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Interest rate cuts ‘some way off’ even if inflation hits 2pc, warns Bank official

Bank of England chief economist warned against a 'false sense of security' if inflation falls to 2pc soon
Bank of England chief economist warned against a 'false sense of security' if inflation falls to 2pc soon - Graeme Sloan/Bloomberg

Interest rate cuts will remain “some way off” even if inflation falls below 2pc in the spring, the Bank of England’s chief economist has warned.

Huw Pill said policymakers must not feel a “false sense of security” if the inflation eases sharply in the near future from its present level of 4pc.

He said Britain’s economy remains weak but added that the evidence is not yet “conclusive” that price rises will not pick up again.

However, he indicated during a speech at Cardiff University that this will not mean interest rates have to stay at their 16-year highs of 5.25pc.

He said: “Maintaining restrictiveness does not necessarily mean leaving Bank Rate unchanged.”


His comments come after inflation soared to 41-year highs of 11.1pc in October 2022.

He added that although “we are now seeing early signs of a downward shift in the persistent component of inflation dynamics, those signs thus far remain tentative”.

Read the latest updates below.

06:06 PM GMT

Signing off

Thanks for joining us today. Chris Price will be back on Monday morning before the London markets open. In the meantime, I’ll leave you with some stories from elsewhere on The Telegraph website worth checking out:

05:39 PM GMT

Dell jumps 28pc amid rising demand for AI servers

Dell Technologies jumped 28pc today in New York after it announced a 20pc increase in its dividend.

The American IT giant reported stronger profit and revenue for its latest quarter than analysts expected, highlighting demand for its AI-optimised servers.

Jeff Clarke, vice chairman, said:

Our strong AI-optimised server momentum continues, with orders increasing nearly 40oc sequentially and backlog nearly doubling, exiting our fiscal year at $2.9bn.

We’ve just started to touch the AI opportunities ahead of us, and we believe Dell is uniquely positioned with our broad portfolio to help customers build [AI] solutions that meet performance, cost and security requirements.

For the full year ending February 2 2024, revenue was down 14pc at $88.4bn (£69.8bn), but profit jumped 32pc to $3.2bn.

Founder Michael Dell addressing the Oracle OpenWorld 2010 Conference
Founder Michael Dell addressing the Oracle OpenWorld 2010 Conference - Tony Avelar/Bloomberg

05:01 PM GMT

American and Continental stock markets continue push into record territory

Stocks markets on the Continent and in the US have continued to push into record territory today as investor excitement over artificial intelligence feed a long rally.

On Wall Street, both the tech-heavy Nasdaq Composite index and the S&P 500 both set new records as Dell Technologies surged around 30pc following an earnings report that highlighted its growing AI business.

In Europe, Frankfurt’s DAX set a new record while the CAC in Paris was also near its record high, with a less-than-expected drop in eurozone inflation failing to derail sentiment.

Meanwhile in Asia, Tokyo’s benchmark Nikkei index almost touched 40,000 points for the first time.

Axel Rudolph, senior market analyst at online trading platform IG, said:

This week saw risk on sentiment take several global stock indices to record highs, the first day of March being no exception.

04:56 PM GMT

Footsie closes up

The FTSE 100 closed up 0.69pc today. The biggest riser was education group Pearson, up 5.56pc, followed by Endeavour Mining, up 3.84pc. The biggest faller was Ocado Group, down 6.92pc, followed by Premier Inn owner Whitbread, down 1.97pc.

The FTSE 250 closed up 1.57pc. The biggest riser was ITV, up 14.34pc, followed by investment busines Quilter, up 10.52pc. The biggest faller was precision measurement company Spectris, down 4.05pc, followed by engineering group Dowlais 3.57pc.

04:46 PM GMT

Defence giant awarded £560m to extend the life of UK nuclear submarine

Babcock has agreed a £560m contract to extend the life of one of Britain’s nuclear-armed submarines. Industry editor Matt Oliver reports:

The FTSE 250 defence giant on Friday confirmed the deal with the Ministry of Defence, following an initial agreement last year.

It involves Babcock carrying out a major refit of HMS Victorious at its vast dockyard in Devonport, Plymouth, where a host of navy vessels go for servicing.

HMS Victorious sailed to Devonport last summer and work has already begun on her multi-year refit.

Babcock has said the overhaul will extend the sub’s lifetime by 15 years or more, ensuring she remains operational well into the 2030s.

Vice Admiral Martin Connell, the Second Sea Lord, said the refit would mean HMS Victorious remained able to carry out her duties until the next generation of nuclear-armed subs, known as the Dreadnought class, are ready to take over.

Read the full story...

British nuclear submarine HMS Victorious in 2013
British nuclear submarine HMS Victorious in 2013 - Tom Robinson/Crown Copyright/Reuters

04:37 PM GMT

Boeing in talks to buy Spirit AeroSystems

Boeing is in talks to buy Spirit AeroSystems, the jet-fuselage supplier it sold in 2005, according to a report.

The Wall Street Journal said that Spirit has hired banks to explore options and has had preliminary discussions with Boeing. The newspaper also said that Spirit is considering selling its operations in Ireland that manufacture parts for Boeing’s rival, Airbus.

Boeing declined to comment, and Spirit has been approached.

The headquarters of Spirit AeroSystems Holdings in Wichita, Kansas, 2019
The headquarters of Spirit AeroSystems Holdings in Wichita, Kansas, 2019 - Nick Oxford/Reuters

04:20 PM GMT

British banking app to approach $1bn valuation

Tide, a banking app popular with startup businesses, plans a share sale that could put it close to a $1bn (£791m) valuation, according to a report.

Sky News says that Tide plans to sell an existing tranche of shares at an approximately 30pc premium to the price of its most recent funding round in 2021.

The fintech business, which is chaired by former Axa Investment Managers chief executive Sir Donald Brydon, is apparently at an advanced stage in the share sale, according to sources mentioned by Sky.

Tide declined to comment.

04:01 PM GMT

Volkswagen shares amid stronger Chinese competition

Volkswagen shares have dropped 4.6pc after predicting slower growth for 2024.

In the carmaker’s results for 2023, released today, it said that an increase in sales in North America and Europe had lifted its operating profits in 2023.

The figure, closely watched by analysts to assess a company’s underlying performance, rose to €22.6bn (£17.9bn), up 2.1 percent on 2022.

The results were carried by a roughly 15pc increase in revenues on the previous year, up to €322.3bn on the back of “increased deliveries in Europe and North America”, according to the group.

In all, Volkswagen delivered some 9.2 million cars to customers in 2023, an improvement of 12pc.

The car giant’s units sold rose by 20pc in Europe and in the North America region by 18 percent.

In China, Volkswagen’s single largest market, the group recorded a two-percent increase in deliveries “despite a difficult market”.

Volkswagen has fallen behind domestic competitors in China, losing its title as the best-selling auto brand to BYD.

The Chinese rival’s success making electric cars has likewise underlined the challenges Volkswagen faces when it comes to shifting production away from traditional internal combustion engines.

Despite the 15pc growth this year, Volkswagen issued guidance saying it expected growth of 5pc in 2024.

Volkswagens inside one of the twin towers used as storage at the Autostadt visitor attraction next to the Volkswagen factory in Wolfsburg, Germany
Volkswagens inside one of the twin towers used as storage at the Autostadt visitor attraction next to the Volkswagen factory in Wolfsburg, Germany - Stuart Franklin/Getty Images

03:44 PM GMT

US manufacturing activity shrinks as high interest rates bite

American manufacturing activity contracted in February more quickly than markets expected, according to industry data published today, as demand slowed and output eased.

The manufacturing sector has been a casualty of the US Federal Reserve’s battle against inflation through interest rate increases.

The Institute for Supply Management (ISM) said its manufacturing index stood at 47.8 percent last month, down from 49.1 percent a month earlier.

This was significantly below market expectations, and kept the index below the 50-point marking separating expansion from contraction for the 16th month in a row.

It came as separate data (reported on this blog this morning) showed that manufacturing in China contracted for a fifth consecutive month, while British manufacturers are facing higher costs as a result of the Red Sea crisis.

Despite the gloomy manufacturing picture, the overall US economy continued its expansion for a 46th consecutive month, according to ISM.

03:36 PM GMT

Shell accused of secret lobbying in developing countries

Shell has been accused of failing to disclose its links to powerful pro-fossil fuel lobbying organisations in developing countries such as India, Vietnam, China and the Philippines. Jonathan Leake reports:

Investigators claim Shell belongs to 80 organisations involved in lobbying for the expansion of fossil fuel use and that these links are not mentioned in its annual lobbying and transparency disclosures.

Organisations Shell is a member of include the Federation of the Indian Petroleum Industry, where executives are on the ruling committee, and the Philippine Institute of Petroleum, where the chief executive of Pilipinas Shell is part of the board of trustees.

In China, Shell was found to be a member of the China Petroleum and Chemical Industry Federation, which was also not disclosed.

Nick Spooner, UK lead for the Australasian Centre for Corporate Responsibility, which published the report, said Shell was failing to disclose the scale of its real lobbying activities.

The report, entitled In the Dark: Gaps in Shell’s climate lobbying disclosures, said it had found evidence of the oil giant lobbying to create new markets for liquefied natural gas (LNG) in India, expand demand in south east Asia and to oppose moves to low carbon energies in China, Mexico and South Africa.

The European Union and the USA have rules on lobbying that oblige companies to disclose how much they spend.

In 2022 Shell spent more than €5.5m (£4.7m) in the EU and $5.2m in the USA. However, the amounts spent in other parts of the world are not disclosed

A Shell spokesman said: “Shell has reported on its key industry association memberships for more than five years. We intend to further expand the information on our website about our direct and indirect climate and energy transition lobbying in additional countries, including some emerging markets, before our 2025 Annual General Meeting.”

Shell has repeatedly said it “aims to be at the forefront of the drive for greater transparency around corporate political engagement”, following guidelines set out by Transparency International.

Oil storage silos beyond waterlogged land at the Shell Pernis refinery in Rotterdam earlier this month
Oil storage silos beyond waterlogged land at the Shell Pernis refinery in Rotterdam earlier this month - Peter Boer/Bloomberg

03:30 PM GMT

Handing over

I’ll wish you all a restful weekend at this stage, as Alex Singleton steps up to furnish you with all the latest updates from here until the evening.

Met Office provisional figures today showed the UK has experienced its fifth warmest and eighth wettest winter on record in 2023.

Yet none of us experienced scenes like these farmers in Bolivia, who were forced to brave a mudslide caused by persistent rains to transport produce to sell at markets.

Farmers transport their produce through a mudslide in El Penol, Bolivia
Farmers transport their produce through a mudslide in El Penol, Bolivia - AP Photo/Juan Karita

03:20 PM GMT

Brazilian economy grows at slower pace

The Brazilian economy expanded 2.9pc in 2023 after a fourth quarter of zero growth, according to official figures.

The gross domestic product growth of Latin America’s largest economy was slightly lower than the 3pc for 2022, according to revised data from the IBGE national statistics agency.

Growth over the past year was driven mainly by the agricultural sector, which surged by 15.1pc, the industrial sector (1.6 pc), and services (2.4pc).

Financial institutions and consulting firms had projected growth of about 0.1pc in the final three months of 2023, and 3pc for the full year, according to business daily Valor.

For 2024 the market anticipates gross domestic product growth of 1.75pc, according to the last survey by the central bank.

Many analysts attribute the modest growth to interest rate levels.

Brazilian President Luiz Inacio Lula da Silva
Brazilian President Luiz Inacio Lula da Silva - EVARISTO SA/AFP via Getty Images

03:07 PM GMT

European gas storage sites at record levels after winter

Europe is ending the winter awash with gas after a mild winter which was the UK’s fifth warmest and eighth wettest winter on record.

Storage sites are more than 62pc full, which is a record for this time of year, and has helped prices fall by more than 20pc since the start of the year.

Europe’s benchmark contract was last up 2.8pc at more than €25 per megawatt hour but fell 17pc during February.

The UK equivalent contract has gained 3.5pc to nearly 64p per therm.

02:37 PM GMT

US markets flat at the open

Wall Street’s main indexes opened subdued after a rally in the previous session driven by an inflation reading that strengthened bets of interest rate cuts by June this year and a persistent artificial-intelligence mania.

The Dow Jones Industrial Average was flat at the open at 38,989.51.

The S&P 500 was also little changed at 5,098.51, while the Nasdaq Composite gained 17.90 points, or 0.1pc, to 16,109.83 at the opening bell.

02:32 PM GMT

Interest rates do not have to stay at 5.25pc to bring down inflation, says Bank of England economist

Interest rates could still come down even while the Bank of England is still battling inflation, its chief economist has said.

Huw Pill said he thinks inflation could fall to 2pc in the spring but said that policymakers will have to be wary about getting a “false sense of security” as prices are likely to rise more sharply later.

However, he indicated during a speech in Cardiff that this will not mean interest rates have to stay at their 16-year highs of 5.25pc. He said:

Maintaining restrictiveness does not necessarily mean leaving Bank Rate unchanged.

For one thing, real interest rates – which may be more relevant for some economic decisions and thus for the transmission of monetary policy – will rise as inflation and shorter-term inflation expectations ease.

The MPC will need to take this into account in setting Bank Rate. And what’s more the overall monetary policy stance can remain restrictive – even if less so than previously – even after a Bank Rate cut.

A change in the Bank Rate can still leave the level of Bank Rate in restrictive territory.

02:20 PM GMT

‘Some way to go’ before interest rates can be cut, says Bank chief economist

Huw Pill warned in a speech that Britain has “some way to go” before he has the evidence he needs to vote for cuts in interest rates.

The Bank of England’s chief economist said:

I continue to assess the persistence of UK inflation primarily through developments in the three key indicators of inflation persistence identified by the MPC: services price inflation, pay growth and the tightness of the UK labour market.

But I interpret the data on these indicators in a broad sense.

Especially at a challenging time for data collection and quality, it is unwise to rely solely on any one measure of wage growth or labour market slack: I am drawing a view from a wider set of individual series.

And recognising the high frequency noise in these series, I am focused on extracting the lower frequency signal in underlying measures rather than the news in any single monthly release.

On this basis, while I recognise that we are now seeing early signs of a downward shift in the persistent component of inflation dynamics, those signs thus far remain tentative.

In my view, we have some way to go before such evidence becomes conclusive.

02:16 PM GMT

Bank of England must not feel ‘false sense of security’ on inflation, warns Pill

The Bank of England’s chief economist has warned Britain’s economy remains weak and that policymakers must not feel a “false sense of security” if inflation falls below 2pc in the spring.

In a speech at Cardiff University, Huw Pill said:

First, while economic activity remains weak in the UK – with real GDP contracting in the second half of last year according to the latest vintage of data – I attribute a significant part of this weakness to developments on the supply side.

Second, I expect to see headline consumer price inflation continue to fall in the coming months, and likely to approach or even fall below the 2pc inflation target this spring. Of itself, that is good news.

But the drivers of this decline in annual headline inflation are a combination of base and external effects.

We need to guard against being lulled into a false sense of security about inflation developments over the medium term by the mechanical effects of high monthly inflation a year ago dropping out of the calculation of annual rates and/or the impact of downside surprises in international commodity prices, notably for energy and food.

02:00 PM GMT

EU countries fear defence staff ‘sideloading’ unauthorised apps after imposing new rules on Apple

Apple has escalated a battle with Brussels over new laws requiring changes to the iPhone, saying that even member states think the rules are a bad idea that will put users at risk.

Our technology editor James Titcomb has the details:

The tech giant said in a security white paper that multiple European government agencies had raised concerns that employees would be put at risk by Apple loosening rules on how apps are downloaded.

Apple is being forced to allow alternatives to its App Store under the new Digital Markets Act (DMA), meaning iPhone owners in Europe will be able to use alternative “app marketplaces”.

The laws are designed to force competition on Apple, which charges developers fees of up to 30pc for app purchases and subscriptions. The company has said it will put users at risk by potentially allowing insecure apps to be downloaded.

Apple said: “Since we announced DMA-related changes to iOS, Safari, and the App Store in the EU on January 25, 2024, we have heard concerns from governments— including government agencies of EU member states—and users about the risks of allowing alternative app stores and alternative payment processors on iOS.

“Government agencies, both in the European Union and outside of it, have been quick to recognise the risks created by these new distribution options and the need for protective measures. These agencies - especially those serving essential functions such as defence, banking, and emergency services - have reached out to us about these new changes, seeking assurances that they will have the ability to prevent government employees from sideloading apps onto government-purchased iPhones.”

Apple is set to allow rival app stores later this month in the EU.

Apple is being forced to allow alternatives to its App Store under the EU's new Digital Markets Act
Apple is being forced to allow alternatives to its App Store under the EU's new Digital Markets Act - AP Photo/Patrick Semansky

01:44 PM GMT

Elon Musk sues OpenAI founder for ‘betrayal’ of company’s values

Elon Musk is suing the co-founder of the ChatGPT developer OpenAI, alleging he compromised the company’s original pursuit to prioritise developing safe artificial intelligence (AI) over profits.

Our senior technology reporter Matthew Field has the details:

The Tesla billionaire accused Sam Altman of “stark betrayal” after the pair co-founded OpenAI in 2015, with Mr Musk agreeing to bankroll the group with the intention of developing AI that would benefit humanity.

The business was set up as a non-profit and shared details of its AI breakthroughs with other scientists.

However, in a lawsuit filed in California, Mr Musk claimed Mr Altman, who is chief executive of OpenAI, has since plotted to “radically depart from their mission”, raising billions of dollars from Microsoft and making OpenAI’s research a secret.

Read what Mr Musk’s lawyers wrote in the filing.

Elon Musk co-founded OpenAI in 2015
Elon Musk co-founded OpenAI in 2015 - AP Photo/Kirsty Wigglesworth

01:25 PM GMT

Pearson ‘well positioned’ for AI boom as profits jump

Education giant Pearson has said it is well-positioned to benefit from opportunities in artificial intelligence (AI) as it posted a jump in profits.

The company has seen its shares rise 4pc to the top of the FTSE 100 as it also announced plans to buy £200m of shares back from investors.

Pearson, which has largely shifted from traditional textbooks to digital training, reported a significant rise in operating profit to £498m in 2023, from £271m a year earlier, as it benefited from a reduction in restructuring costs.

Omar Abbosh, who joined as chief executive in January from Microsoft, said this was supported by growth in its assessment and qualifications arm as he highlighted the potential from AI.

He said:

Pearson is well positioned today, providing a stable platform for continued growth that can benefit from the inflection point we see with the development of AI.

I am optimistic about the opportunities this advancement in technology brings, underpinned by our trusted brand, large high-quality data sets and strong capabilities in assessment, content and services.

01:10 PM GMT

Activists target German forest where Tesla wants to expand factory

Environmental activists are staging a protest in a forest near Berlin against plans to expand Tesla’s first plant in Europe.

Between 80 and 100 activists have been camping in the forest since early Thursday, according to an initiative called “Stop Tesla.”

They are vowing to stay in place for weeks and have put up tents and built treehouses, some of them several meters above the ground — a tactic used in previous German environmental protests.

Police have decided that the demonstration can continue until at least March 15 and are keeping an eye on what is going on, but see no need to break up the protest camp, German news agency dpa reported.

Tesla opened the factory in Gruenheide, just outside Berlin, in March 2022 — launching a challenge to German carmakers on their home turf.

The company now wants to expand the facility to add a freight depot, warehouses and a company kindergarten. Those plans would entail felling more than 100 hectares (247 acres) of forest.

That has drawn opposition from environmentalists and some other local groups, who also worry about possible effects on the area’s water supply.

In a nonbinding vote in mid-February, residents of the Gruenheide municipality rejected Tesla’s plans, which still need approval by local authorities. About 12,500 people work at the plant.

Protesters have set up camp in a German forest where Tesla wants to expand its factory
Protesters have set up camp in a German forest where Tesla wants to expand its factory - Cevin Dettlaff/dpa via AP
The environmental activists have built treehouses and are pledging to stay for weeks
The environmental activists have built treehouses and are pledging to stay for weeks - Cevin Dettlaff/dpa via AP
Grünheide residents voted to block a planned expansion of Tesla's gigafactory that would have meant felling 250 acres of local forest
Grünheide residents voted to block a planned expansion of Tesla's gigafactory that would have meant felling 250 acres of local forest - REUTERS/Hannibal Hanschke

12:51 PM GMT

Royal Mail hikes price of stamps

Royal Mail is to increase the price of stamps again next month.

The troubled delivery giant said the price of first-class stamps will increase by 10p to £1.35 and second-class stamps will go up by 10p to 85p.

A year ago, a first-class stamp cost 95p before being hiked to £1.10 in April 2023, ahead of another 15p increase in October last year.

The rise comes after warnings by the loss-making firm over the impact of higher costs and lower demand for letters.

Royal Mail said the price increase will come into force on April 2.

Last year, industry regulator Ofcom said increases to the price of second-class stamps would be capped at the rate of inflation until 2029 in an effort to keep the sending of letters affordable.

Nick Landon, chief commercial officer at Royal Mail, said: “We always consider price changes very carefully but we face a situation where letter volumes have reduced dramatically over recent years while costs have increased.

“It is no longer sustainable to maintain a network built for 20 billion letters when we are now only delivering seven billion.”

First class stamps will increase in price by 10p to £1.35
First class stamps will increase in price by 10p to £1.35 - Leon Neal/Getty Images

12:08 PM GMT

Pound edges up as house prices rise

The pound has risen as the house prices returned to growth for the first time in more than a year and as stronger-than-expected inflation in the eurozone raised doubts about potential interest rate cuts.

Sterling was last up 0.1pc at $1.26, after falling 0.8pc in February. The euro was also little changed against the pound at 85p.

British house prices rose by 1.2pc in annual terms in February - the first such gain since January 2023 - according to data from mortgage lender Nationwide.

The pound was on track to fall around 0.3pc across the week but on a two-week basis was up 0.3pc.

Jane Foley, head of FX strategy at Rabobank, said some investors may be adding a little to their sterling holdings ahead of next Wednesday’s budget, where Jeremy Hunt will announce the government’s taxing and spending plans. She said:

I think the market may be just positioning itself a little bit stronger sterling because we might get some degree of tax cuts which could give a bit of a fiscal bump to the economy.

But I think we all understand by now that it’s not going to be huge.

11:49 AM GMT

Zara owner to begin reopening stores in Ukraine

Zara owner Inditex plans to gradually reopen stores in Ukraine from April 1, two years after Russia invaded the eastern European country.

The world’s largest listed fast-fashion company by sales said it planned in a first phase to reopen 20 stores in Ukraine, three of them under the Zara brand and resume online sales. The first stores will be around the Kyiv region.

“The group’s priority continues to be the safety of its employees and customers,” the company said in a statement.

Inditex closed its stores in Russia and Ukraine in March 2022 following Moscow’s invasion of Ukraine on February 24 and subsequent Western sanctions.

The group had 72 stores open in Ukraine and 558 in Russia in 2019, according to its annual report.

The fashion giant agreed to sell its stores in Russia to UAE-based Daher Group later in 2022, though it did not rule out returning to the country if circumstances changed.

In Ukraine, Inditex aims to reopen 50 stores in the coming months, the company added without specifying how long the process would take.

Zara owner Inditex plans to start reopening stores in Ukraine
Zara owner Inditex plans to start reopening stores in Ukraine - REUTERS/Borja Suarez

11:46 AM GMT

Red Sea crisis to delay rate cuts, closely-watched survey suggests

British factories are suffering from attacks on shipping in the Red Sea, raising prices and potentially threatening the Bank of England’s plans to cut interest rates.

Our deputy economics editor Tim Wallace has the details:

Manufacturers’ supply chains are being disrupted by the need for ships from Asia to take the long route around the Cape of Good Hope instead of cutting through the Suez Canal, according to an influential survey of businesses.

As a result factories are suffering from delays to deliveries, and are incurring extra costs as they seek more local suppliers of crucial materials.

Input prices are rising at the fastest in a year and manufacturers’ output prices are also back on the up, according to the purchasing managers’ index (PMI), a survey from S&P Global.

Renewed pressure on inflation threatens to further push officials at the Bank of England, led by Andrew Bailey, to keep interest rates higher for longer, delaying the point at which the Monetary Policy Committee can cut its base rate from 5.25pc.

Rob Dobson at S&P Global Market Intelligence said the rise in shipping costs echoes the disruption suffered in the Covid lockdowns, which kicked off the cost of living crisis.

He said: “Although the supply impact and effect of prices is muted by standards seen at the height of the pandemic, any upward pressure on inflation will be a concern to policymakers and may add to calls that it is too early to be confident on the timing of interest rate cuts.”

11:25 AM GMT

Wall Street poised for lacklustre start amid rate hopes hangover

US stock markets are on track to slip at the opening bell after a rally driven by hopes that interest rates could be cut by June this year.

The tech-heavy Nasdaq closed at a record high on Thursday, spurred by gains in AI-linked stocks such as heavyweight chip designer Nvidia and its rival Advanced Micro Devices, which hit an all-time peak.

Shares of Nvidia, the key driver of the AI-led rally on Wall Street this year, were up 0.8pc in premarket trading, while those of Advanced Micro Devices climbed 2.5pc after a 9pc surge in the previous session.

The Wall Street rally found further support as the personal consumption expenditures (PCE) report came in-line with expectations on Thursday and showed annual inflation growth was the smallest in three years.

However, the Dow Jones Industrial Average and S&P 500 were down 0.1pc ahead of today’s opening bell as investors look poised to take profits.

The tech-heavy Nasdaq 100 was down fractionally.

11:10 AM GMT

Oil on track for weekly gains ahead of possible supply cuts

Oil prices are on track for a slight gain this week amid speculation the Opec+ cartel will announce supply cuts for the second quarter of the year.

Brent crude, the international benchmark, has risen 1.1pc today towards $83, while West Texas Intermediate was up 1.1pc to more than $79.

Oil capped a second monthly increase in February, as the Israel-Hamas war also helped push up prices.

Opec+ is expected to extend its current supply cuts into the next quarter in a bid to avert a global glut and prop up prices, according to a recent Bloomberg survey.

10:58 AM GMT

No eurozone interest rate cuts until June, say economists

Yet more economists are pointing to persistent services inflation as they predict the European Central Bank will not begin cutting interest rates until June at the earliest:

10:41 AM GMT

M&S wins legal battle against Gove over Marble Arch redevelopment

Marks & Spencer has won a crucial legal victory against Michael Gove in the battle over the retailer’s multi-million pound redevelopment of its Marble Arch store.

Our retail editor Hannah Boland has the breaking story:

The Housing Secretary will be forced to rethink his decision to block the plans after a High Court judge sided with the retailer.

Marks & Spencer successfully convinced the courts that Mr Gove was wrong to reject its plans to knock down and rebuild its flagship Oxford Street department store.

Mr Gove previously blocked the scheme on the basis that it would “fail to support the transition to a low carbon future, and would overall fail to encourage the reuse of existing resources, including the conversion of existing buildings.”

Under the plans, M&S was seeking to demolish its Art Deco building near Marble Arch and replace it with a new 10-storey complex.

Read why the High Court judge agreed with M&S.

The M&S Marble Arch store on Oxford Street
The M&S Marble Arch store on Oxford Street - Jason Alden/Bloomberg

10:13 AM GMT

Eurozone inflation puts ‘final nail in coffin’ for early interest rate cuts

Jack Allen-Reynolds, deputy chief eurozone economist at the Capital Economics, said the latest inflation figures for the eurozone have put the “final nail in the coffin for an April interest rate cut”.

He pointed to the “important” services inflation rate, which only edged down from 4pc to 3.9pc as inflation eased at a slower pace than anticipated.

He said:

Services disinflation had stalled in the previous few months due to technical factors and one-offs, so we had expected a bigger decline in February when those effects ended.

Most policymakers at the ECB have stuck to the view that they need more time to be convinced that inflation will fall sustainably to 2pc.

February’s inflation data will have strengthened that conviction. So an interest rate cut in April – as we have been forecasting – is now not going to happen.

10:06 AM GMT

Eurozone inflation falls less than expected in blow to rate cut hopes

Eurozone inflation fell less than expected to 2.6pc in February in a sign that the European Central Bank is unlikely to move quickly to lower interest rates.

The single currency area’s consumer prices index dropped from 2.8pc in January but had been expected to fall to 2.5pc.

Core inflation, which strips out volatile food and energy prices, fell from 3.3pc to 3.1pc but economists had forecast it would drop to 2.9pc.

09:51 AM GMT

Prince Harry granted access to secret Leveson records in Daily Mail hacking claim

The Duke of Sussex and Sir Elton John are to be given secret documents from the Leveson Inquiry to support their phone hacking claim against the Daily Mail following a decision by the Government.

Our reporter James Warrington has the details:

In a notice published last night, ministers approved a request from six high-profile figures to unseal documents submitted as part of the public inquiry into hacking more than a decade ago.

The documents outline payments made to private investigators by both the Daily Mail and the Mail on Sunday.

The notice, which was signed by Culture Secretary Lucy Frazer and Home Secretary James Cleverly, states that the ledger cards may be used by the claimants and their lawyers for the purposes of their claims.

Prince Harry and Sir Elton John are among a group of celebrities to have filed a lawsuit alleging widespread unlawful behaviour at Associated Newspapers, the publisher of the Mail titles.

Read how this changes their case.

Prince Harry is one of six high-profile figures to be given permission to unseal documents from the public inquiry
Prince Harry is one of six high-profile figures to be given permission to unseal documents from the public inquiry - REUTERS/Toby Melville

09:40 AM GMT

Britain’s manufacturing declines amid Red Sea disruption

Britain’s manufacturers suffered further declines last month as the crisis in the Red Sea delayed deliveries and increased prices, according to a closely-watched survey.

The S&P Global UK Manufacturing purchasing managers’ index (PMI) registered a reading of 47.5 in March, remaining below the 50 mark that separates growth in output from contraction for a 19th consecutive month.

Bosses said the attacks by Houthi rebels on ships trying to pass through the Red Sea have driven up costs as they tried to find alternative suppliers from more expensive markets closer to home.

Rob Dobson, director at S&P Global, said:

UK manufacturers faced challenging circumstances in February, as the ongoing impact of the Red Sea crisis delayed raw material deliveries, inflated purchase prices and impacted production capabilities.

There were also knock-on effects for demand, as new export orders were hit by both supply disruptions and higher shipping costs.

Production volumes subsequently contracted for the twelfth successive month while total new orders fell at the sharpest rate since October.

The impacts were felt particularly hard on the price and supply fronts. Input cost inflation hit an 11-month high, leading to a further increase in selling prices.

09:24 AM GMT

Asda boss denies rift with brother seeking to offload stake

One of the billionaire brothers who owns Asda has denied that there is rift in his relationship with his sibling just three years after the pair acquired Britain’s third largest supermarket.

Mohsin Issa told the BBC that he and his brother Zuber “get on exceptionally well”.

Zuber, 51, is attempting to offload his stake in the debt-laden supermarket and has approached buyout specialists and retailers as he seeks a retreat to their original business running petrol stations and takeaways.

Days earlier it emerged that EY had quit as auditor to Asda amid one of its senior partners starting a romantic relationship with Mohsin.

Zuber Issa, right, is attempting to offload his stake in Asda
Zuber Issa, right, is attempting to offload his stake in Asda - Jon Super

09:10 AM GMT

Asda to invest £150m on pay rises for staff

Asda has said it will invest £150m into giving more than 120,000 staff an 8.4pc pay rise.

The UK’s third largest supermarket chain said it will increase basic pay for retail workers to £12.04 an hour later this year, with those at stores inside the M25 receiving £13.21.

It is the latest supermarket group to hike pay rates, ahead of an increase in the national minimum wage in April.

The national minimum wage will increase from its current rate of £10.42 to £11.44 on April 1.

Asda currently pays an hourly rate of £11.11 to staff, with that increased to £12.28 within the M25.

It said it will give staff an interim increase to the new national minimum wage in April, with those inside the M25 receiving £12.61, before it launches the larger pay deal in July.

Usdaw, the trade union that negotiates with Asda on retail pay in Northern Ireland and in Asda Express, is recommending members accept the rates in a ballot that closes on March 15.

Asda will give more than 120,000 staff an 8.4pc pay rise
Asda will give more than 120,000 staff an 8.4pc pay rise - Richard Walker/Asda/PA

08:52 AM GMT

FTSE 100 rises amid global stocks rally

UK stocks opened higher in a mirror of gains across global markets as investors cheered signs of slowing inflation in the United States.

The internationally-focused FTSE 100 index was up 0.5pc as markets tracked a rally on Wall Street.

The US PCE data showed the annual increase in inflation was the smallest in three years, raising hopes of a rate cut from the Federal Reserve in the first half of the year.

Interest rate-sensitive real estate investment trusts climbed as much as 1.3pc while telecommunications companies jumped 2.3pc.

Pearson advanced 4.6pc to the top of the FTSE 100 after the education company met market expectations for 2023 operating profit, which rose 31pc on an underlying basis.

The more domestically-oriented FTSE 250 gained 0.53pc and was led by a 15.1pc rise in ITV after the broadcaster sold its entire 50pc stake in streaming service BritBox to BBC Studios for £255m.

08:42 AM GMT

Boeing delivery delays will drive up fares, Ryanair warns

Ryanair has warned it will be forced to push up air fares this summer as it grapples with delays to deliveries of new aircraft.

The low-cost airline urged customers to book early to secure lower fares after it said Boeing now expects to deliver just 40 of the 57 planned B737-MAX8200 aircraft that had been due to arrive by the end of June.

The Irish carrier said it would have to reduce the equivalent of 10 aircraft’s worth of travel from its summer schedules.

It said it will “reduce frequencies on existing routes rather than cutting new routes”.

Ryanair shares fell 0.7pc in early trading as it said overall passenger traffic for the year is expected to drop below 200m, compared to an original target of 205m.

Ryanair chief executive Michael O’Leary said:

We are very disappointed at these latest Boeing delivery delays, but we continue to work with Boeing to maximise the number of new B737 aircraft we receive by the end of June, which we can confidently release for sale to customers during the S24 peak.

We will now work with Boeing to take delayed aircraft deliveries during August and September 2024 to help Boeing reduce their delivery backlog.

Ryanair said it would have to increase prices after delays in planned deliveries
Ryanair said it would have to increase prices after delays in planned deliveries - REUTERS/Ints Kalnins

08:22 AM GMT

Superdry shares plunge as deadline for founder’s takeover talks extended

Superdry shares plunged after it announced a delay in talks with its founder Julian Dunkerton over a deal to take the high street chain private.

The ailing retailer plunged by 13pc as trading began in London after it said it would delay the deadline for a firm offer from Mr Dunkerton until March 29.

It had previously said he had until today to make an offer for the business or stand down.

It said talks remains ongoing “including its exploration of various material cost saving options, which is expected to be an important element of any such offer”.

Mr Dunkerton already owns around a quarter of the company, having increased his holding last year during an equity fundraise.

Going private raises the spectre of another high-profile British company exiting the London Stock Exchange after a bumpy ride on the markets.

Mr Dunkerton took Superdry public in 2010, with the retailer joining the London Stock Exchange with a value of £395m.

Within a week, the company was worth almost £1bn but it is now worth less than £35m.

08:05 AM GMT

UK markets open higher

The FTSE 100 has begun the day higher as markets were relieved by US inflation data indicating an interest rate cut by the Federal Reserve is still possible in the first half of this year.

Britain’s flagship stock index gained 0.6pc to 7,673.21 while the midcap FTSE 250 rose by 0.7pc to 19,140.29.

08:00 AM GMT

China manufacturing slumps for fifth straight month

Manufacturing in China contracted for a fifth consecutive month, according to an official survey of factory managers, amid persistent weakness in the world’s second largest economy.

The official purchasing managers index, or PMI, fell to 49.1 in February from 49.2 the month before. The PMI is on a scale up to 100 where 50 marks the cutoff between expansion and contraction.

The manufacturing PMI has fallen in ten of the past eleven months, rising only in September.

February’s reading comes in spite of Beijing’s recent measures to shore up the economy, including reducing a lending rate that benchmarks home loans and cutting banks’ reserve requirements to boost lending.

07:54 AM GMT

BBC buys out ITV’s stake in BritBox for £255m

The BBC’s commercial arm has bought out ITV from the subscription service BritBox International in a £255m deal, the companies have announced.

BBC Studios said it had extended BritBox’s licensing agreement with ITV as part of the deal, which sees it taking full ownership of the service.

ITV had previously owned 50pc of the platform, which has around 3.75m subscribers and brings together both BBC and ITV content.

BBC Studios chief executive Tom Fussell said: “This is an important acquisition for us. We are taking full ownership of a successful, growing service we know well and that fits with our stated ambition to double the size of our business.”

Britbox contains a host of classic TV series, along with binge-worthy modern boxsets.

The King and Queen's puppets on Spitting Image, which is available on BritBox
The King and Queen's puppets on Spitting Image, which is available on BritBox - Mark Harrison for Avalon/Britbox

07:50 AM GMT

Britain’s last independent haulier agrees to US takeover

Bosses at Britain’s last independent haulier have agreed to the latest offer from a US suitor following a takeover battle.

On Thursday, GXO Logistics - a US-based logistics group - revealed it had made a 605p-a-share cash offer for Wiltshire-headquartered Wincanton, valuing it at around £762m.

Wincanton’s directors had previously agreed to a bid by Ceva Logistics - part of French shipping specialist CMA CGM - which valued the business at £605m.

This morning, the UK haulier’s bosses said they would withdraw its backing from the deal and support the larger bid from GXO.

Sir Martin Read, chairman of Wincanton, said:

Under the current management team, we have made positive progress and ensured that Wincanton is at the forefront of logistics innovation.

The board of Wincanton is pleased that GXO recognises the very significant value inherent in this business and intends to recommend the offer to shareholders for their consideration.

Wincanton, which was founded in 1925, is best known for its blue and white lorries on UK motorways
Wincanton, which was founded in 1925, is best known for its blue and white lorries on UK motorways - ZarkePix/Alamy Stock Photo

07:46 AM GMT

Rightmove warns customers will drop amid housing market uncertainty

Rightmove warned that its number of customers is likely to drop this year amid the uncertainty about interest rates and mortgage borrowing costs.

The online property portal raised concerns about the “ongoing uncertainty in the macro environment” but said in its annual results that it still expects average revenue per advertiser to grow by £100 to £110 in 2024, with overall revenue growth of 7 to 9pc.

Revenue increased by 10pc to £364.3m last year, while operating profit jumped 7pc to £258m.

It increased its final dividend by 10pc to 5.7p, having already returned £201.7m of cash to shareholders through share buybacks and dividends during 2023.

Chief executive Johan Svanstrom said:

In a year of economic uncertainty, consumers continued to trust Rightmove as the place to turn to help them make their move.

Customers were able to choose from an expanded, more sophisticated product suite, to continue to drive business results in a changing market environment.

Our financial performance in 2023 reflects the strength of our business model and our platform network effects.

07:29 AM GMT

Rising mortgage rates put house price growth at risk, say brokers

The first annual increase in house prices in a month has been no surprise for mortgage brokers after an “exceptionally strong” start to 2024.

However, many warned that the uptick in house prices could be short lived as lenders put up mortgage rates amid speculation that interest rates will stay at their 16-year highs of 5.25pc for longer.

Stephen Perkins, managing director of Yellow Brick Mortgages, said:

The start of 2024 was exceptionally strong as the mortgage rate war reigned supreme and demand went through the roof.

Initial enquiries from borrowers continue to grow, but there is now a degree of hesitation around pulling the trigger and making offers due to the recent increases in mortgage rates.

Mortgage rate volatility is leading to inaction, which could be costly for some if rates rise further.

Justin Moy, managing firector at EHF Mortgages, warned: “We are in danger of seeing all those green shoots of recovery from the start of 2024 evaporate quickly following the recent increases in mortgage rates.”

07:16 AM GMT

Interest rate uncertainty threatens housing recovery, warns Nationwide

Nationwide’s chief economist Robert Gardner warned that uncertainty about the future of interest rates could yet derail price rises.

He warned:

After falling sharply in late December, swap rates, which underpin fixed rate mortgage pricing, have drifted back up.

Borrowing costs remain well below the highs recorded last summer but, if the recent upward trend is sustained, it threatens to restrain the pace of any housing market recovery.

While the squeeze on household budgets is easing, with wage growth now outstripping inflation by a healthy margin, it will take time to make up for the ground lost over the past few years, especially given consumer confidence remains fragile.

07:13 AM GMT

House prices approach record high as mortgage lending booms

House prices returned to growth for the first time in more than a year and are approaching their record high, according to a lender, as mortgage approvals surged.

Property values rose by 1.2pc in the 12 months to February, the Nationwide house price index showed.

Prices increased by 0.7pc between January and February, making the average home worth £260,420.

It comes as figures published by the Bank of England showed that mortgage approvals hit their highest in almost 18 months in January as lower borrowing costs tempted more buyers into the housing market.

More than 55,000 loans were approved for home purchase in the month, according to the Bank of England, the highest since October 2022, just before sales went into freefall amid financial turmoil in the wake of Liz Truss’s mini-Budget.

Robert Gardner, Nationwide’s chief economist, said:

House prices are now around 3pc below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.

The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market.

Indeed, industry data sources point to a noticeable increase in mortgage applications at the start of the year, while surveyors also reported a rise in new buyer enquiries.

07:03 AM GMT

Good morning

Thanks for joining me. We begin the day with the latest figures showing house prices increased for the first time in more than a year in February.

The average price of a home grew by 1.2pc in the year to February, rising for the first time since January 2023, making properties typically worth £260,420, according to the lender Nationwide.

5 things to start your day

1) Chinese EVs pose a threat to US national security, Biden warns | President’s comments come as the West braces for Beijing’s electric car shock

2) Public sector must temper pay demands or put frontline services at risk, says Treasury | Large wage increases remain unaffordable and are eating into departmental budgets

3) How the myth of the ‘state pension pot’ has warped Britain’s finances | National Insurance inconsistencies highlight the shaky position of retirement nest eggs

4) Sunak accused of ‘stealth amnesty’ on asylum seekers as immigration surges again | 1.4 million people granted UK visas in 2023 as arrivals hit 18-year high

5) Ben Marlow: Ocado has failed to deliver for M&S customers | The repeated dismissal of old-fashioned values has come back to bite the online apostles

What happened overnight

Facebook parent Meta announced it would no longer pay Australian media companies for news, prompting a government warning that the tech giant was in “dereliction” of past promises.

Extending a global retreat from news content, Meta said it would scrap the Facebook News tab in Australia and would not renew deals with news publishers worth hundreds of millions of dollars.

The decision had been on the cards, but will come as a hammer blow for Australian news outlets already struggling to stay afloat.

However, Australian shares hit fresh record highs - as did markets in Japan - as the key US PCE price index - the US Federal Reserve’s preferred measure of inflation - kept up hopes for a June rate cut.

Australia’s resources-heavy shares ASX 200 rose 0.6pd to a new record high of 7,745.6.

In Japan, the key Nikkei index almost touched 40,000 for the first time, rising 1.9pc, or 744.63 points, to close at 39,910.82, while the broader Topix index added 1.3pc, or 33.69 points, to 2,709.42.

China’s mainland markets were higher. The bluechips rose 0.4pc and Shanghai Composite index edged up 0.2pc, after rebounding nearly 10pc last month on the back of Beijing’s efforts to stop short-selling in the market.

Hong Kong’s Hang Seng index also reversed earlier losses to be up 0.6pc.

In America, the S&P 500 rose 0.5pc, to 5,096.27 to top its record set last week. The Nasdaq Composite index rose 0.9pc, to 38,996.39 and surpassed its all-time high that had stood since 2021. The Dow Jones Industrial Average of 30 leading US companies finished just below its record set last week after rising 0.1pc, to 38,996.39.

The yield on benchmark US 10-year Treasury bonds was little changed at 4.27pc.