Shares in PayPal crashed by more than 25pc on Wednesday, knocking more than $50bn off its value after missing Wall Street growth forecasts.
The payments company revealed worse-than-expected guidance for the start of the year and said it had deleted millions of illegitimate accounts.
PayPal has been a major beneficiary of the pandemic, which moved shopping online, pushed out cash and increased consumer spending in the US due to massive government stimulus programmes.
It has also enjoyed more usage due to rising interest in cryptocurrency, which PayPal lets users invest in.
On Tuesday night the company said it expected revenues to rise by 15pc to 17pc this year, below forecasts of 17.9pc.
It said it had closed 4.5m accounts opened by “bad actors” who it said were taking advantage of incentives and financial rewards.
Last year PayPal began offering $10 credits to new users in an attempt to drive growth, but found that many were being opened by fraudsters.
The closures, and changes to focus on existing customers rather than new ones, led it to abandon a goal of having 750m active accounts by 2025. PayPal said rising inflation meant some customers were spending less.
The drop means PayPal has joined the list of companies whose shares soared during the pandemic but have fallen to trade around where they were before coronavirus lockdowns.
Peloton, Netflix and Zoom have also given up much of their pandemic gains.
It’s time to wrap up the blog, we shall see you tomorrow for a Super Thursday of banking and energy news. While you wait, have a look at our latest stories:
GSK-backed HIV drug business to net $1.2bn settlement from Gilead
Pharma giant GlaxoSmithKline has confirmed an HIV drug business it majority owns will net a $1.2bn (£920m) settlement from rival Gilead.
ViiV, a joint venture GSK runs alongside Pfizer and Japan’s Shionogi, had claimed that Gilead’s triple combination treatment Biktravy infringed the joint venture’s patents over existing drug, dolutegravir.
ViiV will also receive around 3pc of royalties based on future US sales of Gilead’s Biktravy until 2027, GSK confirmed. The drug secured $8.6bn in revenues last year.
Company that owns thousands of military homes threatens to sue ‘anti-business’ MoD
The Ministry of Defence has been threatened with legal action unless ministers abandon “anti-business” plans to re-nationalise military housing controlled by City tycoon Guy Hands. Matt Oliver writes:
Annington Homes, which is owned by Mr Hands’s company Terra Firma, said the Government’s attempt to buy back homes it sold 25 years ago amounted to “attempted expropriation”.
In a missive to Ben Wallace, the Defence Secretary, Annington told the MoD to back down or face a court battle that could cost the already “strained” department “billions of pounds”.
At the same time, it offered £105m to improve some of the military homes concerned, which it claimed had fallen into an “appalling” state of repair under government management.
FTSE 100 closes in the green ahead of Bank of England meeting
The FTSE 100 has been led by miners and consumer staple stocks, while banks rose in anticipation of a second consecutive rate hike from the Bank of England meeting on Thursday.
The blue-chip index was up 0.6pc to 7,583, extending gains for the second session.
The banking sub-index rose 0.9pc as expectations of an increase in rates by as much as 50-basis-points from the BoE pushed yields up on British bonds.
“The MPC (Monetary Policy Committee) may be concerned that a 25 basis point rise in rates may not exert the same strength of downward pressure on price rises than was the case during less severe episodes of inflation,” said Stuart Cole, head macro economist at Equiti Capital.
Among miners, Glencore and Rio Tinto were among the top gainers tracking stronger metal prices.
Water supplier Severn Trent to spend more than £500m on river quality improvement
Water supplier Severn Trent said it is on track to spend more than £500m on schemes to help clean up river quality as it cheered a “strong operational performance” across the business since the end of September.
The update comes after the group was fined £1.5m plus legal costs last month by the Environment Agency for illegal sewage discharges in Worcestershire watercourses in 2018.
Severn Trent said 90pc of its customer outcome delivery incentives measures remained on or ahead of target and it continues to expect to deliver at least £75m in rewards for meeting regulatory customer performance measures.
John Legend starts NFT platform for musicians and entertainers
John Legend is starting an NFT platform for musicians and entertainers who are trying to navigate the frenzy around digital collectibles.
The 12-time Grammy Award winner is working with Chris Lin, who runs Taipei-based digital music service KKBOX, Twitch cofounder Kevin Lin and Matt Cheng of early-stage venture firm Cherubic Ventures as part owners of the new business.
The platform, called OurSong, allows artists to monetise their work through nonfungible tokens, which are digital certificates of authenticity that can be bought or sold. Legend will serve as chief impact officer to attract up-and-coming artists and their fans.
Canva snaps up data visualisation software Flourish, plans more London hires
Canva, one of the world’s most valuable private software companies, has acquired London-based data visualisation platform Flourish to expand its suite of design tools. It didn’t disclose a sum.
Flourish was founded in 2016 by former data journalist Duncan Clark and computer scientist Robin Houston to make it easier for people tell stories with data. It allows non-coders to choose templates to create visuals without having to download software. It has more than 800,000 users including the BBC and Moody’s Corp.
Canva, valued at $40bn (£29.5bn) last year, plans to hire about 100 people to double the size of its workforce in Europe to 200, with London and Vienna being two hubs in the region.
The Australian company has 2,500 employees globally.
That’s all from me today – thanks for following! Join us tomorrow for what promises to be a jam-packed Super Thursday.
Giulia Bottaro is in the driving seat now.
Germany bans Kremlin news channel RT
Germany has banned a news channel funded by the Russian government in a move that risks opening up a new front in the West’s confrontation with Vladimir Putin over Ukraine.
Ben Woods reports:
RT has been blocked from returning to Germany’s airwaves by the nation’s media regulator after failing to secure the “necessary broadcasting licence”.
The move marks an escalation in Berlin’s clampdown on the German-language broadcast of RT, which was taken off air shortly after it launched in December.
An outright ban that keeps RT off Germany’s terrestrial TV networks has the potential to inflame tensions with the Russian President, who has accused America and its allies over trying to draw the country into a war in Ukraine.
British Land snaps up warehouses in £157m deal
Commercial property landlord British Land has bought three warehouses in Wembley for £157m amid booming demand for logistics hubs and a “chronic shortage” of suitable space in London.
The group said the three warehouses are fully let to Amazon, Euro Car Parts and the North London Waste Authority, delivering it with an annual income of £3.6m.
The deal brings its total urban logistics pipeline to over £1bn.
Simon Carter, chief executive of British Land, said: “This acquisition is another example of the strong progress we are making against our strategy to address the chronic shortage of urban logistics space in central London.”
Chinese scupper £2.7bn takeover of British gambling champion
Here’s some more on the collapsed Playtech takeover deal, courtesy of my colleague Oliver Gill.
Chinese investors have blocked a takeover of the British company that has pioneered much of the world’s online gambling technology.
The £2.7bn acquisition of Playtech, the FTSE 250 group founded by Israeli billionaire Teddy Sagi, collapsed on Wednesday after a block of shareholders opposed the deal.
Playtech’s suitor, the Australian slots machine operator Aristocrat, has withdrawn its offer and is now considering its options.
Asian investors, understood to include former Playtech chief executive Tom Hall as well as the owner of Birmingham City, billionaire heiress Karen Lo, the former owner of Wigan Athletic and professional poker star Stanley Choi, opposed Aristocrat’s takeover attempt.
Collectively they own about 28pc of Playtech shares. In total, some 45pc of investors opposed the swoop, Playtech said.
Pret increases coffee subscription by £5
Some real-world inflation news for you now: Pret A Manger is increasing the price of its coffee subscription to £25.
The new pricing – up from £20 previously – will come into force from 16 March.
Pret told subscribers the hike was due to higher prices for ingredients such as coffee beans and milk, as well as the return of VAT to its pre-pandemic rate of 20pc. The coffee chain is also increasing pay for its workers.
Broken down, Pret said the extra £5 would consist of:
- £2 to cover VAT
- £1.50 for pay increases
- £1.50 towards offsetting inflation
PayPal plunges as pandemic shine wears thin
PayPal has joined the ranks of pandemic boom-to-bust stocks, plunging by almost a quarter after releasing disappointing results.
The online payments firm said payment volumes climbed just 23pc in the last three months of the year – its slowest rate of growth in two years.
Shares crashed 22pc at the opening bell, putting the company on track for its worst single-day loss ever.
The sell-off puts PayPal alongside pandemic darlings such as Netflix and Peloton that have returned to earth with a bump as demand for their services falls away after lockdowns.
Elon Musk: My tweet about taking Tesla private was ‘entirely truthful’
Elon Musk has insisted his tweet about plans to take Tesla private was “entirely truthful” and hit back at claims his social media musings amounted to fraud.
In August 2018 the billionaire boss wrote on Twitter that he was considering taking Tesla private at $420 a share, in what was widely interpreted as a reference to cannabis.
US authorities sued Mr Musk for fraud, landing him with $40m (£30m) in fines and resulting in him being ousted as chairman.
Shareholders have now launched a class action lawsuit of their own, saying the tweet spurred wild swings in the company’s share price and caused billions of dollars in losses.
But lawyers for Mr Musk said Saudi Arabia’s sovereign wealth fund had agreed to support his attempt to take the company private.
Oil rises as OPEC agrees to maintain output
Oil pushed higher this afternoon after OPEC agreed to make another modest increase to its output in March, sticking to its plan even as prices surge.
Following a brief meeting, the producer cartel said it will maintain its rate of adding 400,000 barrels a dat next month – in line with its previous targets.
It comes despite calls from major consumers for higher levels of output as demand remains robust. Prices have surged past $90 a barrel, fuelling expectations of triple figures and adding to inflation worries.
Benchmark Brent crude pushed back above $90 following the meeting, while West Texas Intermediate was up 1.4pc to just over $89.
Traders pull forward ECB interest rate bets
Traders have brought forward bets on when the European Central Bank will raise interest rates after surprise figures showed inflation in the eurozone hit a record high.
Money markets now expect the ECB to kick off rate rises with a 10 basis point increase by July, compared to previous bets of September.
Pressure is mounting on the central bank to act after consumer prices rose 5.1pc in January on an annual basis – well ahead of forecasts.
But President Christine Lagarde has so far resisted calls for a tightening of policy, insisting inflation would prove short-lived and arguing the focus should be on the economic recovery.
Alton Towers owner snaps up Cadbury World
The company behind Alton Towers and Thorpe Park has snapped up Cadbury World as it expands its entertainment offering into confectionery.
Merlin Entertainments has inked a deal with Mondelez International to acquire the operations and brand licence for the theme park.
The deal means Merlin will be responsible for the day-to-day running of the site, its employees, and all operational decisions, as well as holding brand usage rights for Cadbury World in the UK.
Cadbury World, which was opened in 1990, is one of the most popular attractions in the West Midlands, with more than 600,000 visitors each year.
Pave the way for mobile mergers to speed up 5G rollout, says Vodafone chief
Here’s a bit more on Vodafone following their results this morning from my colleague Ben Woods:
Mobile companies must be allowed to unleash a wave of consolidation if ministers want to deliver faster 5G mobile coverage by 2030, the Vodafone chief has said.
Nick Read called for lower taxes, smaller fees when bidding for access to mobile airwaves and support if the FTSE 100 company bids for a UK rival.
Vodafone has been linked to a merger with Three UK as part of its attempts to increase returns and its languishing share price with a pan-European consolidation drive.
The demands came as ministers published a “levelling up” white paper to spread opportunity across the UK, which included the “majority of the population” having 5G coverage by 2030.
Mr Read said Vodafone backed the levelling up initiative and wanted to roll out 5G as quickly as possible as well as the best fixed-line broadband.
Ferrari to ramp up electric push as F8 drives sales
Ferrari is preparing to accelerate its push to electrification after it beat profit forecasts for the fourth quarter.
The Italian supercar maker has lagged behind rivals in its switch to battery-powered vehicles, but new chief executive Benedetto Vigna has vowed to up the pace. The company today said it will unveil its new strategy at a capital market day on June 16.
It comes after Ferrari posted quarterly earnings before interest, tax, depreciation and amortisation of €398m (£332m) – ahead of expectations. Revenue dipped slightly to €1.2bn.
While focus will now be on electric vehicles, fourth-quarter performance was driven by higher shipments of models such as the F8 family, as well as the Ferrari Roma and SF90 Stradale.
Centrica rises on energy loan hopes
There’s more from British Gas owner Centrica now…
It’s risen to its highest in almost two years amid reports the Government will provide loans to energy firms to help ease the impact of spiralling energy bills on households.
The Prime Minister and Rishi Sunak, the Chancellor, have agreed to a scheme in which taxpayers will underwrite loans to energy companies, sources told The Times. The firms will give this money back to families as a rebate.
Shares in Centrica rose as much as 4pc to their highest since February 2020.
Read more on this story: Boris Johnson prepares billions in loans to help families with soaring energy bills
Google helps drive Wall Street higher
Wall Street looks set to open higher this afternoon thanks to gains for tech stocks following record results for Google owner Alphabet.
Futures tracking the tech-heavy Nasdaq jumped 1.5pc, while the S&P 500 and Dow Jones were up 0.8pc and 0.2pc respectively.
Alphabet led the way with gains of 11pc in pre-market trading. That came after it reported record quarter sales thanks to a rebound in advertising spend.
Spirit Energy taps Centrica boss as new chairman
Spirit Energy has appointed the chief executive of parent company Centrica as its new chairman as part of a shake-up of its leadership team.
Chris O’Shea will take up his position with immediate effect, replacing Mark Hanafin.
Meanwhile, Neil McCulloch has been named interim chief executive of Spirit Energy, succeeding Chris Cox, who will step down at the end of the month.
Spirit Energy is the oil and gas exploration and production division of Centrica, which also owns British Gas.
Banks sell off £1.2bn of Morrison’s riskiest debt
Banks involved in the private equity takeover of Morrisons have privately sold the riskiest class of debt, allowing the rest of the bumper deal to hit public markets.
Banks including Goldman Sachs, BNP Paribas and Bank of America sold £1.2bn in junior secured notes to credit funds, Bloomberg reports.
Financing the huge takeover by Clayton, Dubilier & Rice will be a major moment for credit markets, with the rest of the £6.6bn debt package being closely watched by traders.
It will lay the groundwork for future private equity deals targeting British companies including Boots and Marks & Spencer.
Antofagasta tumbles as Chile warns of tax hikes
Shares in Antofagasta have dropped after Chile hinted that tax rises would be needed to cope with growing “social pressures”.
A top policymaker in the country warned the Government would need to raise more money amid concerns about surging inflation.
Antofagasta, which operates copper mines in Chile, has also been grappling with the proposed nationalisation of the country’s mining industry being pursued by new left-wing president Gabriel Boric.
The FTSE 100 company dropped more than 5pc to the bottom of the blue-chip index.
Amazon to hire more apprentices as UK workforce hits 70,000
Amazon has said it will create 1,500 new apprenticeships in the UK this year after its workforce grew to 70,000.
The ecommerce giant said it was offering places on 40 entry to degree-level schemes in areas including publishing, retailing and marketing, as well as a programme focused on environmental, social and corporate governance (ESG).
Amazon also said it grew its permanent UK workforce by 25,000 in 2021, taking the total to 70,000.
Energy sector risks ‘boom and bust’ cycle, analysts warn
Energy prices will be stuck in a “boom and bust” cycle without significant reforms to help Britain cope with the shift away from fossil fuels, leading analysts have warned.
Rachel Millard and Tom Rees have more:
The UK needs bigger storage facilities for gas and electricity and more efficient houses, according to market intelligence firm Cornwall Insight.
It said the shift to net zero carbon emissions will put pressure on prices alongside the closure of nuclear stations and geopolitical tensions, and proposed “a greater focus on resilience and risk above efficiency and low costs.”
Cornwall Insight predicts power prices from 2026 could jump by £95 per MWh between the summer and winter, rising to a seasonal difference of nearly £120 per MWh by 2030.
Several of the UK’s ageing nuclear reactors are set to close in the next few years, just as the UK also shuts its coal-fired power plants to try to cut emissions, and ramps up dependence on wind and solar power, which are intermittent.
Expert reaction: Energy crisis still fuelling price rises
There’s a more cautious approach from economist Tomas Hirst, however.
He argues that the surge in energy prices is still the driving force behind inflation across the eurozone, and so the ECB could still be vindicated in its approach to tightening policy.
ECB set for ‘brutal’ revisions
The latest eurozone inflation figures will be a real headache for the ECB, which has repeatedly shrugged off concerns that inflation could become entrenched.
Inflation is currently an entire 1pc above what the ECB predicted in December. What’s more, they forecast price rises to begin falling back, which means the revisions for future months could be even more severe.
Co-op boss: Businesses key to ‘levelling up’ plans
Steve Murrells, chief executive of the Co-op, has welcomed the Government’s latest pledges in its so-called levelling up strategy.
From what I’ve seen, the White Paper appears welcome and it is important that the role to be played by business is fully realised. The unfairness that exists in every community means Government can’t get anywhere near its goal to ‘level up’ the UK without the help of businesses, small and large, throughout Britain. We can achieve meaningful progress when we work together.
Businesses with purpose can be a force for investing into communities, rather than a means of extracting value from them. They can help individuals build the confidence and skills to prosper, irrespective of where they live or have come from. We have proven we can deliver in areas like apprenticeships, where we have the assets and capabilities to match the ambitions of the communities we serve.
So my message to government is: we are ready. So let’s get started, because this is a mission which is critical for our country, our communities and our members.
Landlords hit with £15,000 bills in ‘levelling up’ plans
The Government has announced a string of pledges for its levelling up agenda this opportunity.
Here’s Melissa Lawford with one of the top lines:
Hundreds of thousands of landlords face bills of £15,000 as housing secretary Michael Gove cracks down on poor-quality rental homes.
The Government will introduce a new minimum standard that will push landlords to upgrade an estimated 800,000 rental properties.
Max Armstrong, of North East Property Investment, a buy-to-let specialist, said the cost of bringing a three-bedroom house up to scratch would be £12,000 to £15,000. Additional costs could be added by the supply chain crisis and rising materials and labour costs. “Three years ago this would cost 25pc less,” he said.
The legislation will be announced as part of Mr Gove’s “levelling up” agenda – which focuses on improving poorer parts of Britain – due to be unveiled today. The minister also plans to introduce a register for anyone wishing to let out property – with rogue landlords being struck off – while also giving tenants new rights for redress.
Read more on this story: Michael Gove’s 12 commandments for levelling up Britain to be set in stone
Pound ticks higher as Super Thursday looms
The pound edged up to a one-and-a-half week high against the dollar this morning but treaded water against the euro ahead of major interest rate decisions tomorrow.
The Bank of England and European Central Bank will both issue their latest policy verdicts amid surging inflation on an action-packed Super Thursday.
The pound ticked up 0.1pc against the dollar to $1.3532. Against the euro it was little changed at around 83.39p.
Ofgem to announce energy price cap rise tomorrow
A bit of a procedural update for you now – Ofgem will announce the next rise in the energy price cap tomorrow.
The regulator had been expected to make the announcement next week, but it’s been moved forward to 11am tomorrow. The new level will come into force from April.
Households are bracing for a huge increase in their energy bills, with analysts predicting the cap could jump 50pc to £2,000 for many homes.
It’ll be another blow in the looming cost-of-living crisis, with Brits already facing higher costs in shops and at the petrol pumps.
Alphabet shares surge as Google smashes profit records
Shares in Google’s parent company have surged 10pc in pre-market trading after the tech giant posted record profits for the fourth quarter.
Alphabet shrugged off wider gloom about the tech sector to report $75.3bn (£56.2bn), a 32pc increase on a year earlier. Profits rose by 36pc to $20.6bn.
Alphabet also announced it would carry out a 20-for-one stock split, which should make its shares more accessible to retail investors.
Many tech giants are facing questions over how they’ll maintain momentum after bumper demand during lockdown. But Google seems poised to emerge even stronger as advertising revenue bounces back.
Read more on this story: Google defies tech gloom with record profits
Mild weather eases energy fears
Amid all the turmoil in Europe’s energy market, at least there’s one thing helping to soothe the crisis: mild weather.
February is forecast to be warmer than normal, reducing gas demand for heating and electricity generation. Europe has so far escaped an extreme cold snap like the Beast from the East that hit the continent back in 2018.
Steven Silver, a meteorologist at Maxar, told Bloomberg: “The expectation is for the first half of February to be warmer than normal across most of the continent.”
This has helped avoid gas shortages and rolling blackouts, while the arrival of liquefied natural gas cargoes has further boosted supplies. Still, the looming threat of war between Russia and Ukraine means the crisis could yet deepen.
Sunak accused of failing to combat £30bn fraud spree
ICYMI – Rishi Sunak has been accused of failing to tackle Britain’s £30bn fraud crisis by MPs demanding action to halt an “alarming” Covid surge in economic crime.
Tom Rees has more:
Efforts to combat a wave of scams and false claims for coronavirus support have failed to “stem the rise, let alone start to bring it under control”, the Treasury Select Committee warned in a damning report which recommended sweeping reforms to prevent billions of pounds more being lost.
Mel Stride, chairman of the backbench group of MPs, said getting to grips with the fraud spree would have allowed the Chancellor to reduce the pain of the planned National Insurance rise due to hit families in April.
The cross-party group’s report warned that economic crime is not a priority for law enforcement and highlighted a “bewildering” number of agencies tasked with combatting the problem.
It comes as the Government scrambles to defend its record following the resignation of the anti-fraud minister Lord Agnew over a lack of action. After he quit, Mr Sunak insisted he was “not ignoring” fraud in a rare Twitter intervention.
Ocado jumps on Credit Suisse upgrade
Ocado is the stand-out winner on markets this morning, leading the FTSE 100 with gains of 7.4pc.
It comes after analysts at Credit Suisse double-upgraded the stock from underperform to outperform, saying its weakness over the last 12 months offered a buying opportunity.
The bank said the recent launch of new, lower-cost technology to speed up online grocery deliveries had boosted its confidence in Ocado’s existing partnerships with retailers.
Read more on this story: Ocado promises faster deliveries and fewer fires with robot upgrades
Santander warns on fraud as profits soar
Santander has reported a huge jump in profits for last year as it released more money set aside for Covid loan losses, but warned fraud-related costs were on the rise.
The high street bank posted a 266pc rise in profit to £1.9bn after £233m was put into the bank. It had set aside £448m when the virus first hit in 2020 to cover potential losses.
However, Santander said operating costs rose 5pc to £278m due to costs linked with shutting 111 branches and reducing head office space by 40pc.
It also said costs linked to repaying customers hit by scams rose by more than a quarter.
Nathan Bostock, chief executive of Santander, said:
We have further cemented our position as the UK’s third largest mortgage lender, helping customers with £7.5bn of net mortgage lending, and attracted 19,000 new current account customers through our switcher campaign.
At the same time, we have grown income, realised the savings from our investment programme and continued to simplify our operations.
Our strategy means we are in good shape thanks to our prudent approach to risk, strong capital and resilient balance sheet, and we are well placed to continue growing as the UK economy recovers.
FTSE risers and fallers
The FTSE 100 has pushed higher again this morning, continuing a strong week of gains as investors gear up for tomorrow’s Bank of England meeting.
The blue-chip index is up 0.6pc, led by banking stocks. They’ve gained ground amid higher yields on expectations of further interest rate rises.
Ocado is the top riser, jumping 6.7pc following a double upgrade from analysts at Credit Suisse. Vodafone is also up 2.6pc as higher roaming fees boosted revenue.
The domestically-focused FTSE 250 rose 0.9pc, with Playtech up 1.7pc even after it said Aristocrat’s £2.1bn takeover deal would fall through.
Budget airlines take omicron hit
Two of the UK’s main budget airlines revealed a big hit to passenger numbers in January, suggesting their recovery from the pandemic is still some way off.
Ryanair and Wizz Air lost 2.7m passengers between them last month compared to December, when omicron was already affecting bookings.
Ryanair was the worst hit, with passenger numbers dropping by more than a quarter from 9.7m to just 7m. Wizz Air suffered a 9pc dip to 2.4m.
Investors are hoping airlines now have a path to recovery, with the removal of many restrictions and testing rules opening up international travel once again.
But the numbers show budget carriers still have some way to go after the outbreak of omicron dented the recovery.
FTSE 100 rises at the open
The FTSE 100 has risen at the open, building on a run of gains this week.
The blue-chip index rose 0.6pc to 7,582 points.
Playtech shareholders set to block Aristocrat takeover
It seems Playtech’s takeover deal is dead in the water, with the company admitting shareholders are set to vote against the deal.
At least 75pc of investors must approve the £2.1bn offer from Australian slot machine maker Aristocrat. But Playtech said proxy votes suggested this threshold wouldn’t be reached.
It’s a major setback for the British gambling software firm, which struggled to win the support of a group of Asian investors that own a combined 20pc stake.
Following Aristocrat’s offer, Playtech also received interest from JKO Play – a vehicle led by former Formula One owner Eddie Jordan – and investor Gopher. Both subsequently pulled out of the race.
Playtech said it was now considering a break-up of the company through sales of its B2B and B2C businesses.
Vodafone gets tourist boost as activist circles
Vodafone’s UK revenues grew thanks to higher tourist numbers at the end of last year, giving the company a much-needed boost as it tries to fend off activist investor Cevian Capital.
The mobile network said UK revenue rose 0.9pc in the fourth quarter, while overall revenue was up 4.3pc to €11.7bn (£9.8bn).
Vodafone said it had benefited from higher income from roaming fees, which took a hit during the pandemic. It also improved the number of customers leaving for rival networks.
Bosses said they signed up 152,000 new mobile customers, with good demand for iPhones and a successful Black Friday campaign.
It follows revelations that Swedish investment firm Cevian has built up a stake in Vodafone and is pushing for a shake-up.
Boss Nick Read is exploring potential mergers in the company’s European divisions, as well as a potential deal involving its mobile masts business.
BRC: Further price rises ‘inevitable’
Helen Dickinson, chief executive of the BRC, says there’s nothing retailers can do to prevent further price inflation for consumers.
January saw shop price inflation nearly double, driven by a sharp rise in non-food inflation. In particular, furniture and flooring saw exceptionally high demand leading to increased prices as rising oil costs made shipping more expensive.
Food prices continue to rise, especially domestic produce which have been impacted by poor harvests, labour shortages, and rising global food prices.
The rise in shop prices is playing into wider UK inflation, which is pushing cost of living to the forefront of the political agenda. Many households will find it difficult to absorb the additional costs, as well as others on the horizon.
Retailers are working hard to cut costs, but it would be impossible to protect consumers from any future rises. As commodity prices, energy prices and transportation costs continue to rise, it is inevitable that retail prices will continue to follow in the future.
Shoppers get cost-of-living shock
With just a day to go until the Bank of England’s interest rate decision, there’s yet another sign of how inflation is hurting households.
The latest index from the BRC showed shop price inflation almost doubled in January to hit its highest rate in nine years.
The figures showed growth accelerated across the board, with rising prices for goods from food to furniture – a worrying sign that inflation is becoming entrenched.
It follows official data showing the consumer price index leapt to a 20-year high of 5.4pc last month. The BRC index typically shows smaller changes than the CPI, which includes services and a larger range of goods.
5 things to start your day
1) Google defies tech gloom with record profits US behemoth enjoys soaring spending on search adverts as end of pandemic means further growth in ad segment
2) The bullying and harassment at the dark heart of Rio Tinto 21 women reported rape, attempted rape or sexual assault in the last five years, damning report reveals
3) Sadiq Khan threatens to shut the Tube for days on end as black hole hits £1.5bn Mayor warns a “road tax” and extending congestion charging zone will not be enough to balance Transport for London’s books
4) Tesco abandons its Jack’s stores but braces for battle with the discounters Tesco may be closing it’s Jack’s stores but it’s still serious about challenging Aldi and Lidl, say analysts
5) Tesla forced to fix 50,000 self-driving cars Self-driving software failed to bring some vehicles to a halt at junctions
What happened overnight
Asian markets extended their rally on Wednesday as investors become less worried about the Federal Reserve’s plans to tighten monetary policy. Tokyo, Sydney, Wellington and Manila were all up more than 1pc, while Jakarta was 0.8pc higher.
Coming up today
- Corporate: Vodafone, Glencore, Severn Trent (Trading update)
- Economics: BRC shop price index (UK), consumer price index (EU), ADP employment change (US)