The FTSE 100 has dropped again, rounding off a tumultuous week for global markets amid fears of interest rate rises and the looming threat of war in Europe.
The blue-chip index fell 1.1pc to 7,466, though it’s still set to record a second consecutive month of gains.
Banking stocks including Barclays and HSBC were the main drag on the FTSE despite higher yields, suggesting possible profit-taking by investors ahead of the Bank of England meeting next week.
Overall, UK stocks have made a positive start to the year, driven by gains for energy giants such as BP and Shell as potential conflict between Russia and Ukraine fuels supply concerns.
The blog is now signing off for the weekend, we’ll be back on Monday! Meanwhile, check out some of the latest stories from the business team:
Owner of Country Life and The Week braces for new revolt over £95m bonus scheme
The magazine publisher behind The Week and Country Life is bracing for its second successive investor revolt over a £95m bonus scheme that offers a huge payout for the chief executive, Zillah Byng-Thorne. Ben Woods has more:
Shareholders in Future are being urged to oppose the pay policy by proxy advisory firm Glass Lewis after it “insufficiently responded to shareholder dissent” at last year’s annual meeting.
The company’s value creation plan has the potential to award Ms Byng-Thorne more than £40m since coming into force last year. Staff and executives as a whole can also earn up to £95m annually in shares over a three-year period.
Glass Lewis said the policy had the “potential for excessive payouts” and pointed to significant opposition at last year’s meeting, where 33.9pc, 26pc and 33.8pc voted against the pay policy, remuneration report and value creation plan respectively.
Football champions Inter Milan secures higher-yield loan to refinance debt
Serie A champions Inter Milan set a 6.75pc coupon to place a €415m (£345m) bond as investors asked for a higher yield to refinance Italy’s top flight soccer club’s existing debt.
Inter and its owner, Chinese retail giant Suning, have been hard hit by the pandemic, which forced Serie A clubs to play behind closed doors over the past season.
Inter said the new five-year bond is to repay a €50m revolving credit facility and to roll over a €375m note due at the end of this year.
Both loans were issued by the Serie A club’s media company, which manages the broadcast and sponsorship business of Inter.
FTSE closes in the red
The FTSE 100 clawed back some losses but closed still 1.2pc lower at 7,466 as investors locked in gains in bank shares.
Heavyweight mining stocks sank as the prospect of rising interest rates weighed on metal prices, while energy companies also retreated after recent gains.
Energy stocks had their best month since November 2020 as crude prices hit a seven-year high.
“Looking at the way the FTSE 100 and the big banking names have performed year-to-date, this drop is potential profit taking ahead of the weekend and the Bank of England meeting due next week where expectations are for a 25 bps rate hike,” said Michael Hewson, an analyst at CMC Markets UK.
High earners suffer steepest inflation during pandemic
High earners have experienced a steeper rate of inflation than poorer families throughout the pandemic despite the concerns of campaigners led by food poverty activist Jack Monroe. Tom Rees writes:
Rising transport costs pushed up inflation for high-income households to 5.5pc in December, compared to 5.3pc for low-income families, the Office for National Statistics (ONS) said.
In the aftermath of the financial crisis, the cost of living rose more sharply for poorer households. However, ONS figures show this has not been the case during the pandemic so far.
It also unveiled an overhaul of its analysis amid pressure from Ms Monroe, yet stopped short of her demand for inflation calculations to put more weight on cheap “basic” ranges in supermarkets that many low-income shoppers rely upon.
Citigroup fined HK$348.3m in Hong Kong after decade of ‘dishonest’ deals
Hong Kong’s securities regulator has slapped Citigroup with a HK$348.3m (£33.3m) fine for “serious regulatory failures” in stock deals completed between 2008 and 2018.
The authorities cited deficiencies in internal controls, compliance and management oversight for the “pervasive dishonest behaviour.”
The Securities and Futures Commission said it will commence disciplinary proceedings against “certain former members” of the division’s senior management in due course.
The US bank’s failures in Hong Kong “exposed a culture that encouraged chasing revenue at the expense of basic standards of honesty,” Ashley Alder, chief executive officer of the SFC, said.
The “unrelenting” pressure to gain more business and increase market share meant “deceptive practices were deployed at the expense of clients’ best interest and to the detriment of market integrity,” he added.
Abrdn shareholders to receive cash after Phoenix stake sale
Investment manager Abrdn has said it will hand cash back to shareholders after selling a stake in Phoenix Group.
The company, formerly known as Standard Life Aberdeen, confirmed it sold almost 40m shares, reducing its stake in Phoenix to 10.4pc. It still retains enough to name a director on the company’s board.
The shares were sold to institutional investors at 660p a pop, raising a total of £264m, which will be returned to Abrdn investors after its next financial results announcement on March 1.
That’s all from me – thanks for following! Giulia Bottaro will see you through to the weekend.
Apple shares hold up after record results
Apple shares rose more than 4pc in afternoon trading after the iPhone maker reported record results – holding up despite a rout in tech stocks.
If the gains hold, Apple is on track to snap an eight-day losing streak as it tries to recover from what could be its worst monthly performance in a year.
The world’s most valuable company posted sales of $124bn (£92bn) as it proved resilient to the global semiconductor shortage.
Apple also teased its metaverse ambitions as boss Tim Cook talked of the company investing in the expansion of its library of 14,000 augmented reality apps, prompting strong investor response.
De La Rue investor calls for sale or break-up
One of De La Rue’s largest shareholders has called for a sale or break-up of the British currency printer after a profit warning this week.
Richard Bernstein, head of activist investor Crystal Amber, told the Financial Times that De La Rue had lost money for shareholders by focusing on volume sales rather than on gross profit.
Mr Bernstein said the company had sacrificed most of its £36m of cost savings by reducing prices and claimed it was “highly likely” it would be the target of a takeover attempt.
De La Rue chief executive Clive Vacher said the board had confidence in its strategy and rejected criticism of its sales policy.
US consumer sentiment drops to decade low
US consumer sentiment dropped further in late January to its lowest level in more than a decade as inflation worries and a wave of omicron infections clouded the outlook.
The University of Michigan’s final sentiment index dropped to 67.2 – the lowest since November 2011 – from 70.6 a month earlier. The figure was lower than forecast and down from a preliminary reading of 68.8.
A gauge of current conditions decreased to 72 – the lowest since August 2011. The survey’s measure of future expectations fell to 64.1.
The figures highlight the gloom enveloping economic prospects as the cost of living begins to climb.
US consumers expect inflation to rise 4.9pc over the next year, matching the highest level since 2008. They expect prices will rise at an annual rate of 3.1pc over the next five to 10 years – the highest since 2011.
France rejects power link to UK due to Brexit
France has rejected plans to build an underwater power cable to Britain, blaming increased uncertainty caused by Brexit.
The 1.4 gigawatt GridLink Interconnector – developed by a private company – was supposed to be operational from 2025. The link was awaiting regulatory approval from French energy regulator CRE and Ofgem.
CRE said its research had found Brexit could have a significant impact on the benefits of interconnection projects.
It comes a week after the Government rejected a politically controversial 2,000-megawatt power cable to France proposed by Aquind, a company backed by Ukrainian-born businessman and Conservative party donor Alexander Temerko.
The North Face owner slides as sales slow
Shares in the company behind The North Face slumped after the retailer cut its revenue outlook for the year amid slowing sales.
VF Corporation, which also owns Vans, now expects revenue of about $11.9bn (£8.9bn) for the year to April down from a prior view of about $12bn.
Adjusted gross margin is now projected to be at least 55pc, down one percentage point from the company’s October forecast.
The downgrade appears to be driven by weaker trading in VF’s activewear division, as well as slowdowns in international revenue, direct-to-consumer and the digital business.
Andrew Neil in talks to join Channel 4
Andrew Neil is in talks with Channel 4 about presenting a weekly political analysis show as he seeks to draw a line under his disastrous spell at GB News.
Ben Woods reports:
The veteran broadcaster is thrashing out a deal that could allow him to front a programme after the broadcaster’s Sunday news bulletin at 6.30pm.
Discussions are continuing between Ian Katz, Channel 4’s director of programmes, Louisa Compton, the news and current affairs director, and Mr Neil, who quit GB News in September amid claims that the technical problems and start-up culture were “affecting his mental health”.
The revelations come as Channel 4 prepares to air a documentary presented by Mr Neil on Sunday night about Boris Johnson’s future as prime minister.
Reports linking Mr Neil to a wider deal with the state-owned broadcaster were first published by Broadcast, the film and TV trade title.
Such a move would be a coup for Channel 4 after the BBC director-general, Tim Davie, made advances to lure Mr Neil back to Auntie.
Wall Street opens higher as Apple shines
US stocks have pushed higher at the opening bell after Apple shrugged off chip shortages to post record sales.
The tech-heavy Nasdaq led the way with gains of 0.6pc, while the S&P 500 rose 0.2pc. The Dow Jones slipped a marginal 0.07pc.
Newspaper group Archant ‘up for sale’
Newspaper group Archant, which owns dozens of local titles including the Ham & High Express, is reportedly up for sale just 18 months after a private equity buyout.
The Norwich-based publisher was sold to investment group Rcapital in August 2020 as the pandemic battered its finances.
Rcapital has now issued a memo to prospective buyers and appointed Ulmus Advisory to oversee the process, the Guardian reports.
Several groups including National World – which owns the Scotsman and Yorkshire Post – and Newsquest are said to have expressed an interest. Mirror and Express owner Reach is another potential suitor.
Daimler sets sights on tech valuation with Mercedes rebrand
Daimler’s chief executive is chasing a higher valuation for the luxury car manufacturer amid a rebrand and a shift to electric vehicles.
Following the spin-off of Daimler’s truck division last month, the company will change its name to Mercedes-Benz in a bid to simplify its structure for the industry’s transition.
The group, which counts Mercedes as its primary brand, aims to have battery-powered models across its range this year as it looks to take on Tesla.
Chief executive Ola Kallenius told reporters: “I can definitely see a chance to boost our multiple. If we can boost cashflow and our multiple, there’s lots of potential in the Mercedes-Benz stock.”
Despite pushing towards electric vehicles, traditional car makers like Volkswagen have struggled to gain the same market power as tech rivals such as Tesla and Apple.
IoD urges Rishi Sunak to scrap National Insurance rise
The Institute of Directors has written to Rishi Sunak urging him to scrap the planned rise in National Insurance contributions in April, warning it will fuel inflation and damage the economy.
Director General Jonathan Geldart said the move would reduce take-home pay at the height of a cost-of-living crisis and spark job losses. It would also hit hardest those families that have already suffered the most from the pandemic, he said.
Calls have been growing for the Chancellor to cancel his National Insurance raid after the latest data on public borrowing showed the Treasury has more fiscal room for manoeuvre than previously thought.
Mr Geldart said:
The forthcoming rise in National Insurance will have a negative and significant impact on our members and on the wider macroeconomy. In the last few months, the case against the tax rise has, to my mind, only become stronger.
That’s why we are urging the Chancellor to think again about raising national insurance contributions and are asking for the opportunity to discuss the matter as soon as possible.
Azerbaijan offers emergency gas supplies to Europe
Azerbaijan is ready to supply Europe with emergency gas supplies is conflict between Russia and Ukraine were to disrupt shipments.
Elin Suleymanov, the country’s ambassador the the UK, said that while the extra exports wouldn’t be enough to replace Russian supplies, it could step up deliveries to the continent.
Any significant boost to volumes would require European nations to sign long-term gas contracts.
Countries are looking to secure alternative sources of gas in case shipments from Russia are disrupted or halted amid heightening tensions over Ukraine.
Azerbaijan has previously provided extra supplies to Turkey after flows from Iran were halted.
Mike Lynch loses $5bn court battle
Here’s some more detail on Mike Lynch’s court defeat against HP this morning, courtesy of my colleague James Titcomb:
Friday’s verdict from Mr Justice Hildyard, which follows the UK’s biggest ever civil fraud case, is a blow to Mr Lynch’s hopes of fighting extradition to the US, where he faces criminal charges that could lead to decades in prison if he is found guilty.
HP had sued Mr Lynch, accusing him of fraudulently inflating the value of Autonomy before its sale to Hewlett Packard and seeking $5bn (£3.7bn).
Mr Justice Hildyard said the claimants had “substantially succeeded” but that the “quantum will be determined in a later judgment”. He said the costs would be “substantial but considerably less than claimed”.
The ruling is a pivotal moment in the decade-long battle between Mr Lynch and HP, the Silicon Valley IT giant.
Mr Justice Hildyard delivered his verdict two years after the end of a nine-month trial wrapped up.
LVMH shares shine amid luxury boom
Shares in LVMH have pushed higher after the luxury retailer bounced back from the depths of the pandemic to post record sales.
The French giant, which owns brands ranging from Christian Dior to Hennessy, said revenue hit €64.2bn (£53.4) last year, topping the previous record set in 2019 before lockdowns hammered sales.
The turnaround for LVMH, which is led by billionaire Bernard Arnault, reflects a wider recovery in the luxury sector, with Burberry and Cartier owner Richemont among rivals to cash in on the return of wealthy customers to their stores.
Shares rose as much as 5.8pc in early trading, before falling back to a rise of 0.2pc.
Wall Street to follow FTSE into the red
Wall Street is poised to follow European stocks into the red this afternoon to cap off a torrid week for investors.
Global markets have been mired in volatility all week amid rising interest rates and the growing threat of conflict between Russia and Ukraine.
Adding to the downbeat sentiment, German GDP slumped by more than expected in the fourth quarter and eurozone confidence fell to a nine-month low.
Futures tracking the S&P 500 and Dow Jones fell 0.4pc and 0.5pc respectively, while the Nasdaq was broadly flat.
Credit Suisse bankers must repay bonuses if they leave
Thousands of Credit Suisse bankers are fuming after being told they must repay some of their bonuses if they leave within three years.
Oliver Gill has the story:
Staff were told on Friday of plans to shake up bonus payments as the Swiss bank is hit by big losses and the sudden exit of its chairman.
Bankers not on the front line will now be subject to a clawback provision that is typically reserved for dealmakers. It is believed that this will affect about a fifth of Credit Suisse’s 50,000 staff.
Those in administrative roles would have to repay a pro rata amount of their bonus if they leave within three years. Employees will receive a higher cash amount upfront, however.
One company insider suggested that the bonus overhaul could be “the straw that breaks the camel’s back” given the recent turmoil at the lender: “The place is going down the loo.”
Mike Lynch loses court battle with HP over Autonomy
Tech tycoon Mike Lynch has lost his $5bn (£3.7bn) court battle with HP over false accounting relating to his software company Autonomy.
HP brought a civil claim against Mr Lynch over claims he inflated Autonomy’s value before the computer giant bought it for $11bn in 2011.
A judge today ruled: “The claimants have substantially succeeded in their claims in these proceedings.”
HP had been seeking $5bn in damages, but the judge said the fraud amount was considerably lower.
All eyes will be on Priti Patel now as she decides whether to extradite Mr Lynch to the US, where he faces criminal charges of orchestrating massive fraud at Autonomy.
Lewis Hamilton backs grocery firm Zapp in £150m round
Formula One star Lewis Hamilton has thrown his weight behind rapid delivery startup Zapp as part of a $200m (£149m) funding round.
UK-based Zapp, which was launched in 2020, is one of a number of firms competing to deliver goods and groceries in around 15 minutes. It started in London and has now expanded to Manchester, Cambridge and Bristol, as well as Amsterdam, Rotterdam and Paris.
The new funding round was led by Lightspeed Venture Partners, 468 Capital and BroadLight Capital and takes its total cash raised to $300m.
What to expect from the Bank of England next week
Money markets are betting on another interest rate rise next week, but if we’ve learnt anything from the last two MPC meetings, it’s that you can never quite be sure.
The Bank of England wrongfooted markets in both November and December – first by holding rates steady and then with an unexpected increase.
So what’s going to happen next week? The economists over at ING have drawn up this handy chart for the possible scenarios. They’re backing a 25 basis point increase in rates, with policymakers split 8-1 on the decision.
Watchdogs to review ‘crippling’ post-Grenfell insurance
The Government has asked regulators to review the property insurance market amid concerns residents are facing “crippling costs” in the wake of the Grenfell disaster.
Housing Secretary Michael Gove said some residents in medium and high-rise buildings had seen their insurance premiums double in a year.
He asked the Financial Conduct Authority and Competition and Markets Authority to look into the price increases and the reasons why coverage was limited for properties in multiple-occupancy buildings.
Banks and insurers have refused to finance flat purchases in blocks they fear could have flammable cladding, leaving thousands trapped in unsellable homes.
The Government this month ordered developers to foot a £4bn bill to fix dangerous classing on low-rise apartment blocks.
Read more on this story: Michael Gove threatens developers with planning veto unless they create £4bn cladding fund
Tech sell-off wipes out Tesla’s gains
After a rollercoaster year, Tesla’s shares are now back below where they were a year ago.
The electric car maker has fallen victim to a wider tech rout in recent weeks, but a sharp 12pc drop on Thursday means it’s now trading at $829 – down from November’s peak of $1,230 and below their level this time last year.
The latest fall came after Tesla’s fourth-quarter figures failed to impress, with Elon Musk admitting the company would not bring any new vehicles to market this year. Around $109bn was wiped off Tesla’s valuation.
It’s a setback for Tesla investors and will fuel concerns that the company is running out of momentum after a stellar 2021.
UniCredit backs out of Russian deal amid Ukraine troubles
UniCredit has withdrawn from a possible takeover of Russian lender Otkritie Bank amid concerns about a potential conflict with Ukraine.
Italy’s second largest bank has shown interest in Otkritie as part of its plans to explore mergers and acquisitions to improve profitability. However, the prospect of war between Russia and Ukraine has thrown the plans into turmoil.
UniCredit chief executive Andrea Orcel told reporters: “Given the geopolitical environment we decided to withdraw from the data room.
“The combined bank would have benefited from a much stronger market position and significant synergies without meaningfully increasing our exposure to the country.”
What does this mean for Jack Monroe’s campaign?
The ONS published the figures amid a well-publicised campaign by Jack Monroe – aka the Bootstrap Cook.
In a widely-shared Twitter thread she took aim at the use of the consumer price index, saying it “grossly underestimated” the impact of inflation on poorer households. She called for an index of essential items as the cost-of-living crisis mounts.
At first glance, the new numbers don’t appear to support Ms Monroe’s argument.
It’s worth pointing out, though, that this isn’t the breakdown of basic food ranges the campaigner had called for. What’s more, the ONS warned the figures were experimental and didn’t account for changes in spending patterns during the pandemic.
Read more on this story: ONS inflation overhaul to fall short of food poverty campaigner Jack Monroe’s demands
Inflation hits richer households harder
Wealthier households are suffering slightly higher levels of inflation than lower-income households, official figures have shown, despite concerns to the contrary from campaigner Jack Monroe.
Newly-complied data from the ONS showed inflation for richer households stood at 5.5pc in December, compared to 5.3pc for poorer ones.
Inflation rates have been broadly similar for the different demographics since 2014, while retired and non-retired households have experienced similar levels of inflation rates since April last year.
The ONS said the disparity was caused by different spending patterns. Wealthier households spend more money on transport, which has experienced higher price rises in recent months. Other driving forces include spending on restaurants, accommodation, recreation and culture.
By contrast, low-income households’ experience of inflation has been driven by rising prices in housing-related costs, which forms a higher proportion of their expenditure.
Expert reaction: Germany flirting with recession
Carsten Brzeski at ING warns Germany is at risk of crashing into a recession, but forecast a strong economic rebound in the spring.
The German economy went into hibernation at the turn of the year. New restrictions to tackle the fourth wave of the pandemic and the Omicron wave as well as higher energy prices dented private consumption.
With this weak fourth quarter, the likelihood of Germany being in an outright recession at the turn of the year has increased…
However, even if the economy were to fall into a technical recession, this recession will be mild and short-lived and is unlikely to harm the labour market. On the contrary, we stick to our view that the German economy will stage an impressive comeback in the spring.
H&M aims to double sales by 2030
Two years into the job, H&M chief executive Helena Helmersson isn’t messing around. She wants to double the retailer’s sales by the end of the decade as part of a major overhaul.
Ms Helmersson, who replaced the grandson of H&M’s founder as boss in January 2020, is also targeting an operating margin of more than 10pc within three years.
The new chief began by reducing the Swedish company’s store count and has also reduced discounts and started clearing out a longstanding inventory buildup.
H&M will boost its investment to about 10bn krona (£790m) this year in a bid to reach its target, which Ms Helmersson described as “very ambitious”.
It came as H&M said pre-tax profit rose by almost two-thirds to 6bn krona in the three months to the end of November, beating analysts’ estimates. Sales in December and January are up 20pc.
Pound nears 23-month high against euro
Sterling has neared a 23-month high against the euro as investors ramp up bets on faster Bank of England interest rate rises from next week.
Analysts say a hawkish stance from the Bank would boost the pound, despite tightening plans from the Federal Reserve that have boosted the dollar.
Investors are also focused on the BoE’s bond buying programme after it said it intended to begin reducing the stock of purchased assets once rates had reached 0.5pc.
The base rate currently stands at 0.25pc, with money markets pricing in a further 25 basis points increase at next week’s meeting.
The pound ticked up 0.1pc against the at 83.2p, just off the 23-month high hit last week. It was flat against a stronger dollar at $1.3375.
German GDP slumps
Germany’s latest GDP figures will make for grim reading for Europe’s largest economy.
GDP contracted 0.7pc in the fourth quarter – even worse than the 0.3pc contraction feared.
It’s in stark contrast to the latest data from France, which reported economic growth of 0.7pc in the last three months of the year. That took total GDP expansion in 2021 to 7pc – the strongest since 1969.
YouGov shares rise on profit upgrade
Shares in YouGov pushed higher this morning after the polling company said it expected its full-year performance to be slightly ahead of expectations.
The polling company reported growth across all divisions and geographies in the first half, adding that a robust sales pipeline gave it momentum for the rest of the year.
As a result, it said growth would be slightly ahead of previous forecasts.
Shares rose as much as 4.1pc, before settling up 2.8pc.
Ocado’s German court battle put on hold
Cineworld isn’t the only FTSE firm facing court developments overseas this morning – Ocado is also having some difficulties in Germany.
Munich District Court has suspended its effort to block the sale of AutoStore’s B1 robot in Germany over intellectual property concerns.
It’s because the court thinks the claims are likely to be invalid – even despite Ocado making last-minute amendments
It said this is because the claims are seeking to cover more than had been disclosed in the application for the utility models as originally filed, and told Ocado it is trying to make a claim over technology it did not invent.
Ocado and AutoStore, which both produce robots used in warehouses to pick goods for online shopping, are locked in legal battles around the world over patent infringement claims.
FTSE risers and fallers
The FTSE 100 is on the back foot this morning, but it’s on track to end the week higher after a tumultuous period for investors.
The blue-chip index fell 0.6pc with banking stocks including HSBC and Barclays leading the declines.
Insurer Phoenix Group is the biggest faller, dropping 4.9pc after abrdn sold a large chunk of its stake.
Still, the index is set to end the week 0.4pc higher – its fifth weekly gain in six as heavyweight energy shares tracked higher crude prices on supply worries.
The FTSE 250 is down 0.8pc, with IG Group leading declines after shareholder TCMI sold shares.
Get ready for cyber attacks, British spooks warn
Businesses have been told to ramp up their defences against potential Russian cyber attacks as fears mount that President Vladimir Putin could push his troops into Ukraine.
The National Cyber Security Centre (NCSC), which is part of GCHQ, told large organisations to bolster their resilience after an attack on Ukraine earlier this month warned citizens to “be afraid and expect the worst”.
Paul Chichester, NCSC director of operations, said: “Over several years, we have observed a pattern of malicious Russian behaviour in cyberspace.
British spooks say Russia remains the biggest immediate threat to the West but Communist China’s long-term dominance of technology poses a much bigger problem.
Phoenix Group slides after abrdn sells big chunk of stake
Shares in Phoenix Group have dropped 4pc in early trading after abrdn sold a big chunk of its holding in the insurance company.
The asset manager has sold 40m shares – equivalent to about 4pc of Phoenix’s total issued share capital – with proceeds of around £264m.
However, abrdn’s stake is still above 10pc, which is the level required to appoint a director to the board.
Apple shares rise on $124bn record sales
All eyes will be on Apple this afternoon after the tech giant posted record sales despite the global chip crunch.
Shares rose more than 5pc in pre-market trading after the iPhone maker said quarterly revenues had climbed by 11pc to $124bn (£93bn).
Profits were up 20pc to $34.6bn, also an all-time high in what is typically Apple’s most lucrative part of the year.
However, sales growth was at its slowest since the early months of the pandemic, and revenue from the iPhone, its most important product, rose by 9pc, compared to double-digit increases in previous quarters.
French economy grows at fastest rate since 1969
France’s economy grew at its fastest pace in more than five decades in 2021 as the country bounced back from the pandemic more quickly than expected.
GDP growth hit 7pc last year – the strong rate since 1969 – following an 8pc contraction in 2020 when lockdowns hammered the economy.
A resurgence in Covid cases meant France’s economy grew only 0.7pc in the final three months of the year, following a strong third quarter when it jumped 3.1pc.
Still, this was ahead of economists’ expectations and the bumper growth in 2021 is a boost to President Emmanuel Macron’s economic credentials less than three months before the April election,
Finance Minister Brune Le Maire told French radio:
The French economy has rebounded spectacularly and that’s erased the economic crisis. There are still some sectors that are still having trouble, like tourism and hotels, but most are recovering very strongly and that’s creating jobs.
FTSE 100 dips at the open
The FTSE 100 has lost ground at the open as stocks head towards the end of a turbulent week of trading.
The blue-chip index dipped 0.2pc to 7,542 points.
Capita sells Trustmarque in £111m deal
Outsourcer Capita has secured a deal to offload its IT business Trustmarque for £111m.
The FTSE 100 company said it will sell the division to private equity firm One Equity Partners on a cash-free, debt-free basis.
Capita said it expects to receive net proceeds of around £115m from the deal, with an additional £3m contingent on certain future events.
It comes as the outsourcer looks to sell off a string of non-core businesses in an effort to shore up its balance sheet.
Jon Lewis, chief executive of Capita, said:
I am delighted that, once this sale is completed, we will have exceeded our disposals target – and achieved this much earlier than originally planned.
It marks another significant step towards materially reducing our debt, as we continue to simplify and strengthen Capita, and become a more successful business for the long term.
Cineworld’s Canadian court battle heats up
Cineworld’s court battle over the botched takeover of a Canadian rival has heated up after its opponent submitted a new claim over compensation.
The cinema chain has appealed a ruling that stated it must pay out C$1.2bn (£720m) to Cineplex after it pulled out of a takeover deal during the pandemic.
But Cineplex has now filed a cross-appeal arguing that it should be awarded “alternative forms damages” if the Ontario Court of Appeal deems the original fine was too high.
Cineworld said it disagreed with the original judgement and its Canadian rival’s new claim.
The court battle has plunged Cineworld – which was already reeling from the impact of lockdowns – into crisis. Shares tanked nearly 30pc after the initial ruling, though no cash has been paid out while the appeal is ongoing.
Tech minister: National Insurance rise will go ahead
Technology minister Chris Philip has insisted the planned increase in National Insurance contributions will go ahead in April as planned, despite calls for the tax rise to be scrapped.
The minister stuck by the tax increase even as the Treasury has been urged to rethink its plans amid a cost-of-living crisis and lower-than-expected Government borrowing figures.
Yesterday Mel Stride, one of the Tory party’s most senior backbenchers, joined calls for Rishi Sunak to cancel the National Insurance raid.
My colleagues Tim Wallace and Russell Lynch have more on this story:
Russian gas projects face sanctions
Britain and the EU are said to be preparing sanctions on new Russian gas projects in retaliation for any attack on Ukraine.
The planned sanctions, which would form part of a wider package of economic measures, marks a step up in potential defensive moves against Moscow’s aggression in eastern Europe.
Hitting gas projects is a bold move, given Europe relies on Russia for 40pc of its gas imports and is already in the clutches of an energy crisis.
But targeting new projects is seen as a way of striking at the country’s main industry while not causing more disruption in the short term, the FT reports.
5 things to start your day
1) Nicola Sturgeon relies on Bank of England amid record deficit New report shows Scotland’s potential challenges as an independent state
2) M&S launches TikTok-inspired ‘live shopping’ to win younger customers The 137-year-old company is thought to be the first major UK retailer to launch this feature
3) Apple avoids global microchip crunch with $124bn record sales Tech giant posts highest-ever profits but iPhone growth slows as pandemic gadget-mania loses steam
4) Wasps and bees force Heathrow take-offs to be abandoned Airport, airlines and authorities have taken steps to increase safety
5) Calling cars ‘self-driving’ should be criminal offence if human input needed, says Law Commission Proposed law may prove challenging for Elon Musk’s Tesla
What happened overnight
Asian markets were mixed on Friday, at the end of a broadly damaging week for global investors as the Federal Reserve gave notice that the days of ultra-cheap cash were coming to an end quicker than envisaged.
Some bargain-buying provided support after Thursday’s steep drops, with Tokyo and Sydney both up about 2pc.
Singapore, Seoul, Manila and Jakarta were also up, but Hong Kong lost more than 1p to 23,548/75, and Shanghai was down 0.8pc to 3,366.72.
Coming up today
- Corporate: Paragon Banking Group (Trading update)
- Economics: Consumer confidence (EU), core personal consumption expenditures (US), Michigan Consumer Sentiment Index (US)