Stocks open higher
Stocks have opened higher in the first minutes of trading in London.
TRG shares have soared 38% following its takeover offer from Apollo, and are now trading above the offer price of 65p.
But investors have been less welcoming of easyjets results, with shares down 3%.
Record fine for KPMG after failed audit of collapsed construction giant Carillion
KPMG, the major accountancy firm, is paying a record fine over its failed audit of the fallen construction and facilities management giant Carillion .
The big-four accountancy firm approved Carillion’s accounts not long before it collapsed under a £1.3 billion debt burden, with the loss of thousands of jobs. The shockwaves ripples through the public sector, where Carillion had a range of contracts covering schools, prisons and hospitals.
Even after reductions for co-operating with the Financial Reporting Council’s investigation into the audit, KPMG will pay £21 million in total.
It has been fined £18.5 million over its audit of Carillion covering the financial years ending in 2014, 2015 and 2016, as well as some work in 2017. The fine was reduced from £26.5 million because the company cooperated. It will pay £2,450,000 relating to the 2013 financial year.
The former KPMG partner Peter Meehan is being fined £350,000, reduced from £500,000 after he cooperated. He is banned from the profession for 10 years. Another former partner, Darren Turner, will pay £70,000, reduced from £100,000 having co-operated. Both men were also issued with a severe reprimand.
The FRC found “significant and serious breaches” including “ lack of integrity”.
Fall in US inflation rate expected
Inflation figures due this afternoon are expected to offer more signs of easing price pressures in the US economy.
Wall Street is forecasting that the annual headline inflation rate will have edged down to 3.6% in September, from 3.7% the previous month.
Core inflation excluding food and energy prices is likely to have slowed from 4.3% to 4.1% year-on-year, the lowest level since September 2021.
The next Federal Reserve policy meeting concludes on 1 November, when policymakers are widely expected to keep interest rates unchanged.
Watchdog eyes big-name broadcasters and TV production houses over freelance pay
Some of the biggest names in showbusiness are coming under scrutiny from the Competition and Markets Authority.
The watchdog is looking into potential collusion over the rates of pay offered to freelance production staff at a range of big-name TV programme makers, including the BBC and ITV.
Pay offered to the technical staff working on sports broadcasts came under scrutiny at the CMA in the summer of last year. Today’s announcement puts the wider industry in the spotlight. It said:
“The CMA believes it has reasonable grounds to suspect one or more breaches of competition law. The CMA has not reached a view as to whether there is sufficient evidence of an infringement.”
As well as the BBC and ITV, the companies under investigation are: Hartswood Films , Hat Trick Productions , Red Planet Pictures , Sister Pictures and Tiger Aspect Productions.
Easyjet flies high as pre-tax profits set to land at £460 million
Easyjet is bringing back its dividend as it expects its FY23 Group headline profit before tax to be between £440 million and £460 million.
The low-cost airline saw 8% year-on-year growth in customer numbers with load factors increasing to 93%.
Easyjet said it now has 157 firm orders for the deliery of new aircraft with the option of a further 100 as it charts a course towards major expansion.
John Choong, senior equity analyst at investing comparison platform, InvestingReviews.co.uk, said: “easyJet may be clear for takeoff after its latest numbers continue to climb to new heights. Although the outlook remains mildly turbulent, investors may find some relief in the fact that the company has already secured 73% of its fuel for the first half of its new financial year at a lower rate than today’s price.
“But perhaps more importantly, easyJet’s packaged holidays business continues to impress from end to end as is expected to rake in an impressive £120m. With its Holidays being more profitable, this leaves room for higher earnings potential next year and should see its shares flying even higher soon, as the firm upgraded its medium-term targets with the ambition to deliver over £1bn in pre-tax profits.”
EasyJet is proposing to order new aircraft and resume dividend payments to shareholders after making a record profit this summer (Nick Ansell/PA)
/ PA ArchivePrivate equity swoop for Restaurant Group
The Restaurant Group has agreed a takeover by private equity firm Apollo.
The offer of 65p per share is a 34 per cent premium on TRG’s closing share price yesterday and values Wagamama’s owner at £700 million.
Apollo partner Alex van Hoek said: “TRG’s business has proven resilient through macroeconomic cycles but the outlook is still one of high interest rates and inflationary pressures and the company now needs the support of patient private capital, to achieve its ambitions.”
(Mike Egerton/PA)
/ PA ArchiveAsia markets rally, FTSE 100 seen higher
Asia markets have seen strong trading after Wall Street benchmarks rose in the wake of the Federal Reserve meeting minutes published last night.
The central bank met expectations by signalling that one more rate rise may be necessary, with policy likely to remain restrictive for some time.
The comments from the meeting a fortnight ago gave a lift to US markets as the S&P 500 index closed 0.4% higher and the Nasdaq Composite added 0.7%.
Asia tracked Wall Street’s performance, while the purchase of stakes in several banks by China’s sovereign wealth fund also boosted sentiment to help the Hang Seng index up 2% in afternoon trading. Japan’s Nikkei 225 lifted 1.7%.
CMC Markets expects the FTSE 100 index to open 32 points higher at 7652, having consolidated Tuesday’s 1.8% jump with a flat performance in yesterday’s session.
On commodity markets, Brent Crude stood at $85.40 a barrel after figures showing a big jump in US inventories put pressure on the price last night.
GDP grew 0.2% in August
Britain’s economy returned to growth in August but remains firmly stuck in the slow lane, new official figures reveal today.
GDP inched ahead a modest 0.2% in the month, a recovery from the 0.6% fall seen in July when output was hit by wet weather and strikes.
The data from the Office for National Statistics (ONS) shows that the all important services sector, which accounts for 80% of the economy, grew by 0.4%.
But the production sector, which includes manufacturing, was down 0.7% while construction fell 0.5%.
The economy has been struggling to gather pace under the weight of 14 consecutive interest rate rises, which have shackled consumer spending and made it more expensive for businesses to invest.
The bounce, which was in line with City forecasts, means that the economy may avoid contracting in the third quarter from July to September, reducing the chance of a technical recession.
However, City analysts said growth was likely to be sluggish for the rest of the year.
Recap: Yesterday’s top stories
Good morning. Here’s a summary of our top headlines from yesterday: