

The product’s dark green tin and golden lion packaging is a reference to the story of Samson killing a lion, and the original logo includes the biblical quotation: “Out of the strong came forth sweetness.”

It is the world’s oldest unchanged brand packaging, and holds a Guinness World Record, having remained almost identical since 1888.

Read why Lyle’s rebranding, created by the product’s founder, Scottish businessman Abraham Lyle, has angered some traditional Christians.

The BT Tower, an iconic landmark in London’s skyline, has been sold by the telecoms giant to MCR Hotels for £275m.

BT said the deal would secure the future of the site, which was  opened by Prime Minister Harold Wilson in 1965 and was the tallest structure in London until 1980.

It was one of the key interchange points for live television but its usage as a hub for telecoms equipment has waned in recent years, with its microwave aerials removed more than a decade ago.

Tyler Morse, chief executive and owner of MCR Hotels, said it would develop plans to turn the site into an “iconic hotel”, adding his company was “proud to preserve this beloved building”.

Brent Mathews, property director at BT Group said: 

The BT Tower sits at the heart of London and we’ve been immensely proud to be the owners of this important landmark since 1984. 

It’s played a vital role in carrying the nation’s calls, messages and TV signals, but increasingly we’re delivering content and communication via other means. 

This deal with MCR will enable BT Tower to take on a new purpose, preserving this iconic building for decades to come.

Heathrow Airport has returned to profit for the first time since the pandemic amid a wider recovery in the travel industry.

Europe’s busiest airport made adjusted profit before tax of £38m last year after a strong performance in the run up to Christmas.

Passenger numbers have recovered to 79.2m, the third highest year in Heathrow’s history, but bosses warned a reduction in the charges it can impose on airlines - enforced by the aviation regulator - means it will need to save £400m over the next three years to remain profitable.

It said: “Airport charges were reduced by 20pc in real terms at the start of 2024 in line with the CAA’s H7 settlement, which means maintaining even a small profit will require us to close a £400m gap with efficiencies and investment trade-offs over the next three years.”

Chief executive Thomas Woldbye, who replaced long-standing boss John Holland-Kaye in October, said:

2023 was a good year for Heathrow from a challenging start to a great finish – We delivered much improved service for our customers, and managed to turn a small profit after three consecutive years of losses. 

That’s a great platform to build on, although in 2024, we are expected to deliver even further improved service to more passengers, but with airport charges cut by 20pc in real terms. 

We will have to pull every lever to become more efficient and make tough choices on where we spend and invest our money to overcome the huge cost challenge set by the CAA and remain profitable over the next three years.

FTSE 100 mining giant Glencore suffered a sharp drop in profits due to falling commodity prices from the surge experienced in immediate aftermath of the Ukraine war.

Shares dropped 4.2pc to their lowest level in a year after underlying profits fell by 50pc to $17.1bn (£13.5bn), although it was still one of the company’s best ever performances.

The company saw profits surge in the wake of Russia’s invasion of Ukraine in 2022 as an energy crisis hit Europe, sending commodity prices higher.

Glencore lowered its dividend to $1.6bn (£1.3bn) and for the first time in several years has not announced a new share buyback program.

HSBC shares have fallen by 6pc since markets opened after it revealed fourth quarter pre-tax profits plunged following a $3bn (£2.4bn) blow from its China operations.

Matt Britzman, equity analyst at Hargreaves Lansdown, said:

If there was an award for simple and clean results then HSBC would get the booby prize. 

There’s a lot to unpack here, with the fourth quarter alone impacted by two major impairments: a $3bn write-down in the value of BoCom (Chinese bank) and a $2bn write-down from the sale of its French operation. 

Backing out a lot of the mess, it looks like performance was a little worse than expected with higher operating costs more than offsetting slightly better impairments.

Mainland China remains a question mark. The write-down of BoCom follows a similar pattern to what Standard Chartered did last quarter and while loan loss charges were better than expected, the Chinese commercial real estate sector continues to be weak.

The FTSE 100 has begun the day lower following declines on Wall Street and on Asian markets.

The UK’s blue chip index was down 0.4pc after the open to 7,686.83 while the midcap FTSE 250 was little changed at 19,110.67.

A record surplus in January and lower than expected borrowing do not mean Jeremy Hunt will be able to spend big in his Budget next month, economists have warned.

Ruth Gregory, deputy chief UK economist at Capital Economics, said:

January’s public finances figures delivered some much-needed good news for the Chancellor in the lead-up to the Budget on March 6. 

But we doubt this will pave the way for a big pre-election splash. 

We think the Chancellor will be handed “headroom” of just £15bn (0.5pc of GDP), limiting his ability to unveil big unfunded tax cuts if he wishes to adhere to the fiscal rules. 

Gora Suri, economist at PwC UK, added: “With the OBR’s final forecast assumptions now locked in, Hunt is likely to have limited scope for tax cuts or additional spending compared to his predecessors. 

“The Chancellor may have more headroom than the OBR expected in November, due to falls in market expectations for interest rates and gilt yields, but lower tax revenues from a smaller cash economy may push headroom down.”

HSBC reported a sharp slide in final quarter profits after a $3bn (£2.4bn) writedown on its stake in a major Chinese bank.

Our reporter Michael Bow has the details:

The bank’s pre-tax profits for the three month period ending December 2023 fell 80pc from $5bn to $1bn after it took the $3bn charge on its stake in Bank of Communication (BoCom).

The UK-based lender has held a 19pc stake in the Shanghai-based lender since 2004. The stake is seen as strategically important for HSBC but has raised questions from analysts about its value.

HSBC cited “recent macroeconomic, policy and industry factors” for the impairment but said it had no plans to sell the BoCom stake. 

“BoCom remains a strong partner in China, and we remain focused on maximising the mutual value of our partnership. Our positive views on the medium and long-term structural growth opportunities in mainland China are unchanged,” it said. 

The devaluation of the Argentine peso also hit profits by $500m. Argentina is suffering from hyperinflation due to the devaluation of the peso in December.

The $3bn writedown marred record annual profits for HSBC.

Michal Stelmach, senior economist at KPMG UK, said the public finances were “flattered” by the drop in grants and subsidies but said that the OBR would likely upgrade its outlook for the Treasury. He said: 

The latest set of data suggests that borrowing could end 2023-24 at £114 billion. 

We expect the OBR to upgrade its fiscal outlook on the back of a weaker expected path for interest rates, lower spending on inflation-linked debt, as well as a possible upward revision to their net migration assumptions, which are net positive for the public finances. 

This could increase the headroom to meet the fiscal mandate to £21bn, up from £13bn at the Autumn Statement.

The policy choice lies between fiscal pragmatism and a stated desire to cut taxes. 

Accounting for the customary fuel duty freeze could leave the Chancellor with around £14bn to play with. 

This would be enough to afford a 2p cut to the basic rate of Income Tax, also benefitting the pensioners who could not take advantage of the recent reduction in the National Insurance contributions. 

However, it would inevitably come at a cost of a greater constrain on future policy options. Navigating this delicate balance will be a tricky task in an election year.

Government spending rose by £67.5bn in the first ten months of the financial year, hitting £944bn, but the picture could have been much worse.

The Treasury saved £28.9bn over the period on debt interest payments as inflation fell back from 41-year highs experienced in October 2022.

Meanwhile, the Government spent £12.9bn less on subsidies, mainly because of the reduction in energy support costs.

As the latest Government borrowing figures were published, Chief Secretary to the Treasury Laura Trott said:  

We provided hundreds of billions to pay wages, support business and protect lives during Covid, and to pay half of people’s energy bills after Putin’s invasion of Ukraine.

But we can’t leave future generations to pick up the tab, which is why we have taken tough decisions to help reduce borrowing versus what the OBR expected in March. 

While we will not speculate over whether further reductions in tax will be affordable in the Budget, the economy is beginning to turn a corner, with inflation down from over 11pc to 4pc.

While Government borrowing is much lower than expected so far this financial year, the Treasury’s overall debt remains at its highest levels in six decades, when compared to the size of Britain’s economy.

Public sector net debt excluding public sector banks was £2.64 trillion at the end of January, which is equivalent to about 96.5pc of UK GDP.

That is 1.8 percentage points higher than in January last year and remains at levels last seen in the early 1960s.

ONS deputy director for public sector Jessica Barnaby said:

January’s surplus is the largest in nominal terms since monthly records began in 1993, although borrowing in the year to January is only slightly lower than the same period last year.

Tax receipts are always higher in January than other months owing to self-assessed taxes, which often leads to a surplus.

Also, with recent reductions in the RPI rate, interest payable on government gilts and without last year’s government support schemes, overall expenditure was down on this time last year, despite increased spending on public services and benefits.

As a proportion of gross domestic product, public sector debt is up on the year, and remains at levels last seen in the 1960s.

Jeremy Hunt has been handed a £9.2bn borrowing boost as he seeks potential pre-election giveaways for his Budget next month.

Government borrowing came in at £96.6bn in the first ten months of the financial year, according to the Office for National Statistics (ONS).

This was lower than the official forecasts of spending by the OBR, which thought the Treasury would have borrowed £105.8bn by this point.

The extra headroom for the Chancellor comes as the public purse was boosted by a record surplus in January, which is traditionally a strong month as Britons file their tax returns.

The ONS recorded a £16.7bn surplus last month in the public finances, which was more than double the surplus last year and the largest surplus since monthly records began in 1993 in nominal terms.

However, it was still below economists’ estimates of a surplus of £18.4bn.

Thanks for joining me. The Government has borrowed £9.2bn less than official forecasts so far this financial year, giving Jeremy Hunt potential room for tax cuts in his Budget next month.

The public finances enjoyed a record surplus in January of £16.7bn, amid higher tax receipts.

5 things to start your day 

1) Britain must work with EU to halt onslaught of Chinese EVs, warns Renault | Car makers on the Continent struggle with slowing demand and cheaper competition

2) Why your Easter egg will be smaller and more expensive this year | Poor cocoa harvests in West Africa threaten to leave consumers with a bitter taste

3) ‘Putin will spark a third world war if Russia claims victory in Ukraine’ | Ukrainian steel magnate Yuriy Ryzhenkov warns of global fallout from the Kremlin’s war

4) Net zero will be far more expensive than public thinks, Lords warned | Former chief IMF economist says governments need to borrow more to fund transition

5) Currys’ largest shareholder warns of UK stock market decline | Investors devalue listings by shifting focus away from Britain to the US, says Redwheel

What happened overnight 

Hong Kong and Shanghai stocks jumped after Beijing’s latest measures to boost the stuttering economy but declines on Wall Street weighed on other Asian markets.

China’s central bank rate cut on Tuesday is among measures intended to rally dwindling growth as the world’s second-largest economy battles a prolonged property-sector crisis and a global slowdown.

The People’s Bank of China said it was lowering the five-year loan prime rate, used to price mortgages, from 4.2 to 3.95 percent - the largest reduction since the key rate was revamped in 2019.

Hong Kong climbed 3pc in the morning session while Shanghai was up 2.3pc.

Tokyo stocks closed lower, with the benchmark Nikkei 225 index slipping 0.3pc, or 101.45 points, to 38,262.16, while the broader Topix index ended down 0.2pc, or 5.00 points, to 2,627.30.

Sydney, Seoul, Taipei, Jakarta and Kuala Lumpur were all down.

In Wall Street, the S&P 500 fell 0.6pc to 4,975.51. Meanwhile, the Dow Jones Industrial Average of 30 leading American companies fell 0.2pc, to 38,563.80. The Nasdaq Composite index fell 0.9pc, to 15,630.78. 

The yield on the all-important benchmark 10-year Treasury bonds slipped to 4.27pc from 4.28pc late on Friday.