ECB slows pace of pandemic bond purchases 

That is all from us today - here are some of our top stories:

• EasyJet rejects takeover bid from budget rival Wizz Air
• Ikea to open flagship Oxford Street store at site of shuttered Topshop
• Ireland freezes power exports to UK as energy costs rocket tenfold
• Gene-edited, virus-resistant super pig moves a step closer to market

One of Britain's biggest trucking companies Wincanton is having to hike drivers' pay by a third as wages surge across the industry.

Trade union Unite said it had "won again for working people" after it secured a huge pay rise for more than 90 HGV drivers employed by Wincanton and who delivered for Argos in the North West, meaning they would now be earning £15 an hour, equal to more than £35,000 a year. They had previously been earning £11.41 an hour, meaning their annual salary had stood at £26,699.

Unite regional officer Kenny Rowe said:

"Lorry drivers have been chronically undervalued and underpaid for too long.

“Employers have to understand that if they want to have sufficient drivers to deliver their goods, they need to pay a fair rate of pay which reflects the skills and responsibility needed to drive a heavy goods vehicle."

The union said it was in talks with other employers in the North West over similar pay deals.

It comes as wages surge for lorry drivers. Research from job website Indeed late last month found that salaries for HGV drivers had jumped by more than a tenth between February and July. This was almost double the rate of increase across all driving jobs.

It came as the UK scrambles to cope with a shortage of lorry drivers, with estimates suggesting the shortfall stands at around 100,000 HGV drivers.

Last week, the boss of Wincanton said: "We know we need to pay people more and look at initiatives such as signing on bonuses and training incentives."

He ­called for the UK to cut down the time it took to train drivers in an effort to cope with this shortage - something ministers were said to be readying to announce within the coming days.

However, some have warned this would not go far enough, and have pushed for further measures. The Morrisons boss on Thursday urged for HGV drivers to be added to the shortage occupation list, which would allow more EU workers to come back and fill the empty posts.

The London Stock Exchange has responded to the news that Oxford Nanopore is planning to float in the City later this year - a move which is seen as a coup for the exchange.

Julia Hoggett, CEO, The London Stock Exchange plc, said:

“The UK has a long-standing track record of creating companies based on innovative science backed by London’s deep pools of capital. 

"Oxford Nanopore’s planned IPO on the London Stock Exchange highlights the UK capital markets’ ability to support globally leading life science and technology companies and provide them with access to global investors. We look forward to welcoming Oxford Nanopore to the market.”

It comes after Nanopore co-founder and boss Dr Gordon Sanghera vowed to debunk the "urban myth" that companies did better when they floated on Nasdaq.

Read more about it here. 

LinkedIn will make it easier for jobseekers who never want to go back to the office to find remote and hybrid roles as it adapts to shifting working habits after the pandemic.

New search options will allow users to filter out roles in traditional offices or find workplaces that offer a mix, the company said in a blogpost.

LinkedIn also plans to make it easier to find out about companies' vaccination requirements.

The professional networking site has reported a surge in demand for flexible jobs, with postings listed as "remote" jumping more than 8.5 times since the start of the pandemic to 16pc of the total in August.

But LinkedIn said in-person working wasn't going away, with staff at its own parent company Microsoft planning to return to the office more frequently than managers expected, according to an internal survey.

Joe Little, chief global strategist at HSBC Asset Management, says the ECB's move to slow its emergency stimulus is "not tapering, but a reversal of March’s emergency uplift in purchases".

Today’s meeting was a challenge for the ECB which had to balance improving financial conditions and economic activity data versus a subdued inflation outlook and Mrs Lagarde’s previous commitment for forceful policy action.

In our view, the decision to reduce asset purchases is not tapering, but a reversal of March’s emergency uplift in purchases – which itself followed a market episode of rising bond yields. It means that in Q4, ECB asset purchases will look closer to the levels they were in Q1 this year.

The Pandemic Emergency Purchase Programme (PEPP) – which accounts for up to 80% of current ECB purchases – expires next March. We think the bigger decision on asset purchases comes at the December ECB meeting. The new symmetric inflation target, subdued underlying inflation trends, and pandemic risks suggests a dovish tilt to policy for the foreseeable future. This is likely to include ongoing purchases under the Asset Purchase Programme (APP), and a possible extension of the PEPP deeper into 2022.

Overall, with the ECB in no rush to significantly tighten policy, the recovery in the eurozone is set to continue amid high levels of vaccination, substantial savings piles, and the release of EU recovery funds. We expect GDP to recover to its pre-crisis level by year-end, with very little if any economic scarring in the longer-term. This supports our positive view on the region’s equity markets which benefit from exposure to cyclical and value factors, although strong year-to-date performance may cap the upside potential in the near-term.

German prosecutors raided the finance and justice ministries today as part of an investigation into the government's anti-money laundering agency, putting a spotlight on the country's failure to tackle financial crime.

Reuters has more details:

The probe into the Financial Intelligence Unit, an agency of the finance ministry under Social Democrat chancellor candidate Olaf Scholz, is looking at whether it was told to ignore warnings of suspect payments to Africa.

The raids come at a pivotal moment for Scholz, who opinion polls suggest has a good chance of becoming German chancellor in national elections on 26 September.

Scholz rebuffed criticism from lawmakers following the raids, but the episode casts a cloud because it refocuses attention on the ministry he runs. The FIU and BaFin, the financial regulator, which also answers to Scholz have been under scrutiny for failing to spot problems at payments firm Wirecard, which collapsed last year in Germany's biggest corporate fraud.

"This is a security risk for Germany," said lawmaker Fabio De Masi. "We need a financial police with criminal expertise. Germany is a paradise for criminals."

Scholz, speaking on a campaign stop in Potsdam, said he had had bolstered staff at the FIU agency to almost 500 from 165 and invested heavily in better equipping it.

He signalled his frustration with the raids, saying that prosecutors with questions "could have put them in writing".

The FIU declined to comment.

The probe comes as the country's anti-money laundering efforts are under review by the Financial Action Task Force (FATF), a global body that groups countries from the United States to China, to tackle financial crime.

Asos slid 5.7pc to its lowest level since last August after a shareholder dumped around 3m shares in the company.

Bloomberg reports that the placement was priced at 3,325p per share, representing a 4.3pc discount to Tuesday’s closing price.

Shares in the online retailer were down at 3,160p per share.

Ikea is to buy the flagship Oxford Circus store occupied by Topshop in a £385m deal following the collapse of Sir Philip Green's retail empire, reports my colleague Ben Gartside.

He writes:

It will give the Swedish furniture chain a presence at the heart of London's shopping district amid booming demand for its products since lockdown was lifted.

Topshop fell into administration last November after years of declining sales. The brand was subsequently bought by Asos, which announced plans to dispose of all physical stores.  

The deal is not the first time the Swedish furniture chain has attempted to move to Oxford Circus. Ikea previously sought to take over British Home Stores’ location on Oxford Street, and had also enquired about a site at a nearby  redevelopment on Cavendish Square.

Read the full story here.

Car dealership Lookers said it would repay £4.1m in furlough support, after it posted record underlying pre-tax profits of £50.3m for the six months to the end of June.

The profits compare with losses of £36.5m a year ago and comes after the company said like-for-like new car sales surge 45.7pc, with a 38.3pc hike for used cars.

"Demand has continued to be strong as we see a sustained preference for car-based travel amongst consumers," said Mark Raban, chief executive.

"The rapid growth of electric vehicles continues apace, and we are well positioned to maximise this exciting growth."

The group also announced that Ian Bull had been appointed as non-executive chairman while Oliver Laird had been appointed the new chief financial officer. 

Coffee chain Costa has announced a 5pc pay increase for more than 14,000 of its UK staff as it plans to recruit 2,000 more people due to rising demand.

"Our team members are the heart of our business and as we continue to emerge stronger from the pandemic, this 5pc pay increase is one way we are able to show our thanks to them," said Neil Lake, managing director of Costa Coffee UK & Ireland.

In September 2020, Costa said 1,650 jobs were at risk after a rebound in demand failed to materialise following the first coronavirus lockdown. Eventually, it made 647 people redundant.

Three has become the latest mobile network to start charging Britons when they travel to Europe, resuming fees that were scrapped by the EU, reports James Titcomb.

He writes: 

The operator said that from May next year customers would face a £2 a day charge for roaming within Europe, and £5 a day for other countries. Customers who had taken out a contract before October this year will not be affected.

The move makes Three the last of the UK’s four major mobile networks to revise its policy on roaming charges, which were abolished by the EU in 2017. Vodafone and EE have both announced they will start charging users. O2 has said it has no plans to introduce roaming fees but has introduced caps on how much data customers can use abroad.

The operators had previously said they did not plan to reintroduce roaming fees after Brexit.

Read more about this story here. 

The FTSE 100 has stayed stubbornly low throughout the day and is still trading 0.9pc down compared to yesterday's close. 

Leading the losses are Melrose Industries (down 3.4pc), Coca Cola (down 3.3pc) and British Airways owner IAG (down 3pc). 

A series of US airlines said today they expect a surge in coronavirus infections to curb their recovery, projecting that slowing customer bookings will hit their revenues in coming months. 

United Airlines projected an adjusted pretax loss this quarter and if current trends continue, while Southwest and American Airlines Group said third-quarter revenue will fall more than previously expected from the pre-pandemic levels of two years ago.

“The variant has caused a bit of a pause on some segments of our business, particularly business travel,” Delta Air Lines boss Ed Bastian said at a transport conference today.  

Southwest also projected that September revenue would be down as much as 30pc from two years earlier, compared with an earlier estimate of as much as 25pc.

American expects third-quarter revenue to be down as much as 28pc from two years earlier as demand continues to slow, compared with earlier guidance for a drop of 20pc.

JetBlue forecast that third-quarter revenue would fall between 6pc and 9pc from 2019, compared with a previous estimate of down 4pc to 9pc.

The softness in bookings has extended into the fourth quarter, although leisure demand for the peak holiday periods “will hold up relatively well,” the carrier said in a securities filing.

US stocks moved higher this afternoon after new data showed that unemployment benefit claims dropped to a near 18-month low and the ECB announced a modest slowing of its bond buying programme.

The Dow Jones and Nasdaq both rose 2pc in early trading, while the benchmark S&P 500 ticked up modestly.

Investors remain jittery amid speculation about when central banks will begin to taper stimulus measures even as the spread of the delta Covid variant threatens global economic recovery.

US Labor Department data today showed initial state unemployment claims fell to 310,000 in the week ended 4 September, ahead of the estimated decrease to 335,000.

The euro gained against the dollar after the ECB said it would slow the pace of bond purchases but showed no signs of winding down the €1.85 trillion programme.

British petrol station and convenience store operator EG Group is said to have tapped advisers to explore a possible sale.

Bloomberg reports that a deal to offload the company, which is co-owned by the billionaire Issa brothers and private equity firm TDR Capital, could value it at around $15bn.

The report states that discussions are in early stages and there is no guarantee they will result in a deal. EG Group could also explore a potential initial public offering, according to people familiar with the matter.

EG previously weighed up a stock market float in 2019 that could have valued it at more than £10bn.

UK electricity prices have surged to fresh highs and Ireland warned of possible blackouts as Europe's power crisis shows no signs of fading.

Prices hit a peak of £2,300 this afternoon – 10 times higher than the value recorded at 8am – as the supply crunch continues to take its toll.

Low wind on both sides on the Irish Sea as well as some unplanned outages have pushed UK prices soaring to record highs this week.

Ireland, which usually exports wind power to the UK, is facing severe supply shortages and today issued an amber warning signalling that the country could face blackouts.

The Moyle interconnector, which sends electricity across the Irish Sea from Northern Ireland to Scotland, was halted to prevent exports.

The supply squeeze has also been felt elsewhere in Europe, with the cost of power also hitting record highs in Spain, Germany and France.

A ship was briefly stranded in the northern section of the Suez Canal this afternoon but was soon refloated, Egyptian authorities have said.

The Panama-flagged Coral Crystal, which was carrying 43,000 tonnes of cargo, suffered from a temporary problem but ships behind it were diverted through a parallel channel.

The Suez Canal Authority (SCA) said there was no impact on traffic.

The incident comes months after the huge container ship Ever Given became grounded in the canal in March and blocked traffic in both directions for six days.

European stocks have climbed back from session lows and banking shares pushed higher after the ECB said it will only slightly reduce its emergency bond purchases over the next quarter.

After dropping as much as 0.9pc in morning trading, shares recovered to a fall of just under 0.2 per cent while the euro extended gains.

Rate-sensitive banking stocks in the region turned positive and were last up 0.3pc.

While the ECB said it would slow the pace of its bond-buying programme, it said this would happen at a "moderately lower pace" than the rate of the past two quarters.

The central bank also gave no indication of its next policy move, including how it might wind down the €1.85 trillion stimulus package.

Meanwhile, the FTSE 100 was the worst performer in the region, trading down just over 1pc at 7,018 points shortly after the ECB announcement.

The index was dragged down by airline stocks after Easyjet rejected an unsolicited takeover approach from Wizz Air.

DNA-sequencing firm Oxford Nanopore has unveiled plans to list on the London Stock Exchange in the latest boost for the capital’s thriving IPO scene, reports James Warrington. 

The offering will consist of both new and existing shares, the company said in a statement, with Oxford Nanopore expecting to list a stake of at least 25pc.

The decision is a welcome show of confidence in London as a destination for tech floats as the UK looks to attract fast-growing companies in the aftermath of Brexit.

Oxford Nanopore’s debut comes on the back of a pandemic-related boost to trading. The firm supplies the UK with tests used to detect Covid.

The company, which was spun out of the University of Oxford, was valued at roughly £2.5bn following its last funding round in May.

It said the proceeds of the IPO will be used to drive growth as part of its stated goal of enabling “the analysis of anything by anyone, anywhere”.

“I believe we are only in the foothills of what is possible, as this knowledge is now starting to translate into ground-breaking ways of using rapid DNA insights that have the potential to provide benefits in infectious disease, cancer management, agricultural optimisation, industrial manufacturing, food safety, and much more,” said chief executive Gordon Sanghera.

“An IPO will be a step on the journey to make our vision a reality, supporting our ambitious growth plans and enhancing our ability to innovate and grow.”

Applications for US state unemployment support fell sharply last week to the country's lowest level in nearly 18 months.

Initial claims for state unemployment benefits dropped from 345,0000 to 310,000, according to the US Labor Department. Economists had forecast a more marginal decrease to 335,000 new applications.

However claims rose by more than 7,200 in Louisiana, after Hurricane Ida caused deaths, damage and power outages in the state last week. 

Although there has been an increased demand for workers as the economy reopens, claims remain higher than pre-pandemic levels.

German prosecutors raided the finance and justice ministries today, as part of an investigation into possible obstruction of justice by the government’s anti-money laundering agency.

Reuters has more details: 

The probe into the Financial Intelligence Unit, an agency of the finance ministry under SPD chancellor candidate Olaf Scholz, is looking at whether the division failed to act on warnings from banks of possible money laundering.

The raids come at a pivotal moment for Scholz, who opinion polls suggest has a good chance of becoming German chancellor in national elections on September 26.

The FIU along with the Germany's financial regulator, Bafin, both units of the finance ministry, have previously been criticised for failing to detect problems at payments company Wirecard, which collapsed in the country's biggest post-war fraud scandal.

A spokesman for the public prosecutors said they launched the inquiry after receiving complaints that the FIU had not acted on millions of euros of suspect transactions, including to Africa, between 2018 and 2020.

He said they had searched the ministries to see whether the agency had been told to ignore the suspect money flows.

The finance ministry said in a statement that it supported the investigation and noted that suspicion was not directed at the ministry's employees.

Seema Shah, chief strategist at Principal Global Investors, comments:

The ECB has taken its first meaningful step towards tapering today. Characteristically, it hasn’t tied itself to a specific pace of purchase, instead retaining an element of flexibility which will be helpful in the face of a potential tightening in financial conditions as Fed taper draws near.

Lagarde will likely insist that this is not tapering and, in fairness, by official definition it isn’t. But certainly it is the first step towards tapering and investors will be listening closely to clues about the eventual wind down of PEPP.

In the past week, market focus has shifted from when the Fed would begin to taper to when the ECB would reduce the pace of its purchases, so today’s announcement should not come as a surprise.

Even so, with markets concerned about the risk of a hawkish policy error, Lagarde’s efforts to disconnect bond purchases from rate lift-off will be important in reassuring investors that the central bank isn’t on the verge of making a repeat of the 2011 policy mistake.

The European Central Bank has left monetary policy unchanged but has slowed the pace of its pandemic emergency purchase programme (PEPP). 

The ECB said: "Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council judges that favourable financing conditions can be maintained with a moderately lower pace of net asset purchases under the pandemic emergency purchase programme (PEPP) than in the previous two quarters."

The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.0pc, 0.25pc and -0.50pc respectively.

 

Half of construction firms are combating soaring costs and a third of restaurants, hotels and bars are struggling to fill vacancies as shortages stifle Britain’s recovery, reports Tom Rees. 

New data revealed the extent of severe labour and raw material shortages facing businesses with one in eight firms struggling to fill record vacancies, according to the Office for National Statistics. 

A quarter of businesses across all industries are battling higher prices for materials, goods or services, up from 14pc at the end of 2020.

The ONS said 65pc of sewage and waste firms are struggling with a jump in prices amid a shortage of chemicals used to treat waste water. Half of construction businesses and 42pc of manufacturers are also suffering as port and factory closures in Asia deepen the supply chain bottlenecks.

Worker shortages threaten to be a major headwind for the economy in the coming months but an end to the furlough scheme could boost the supply of staff. 

The ONS data suggested that accommodation and food services sector has been hit hardest by worker shortages with 30pc of firms reporting problems filling vacancies. Almost a quarter of health and social work firms also admitted struggles to filling staff shortages.

US stock futures fell this morning in New York, as investors continued to worry about a slowing economic recovery.

Futures tied to the Dow and S&P 500 dropped 0.3pc while Nasdaq futures slid 0.2pc. 

The fear of delta “is driving the downside risks to the U.S. economy, but also more broadly the global economy as that delta strain spreads around the world,” Kim Mundy, a currency strategist and international economist at the Commonwealth Bank of Australia, said on Bloomberg Television.

The Government should introduce a carbon tax on imports to protect ­domestic companies that are subject to the UK’s “net zero” climate policies, a report backed by major UK manufacturers has said.

Rachel Millard reports: 

A carbon import tax could prevent so-called “carbon leakage” – where Britain cuts pollution at home only to import more dirty goods instead as they are cheaper. It could also stop producers moving abroad.

In its report published today, the ­consultancy Frontier Economics says the levy or other support, such as free ­carbon emission allowances, would help industries “avoid being put at a competitive disadvantage”.

The UK has committed to cutting carbon emissions to net zero by 2050, requiring an overhaul across the economy including in industries which rely on fossil fuels such as steel-mills and ceramics makers.

Read Rachel's full story here. 

Consumer goods company Reckitt Benckiser said today it had completed the sale of its baby formula business in China to private equity firm Primavera Capital Group. 

The Dettol soap maker announced the sale in June. The division has suffered sluggish sales, partly due to intense competition as well as slowing birth rates in the country. 

Reckitt CEO Laxman Narasimhan said the deal "represents a major step forward in our strategy to rejuvenate  sustainable growth."

He added: "Our Nutrition business is now stronger and more concentrated in attractive markets such as North America, Latin America and ASEAN." 

Student accommodation provider Unite said today it had signed a £450m "sustainability-linked" loan which it plans to use to support the group's transition to net zero carbon by 2030.

The FTSE 250 listed company said the the unsecured revolving credit facility had been agreed with HSBC, NatWest and the Royal Bank of Canada.

Joe Lister, chief financial officer of Unite Students, commented :

Our first sustainability-linked loan is a significant milestone for our sustainability strategy. We have clear objectives to become a net zero carbon business by 2030, while delivering a positive social impact through our work with our employees, students and local communities.

The performance targets further incentivise the Group to accelerate decarbonisation and improvements in energy efficiency and underline our growing commitment to social initiatives.

Goldman Sachs is scrapping social distancing in its London headquarters in a bid to encourage staff back to the office – but bankers will no longer be given free food, reports James Warrington. 

The Wall Street giant told staff that “seating will return to full occupancy, meaning we will be able to welcome all of our people in the UK back into the office”.

The change will come into effect from Monday, Goldman Sachs International boss Richard Gnodde wrote in the memo, seen by Financial News.

Goldman has been offering free food in its canteen for employees returning to the office during the pandemic, more recently handing out free ice creams in a bid to lure back bankers.

But from 20 September the canteen will revert to a “paid-for meal service”, it said.

Around half of Goldman’s 6,000 UK-based employees have been returning to the office this week. Rivals Bank of America, Barclays, Citigroup and JPMorgan are also asking more London staff to return in the coming weeks.

One of the world's most prolific investors, Cathie Wood, said her fund Ark Invest is "dramatically" cutting its China positions in response to the Beijing's wide-reaching regulatory crackdown. 

Wood told institutional fund managers today that her fund's shift in strategy was because the environment in China was "quite different" compared to last year, when global asset managers funnelled funds in to the country. 

She said now Chinese authorities were focused on social engineering at the expense of capital markets, with "common prosperity" becoming their prevailing concern. 

Read more about the China crackdown here: 

• China's new gaming crackdown wipes billions off developers
• Questor: China’s crackdown catches a cluster of our trusts in the crossfire  
• Hinkley nuclear plant at risk from China crackdown

Tencent and fellow tech giant Netease have lost more than $60bn (£43.4bn) of value amid fears that Beijing is preparing a crackdown on China’s booming gaming industry, reports James Warrington. 

Chinese regulators summoned industry bosses to a meeting yesterday to instruct them to break their “solitary focus” on profit and prevent under-18s from becoming addicted to games, according to local media reports.

Regulators are also said to have announced a temporary freeze on approvals for all new online games – a move that would slam the brakes on growth for developers.

It echoes a 10-month halt to game monetisation licences introduced in 2018, which sparked Tencent’s first profit drop in a decade and wiped as much as $200bn from its market value.

The developments accelerated a selloff that began this morning as investors become increasingly concerned about regulatory pressures on the sector.

It comes amid a wider campaign by authorities in China to clamp down on the country’s tech sector, with major social media, e-commerce and ride-hailing firms all targeted.

At the same time President Xi Jinping’s administration is waging a war against addiction among minors that aims to curb time spent online and encourage young people to take up more productive pastimes.

Here's the daily round-up from The Telegraph's Money team: 

• Tens of thousands still face selling homes to pay for care despite cap: The cap does not include daily living costs, which could double the fees people have to pay
• How to make your pension last 20 years – and pay less tax: Careful planning is needed even for substantial pension pots
• So much for simplification – we now have four types of income tax: There's no silver bullet to this muddle of complexity, and workers, savers and shareholders are all paying the price

The FCA will take on new powers to help it quickly remove regulatory permissions that are no longer being used by financial services firms, writes James Warrington. 

Incorrect or outdated information on the Financial Services Register can mislead consumers about the level of protection offered by a firm or give credibility to a company’s unregulated activities.

The City watchdog said the accelerated process will help to prevent scams and ensure the register presents a clearer picture of the permissions firms hold.

The pound has lifted today following three consecutive days of losses, after MPs backed Boris Johnson's tax hike. 

Sterling initially responded to the announcement of a tax hike to fund health spending and social care by extending its fall on Tuesday. 

This morning, however, the currency has so far risen 0.3pc against the dollar. Theoretically the policy could ease pressure on the Bank of England to start tightening monetary policy as higher taxes might slow down the pace of the economic recovery.

However analysts believe the tax increase will not have a major impact on the currency.

"It seems to me the market isn't viewing it as a big deal and I don't think it's a big deal either", Kallum Pickering, a senior economist at Berenberg, told Reuters.

Against the euro, the pound has dropped 0.2pc to 85.63p.

The number of Brits on furlough fell to 1.6m by the end of July, down from 1.9m at the end of the previous month, writes James Warrington. 

The latest figures from HMRC show the number of furloughed staff dropped by 340,000 over the period. Provisional data suggests a quarter of employers still had employees on furlough, down from 28pc at the end of June.

Furlough numbers last peaked at 5.1m in January but have fallen ever since as lockdown restrictions have eased.

Separate data from the ONS show the proportion of the British workforce still on furlough stood at 6pc in mid-August, largely unchanged from late July.

This suggests that around 1.4m to 1.8m people were furloughed.

European stocks have fallen for a third consecutive day, as investors wait for the European Central Bank’s update today on the timing of a possible reduction in stimulus.

The Stoxx 600 Europe Index has dropped 0.5pc lower this morning, with the travel and leisure sector falling the most. Miners also dropped as iron ore futures declined.

After peaking at an all-time high in August, the Stoxx 600 has stalled and is now at its lowest level in three weeks, as concerns mount about reduced central bank support. 

Investors will be closely watching the ECB's with its policy announcement at 12.45pm UK time about how much bond buying the region will need on the fourth quarter. President Christine Lagarde will hold a virtual media briefing 45 minutes later.

“The ECB is strongly positioned in a dovish mood and I wouldn’t expect many negative surprises from today’s meeting,” said Patrick Nielsen, deputy general manager at Mapfre Asset Management, told Bloomberg. 

Bloomberg is reporting that Wizz Air is the mystery suitor that made a takeover approach for airline EasyJet. 

EasyJet said earlier today that it had rejected a takeover approach, without naming which company had made the offer. 

However people with knowledge of the matter told Bloomberg that the Hungarian budget airline made a preliminary proposal about a potential all-stock takeover of EasyJet. 

The chief executive of British fintech firm Funding Circle is stepping down after 12 years in the role, reports James Warrington. 

Samir Desai, who co-founded the peer-to-peer small business lender in 2010, will move into a non-executive role from January next year.

He will be replaced as chief executive by Lisa Jacobs, who has been with the company since 2012 and currently leads its UK operations.

Funding Circle was one of the pioneers of Britain’s now-booming fintech sector, but has seen its valuation slump since a disappointing London stock market float in 2018.

News of Desai’s departure came as Funding Circle swung to a first-half operating profit of £35.5m, up from a £113.5m loss in the same period last year.

The company said loans under management grew by a third to a record £4.9bn, spurred on by the automation of its loan application process.

Shares jumped 8.6 pc in morning trading.

Shares of animal genetics company, Genus, have tumbled more than 10pc, after it warned that it expects volatility in the Chinese pig market to dent its growth.

"Recent volatility in the Chinese porcine market is expected to continue for some months, creating a short-term headwind in FY22, primarily for PIC China [the company's pig division]," said Stephen Wilson, chief executive. 

"As a result of this headwind, and despite an expected strong performance in the other areas of the business, we expect Genus's growth to be lower than our medium-term goal in the current year before increasing again in FY23."

FTSE 250 listed Genus sells genetics and other products made using biotechnology to pig and other farmers. 

Domestic prices for pigs in China have plummeted more than 50pc on increased supplies as herds recover from African swine fever. 

IT services provider Computacenter has warned it expects global shortages to continue into next year as it said the supply chain crunch has overtaken Covid as its biggest challenge, reports James Warrington. 

The FTSE 250 firm said it was not expecting the issue to ease until “well into 2022”, adding that the impact on its business was difficult to fully quantify.

Despite this, Computacenter reported a sharp rise in both revenue and profit for the half year thanks to strong trading in the US, UK and Germany.

It said large increases in spend by industrial customers as well as continued good performance in the public and financial services sectors had helped to drive the growth, while Covid-related cost cutting had pushed up profit.

Revenue rose 29pc to £3.18bn while pre-tax profit jumped by almost 60pc to £118.9m. Computacenter announced a dividend of 16.9p per share for the period

Shares pushed 1.48pc higher following the update.

EasyJet is still down almost 9pc but it is not the only airline sliding this morning. 

British Airways owner IAG is leading losses on the FTSE 100, down 3.4pc and Tui is also down 3.1pc today. 

Wizz Air and RyanAir are also falling, as global travel remains restricted and countries try to limit the spread of the contagious Delta coronavirus variant.

JD Sports has appointed a long-serving Nike executive to join its board, writes James Warrington. 

The sportswear group said Bert Hoyt has joined the company as a non-executive director with immediate effect.

Hoyt, a former Top 200 ATP tennis professional, is a major name in the sector. He joined Nike in 1998 and rose to lead the brand’s European operations – a position he held until his retirement in January this year. Prior to this he spent 10 years leading Puma’s international business.

The appointment follows an investor backlash over executive pay at JD Sports that led to the ousting of the chair of the company’s remuneration committee.

Executive chairman Peter Cowgill said the firm was making “substantial progress with regard to additional board appointments, which will address the composition, skill sets and balance of the Board”.

Lloyd's of London is likely to be exposed to around 10pc of the billions of dollars of insured losses from Hurricane Ida, the insurer's chairman said in an interview today.

Ida was one of the most powerful hurricanes ever to strike the US Gulf Coast, hitting Louisiana at the end of August. Risk modelling agencies have estimated that total insured losses for the hurricane range from $17bn (£12.3bn) to $35bn (£25.4bn). 

"Typically, if you looked at Lloyd's' exposure to those kinds of events, it would be about 10pc of that number," Bruce Carnegie-Brown told Reuters.

"Because of our market share in the U.S., we have a bigger exposure than we would, for instance, to continental flooding."

KPMG has vowed to ensure that a third of its senior employees come from working class backgrounds, making it the first large British business to set such a target, reports my colleague James Warrington. 

He writes: 

The accounting behemoth is aiming for 29pc of its partners and directors to come from the demographic by 2030.

KPMG defined working class as anyone with parents who held “routine and manual” jobs, such as plumbers, electricians, butchers and van drivers.

The company will also provide training to all 16,000 of its employees on “invisible barriers” faced by people from lower socioeconomic backgrounds.

Read the full story here. 

Easyjetis leading losses on the FTSE 250 this morning, after it announced a share sale and said it had recently rejected an all-share takeover approach which it said undervalued the business.

The budget airline's shares dropped 6.9pc to 737.8p.

The FTSE 100 index also slumped as much as 1pc this morning, as heavyweight commodity and financial stocks fell on concerns over slowing economic growth.

Miners dropped 1.2pc, tracking iron-ore prices. Oil and gas shares were also down, with BP and Royal Dutch Shell shedding about 1.5pc each.

The only stock which rising on the FTSE 100 is B&M which is up 0.2pc. 

Shares of Betfair owner Flutter have dropped 1.8pc this morning, after rival gambling company 888 said it had acquired William Hill's European operations.  

Flutter's shares are down more than 6pc since the start of the year. 

The FTSE 100 has dropped 1pc this morning, sliding 72.29 points to 7,023.24. 

The FTSE 250 is also down 0.7pc or 164.22 points to 23,684.67. 

EasyJet said this morning it would raise £1.2bn in a fully underwritten rights issue to fund its pandemic recovery, adding it had also recently rejected a takeover offer.

Under the rights issue,  easyJet said shareholders will be able to buy 31 new shares for every 47 existing shares at a price of 410p each, a 35.8pc discount on the theoretical ex-rights price of 638p per share on September 8.

The airline said it planned to use the new funds not just to strengthen its balance sheet, but to take advantage of growth opportunities that arise from the aviation market's post-pandemic recovery. 

The company added it had recently rejected an all-share takeover approach which it believed undervalued the business. It said the potential bidder had since said it was no longer interested in a deal.

Salaries for new recruits have surged at the fastest rate in nearly a quarter of a century as companies battle against a shortage of labour, reports Louis Ashworth. 

He writes: 

The amount of hiring increased again in August as businesses tried to take advantage of the economic recovery, yet firms were forced to cough up to attract staff. 

Permanent staff appointments rose at the quickest pace on record, according to the latest report on jobs by KPMG and the Recruitment and Employment Confederation, while temporary job placements were also high by historical standards.

The rate of salary inflation topped the previous record struck in July, and was the quickest rise in the nearly 24 years the survey has run. Jumps were seen across England, although London saw a slowdown in the pace of rises compared with the previous month.

Read Louis' full story here. 

Online gambling group 888 said it has agreed to buy William Hill's European operations, after outbidding its private equity rivals with a £2.2bn offer. 

888 had been competing with Apollo Global Management and CVC Capital Partners for the acquisition, which the Gibraltar-headquartered gambling firm said is "expected to deliver substantial value creation for shareholders" including "pre-tax cost synergies of at least £100m per year".

It added the acquisition is conditional upon approval by the FCA and shareholders, although it said it had already received "unconditional support" from its largest shareholder, the Dalia Shaked Trust. 

This morning, Itai Pazner, CEO of 888, said:

The acquisition of William Hill International is a transformational and hugely exciting moment in 888's history. This transaction will create one of the world's leading online betting and gaming groups with superior scale, exceptional brands, increased diversification, and a platform for strong growth.

William Hill is an iconic sports brand, making it the ideal complement to 888, one of the leading global online gaming brands. Our strategies are also complementary, being digitally led, customer focused, and committed to player protection and raising industry standards around safer gambling.

The UK property market cooled in August, with a new survey from the Royal Institution of Chartered Surveyors showing sales and demand easing as the stamp duty holiday winds down.

The number of home sales fell for a second consecutive month, while the number of homes put up for sale and new buyer enquiries also dropped. 

However a shortage of properties is expected to keep pushing up prices - although at a more moderate pace.

“The latest survey evidence inevitably points to market activity taking a breather following the flurry of sales seen ahead of the tapered Stamp Duty holiday withdrawal,” said RICS economist Tarrant Parsons.

 “That said, while momentum has eased relative to an exceptionally strong stretch earlier in the year, there are still many factors likely to drive a solid market going forward.”

Those factors include low borrowing costs, savings accumulated during lockdowns and a search for larger homes with more space to facilitate working from home. 

Good morning.

Morrisons revealed profit fell by 43pc in the six months to August as it prepares to kick off an auction to decide between two US private equity suitors.

The supermarket chain fell from a pandemic half-year profit before tax of £145m this time last year to £82m as it counted the cost of cafe closures and Covid expenses.

Direct Covid-19 costs amounted to £41m and Morrisons also lost £80m in profit from closed cafes, fuel and food-to-go sales.

However, the retailer said it expected full-year profit before tax to beat last year’s £431m.

Shares edged higher yesterday after it confirmed it will kick off an auction to decide between rival offers from CD&R and Fortress, two American private equity outfits, that could exceed £9bn.

Total revenue including fuel rose 3.7pc to £9.05bn, but excluding fuel like-for-like sales were broadly flat year on year. Online sales surged 48pc higher year on year, and are up over 200pc compared to 2019.

Morrisons also warned of higher prices in the second half, driven by higher commodity costs and a shortage of lorry drivers.

“We will seek to mitigate these and other potential cost increases, such as any incurred to maintain good on-shelf availability,” it said.

5 things to start your day 

1) Andrew Bailey: UK economic recovery 'flattening out' The Bank of England Governor has begged 2m sidelined workers to return to the jobs market as he warned that severe staff shortages are holding back Britain's economic revival. Britain needs millions of people to come back to the workforce to fill huge vacancies created since society reopened, he said. 

2) Facebook accused of discrimination after mechanic and pilot jobs targeted at men The social network has been accused of breaching equality laws after its technology was found to favour men when targeting job adverts for male-dominated roles such as mechanics and pilots. The campaign group Global Witness has filed complaints with the Equality and Human Rights Commission (EHRC) and Information Commissioner, claiming a Facebook algorithm designed to show jobs to the most interested candidates is discriminatory.

3) Morrisons takeover battle set to end in £7bn head-to-head auction The takeover battle for Morrisons is due to be settled in a highly unusual head-to-head auction which the supermarket's bosses hope will lift bidding beyond £7bn. The ongoing bidding war for the grocer between US private equity firm Clayton, Dubilier & Rice (CD&R) and a consortium led by SoftBank-owned Fortress is set to go to an auction next month after Morrisons said that neither side had "declared their offers final [so] a competitive situation continues to exist". 

4) Marks & Spencer revives St Michael brand after 21-year absence The retailer is reviving the St Michael brand after a 21-year absence, as vintage clothes find a new audience in younger generations. M&S said that it intends this year to start selling menswear using the vintage label first launched in 1928. 

5) Britain forced to ask France to cut electricity exports over threat of power surge Officials issued a request for “emergency assistance” from France on the morning of Sunday August 29 to cap flows to Britain through giant cables under the sea. It came after traders buying and selling power across borders around Europe were temporarily unable to book trades due to problems with the Joint Allocation Office, meaning too much energy would have been coming into Britain via the cable. 

What happened overnight 

Asian shares dropped on Thursday, while the dollar held firm, in line with a cautious global mood as investors worried about the combination of slowing global growth and the potential tapering of central bank stimulus.

The European Central Bank is particularly in focus, with analysts expecting it to announce a token step towards reducing its emergency economic support later on Thursday.

MSCI's broadest index of Asia-Pacific shares outside Japan lost 1.04pc while Japan's Nikkei dropped 0.38pc.

There were losses in Australia down 1.01pc, Korea off 0.74pc, and in Hong Kong which shed 1.17pc, with tech names leading the declines there.

The Hang Seng Tech Index fell 2.44pc in early trading, weighed by declines in Tencent Holdings down 3.7pc and Netease down over 7pc after China's government on Wednesday summoned gaming firms to ensure they implement new rules for the sector.

Chinese blue chips were down 0.41pc just after the bell, and US stock futures, the S&P 500 e-minis, were down 0.16pc.

Coming up today

• Corporate: Genus (Full year);  Burford Capital, Capital & Regional, Cairn Homes, Computacenter, Funding Circle, STV, Morrisons, EMIS Group, Spire Healthcare, International Public Partnership Economics (Interim)
• Economics: Trade (Germany), jobless claims (US)