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Pound and FTSE 100 gain ground

Bank of England pound sterling FTSE 100 markets -  REUTERS/Toby Melville//File Photo
Bank of England pound sterling FTSE 100 markets - REUTERS/Toby Melville//File Photo

Sterling and the FTSE 100 both pushed higher as sentiment remained bullish ahead of the Bank of England decision later this week.

The pound rose 0.5pc against the dollar to $1.3503, recording its third straight day of gains.

Markets are fully pricing in an interest rate rise to 0.5pc this week, with as many as five increases by the end of 2022. Speculation is also mounting that the Bank could signal the plan for winding down its pandemic bond-buying programme.

The FTSE 100 was up 1pc at close, with miners and banking stocks leading gains.

06:03 PM

Wrapping up

Thanks for following us today, we are now closing the blog. Before you go, have a look at the latest stories from our business reporters:

06:01 PM

Activist targeting Unilever appointed to Janus Henderson board

The activist investor stalking Unilever has won a board seat at fund manager Janus Henderson after pushing for an overhaul of the business. Hannah Boland reports:

Nelson Peltz is joining the board of the investment company less than two years after his business Trian Partners revealed it owned a stake of more than 10pc. Ed Garden, another executive at Trian, will also take a board seat.

The appointments are likely to be closely watched at Unilever after it emerged last month that Mr Pelttz had built a holding in the business amid demands for a major shake-up and possible sale of assets.

Richard Gillingwater, chairman of Janus Henderson, said: "We look forward to benefitting from [Trian's] deep industry experience, fresh perspectives, and valuable insights as we search for a new chief executive and evaluate growth opportunities and expansion into new markets and products."

05:41 PM

FTSE 100 holds gains

After a cold start to the week, the FTSE 100 has recorded another strong performance, shaking off the fears from a week ago over the military situation in eastern Europe.

Markets across Europe outperformed their Wall Street counterparts as they soared upwards. Traders once again seem more focused on US monetary policy than on a potential war between Russia and Ukraine.

London's main index was 1pc higher at 7,535 at close.

"European markets have got off to a strong start to February, after last night's push back by a number of Federal Reserve officials, who poured cold water on some of the hawkish narratives being put out with respect to the Federal Reserve's hiking timeline," said CMC Markets analyst Michael Hewson.

05:20 PM

'Smart' electric scooters that stop if ridden recklessly come to Britain

Electric scooters that automatically stop when being ridden recklessly or on footpaths will be brought to British roads in a world first for the "smart" technology. James Titcomb has more:

Superpedestrian, an American company that styles itself as the “Volvo of e-scooters”, plans to bring the technology to a trial programme in Nottingham in the spring before taking it to cities in the US and Europe. It has also raised $125m (£93m) to expand.

The technology, designed to make the devices safer, comes as scooter companies try to prove to ministers that they are not dangerous. The Department for Transport has approved trials from scooter hire companies in cities across the UK amid hopes that they could help cut down on traffic and emissions, and are considering fully legalising them. The use of privately owned scooters remains illegal.

Read James's full story here

05:03 PM

Amazon doubles UK parcel lockers to take pressure off delivery staff

Amazon has doubled the number of its UK parcel lockers as it tries to take pressure off delivery workers, the Financial Times reported.

Lockers are usually placed in car parks, petrol forecourts and outside retail outlets so people can collect their online shopping there instead of booking home deliveries.

With the e-commerce trend accelerating during the pandemic, parcel deliveries surged 50pc to 4.2bn in the financial year to March 2021, according to Ofcom, straining logistics operations of many online retailers.

04:45 PM

Ethiopian Airlines flies Boeing 737 MAX for first time since 2019 crash

Ethiopian Airlines 737 MAX Bole International Airport in Addis Ababa
Ethiopian Airlines 737 MAX Bole International Airport in Addis Ababa

Ethiopian Airlines has today flown the Boeing 737 MAX for the first time since a crash nearly three years ago killed all 157 people on board and triggered the global grounding of the aircraft.

Flight 302 from Addis Ababa to Nairobi plunged six minutes after take-off into a field southeast of the Ethiopian capital in March 2019, five months after a similar crash in Indonesia left 189 people dead.

The twin disasters and subsequent scrutiny of the 737 MAX's faulty flight handling system - known as the Maneuvering Characteristics Augmentation System (MCAS) - amounted to the worst crisis in Boeing's history.

State-owned Ethiopian Airlines, the jewel of the economy of Africa's second most populous country, had long said it would be the last carrier to use the single-aisle jets again.

It said this week that the decision to resume 737 MAX flights came after "intense recertification" by regulators in the United States, the European Union, China and Ethiopia. It also provided a list of 35 other carriers that have also begun operating the jet again.

04:26 PM

Carlyle Group becomes first Wall Street's major private equity firm to set green goals for portfolio companies

Private equity giant Carlyle Group is requiring all its portfolio companies to cut their greenhouse gas emissions to net zero by 2050.

It's the first major private equity firm to join its Wall Street peers, such as Goldman Sachs, in making the climate pledge.

About three quarters of the Washington-based firm’s majority-owned companies in the private equity, power and energy sectors will be in line with net-zero goals by 2025,. That would not cover a specific category of emissions that companies can’t control in the same way as those generated by their own operations.

Carlyle said it expects to bring the emissions of all its investments, including those that companies don’t control directly, to net zero by 2050. It will also push new majority-owned portfolio companies to set Paris-aligned climate goals. It will monitor their work and press them to collect more data on how they’re getting to the targets.

04:10 PM

Handing over

That's all from me today – thanks for following! Handing over now to Giulia Bottaro.

04:07 PM

Marks & Spencer and Aldi call a truce in Colin the Caterpillar cake war

Colin the caterpillar, left, and impostor Cuthbert the Caterpillar, right
Colin the caterpillar, left, and impostor Cuthbert the Caterpillar, right

There's been a major development in the Colin the Caterpillar war. Laura Onita serves up the details:

Marks & Spencer has settled a copyright row with Aldi over its Colin the Caterpillar cake after the German discounter altered the appearance of a lookalike version.

The spat between the two retailers made headlines in April when M&S logged a legal claim against the German discounter after it began selling a cake called Cuthbert the Caterpillar, which looked similar.

The companies reached a confidential agreement out of court on Nov 5, legal documents show. They declined to comment on the terms of the settlement.

M&S’s roll-shaped cake first went on sale more than 30 years ago. It is made of chocolate sponge and buttercream encased in a chocolate shell and dotted with multi-coloured chocolate buttons.

Last year, Marks claimed that Aldi infringed its trademark and demanded it stop selling the Cuthbert cake and not sell any similar products in the future.

​Read Laura's full story here

03:25 PM

US job openings rise unexpectedly

US job openings rose unexpectedly in December while the quits rate decline slightly, suggesting labour demand held up despite a surge in Covid cases.

The number of available positions rose to 10.9m from 10.8m in November, according to Labor Department figures. This was ahead of economists' expectations.

The so-called quits rate edged down marginally to 2.9pc from a record 3pc in the previous month, suggesting a high degree of churn in the jobs market.

The figures show vacancies remained high in the final month of 2021 despite temporary business closures as omicron tore through the country.

While openings may fall in January, economists expect the impact to be short-lived as employers increase headcount amid stronger consumer demand.

03:03 PM

KPMG partners handed 20pc pay rise to almost £700,000

KPMG partners - REUTERS/Charles Platiau/File Photo
KPMG partners - REUTERS/Charles Platiau/File Photo

Partners at KPMG have been handed their biggest payday since 2014 despite a tumultuous year in which the firm was embroiled in a string of scandals.

Simon Foy has more:

The big four accounting and consulting firm paid its 571 partners an average of £688,000 last year, up by a fifth on 2020.

The chief executive, Jon Holt, was awarded £1.7m, while chairman Bina Mehta took home £879,000. Its 14,700 staff also shared a £100m bonus pool after the firm was boosted by a surge in demand for its dealmaking advice.

The pay bump came after KPMG faced one of its most turbulent years. In February, its former UK chief resigned after telling staff to “stop moaning” and “playing the victim card” about working conditions.

Since Mr Holt took over in April, KPMG has been handed a £13m fine for having a “deeply troubling” conflict of interest in its role in the sale of Silentnight to a US private equity firm. It had been eyeing the mattress maker as a potential client while deliberately pushing the company into insolvency.

It was also pulled up by the accounting watchdog over the quality of its banking audits and dropped out of bidding for public sector contracts following criticism from the Cabinet Office.

Read Simon's full story here

02:40 PM

Wall Street slips at the open

US stocks drifted as markets opened, with investors focusing on comments from Fed officials and more corporate results.

The S&P 500 and Dow Jones were little changed, while the Nasdaq dipped 0.2pc.

It comes after four Fed officials said they'd back interest rate rises that didn't damage the economy, bringing some calm back to markets. Meanwhile, Exxon Mobil and UPS both posted positive results.

02:07 PM

Gas prices tumble as Russia steps up supplies

Natural gas prices plunged after Russia stepped up supplies via a key route through Ukraine.

The European benchmark slumped as much as 12pc, while the UK equivalent was down 11pc as deliveries into Slovakia returned to normal.

Russian supplies have remained curbed in recent weeks, so higher flows are taking the pressure off prices alongside milder weather and higher wind output.

Still, Russian flows via Poland into Germany remain suspended, and geopolitical tensions over Ukraine are still running higher.

01:52 PM

UK inks fresh CO2 deal amid shortage fears


Britain's carbon dioxide industry as agreed another deal to ensure stable supplies amid concerns factory shutdowns could lead to shortages of food and drink.

It comes after an initial agreement with CO2 producer CF Industries signed last year came to end, prompting fears the industry could be plunged into crisis.

The gas, which is produced as a by-product of fertiliser, has a range of uses from fizzy drinks to packaging and stunning animals before slaughter.

The Business Department said:

The deal will enable CF Fertilisers’ Billingham plant to continue to operate while global gas prices remain high. It means key sectors, including food processing and nuclear power, are ensured supplies of CO2.

In the longer term, the Government would like to see the market take measures to improve resilience, and we are engaging on ways this could happen.

12:57 PM

Private equity firms mull $25bn bid for Novartis division

Two private equity firms are said to be mulling a joint bid for the generics unit of Swiss pharmaceutical firm Novartis, in what could be one of the biggest buyout deals ever.

Blackstone and Carlyle Group are weighing up a deal for the Sandoz business, which could be valued at $25bn (£18.5bn), Bloomberg reports. Other private equity firms are also said to be in the running.

Novartis last year said it was reviewing options for Sandoz, which makes generic drugs. The business has struggled against tough competition, with sales stagnant at $9.6bn in 2020.

12:41 PM

Oil holds near seven-year high ahead of Opec meeting

Oil prices have dipped slightly but are holding close to a seven-year high ahead of a meeting of producer cartel Opec later this week.

Benchmark Brent crude dipped 0.4pc, while West Texas Intermediate fell back below $88 a barrel.

Oil has surged to its highest level since 2014 amid robust demand, limited supply and worries about a conflict between Russia and Ukraine.

While most analysts expect Opec to maintain its supply increases, Goldman Sachs warned the recent price surge could mean the group may deliver more than expected.

12:24 PM

Tesla to disable 'rolling stop' feature

Tesla rolling stop self-driving -  David Zalubowski
Tesla rolling stop self-driving - David Zalubowski

Tesla has recalled more than 53,000 cars to disable a feature in its self-driving software that could cause vehicles to roll straight through a junction.

Tesla has released an over-the-air software update that disables the so-called rolling stop feature after discussions with US authorities, Bloomberg reports.

The company is going to send letters to the owners. Tesla said no accidents had been reported.

12:07 PM

US futures dip as FTSE rallies

Wall Street is set to open lower this afternoon as US stocks miss out on a broader market rally.

Futures tracking the tech-heavy Nasdaq were little changed, while the S&P 500 and Dow Jones both fell 0.2pc.

Meanwhile, the FTSE 100 is holding its gains of 1pc, with miners and banking stocks leading the way.

11:56 AM

Historic bookshop Blackwell's up for sale

Blackwell's bookshop - Oli Scarff/Getty Images
Blackwell's bookshop - Oli Scarff/Getty Images

The family behind historic bookseller Blackwell's are said to have put the company up for sale for the first time in its 143-year history.

Blackwell's, which opened its first store in Oxford in 1879, has appointed advisers to oversee a sale after scrapping plans to transfer ownership of the business to employees, Sky News reports.

Discussions with prospective buyers are said to have been underway for some time, with a deal possible in the coming months.

Blackwell's, which is one of Britain's oldest bookshops, now trades from 18 stores and online. It also trades under the name Heffers in London, Cambridge and Edinburgh.

11:43 AM

What to expect from this week's Bank of England meeting

Another interest rate rise looms, as rapidly rising prices catch central bankers off guard.

Russell Lynch has dug into the challenges facing members of the Bank's MPC when they meet later this week to decide on interest rates.

Read the full story: Inflationary tsunami leaves the Bank of England high and dry

11:32 AM

Watchdog struggles to hire lawyers as salaries soar

The competition watchdog is struggling to attract qualified staff because of soaring salaries in a booming private sector, its boss has said.

Dr Andrea Coscelli said the Competition and Markets Authority (CMA) needed to hire more staff to ensure that it exercised its post-Brexit powers, but that it's proving difficult to fill some jobs.

He told MPs: "For mergers, antitrust and digital it is a bit tougher, because the private sector market is very hot at the moment in those areas.

"As you know there's very significant M&A [mergers and acquisitions] activity and salaries for lawyers have increased very significantly. We have civil service pay scales – we've had a pay freeze over the last 12 months – so it's not super easy."

He said this was "a risk" for the CMA going forward.

11:24 AM

Mobile network Three unveils 12.6pc pay rise

Mobile operator Three has announced pay increases of up to 12.6pc for around 2,500 employees in its retail stores.

The new wages, which set minimum hourly rates at £10.13 nationwide and £11.40 in London, take pay above the National Living Wage.

This doesn't include bonuses averaging 25pc of base salary, which will continue to be paid to all staff.

Three said it was currently recruiting for 100 vacancies at its retail stores, including in central London, Manchester, Birmingham and Glasgow.

11:06 AM

Eurozone unemployment falls to record low

Unemployment in the eurozone fell to a record low in December in a sign the bloc's labour market is holding up despite restrictions to curb Covid infections.

The unemployment rate declined to 7pc last month, down from 7.1pc in November and the lowest rate since records began.

German data earlier today also showed an unexpectedly strong decline in jobless claims, marking a much-needed to boost to the country's ailing recovery.

10:45 AM

Nicola Sturgeon's transport officials don't want to travel to the office

Nicola Sturgeon Scotland - Fraser Bremner - Pool/Getty Images
Nicola Sturgeon Scotland - Fraser Bremner - Pool/Getty Images

Nicola Sturgeon has been accused of “failing to lead by example” after it emerged Holyrood officials running Scotland’s rail and roads plan to go into the office as little as one day a week after the pandemic.

Oliver Gill has the story:

Civil servants in Ms Sturgeon’s devolved transport authority want to work from home for three to four days a week, according to a Holyrood filing.

Meanwhile, only 5pc of staff at Transport Scotland went into the office at some point between the start of the pandemic and the end of November, details released under Freedom of Information laws also disclosed.

The filings come with Ms Sturgeon’s administration poised to nationalise Scotland’s railways at the end of March.

With the operation of the railways coming on to the public balance sheet, UK taxpayers will pick up the financial shortfall for running train services if passenger numbers do not return to pre-pandemic levels. Alternatively, service cuts could be introduced to balance the books.

​Read Ollie's full story here

10:32 AM

Expert reaction: Manufacturing robust but concerns linger

Rob Dobson, director at IHS Markit, says UK manufacturing showed "encouraging resilience in the face of the omicron wave".

Causes for concern remain, however, as new orders growth slowed, exports barely rose, staff absenteeism remained high and manufacturers' ongoing caution regarding supply chain disruptions led to the beefing up of safety stocks.

There was some positive news on the supply chains front. Although pressure on vendors remains severe, and still sufficient to stymie output growth and cause difficulty in obtaining required inputs, supplier lead times lengthened to the lowest degree since November 2020 to suggest that the current period of abnormal stress has hopefully passed its peak, despite the surge in cases linked to omicron.

This also lessened the upward pressure on prices, with input costs and output charges both rising at less elevated rates in January.

10:28 AM

Manufacturing output rises at fastest pace in six months

Manufacturing output and employment strengthened at the start of the year as companies responded to improved order intakes, rising backlogs of work and addressed shortfalls in capacity.

While supply chain issues continued to hold back growth, there were signs these had passed their peak, and price inflation eased slightly.

The IHS/Markit PMI fell slightly to 57.3 in January, down from 57.9 the previous month. The slight dip reflected slower growth of new orders and a further easing in the rate of increase in vendor lead times.

Production volumes rose for the 20th successive month in January. The rate of expansion accelerated for the third month running to its highest since July 2021.

10:11 AM

Tesco: Changes will simplify our business

Jason Tarry, chief executive of Tesco UK and Ireland, said the job cuts would help the supermarket chain operate more simply and efficiently.

We operate in a highly competitive and fast-paced market, and our customers are shopping differently, especially since the start of the pandemic.

We are always looking at how we can run our business as simply and efficiently as possible, so that we can reinvest in the things that matter most to customers. The changes we are announcing today will help us do this.

Our priority now is to support our impacted colleagues through these changes and, wherever possible, find them alternative roles within our business.

Read more: Tesco pulls the plug on Aldi challenger – and more deli counters

09:57 AM

Expert reaction: Consumers could get nervy as rates rise

Karim Haji, head of financial services at KPMG, says rising inflation and rate rises will soon feed in to lending.

The lag in the data means we’re not looking at the full impact of some of the recent macro developments, such as the interest rate hike and rising inflation, though there is already evidence of higher rates on mortgages and personal loans.

With the housing market still buoyant – particularly outside the M25 – there is the prospect of another strong year in 2022. Yet if lenders feel forced to pass on a further interest rate rise on Thursday to borrowers, consumers could get nervy, cooling the market.

From a household finances perspective, the personal loan interest rate is the measure to watch this year. Typically, unsecured loans are the ones consumers default on first and a rising rate would be a sign that banks are worried about the gloomier consumer outlook.

09:53 AM

Consumer borrowing holds up despite omicron

Consumer borrowing remained resilient in December as Brits shrugged off concerns about the omicron and rising inflation.

Unsecured lending rose by £831m last month, according to new Bank of England figures. That's double the pace economists had expected.

New mortgage approvals surged to 71,015, defying forecasts for a drop as the housing market kept up its pace.

09:45 AM

Two-thirds of Brits suffer cost-of-living crunch

Two-thirds of adults in Britain have reported a rise in their cost of living in the past month, with energy prices playing a growing factor in the squeeze on household budgets.

A survey by the ONS found that 79pc of those who experienced higher costs cited increased gas and electricity bills as a cause.

Energy costs rose considerably in October after Ofgem raised the price cap by 12pc. Consumers are braced for an even bigger surge in prices in April, when the next increase comes into effect.

09:39 AM

Pound rises with Bank of England in focus

Sterling rallied against a weaker dollar with morning with focus firmly on the Bank of England's meeting later this week.

Markets are pricing in another 25 basis point rise in interest rates when the MPC meets on Thursday, with as many as five rate rises in total this year.

Traders also have an eye on Boris Johnson's future as prime minister, though it's become clear his position rests on the outcome of the Met's investigation, which could take weeks or even months.

The pound rose 0.3pc against the dollar to $1.3487. Against the euro, it was up 0.1pc at 83.48p.

09:24 AM

Cineworld starts talks with Regal shareholders

Cineworld Regal shareholders -  Henry Nicholls
Cineworld Regal shareholders - Henry Nicholls

The problems just keep mounting for Cineworld. Away from its £700m Canadian court battle, it's also embroiled in a row with former shareholders in its US business Regal.

The cinema group said in September it would pay $170m (£126m) to shareholders who were disgruntled with the price they received following the takeover in 2017.

Cineworld said it's now kicked off talks with the shareholders. To facilitate the talks, it's obtained undertakings to waive off any default arising from non-payment of obligations due to creditors, including certain holders of the company's guaranteed convertible bond due 2025.

The company, which is also facing a C$1.2bn (£700m) fine over its botched takeover of Cineplex, said it hoped a deal could be reached in the period afforded by the waivers.

09:13 AM

UBS jumps as it boosts share buyback

Shares in UBS jumped this morning after the investment bank ramped up its buyback programme on the back of better-than-expected results.

Switzerland's biggest lender beat forecasts for revenue and profit and said it will buy back almost $5bn (£3.7bn) of shares this year – almost doubling its buyback programme. Shares rose as much as 7.4pc.

However, UBS booked a $740m charge in the fourth quarter relating to a $2bn tax penalty it's fighting in the French supreme court. The provision adds to the $505m the bank has already set aside to cover possible costs.

09:01 AM

Two in three bankers could be back at London offices

Pret Index return to the office -  Jason Alden/Bloomberg
Pret Index return to the office - Jason Alden/Bloomberg

Time for an update from the closely-watched Pret Index, which gives us a tasty sense of how the return to the office is going.

Sales of cappuccinos and tuna baguettes grew faster in London's financial districts last week than in any other area in the UK after banks hauled staff back to the office.

The index, compiled by Bloomberg, showed transactions are now at 68pc of pre-pandemic levels in the City and Canary Wharf – the highest figure for almost two months.

It comes after the Government dropped its work from home order, prompting the likes of Goldman Sachs, Citigroup and Barclays to tell their bankers to get back to their desks.

Pret chief executive Pano Christou predicted sales could hit 90pc of pre-pandemic levels on Tuesday, Wednesday and Thursday. However, he said Monday and Friday would be more subdued as bankers opt to work from home around the weekend.

08:50 AM

Virgin Money upbeat despite mortgage lending hit

Virgin Money has struck an upbeat tone on the outlook for the UK economy, even as it revealed a hit to mortgage lending since the end of the stamp duty holiday.

The group reported a 0.5pc fall in mortgage lending to £57.8bn in its first quarter to the end of December. It blamed the end of the stamp duty relief from October, as well as tough competition in the sector.

Virgin Money also said business lending dropped 2.2pc to £8.3bn in the quarter as demand remained "subdued" and as the Government's Covid support schemes began to wind down.

But the bank upped the full-year outlook for its net interest margin – a key measure of profitability for retail banks – and cheered a more buoyant outlook for the wider UK economy.

It said: "Despite the uncertainty posed by new variants and concerns over inflation, the strengthening backdrop and easing of Government restrictions give some scope for greater optimism about the pace of the recovery."

Shares rose 0.2pc following the update.

08:39 AM

Irn-Bru owner raises prices as inflation bites

Nicola Sturgeon and Alexandria Ocasio-Cortez with a can of Irn-Bru
Nicola Sturgeon and Alexandria Ocasio-Cortez with a can of Irn-Bru

The company behind Irn-Bru and energy drink Rockstar is hiking its prices as costs increase.

AG Barr said it was paying more for raw materials, packaging and energy bills, forcing it to cut costs and increase prices for consumers.

Still, this didn't stop the London-listed firm from lifting its profit forecasts for the full year. Sales for the year to the end of January are set to hit £267m – up 17.5pc on last year and beating pre-pandemic levels.

This came despite the omicron outbreak, which led to the closure of pubs, bars and restaurants.

Roger White, chief executive of AG Barr, said:

We have remained fully operational throughout the year, producing high-quality products and providing strong business support to all of our customers.

We have delivered an excellent financial performance against a volatile backdrop, whilst at the same time delivering on our strategic priorities.

08:29 AM

FTSE risers and fallers

The FTSE 100 has got off to a positive start for the month, pushing up as much as 1pc in early trading.

The gains are being led by mining stocks including Anglo American and Glencore. Rio Tinto has shrugged off a shocking report into workplace culture to rise 2pc.

Banks including HSBC are also providing some positive momentum, tracking higher yields and expectations of another Bank of England interest rate rise later this week.

The domestically-focused FTSE 250 was up 1.1pc, with travel and leisure stocks leading gains.

08:22 AM

Joules tumbles as higher costs hammer profits

Joules profit retail fashion
Joules profit retail fashion

Joules has plunged in early trading after the upmarket fashion brand said its profits would fall well short of expectations.

The London-listed retailer had forecast full-year profit of between £10m and £12m, but has revised this down to just £5m.

It blamed a sharp decline in footfall due to the omicron outbreak, delays to stock arrivals due to supply chain troubles and rising costs in freights, duties and distribution.

The company's distribution centre costs more than doubled – £1.2m above expectations – while wage costs were also higher, although they have since reduced.

As a result, bosses said it would increase prices in its spring-summer collection.

Shares dropped as much as 34pc.

08:15 AM

Grocery inflation rises to 3.8pc

Supermarket prices have grown 3.8pc over the last year, adding an extra £180 to the average household's grocery bill.

Grocery inflation over the last four weeks rose 0.3 percentage points from December, in the latest sign of how the cost-of-living crisis is hitting consumers.

It came as the latest data from Kantar showed a 3.8pc fall in grocery sales in the 12 weeks to 23 January, though sales remain 8pc higher than in the same period in 2020.

Shoppers began to return to their pre-pandemic habits. with more socialising, a return to the office and city centres and more visits to brick-and-mortar stores.

Sales of no- and low-alcohol and plant-based products also soared as Brits embraced Dry January and Veganuary.

Fraser McKevitt, head of retail and consumer insight at Kantar, said:

Prices are rising on many fronts, and the weekly shop is no exception. Like-for-like grocery price inflation, which assumes that shoppers buy exactly the same products this year as they did last year, increased again this month.

We’re now likely to see shoppers striving to keep costs down by searching for cheaper products and promotions. Supermarkets that can offer the best value stand to win the biggest slice of spend.

08:05 AM

Expert reaction: Property market refuses to squeak

Lucy Pendleton, at estate agent James Pendleton, says there are no signs of a slowdown in the market just yet.

The pips are being squeezed on all sides but for now the UK property market just refuses to squeak.

Weakening affordability remains the elephant in the room, with deposits requiring a higher chunk of annual pay than ever before. Add this to the soaring living costs, low stock availability and the prospect of more interest rate rises, and you can expect things to cool down.

With a roaring 2021 behind us it was tempting to believe January would be the month after the circus had left town. But with annual growth revving back up to full throttle, it seems reports of this hot market’s demise have been greatly exaggerated.

As supply improves, it will have a sobering effect on prices. Yet while the rest of the UK may take a breath after the record highs of the last 12 months, London, the unlikely poor relation, should be getting back to pre-pandemic business as usual.

08:02 AM

FTSE 100 opens higher

The FTSE 100 has gained ground at the open after bucking the wider trend on global markets to close higher in January.

The blue-chip index rose 0.7pc at the open to 7,513 points.

08:01 AM

House market posts strongest start to year since 2005

Away from the drama at Rio Tinto, there's yet more evidence of the UK housing market boom.

House prices registered their strongest start to the year since 2005, surging 11.2pc year on year to £255,556. That's up 0.8pc since December.

It's the biggest January jump for 17 years. However, a looming cost-of-living crisis means the property market is facing a slowdown, with higher interest rates, taxes and energy bills all hitting household finances.

Robert Gardner, chief economist at Nationwide, said:

Reduced affordability is likely to exert a dampening impact on market activity and house price growth, especially since household finances are also coming under pressure from sharp increases in the cost of living.

07:51 AM

Report piles fresh pressure on Rio over culture

Rio Tinto scandal Aboriginal Juukan Gorge Australia -  RICHARD WAINWRIGHT/EPA-EFE/Shutterstock
Rio Tinto scandal Aboriginal Juukan Gorge Australia - RICHARD WAINWRIGHT/EPA-EFE/Shutterstock

The damning report comes less than two years after the world's second biggest miner was embroiled in a controversy over its destruction of ancient Aboriginal caves in Australia.

Rio apologised for blowing up the two Juukan Gorge sites – burying a record of life dating back more than 40,000 years. The scandal sparked the resignation of former chief executive J-S Jacques, while chairman Simon Thompson also plans to step down.

The latest controversy over workplace culture now threatens to stoke fresh investor unrest.

07:40 AM

What's Rio doing about it?

The report outlined 26 recommendations that will inform how the FTSE 100 miner prevents and responds to discrimination and unacceptable workplace behaviour.

Rio said it will implement all these recommendations, with a focus on three main areas:

  • A commitment from the company’s leadership to create safe, respectful and inclusive working environments to prevent harmful behaviours and better support people in vulnerable situations. This includes improving diversity.

  • Ensuring the company’s camp and village facilities are safe and inclusive. This includes making sure the company is applying the same safety and risk processes that it uses to prevent harm in operations to create a safe environment for all employees and contractors.

  • Making it as easy and as safe as possible for all people to call out unacceptable behaviours, highlight issues when they happen and receive support. This includes introducing early intervention options and improving how the company responds to formal complaints in the workplace.

07:36 AM

Rio Tinto's response in full

Jakob Stausholm, chief executive of Rio Tinto, said:

The findings of this report are deeply disturbing to me and should be to everyone who reads them. I offer my heartfelt apology to every team member, past or present, who has suffered as a result of these behaviours. This is not the kind of company we want to be.

I feel shame and enormous regret to have learned the extent to which bullying, sexual harassment and racism are happening at Rio Tinto.

I am determined that by implementing appropriate actions to address the recommendations, and with the management team’s commitment to a safe, respectful and inclusive Rio Tinto in all areas, we will make positive and lasting change and strengthen our workplace culture for the long term.

I am grateful to everyone who has come forward to share their experiences as we go about this vital work.

07:34 AM

Rio Tinto publishes damning report

Good morning.

We kick off the day with a jaw-dropping report from Rio Tinto into its workplace culture, which has revealed sexual assaults, harassment, racism and "systemic" bullying.

The Anglo-Australian miner revealed that 21 women have experienced actual or attempted rape or sexual assault at its mines over the last five years.

More than a quarter of women experienced sexual harassment at work, while almost half of all employees suffered bullying. Meanwhile, racism was found to be widespread across its operations in Australia and South Africa.

The eight-month study, conducted by former Australian Sex Discrimination Commissioner Elizabeth Broderick, surveyed more than 10,000 employees.

5 things to start your day

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2) Nicola Sturgeon's transport officials don't want to travel to the office Transport Scotland's civil servants demand to work from home for up to four days per week

3) French demands for 'wet' signatures spark lengthy Dover delays Companies have faced hold ups as most documentation is produced digitally

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5) Top investor backs Vodafone boss after activist investor swoops in Abrdn says management has support of shareholders following revelation of Cevian Capital

What happened overnight

Asian markets rose in limited trade Tuesday following another strong lead from Wall Street fuelled by a rebound in tech firms, while comments from Federal Reserve officials eased concerns that it will embark on an aggressive phase of policy tightening.

The Nikkei 225 was up 0.3pc at 27,078.48, while the Hang Seng and Shanghai Composite were both closed for a holiday.

Coming up today

  • Corporate: Virgin Money UK, AG Barr, Joules (Trading update)

  • Economics: Manufacturing PMI (UK, US), unemployment rate (EU), ECB bank lending survey (EU)