Energy bills to top £4,000 by January, analyst warns

That's all from us today, thank you for reading! Before you go, check out the latest stories from our reporters:

• Gordon Ramsay’s restaurants slash 300 jobs after lockdowns push losses to £7m
• Tax cuts won’t solve economic crisis, says Next boss Lord Wolfson
• Rhine runs dry in new threat to German energy
• Taxpayer takes stake in helium airship maker backed by Iron Maiden singer
• Digital GP Babylon ends NHS deals due to mounting losses

Children in England from low-income homes earn a fifth less than those who go to fee-paying schools by the time they’re 30, new research has found. 

That’s even when taking into account factors such as education level, years of experience, and the region they grew up, according to a report from the Office for National Statistics. 

England’s education system has long been under scrutiny for the outsized impact schooling can have on children’s futures in a country where accents are often taken as a sign of ability. Separate research has shown that employees from lower socioeconomic backgrounds take 25pc longer to progress through grades in financial services, one of the highest-paid industries.

As volcanic activity in Iceland started yesterday, the country’s tourism industry kicked into high gear, grasping an opportunity to revive the business after the pandemic had banished most visitors for more than two years. 

With reports emerging of sightings of lava, the shares of Icelandic airlines Icelandair hf and Fly Play hf, which flies under the banner Play Air, began ticking up. Within hours of magma emerging, Play Air was already advertising the eruption on its website, describing it as “peaceful” and “picturesque”.

The island nation, which calls itself the land of fire and ice, already has experience of how a volcano captivates imaginations and prompts travelers to book trips into the country. An explosive 2010 eruption under the Eyjafjallajokull glacier spewed out a magnificent ash plume, capturing the world’s attention as it grounded about 100,000 flights over six days, and eventually turned tourism into one of the Nordic country’s biggest industries.

In contrast, the current fissure eruption on the Reykjanes peninsula causes no disruption to travel, and is what the Icelanders call a “tourist volcano,” where lava flows from a rift in the ground in a relatively accessible location near roads. That’s tempting onlookers to approach, even as authorities warn of toxic gases and seismic activity. 

The taxpayer has taken a stake in a helium airship maker that is backed by Bruce Dickinson, the singer of Iron Maiden, and went viral after a crash landing during testing. Tom Rees reports:

The Government has snapped up shares in the airship maker Hybrid Air Vehicles, as well as a medicinal cannabis firm and a company turning carbon dioxide into clothing, the latest data from British Business Bank (BBB) revealed.

Under the £1.1bn Future Fund, the Government offered startups loans that could be later converted into equity stakes, helping to protect fast-growing firms from the pandemic.

The taxpayer has taken 400 stakes, including in football club Bolton Wanderers and sex party organiser Killing Kittens.

The FTSE 100 was little changed today as investors weighed the biggest interest rate hike from the Bank of England in 27 years, which raised fears of a looming recession.

Paul Craig, portfolio manager at Quilter Investors, said: "The Bank of England has clearly decided that now is the right time to bring out more firepower and raise rates by 0.5% for the first time since 1995.

"It has clearly taken note of what the Federal Reserve is doing in the U.S. and feels it could be running out of time to grapple inflation and get it under control."

Vegan burger maker Beyond Meat has slashed about 40 jobs, as it attempts to stabilise the business after burning through cash. Ben Woods writes:

Chief executive Ethan Brown told staff in an internal memo that it had taken the difficult decision as part of a wider push to cut operating costs.

It comes as analysts report poor sales of Beyond's meat-free McPlant burger for McDonald's across its American restaurants. 

The job cuts will impact staff from a number of Beyond's teams around the world, according to Bloomberg, which first reported the story. 

More than 700 Amazon warehouse workers in England have staged a protest in a dispute over pay, in the latest sign of workplace friction stoked by Britain's cost of living crisis and a growing discontent among employees over wage and working conditions.

The GMB union said employees at the facility in Tilbury, Essex, stopped work after the ecommerce giant offered to raise salaries by 35p an hour.

The union said workers want a raise of £2 to better match the demands of their job and cope with soaring inflation. Amazon doesn't recognise the union, which likely has one of the highest number of members at the Tilbury location out of its 28 UK facilities.

That's all from me today – thanks for following! Giulia Bottaro will take things from here.

Germany's Rhine river is on the brink of closure as critically low water levels force one of the country's biggest gas companies to warn it may have to cut energy output.

Louis Ashworth has more:

Uniper said there could be an “irregular operation” at its 510-megawatt, coal-fired Staudinger-5 plant until early September because of disruptions to coal supplies along the waterway.

Water levels on the Rhine have sunk amid drought-like conditions afflicting most of the continent. Low levels around key chokepoints force the barges that traverse the river to take on smaller loads, and may reach levels where passage is impossible.

Several major companies, including chemicals giant BASF, use the Rhine, which runs for nearly 800 miles from Switzerland to the North Sea, as a supply line and source of water for cooling machinery.

Deutsche Bank warned low Rhine levels risk a repeat of 2018, when a hot summer led to severe lows at the Kaub bottleneck during the autumn that took 0.2 percentage points off German growth.

​Read Louis' full story here

Workers at Network Rail, which owns and maintains train infrastructure, will join other unions in a walkout later this month.

The Unite union said its members at Network Rail will join the planned strike on Aug 18 and 20.

The industrial action will be taken by control room operatives at several locations across the country, who are responsible for managing power supply to the rail network.

Phoenix Group, the UK’s largest retirement business, is targeting £1bn of takeovers after reaching a deal to buy Sun Life’s UK unit for £248m. 

Patrick Mulholland has more:

Chief executive Andy Briggs said he is seeking more deals to expand the FTSE 100 company after Phoenix announced the all-cash deal to buy the life insurance business from Canada’s Sun Life.

“It’s an easy deal to integrate from our perspective, so we’re ready to do the next deal,” Mr Briggs said.

Phoenix has another £1bn for similar acquisitions, he said, and conversations are ongoing.

“A key part of my role is that I have cups of tea with the chief executives of the groups overseeing all these different businesses,” Mr Briggs said. “And the message I generally get is a question of ‘when’, not ‘if’, they will want to sell, especially for smaller businesses.”

With 13m customers and £310bn in assets under administration, Phoenix is the UK’s largest long-term savings and retirement group. Its strategy is to buy and operate life insurance businesses that are closed to new customers. 

Tax cuts will not solve the challenges facing the British economy, Lord Wolfson has warned.

Matt Oliver reports:

The Tory peer, who is chief executive of fashion retailer Next, said inflationary pressures that are eating away at household earnings can only be tackled by increasing the supply of goods and workers.

Aside from helping the poorest in society, he said there is “nothing the Government can do” for the vast majority of families and that “printing money” would do little to help the situation.

Lord Wolfson also predicted that while Britain was likely heading for a recession, the result was likely to be a slight decline in earnings rather than mass job losses, due to high levels of employment.

His comments came as Sajid Javid, the Health Secretary, defended the tax cuts proposed by Tory leadership frontrunner Liz Truss and insisted they would not drive up inflation.

Asked about whether tax cuts were needed to boost the economy, Lord Wolfson would not be drawn on the contest for the next prime minister but pointed to the need for “supply-side” reforms.

Read Matt's full story here

Ed Monk at Fidelity International says today's interest rate rise won't be the last, but the question now is how high will they go?

The fact that today’s half-point rate rise – the first in 27 years – was fully expected goes to show the extreme conditions facing the UK economy.

The Bank has a narrow path to tread with inflation now forecast to hit 13pc this year but with growth slowing as well. With the US already in a technical recession, the Bank now believes the UK will follow suit.

The Bank knows further rate rises make a future recession potentially deeper and longer but may see it as a price worth paying to help bring prices under control.

Today’s commentary includes that the Bank now expects inflation to still be around today’s levels in a year’s time so today won’t be the last of the rate rises but there’s a question as to how high they will go.

Rate-setters have been clear they will do what it takes to bring inflation under control, but that could mean the Bank rate nearing 3pc by the end of the year. That would add significantly to mortgage repayments for many people and heap yet more pressure on households already struggling to make ends meet.

Seema Shah at Principal Global Investors warns interest rate rises will take their toll on the UK economy.

The largest hike in 27 years is the minimum action required by the Bank of England at this stage.

With inflation set to hit 13pc later this year and set to remain stubbornly high through next year, the central bank needs to tighten policy at an accelerated pace.

Indeed, with other developed market central banks already hiking by 0.5pc or more, it’s a wonder that the Bank of England had been steadfastly sticking to 25bps hikes for so long. 

Unfortunately, policy tightening will inevitably take its toll on the UK economy. Higher mortgage payments and borrowing costs will only add to the awful cost of living crisis, straining household budgets in a way we haven’t witnessed for over 60 years and plunging the UK into recession later this year.

If nothing else, the Bank of England should be applauded for its realistic economic forecast. If only other central banks could be so realistic.

Now at 1.75pc, the Bank Rate is likely to keep on rising. How should households protect themselves, and is there a way to profit?

Switching to the best savings rates, investing in companies that can prosper as the cost of borrowing rises, and locking in cheap mortgage rates while they last could have a big impact.

An interest rate rise should be a prompt to review your finances, here's what savers, investors and homeowners need to do now.

The Telegraph's Money team have rounded up some top tips for you - read their analysis here

Kitty Ussher, chief economist at the Institute of Directors, strikes an upbeat tone over the Bank of England's rate rise.

We welcome this decisive action by the Bank of England. Concern about inflation is causing firms to hesitate before committing to essential long-term investment.

With energy prices continuing to rise, strong intervention is needed to increase confidence that we will soon be through the worst, so that boardroom decision-makers can plan ahead with greater certainty.  

At the moment two-thirds of our members believe the inflation rate will continue to rise until at least the Spring of next year, with a large number thinking the peak will come even later.

We will be watching carefully to see if today’s rate rise brings business expectations more into line with the Bank of England’s central forecast that inflation will peak before the end of this year.

Paul Dales, chief UK economist at Capital Economics, reckons interest rates may need to rise as high as 3pc to tackle inflation.

The 50bps rise in interest rates, from 1.25pc to 1.75pc , the suggestions that such a move could be repeated in coming months (despite the Bank now forecasting a chunky recession) and the indications that the Bank will probably sell £10bn of gilts a quarter from the end of September all show that the Monetary Policy Committee is stepping up its fight against high inflation.

We think the battle is far from over and that rates may peak at 3pc rather than the 2pc expected by most economists.

The MPC sounded hawkish in two key ways. First, the 8-1 vote, with only Tenreyro preferring a 25bps hike, shows there was strong support for stepping up the pace of rate hikes from the 25bps increases at the previous four meetings.

Second, by saying once again that it will “act forcefully” in response to “indications of more persistent inflationary pressure”, the MPC signalled its willingness to raise rates by 50bps again should the inflation data remain strong.

The FTSE 100 has jumped to session highs after the Bank of England unveiled its biggest interest rate rise in 27 years.

The jump in interest rates to 1.75pc weakened the pound and helped boost the blue-chip index, which rose 0.5pc.

That's a wrap - Andrew Bailey and his colleagues have left the stage.

Time now to take a look at some of the reaction from markets, economists and analysts.

Andrew Bailey is asked how the actions of the Bank's counterparts influenced today's decision.

He responds:

Each of us if facing a different configuration of shocks... We've got elements in common and we have different elements.. [but] we're responding to the economies we serve.

We're back to another contentious issue – wage increases.

Andrew Bailey reasserts his argument that the pursuit of "very high" wage rises will fuel inflation.

The Governor came under fire earlier this week for urging employers not to dish out pay rises, saying that doing so could spark a wage-price spiral.

A number of major companies – including HSBC, Morrisons, BA and easyJet – have announced cost-of-living bonuses or wage rises, suggesting they haven't taken much notice of the warning.

Here's a response from Chancellor Nadhim Zahawi to the BoE's decision:

Along with many other countries, the UK is facing global economic challenges, and I know that these forecasts will be concerning for many people.

Addressing the cost of living is a top priority and we have been taking action to support people through these tough times.

There's one fundamental message that a rather dour-looking Andrew Bailey keeps reiterating.

He says the Bank had to act aggressively now to prevent things getting worse, adding that it will keep doing so to prevent inflation becoming embedded in the economy.

If we don't act now, inflation will get embedded. It will get worse. And then we'll have to act more.

 The Bank of England has raised its forecasts for inflation to peak above 13pc later in the year.

The MPC has repeatedly revised its expectations, with this graph showing just how big the latest jump is. 

Andrew Bailey is defending the decision to raise interest rates even if it brings economic pain. He says the alternative (i.e. not raising rates) is "even worse".

He adds:

If we don't bring inflation back to target and if we get these so-called second round effect, it's going to get worse. And it's going to get worse precisely for those less well-off in society.

Here's another graph from our excellent producers that highlights just how steeply the pound has fallen.

The first two questions have both focused around the political situation - specifically Liz Truss' plans for big tax cuts.

But Andrew Bailey is having none of it. He says he won't address the candidates' comments on policy.

There's a clear pullback from the Bank on issuing future guidance.

Andrew Bailey says "all options are on the table" for future meetings in September and beyond.

Still, there are hints the MPC is looking to act aggressively. Bailey affirms that the Bank will "act forcefully" if needed and says failing to act will mean rates will have to rise higher and for longer to get inflation under control.

The Governor is being quite clear in who he blames for surging inflation and the resulting economic downturn.

He says the Russian shock is now the largest contributor to inflation "by some way", suggesting that the longer the war goes on the worse it will be.

But he vows to take action on inflation even if it hurts the economy.

He says: "There's an economic cost to the war. But it will not deflect us from setting monetary policy."

Andrew Bailey is giving a rather glum summary of the outlook amid surging inflation and a looming inflation.

But he says the risks to the Bank's forecasts are "exceptionally large" this time around due to the massive uncertainty around Russia's war in Ukraine and its cuts to gas supplies.

In its statement, the MPC suggested an end to forward guidance.

It said: "Policy is not on a pre-set path. The Committee will, as always, consider and decide the appropriate level of Bank Rate at each meeting."

That's a change in tack from the Bank, and follows criticism that it's failed to communicate effectively.

The MPC's press conference has begun, with Governor Andrew Bailey taking the stage alongside policymakers Ben Broadbent and Dave Ramsden.

Here's a more detailed rundown of what's happened from our economics editor Szu Ping Chan, who's reporting now from the Bank of England:

British families face the longest recession since the financial crisis and soaring prices, the Bank of England has warned, as a surge in energy bills will leave households poorer and the economy smaller.

Policymakers raised interest rates by 0.5 percentage points on Thursday to 1.75pc to try to keep a lid on inflation, which is now forecast to climb above 13pc this Autumn.

The Bank's sixth rate rise in a row is the biggest in 27 years, and comes as it warned that price rises were likely to remain in double-digits for the best part of 12 months.

Its latest forecasts showed the UK is expected to start contracting at the end of this year and keep shrinking until the end of 2023.

This would represent the longest recession – defined as two or more straight quarters of economic decline - since the 2008 financial crisis. It is expected to leave the economy 2.1pc smaller.

Read Szu's full story here

Tory leadership hopeful and former chancellor Rishi Sunak has issued his response to the latest figures:

One of the most urgent challenges we face as a country is getting inflation under control as quickly as possible.

The Bank has acted today and it is imperative that any future government grips inflation, not exacerbates it.

Increasing borrowing will put upward pressure on interest rates, which will mean increased payments on people's mortgages. It will also make high inflation and high prices last for longer, making everyone poorer.

As prime minister I would prioritise gripping inflation, growing the economy and then cutting taxes.

The Bank's latest increase to inflation forecasts come as energy bills continue to surge.

Here's a chart showing just how much the energy crisis is adding to inflation.

There's another detail that will be worrying for politicians.

The Bank of England thinks UK unemployment will climb to 6.3pc by 2025.

A tight labour market in the aftermath of the pandemic has so far kept the unemployment rate near historic lows. But the depth of the recession now forecast means that's set to change.

That poses a big challenge for whoever takes over from Boris Johnson as prime minister.

The Bank has also revised up its forecasts for inflation, with price rises now expected to peak above 13pc later this year.

That's an eye-watering rise from the already-high level of 9.4pc, and above previous forecasts of 11pc.

Perhaps the most damaging aspect of the Bank of England's update is its forecast for a recession.

The MPC warned that Britain will be plunged into its deepest recession since the global financial crisis later this year. It will also be a long one – lasting for five quarters.

Well here's a surprise. The pound has wiped out today's gains after the Bank's decision.

While the aggressive rate rise would normally support the pound, it seems traders are focusing on the grim outlook for inflation and its impact on the economy.

As expected, there's also more pessimism from the Bank over what's to come.

The MPC says it now expects inflation to rise above 13pc in the fourth quarter. That's up from 9.4pc in June and more severe than its previous forecasts of an 11pc peak.

It added that inflation will "remain at very elevated levels throughout much of 2023, before falling to the 2pc target two years ahead".

The large rise in interest rates was expected, but what's interesting is how the MPC votes were broken down.

An overwhelming number of members – eight – voted for the more aggressive 50 basis-point move. Only dovish Silvana Tenreyro opted for a more modest 25 basis-point increase.

It's confirmed – the Bank of England has announced its biggest interest rate rise in 27 years.

The MPC raised rates by 50 basis points to 1.75pc.

Just over 10 minutes to go now before we get the Bank of England's decision.

Our economics editor Szu Ping Chan is currently deep in the bowels of Threadneedle Street, where there's a lock-in for reporters.

We'll get updates from her after noon, then Andrew Bailey will give a press conference at 12.30.

Today's main event is the MPC's decision on interest rates, with markets betting on a big 50 basis-point rise.

But that won't be the only thing to look out for.

The Bank of England is also set to release its latest inflation forecasts, and they're likely to make for grim reading.

The Resolution Foundation, a think tank, said that double-digit inflation could now feasibly persist well into 2023, with a peak of 15pc at the start of 2023.

It warned that it was “increasingly unlikely” that annual price rises would fall back to the Bank's 2pc target within the coming year.

The Bank has previously said inflation will peak at around 11pc in October, but that could well change as the energy crisis deepens.

Policymakers will also announce plans to start selling the £850bn mountain of government debt amassed through a bond-buying programme during the pandemic and financial crisis.

Andrew Bailey has suggested the Bank will try to sell between £50bn and £100bn of bonds in the first year, starting this autumn.

What will today's interest rate rise mean for mortgage rates? Melissa Lawford explains:

Millions of homeowners are braced for the biggest mortgage rate rise in nearly 30 years, with repayments increasing by thousands of pounds a year.

The Bank of England is expected to announce a sixth consecutive increase to the Bank Rate since December and the largest individual jump for 27 years today, with markets anticipating a rise from 1.25pc to 1.75pc.

Karl Thompson, of the Centre for Economics and Business Research, an analysis firm, said: “A half point rise is what we are expecting, which is something we haven’t seen in nearly 30 years. And the key point is that it will be coming on top of a succession of rate rises. We are entering a new era.”

A 0.5 percentage point rise will mean monthly mortgage payments for owners with an average £270,708 property with a 25pc deposit will cost £196 more per month than in November last year, before the Bank began raising rates, according to financial analyst Moneycomms and TotallyMoney, a credit app.

Nearly two million homeowners will be immediately hit by rising costs. Nationally, 1.1 million homeowners are on standard variable rate mortgages and a further 850,000 are on tracker rates, which will jump in response to the Bank Rate.

​Read Melissa's full story here

Thanim Islama at Equals Money says the Bank may find it difficult to steer away from its previous guidance on acting 'forcefully'.

Ahead of today's Bank of England meeting at noon, the Resolution Foundation has warned that inflation could rise to 15pc in early 2023, up from current levels of 9.4pc, due to the outlook for gas prices and the energy price cap, which is expected to top £3,600 in early 2023.

Whether the Bank of England has considered this in its monetary policy or not, we shall find out today.

So, the minimum expectation is for a 0.25pc rate hike with a strong chance of a hike of 0.50pc, the biggest since 1995. However, perhaps more importantly, will be what guidance the Bank give for future rate hikes as well as their inflation forecasts.

The recent trend by Central Banks (ECB, Fed, RBA) has been to take the stance that rate decisions will be dependent on data, i.e. an unclear path of future rate hikes, which ultimately caused the respective currencies to weaken.

Given the outlook for gas prices and the role sterling plays in monetary policy, the Bank may find it difficult to steer away from its previous message of acting forcefully. As ever, the devil will be in the detail.

Here's a lookahead on what to expect from the MPC, courtesy of our excellent economics team:

The Bank of England will on Thursday be forced to admit that inflation will remain high for far longer than previously predicted as it increases interest rates for the sixth time in a row.

Andrew Bailey, the Governor, is expected to unveil forecasts showing inflation will still be significantly above 10pc in 2023 as Britain battles soaring energy bills sparked by the war in Ukraine.

Markets are betting that the Bank will raise interest rates by 0.5 percentage points in an effort to combat surging prices, its biggest increase in 27 years.

Policymakers will also announce plans to start selling the £850bn mountain of government debt amassed through a bond-buying programme during the pandemic and financial crisis.

Mr Bailey has suggested the Bank will try to sell between £50bn and £100bn of bonds in the first year, starting this Autumn.

The Monetary Policy Committee (MPC) has come under mounting pressure to pick up the pace of rate rises as inflation continues to rise and other central banks push ahead with a rapid unwinding of low rates. 

​Read the full story here

Morrisons has lowered petrol prices across the UK, joining rival supermarkets in efforts to reduce costs for motorists amid a historic squeeze in living standards.

The price of unleaded petrol and diesel will fall by an average of 6p a liter, the company said.

It follows similar moves by big retailers including Tesco, Asda and Sainsbury's after weeks of criticism that supermarkets had kept rates too high by not passing on the recent decline in wholesale fuel prices. 

Andrew Ball, fuel operations manager at Morrisons, said: “Morrisons is passing on recent reductions in wholesale fuel prices directly to customers to reduce the cost of motoring.”

Gareth Belshamat property consultancy and surveyors Naismiths says it's hard to find the positives in the latest construction PMIs.

So far it’s a retreat rather than a rout, but it’s hard to sugarcoat these disappointing figures.

Ebbing confidence and months of gradually slowing momentum have finally tipped the construction sector into contraction territory for the first time since the lockdown affected days of January 2021.

The pain is spread unevenly across the industry though, with infrastructure firms seeing the biggest fall in output. Housebuilding contracted only slightly, and commercial building increased.

The flow of new work is slowing too, with many firms reporting that levels of new orders are significantly down on what they saw earlier this year.

That said, today’s report isn’t devoid of good news. The formerly runaway inflation in building material costs has slowed as prices ease for some key commodities such as metals and timber, and building firms continue to hire more staff.

UK construction output declined in July for the first time in a year and a half amid lower volumes of residential work and civil engineering activity.

The S&P Global PMI posted 48.9 in July, down from 52.6 in June and below the 50.0 no-change threshold for the first time since January 2021.

Although only marginal, the rate of decline was the fastest since May 2020.

Tim Moore, Economics Director at S&P Global Market Intelligence, said:

July data illustrated that cost of living pressures, higher interest rates and increasing recession risks for the UK economy are taking a toll on construction activity.

Total industry output fell for the first time since the start of 2021 as civil engineering joined house building in contraction territory.

Only the commercial segment registered growth in July, supported by strong pipelines of work from the reopening of hospitality, leisure and offices.

Sterling edged higher and moved in a narrower range ahead of the Bank of England's interest rate decision later today.

The Bank is expected to deliver a 50 basis-point increase in rates to 1.75pc at this afternoon's meeting. That would be the biggest increase since 1995.

Focus will also be on policy guidance, inflation forecasts and details over quantitative tightening.

The pound rose 0.1pc against the dollar to $1.2156. Against the euro it dipped 0.1pc to 83.74p.

Ofgem boss Jonathan Brearley has warned consumers that refusing to pay their energy bills will push up costs even further after a campaign was launched encourage Brits to boycott their bills.

He said: “I wouldn’t encourage anyone to withhold their bill; it damages things further and it will impact them personally.”

Here's more from Rachel Millard:

He spoke as Ofgem this morning confirmed plans to reset the price cap on energy bills every three months rather than every six months. 

The cap is next due to be reset in October. Analysts predict the level will rise from £1,971 currently to more than £3,000 - compared to £1,277 last October. 

Cornwall Insight, the energy analysts, predict the price cap will hit £3,359 this October before rising to £3,616 in April. 

Wholesale gas prices have been exceptionally high since last September, with Russia worsening global shortages by restricting supplies to Europe in retaliation for sanctions imposed over its war on Ukraine.

ICYMI - The Serious Fraud Office has convicted a fraudster of encouraging thousands of people to invest in properties in the Caribbean that were never built.

Helen Cahill has more:

David Ames has been found guilty on two counts of fraud by abuse of position for his role in the seven-year scheme as head of Harlequin Group.

Mr Ames convinced 8,000 investors to pay a 30pc deposit on an unbuilt villa or hotel room and took half of the money as fees for the company and salesmen.

The company then only put 15pc of the deposits towards construction and never secured additional funding for the scheme.

Harlequin ultimately sold investors around 9,000 units across a string of proposed holiday resorts on the Caribbean islands but only delivered around 200 units before collapsing into administration in 2013. Investors ultimately wracked up losses totalling £398m. 

Mr Ames promoted the investments through videos promising tennis, golf and football academies on the resorts sponsored by celebrities.

​Read Helen's full story here

The suitors courting transport group Go-Ahead have raised their takeover offer by more than £20m.

Australian bus network Kinetic and Spanish transport firm Globalvia agreed to buy Go-Ahead, which runs the Govia Thameslink franchise, for around £647m in June.

But the consortium of investors has now raised its takeover bid by £22m to about £669m – despite not having any competing suitors.

In July, Australian bidder Kelsian dropped out of the race to buy Go-Ahead after falling share prices in Australia forced the group to withdraw its offer.

Michael Sewards, co-chief executive of Kinetic, and Javier Perez Fortea, chief executive of Globalvia, said: "This transaction will create a leading global, multi-modal, mass transit platform and unlock value for all stakeholders."

Attorney General Suella Braverman has taken aim at Bank of England Governor Andrew Bailey for being "too slow" to raise interest rates.

The former contender for prime minister was asked by Sky News about Liz Truss' tax cut pledges and concerns that higher interest rates will dampen economic growth.

She said:

Interest rates should have been raised a long time ago and the Bank of England has been too slow in this regard.

Interest rates are a really important gravitational pull on the value of assets and it is really important to curb inflation so actually it is very welcome that the Bank of England is increasing interest rates now but what we really need to do, and this is why Liz has got the right plan for dealing with the cost of living challenges, is that we have got to ensure that we review the Bank of England’s mandate.

She is very interested in looking at how the Bank of England operates, maintaining its independence of course, but also ensuring that it is much better placed and more responsive in the future to economic challenges like the type we are seeing at the moment.

Shares in Serco pushed higher this morning after the outsourcing giant lifted its profit forecast for the second time.

The FTSE 250 firm jumped as much as 7.6pc to its highest since November 2014.

Serco lost around £220m of revenues in the first half as the Test and Trace system was wound down. But it offset this with better-than-expected trading in other divisions, including UK immigration services.

The company said its order book for the rest of the year was "very strong" at £14.6bn – up by more than half a billion on the prior year.

As a result it lifted its forecast for full-year profit to £230m. That's up from its previous increase to £225m in May.

The FTSE 100 is treading this water as investors turn their attention to the Bank of England's interest rate decision at noon.

The blue-chip index was flat ahead of what is expected to be the biggest interest rate rise since 1995. Markets reckon the Bank will raise rates by 50 basis points to 1.75pc.

Shares in Unilever fell 0.8pc, providing the biggest drag on the index. after Ben & Jerry's independent board said the company had frozen its directors' salaries last month as a pressure tactic. 

Rolls-Royce also tumbled more than 6pc after it warned on the continuing impact of inflation and the war in Ukraine.

It was better news for Next, which gained more than 2pc after reporting a surprise rise in sales. Phoenix Group was also in the green after announcing its takeover of Sun Life UK.

The domestically-focused FTSE 250 rose 0.5pc.

Embattled miner Petropavlovsk has secured an agreement for sale its Russian business and the majority of its subsidiaries in other countries.

Petropavlovsk, which was suspended from the London Stock Exchange last month after filing for administration, has reached the deal with UMMC, Russia's second largest copper producer.

The sale is conditional on a number of matters and has a completion deadline of September 30. If it goes ahead, Petropavlovsk could receive more than $600m (£493m).

Petropavlovsk was plunged into crisis earlier this year after the UK slapped sanctions on Gazprombank, its biggest lender. This left it unable to sell gold and repay its debts.

Insurance giant Phoenix Group has inked a deal to buy Sunk Life UK for £248m in cash.

The FTSE 100 group is buying the life insurer from parent Sun Life Financial as it looks to expand its offering for British customers.

Phoenix said the takeover, which is set to complete in the first quarter of next year, is expected to deliver about £470m of incremental long-term cash generation.

Shares rose 2pc following the announcement.

Aircraft parts supplier Meggitt has posted a 21pc rise in first-half revenue as manufacturers ramped up production to meet a rebound in travel demand.

The FTSE 100 company, which supplies to both civil and military aerospace manufacturers including Boeing and Airbus, said revenue came in at £821m in the first half, compared to £680m last year.

Its first-half underlying profit before tax rose 31pc to £63.6m.

Still, major aerospace companies have warned that supply chain troubles have hampered the industry's ability to capitalise on surging travel demand.

Meggitt, which agreed to a £6.3bn takeover offer from US rival Parker Hannifin, reaffirmed its plan to close the deal by third quarter of 2022 after securing regulatory approval earlier this year.

Ofgem has warned of a "very challenging winter" for Britons due to Putin's gas cuts as it confirmed changes to the price cap review process.

While the UK only imports a small amount of gas from Russia, Ofgem said Putin's actions would cause disruptions to last much longer and push prices even higher than before.

It came as Ofgem confirmed it will review the energy price cap every three months instead of twice a year.

The regulator said the move would help to provide stability in energy markets and reduce the risk of further supplier collapses that have sparked havoc and pushed up prices further.

Jonathan Brearley, chief executive of Ofgem, said:   

I know this situation is deeply worrying for many people. As a result of Russia’s actions, the volatility in the energy markets we experienced last winter has lasted much longer, with much higher prices than ever before. And that means the cost of supplying electricity and gas to homes has increased considerably.  

The trade-offs we need to make on behalf of consumers are extremely difficult and there are simply no easy answers right now. Today’s changes ensure the price cap does its job, making sure customers are only paying the real cost of their energy, but also, that it can adapt to the current volatile market.  

The FTSE 100 has started the day on the back foot ahead of the Bank of England's decision on interest rates.

The blue-chip index slipped 0.1pc to 7,441 points.

Businesses are facing energy bill increases of up to 500pc that could put their survival in jeopardy this winter, analysts have warned.

Energy costs for companies are rising even faster than for households and risk pushing businesses "over the edge" unless the Government intervenes, Cornwall Insight said.

Companies usually negotiate fixed-price energy contracts to begin from the beginning of October.

Firms whose two-year contracts are coming to an end face a five-fold increase, while those who took out a contract a year ago are likely to see bills double, according to the analysis seen by The Times.

Rolls-Royce has warned pressures from rising inflation, the Ukraine war and supply chain troubles will continue throughout next year, but said profitability should improve over the final months of 2022.

The engine maker saw underlying operating profits more than halve to £125m for the first six months of the year, down from £307m a year ago.

It said operating margins had been squeezed in the first half, while it said the "external environment remains challenging, with the war in Ukraine, inflationary pressures, and supply chain constraints all impacting our business".

It added: "We expect these issues will persist into 2023 and have been managing our business to address and minimise the impact."

However, Rolls-Royce said margins were set to improve in the second half of the year with a boost from recovery in the travel sector and higher demand for long-haul flights.

Glencore will hand out an additional $4.45bn (£3.7bn) to shareholders in dividends and share buybacks as profits more than doubled to a record high thanks to surging coal prices.

The world's largest coal exporter reported core profit of $18.9bn in the first half, with coal earnings of $9.5bn exceeding the entire company’s profit a year earlier.

Prices for coal have surged this year as the global energy crisis boosts demand for fossil fuels, while Glencore's trading division has also benefited from volatility across commodities markets in the wake of Russia's invasion of Ukraine.

Glencore said it would top up its dividend by $1.45bn and buy back a further $3bn in its own stock. 

Good morning.

There's an upbeat update from Next this morning, which revealed a surprise spike in sales in its latest quarter.

Full-price sales rose 5pc in the second quarter, jumping £50m ahead of guidance. That came despite fears trading would slump below pre-Covid levels.

Next pinned the positive performance on the heatwave, as well as higher demand for formalwear as social events such as weddings returned.

As a result, the retailer raised its guidance for full-year profit by £10m to £860m.

But it wasn't all rosy. Next said it didn't expect the trading boost to last, warning that the impact of inflation on consumer spending would worsen in the second half of the year.

5 things to start your day 

1) Walls close in on Zuckerberg as executives desert Meta  Deep turmoil inside social media giant and brain drain at the top leave founder looking increasingly isolated

2) Rural households clamouring for onshore wind turbines, says Octopus boss  Energy supplier says it is ‘pushing at an open door’ with plans to boost output 

3) Taiwan crisis to wreak havoc at ports and disrupt one of world’s busiest shipping lanes  China's live-fire military drills spark fears of delays and collisions 

4) UN chief attacks 'immoral' oil companies and claims they are punishing the poor  António Guterres calls for action against energy businesses across the world

5) Wildfire fears prompt Marks & Spencer to stop selling disposable barbecues  London Fire Brigade urges other retailers to follow suit

What happened overnight 

Asian stocks rose this morning, taking cues from a strong rally on Wall Street after robust economic data and upbeat corporate guidance boosted investor appetite.

Japan's Nikkei rose 0.6pc, while Chinese blue chips also added 0.6pc and Hong Kong's Hang Seng jumped 1.2pc, with an index of its tech stocks surging 2.3pc.

MSCI's broadest index of Asia-Pacific shares gained 0.7pc.

Coming up today

• Corporate: Pantheon International (full-year results); Centamin, ConvaTec Group, Evraz, Glencore, Hikma Pharmaceuticals, Informa, Meggitt, Mondi, Morgan Sindall, Next, Rolls-Royce, Serco, Spirent Communications, Tritax Big Box (interims)
• Economics: Bank of England interest rate decision (UK), construction PMI (UK), jobless claims (US)