Got a TV Licence?

You need one to watch live TV on any channel or device, and BBC programmes on iPlayer. It’s the law.

Find out more
I don’t have a TV Licence.

Summary

  1. Inflation falls to 0.5%, matches record low
  2. Morrisons boss Dalton Philips to leave
  3. E.On cuts gas prices

Live Reporting

By Ben Morris and Matthew West

All times stated are UK

Get involved

Ben Morris

Business Reporter

That's it from us today. Thanks to readers who emailed and tweeted today, you made some some excellent points. Come back tomorrow, we are here from 06:00.

Via Blog

Inflation matches record low

Robert Peston

Economics editor

As I have been banging on about, if we became accustomed to prices falling as the new norm, we would spend less - in that delaying would always make our money go further. And then the economy would sclerotic and stagnant, and desperately difficult to reinvigorate.

Via Email

Nigel Brewer from Bournemouth

"How long will it take highly paid chief exe's to chase prices down is not the way forward. Look at Waitrose's success built on quality, service and space. There is adequate market space for all the supermarkets, we don't all have to [race] down at the bottom, fighting to give away profits."

Inflation matches record low

Bank of England governor, Mark Carney
BBC

Bank of England governor Mark Carney tells the BBC's economics editor, Robert Peston that

lower inflation in the short term is good news. "The issue is to make sure this doesn't become more generalised, that we don't see lower falling prices more generally because a little bit of inflation is good for the economy," he says. But he also believes inflation could have further to fall yet, given oil prices are still coming down.

Fizzing Lidl

Champagne bottle
Getty Images

Champagne out-sold semi-skimmed milk at Lidl over Christmas, according to the supermarket. Its Comte De Senneval champagne, which was selling at £11.99 a bottle, was particularly popular, the discounter said. Figures from Kantar Worldpanel showed that Lidl sales grew 15% for the 12 weeks to 4 January.

Rouble crisis

A Russian rouble coin is pictured in front of the Kremlin
AFP

The rouble has been falling against the US dollar again today and is currently

down 4% at 65.39 roubles to $1. Fallling oil prices are largely to blame -
Brent crude has fallen 3.4% today to $45.83. There are also fears that ratings agency Standard & Poor's could downgrade the country's credit rating in the next few days.

Retail shares on the move

Morrisons shares continue to be the biggest winners on the FTSE 100, following the announcement of the

departure of the company's chief executive.

Morrisons board savaged

Morrisons, Croydon
Reuters

"They couldn't run a school tuck shop," says former Morrisons director Roger Owen about the current board of directors at the supermarket.

Speaking to the Yorkshire Post, Mr Owen said the departure of chief executive Dalton Philips was a decision that chairman Sir Ian Gibson "should have made two and a half years ago when it was evident that Dalton Philips was not the man for the job". Ouch.

Via Twitter

Robert Peston

Economics editor

"

Just interviewed Bank of Eng gov. Says although inflation lower than Bank expected in Nov, no need for more money stimulus. Though Mark Carney gave a hint (no more than that) interest rates could be lower for longer - though path still gently upward."

Airbus behind Boeing

John Leahy, chief operating officer, Airbus
BBC

Airbus delivered 629 plans last year, fewer than rival Boeing which delivered 723 planes to customers. Chief operating officer John Leahy tells World Business Report that Airbus will "ramp-up" production over the next few years, so is likely to overtake Boeing again. Airbus has a record order backlog of 6,386 planes.

Inflation letter

Bank of England governor, Mark Carney
Getty Images

We have mentioned that Bank of England governor Mark Carney has to write to the government to explain why inflation has

fallen below the 1% level. That letter will not be released until 11 February when the inflation report is released.

Via Twitter

Mark Lobel

Middle East Business Reporter

"

No oil production cut says UAE energy minister in Abu Dhabi & dismisses @GoldmanSachs report of oil in $40s for months @BBCBusiness #giforum"

Via Email

E.On cuts gas prices

Adrian Smith

E.On says they have passed on the full price drop. If prices have fallen by 30% and the cost of gas makes up 50% of the bill. Then the real drop of our bills should be 15% . Not 3.5%. So we are still being ripped off that is why the share price has risen. Time to get rid of this cartel. I will vote for any government that promises to do it. Any takers. Labour, Libs or Conservatives?

Retail sales

Sales fell by 1.6% at both Asda and Morrisons, Kantar Wordpanel adds. Meanwhile, Aldi and Lidl have grown by 22.6% and 15.1% to finish the year with market shares of 4.8% and 3.5% respectively. Half of all UK households visited at least one of the two retailers over the past 12 weeks. Waitrose also continued its strong run as sales rose 6.6% to take its market share to 5.1% in December.

Retail sales

Tesco continued to lose market share in December, down to 29.1% from 29.6% a year ago, retail analysts Kantar Worldpanel have said. Sales at Sainsbury's were 0.7% lower over the same period, but that actually made Sainsbury's the best performing of the "Big Four". It also means it overtook Asda as the UK's second largest - in terms of market share - supermarket for the first time since 2003.

Via Twitter

Inflation matches record low

Duncan Weldon

Economics Correspondent, BBC Newsnight

"Lower inflation driven by oil is a positive shock to incomes & profit margins. But benign low inflation can turn into very unbenign. Deflation if second round effects play out, inflation expectations fall & wage growth slows. Huge risk in Europe, rising one in UK."

Sellafield clean-up

Sellafield plant, Cumbria
PA

Private consortium Nuclear Management Partners

is to be stripped of its multibillion-pound contract to clean up the nuclear waste site at Sellafield, the government has just confirmed.

Via Twitter

Inflation matches record low

Andy Verity

Business reporter

"@bbcnews_ticker @BBCBusiness

As well as the 22.6% drop in the price of petrol, the price of spuds and other veg dropped 7.1%"

Pound falls

Pound dollar
Bloomberg

As you can see from the chart above, the pound fell against the dollar after the inflation figures came out. Shortly before the data it was trading around $1.512 and it dropped around a third of a cent to $1.5079.

Via Twitter

Inflation matches record low

Michael Hewson

Chief market analyst, CMC Markets

"

No rate hike this year - CPI headline at 0.5% #gbp ... not one major central bank is meeting its inflation target - not one!!"

House prices

We also have house price data out. UK house prices rose by 10% in the year to November 2014 the Office for National Statistic says, a slowdown from the 10.4% rate in the year to October 2014.

Inflation matches record low

"The main contributions to the fall came from the December 2013 gas and electricity price rises falling out of the calculation and the continuing drop in motor fuel prices," according to the Office for National Statistics. "Petrol and diesel prices are now almost 25p per litre below their peak prices in April 2012."

BreakingBreaking News

UK inflation matches record low

The consumer price index fell to 0.5% in December from 1% in November, according to the Office for National Statistics. That matches the record low set in May 2000. Inflation is now below the Bank of England's target of 1% and Bank of England governor Mark Carney will have to write an open letter to the Treasury to explain the situation.

Via Twitter

Oil prices

Mark Lobel

Middle East Business Reporter

"By 2020,

Brent oil will cost $80-100 per barrel according to 79% of industry insiders at UAE Energy Forum @BBCBusiness #giforum"

E.On cuts gas prices

BBC Radio 4

E.On's residential and customer operations manager, David Bird, tells

Today, the firm started to plan its price cut,
announced this morning, before Christmas. But wholesale gas prices have been falling for around a year so why the delay? He says wholesale gas prices make up less than half of the bill to customers. Pylons, pipes, environmental and social costs all influence customer bills too, he adds.

Via Twitter

Oops

Robert Peston

Economics editor

"

Darn, i bogged it up. CPI inflation was 0.5% in May 2000, as @ReutersJamie points out (tks & curses - & next time caffeine before data)"

Via Email

Morrisons sales

Neil Willson from Northamptonshire

The problems started when his [Dalton Philips] cost saving measures ie reduction in store staff meant that the stock availability was reduced and in turn leaving customers no choice but shop elsewhere. All this about convenience online and loyalty is just a smoke screen if you want the truth go speak to Morrisons staff and customers. Even their online shopping is a joke as you are unable at times to get basic fruit and veg.

Via Twitter

Robert Peston

Economics editor

"

Lowest CPI inflation has ever been since Jan '89 is 0.6% in June 2002. Was it same or lower in Dec 2014? We'll know at 9.30"

Newspaper review

Newspapers
BBC

The Telegraph business section leads with the removal of the contract to clean-up Sellafield from a private consortium. It's been the worst Christmas since the financial crisis, according to
the Guardian business pages. Big investors plan to put more money in hedge funds this year, despite a dire 2014, reports the Financial Times. And Fiat's boss says car makers will have to share more development costs in the future, according to the Times.

Market update

The

FTSE 100 Index is up 0.2% at 6515.34, with Morrisons leading the gainers following the departure of boss Dalton Philips.
Tesco is also among the top five, rising 2.13% to 208.9p. Meanwhile,
Centrica is also higher, by 3.6% to 270.5p, possibly anticipating a move on gas prices after E.On's earlier price cut.

E.On cuts gas prices

Business and energy minister, Matthew Hancock is meeting the Big Six energy suppliers "shortly".

He hopes more will follow the lead of E.On and cut their gas prices as well. He describes Labour's plan for a price freeze as "ludicrous".

Via Twitter

Douglas Fraser

Business and economy editor, Scotland

"

Norway oil+gas: investment to drop 25% this year. 2014 drilling results "lacklustre" while production up 1st time in 14 yrs: @WoodMackenzie"

Slow Christmas sales

Oxford Street, Christmas
PA

Retailers suffered the slowest Christmas in six years, according to figures from the

British Retail Consortium. Like-for-like sales fell 0.4% in December and total sales were only 1% higher. Retail analyst says Nick Bubb says the figures are "a bit disappointing". Black Friday on 28 November "pulled even more business forward than had been expected" he says.

E.On cuts gas prices

Radio 5 live

David Bird, customer operations director at E.On on

Radio 5 live says the company has passed on the full extent of the savings it has seen from falling wholesale energy prices. Like all big energy companies it hedges against volatile swings in the energy markets. So at the moment it is buying as far out as 2017.

Greggs profits

The exterior of a Greggs shop
PA

Greggs the baker says full-year profits will be higher than previously forecast after customers responded to changes made at the start of last year. The forecast came as Greggs reported an 8.1% rise in like-for-like sales for the five weeks to 3 January compared with a rise of 3.1% a year earlier. Like for like sales for the year were 4.5% higher, it adds.

ASOS sales

Asos website
ASOS

Online fashion retailer ASOS, which suffered a difficult 2014, has announced a 15% in rise like-for-like sales for the six weeks to 9 January. UK sales rose a healthy 27%, while international sales were also up 5%. ASOS also maintained its profit guidance for the full year.

Morrisons sales

BBC Radio 4

Morrisons sign
Getty Images

Mr Leyland tells

Today part of the problem at Morrisons is many of the changes, like moving into convenience stores, and the introduction of a loyalty card, came far too late in the day. In part this was done to combat falling sales, but the problem is Morrisons needs to grow again, he says.