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Summary

  1. FTSE 100 closes at 14-month high
  2. Pound hovers around $1.30 and €1.17
  3. Bank reforms will give customers "better deal": watchdog
  4. Consumer groups and challenger banks say changes don't go far enough
  5. UK trade deficit widens in June

Live Reporting

By Karen Hoggan

All times stated are UK

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Good night

That's all from Business Live for today - thanks for reading. We are back bright and early at 06:00 Wednesday - do join us then.

Snap!

And North America technology correspondent Dave Lee gives us the perfect way to end Tuesday

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BreakingJungle Books boosts Disney

The success of the Jungle Book remake helped the Walt Disney Co to a 9% rise in quarterly revenue to $13.1bn. Net profit rose $120m to $2.6bn in the third quarter to 2 Jul2.

Disney is also buying a one third stake in BAMTech, a video streaming company formed by Major League Baseball (MLB) for $1bn. The company has the option to acquire a majority ownership in the coming years.   

Grint loses £1m tax appeal

Chris Johnston

Business reporter

Rupert Grint
Getty Images

Harry Potter star Rupert Grint - who is thought to have earned about £24m from the film franchise playing Ron Weasley - has lost a legal battle for a £1m tax refund. 

A tax tribunal judge rejected the actor's appeal against an HM Revenue and Customs (HMRC) block on him using a change in accounting dates to protect his earnings from a high tax rate. 

The judge stressed it was not part of HMRC's case that Grint was involved in tax avoidance.

During the hearing, Grint, 27, admitted that his knowledge of his financial affairs was "quite limited", and that he left his tax returns to his father, Nigel, and his accountant, Dan Clay.

The judge said in her ruling that he had made it clear "that he placed his faith in his father and accountants to deal with his financial affairs".

Wall Street ends flat

US flag
Getty Images

Bit of a lacklustre day across the pond, with the Dow Jones industrial average ending almost flat at about 18,532 points, while the S&P 500 was also becalmed - ending at about 2,182 points. 

Now that nearly 90% of companies on the S&P 500 have reported this quarter, revenue growth has not been as bad as expected, says Bob Doll of Nuveen Asset Management. 

"We're slowly turning the corner and exiting the earnings recession," he says. "The worst quarter, year-over-year, was the first quarter. While the second quarter wasn't great, it was less bad. The third and fourth quarters will continue that.''  

A new Pink 'Un

Here's the front page of tomorrow's Financial Times:

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Oil down 1%

Nodding donkey
Getty

Oil is down more than 1% as concern about global oversupply mount. Earlier in the day prices had held steady and rose on Monday amid speculation that Opec and other oil producers would freeze output. 

A short while ago Brent Crude was down nearly 1.2% at $44.83 a barrel, while 

US oil slid by 1% to $42.61. 

"Both [US oil] and Brent will have to move above the $50 per barrel level and remain there for the shorter-term traders to regain confidence," said Dominick Chirichella at the Energy Management Institute in New York.

Why is executive pay so high?

LSE Centre for Economic Performance director tweets

'Earth Overshoot Day' 2016 is earlier than ever

BBC World Service

Human beings have already used up the Earth's budget of natural resources for this year, in less than eight months, reports World Business Report.

That's according to the Global Footprint Network, which says people are putting even more emissions into the atmosphere than they were even a few years ago. 

They're also catching more fish, and cutting down forests more quickly than nature can replenish them. 

As a result the world reached its so-called "overshoot day" yesterday, according to the environmental campaign group. That compares to late September back in 2000, suggesting the environment is being damaged at a faster rate than ever.

Andrew Simms is from the research group, New Weather Institute, and explained the idea behind "overshoot day" to the BBC's Tony Bonsignore.

Humans have already used up the Earth's budget of natural resources for this year.

Back to the future

Technology reporter Zoe Kleinman tweets:

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Bank of England falls short of bond buying target

Bank of England building
PA

The Bank of England's latest round of quantitative easing got underway on Tuesday, but the bank fell £52m short of its target to buy more than £1bn of long-dated government debt.

For the first time since it started buying government bonds to boost Britain's economy back  in 2009, the Bank failed to find enough willing sellers to meet its purchase target, pushing bond yields to record lows, reports Reuters.  

This was the Bank's first attempt to buy long-dated debt since it announced last week that it was cutting interest rates and resuming its quantitative easing programme to cope with the effects of the UK's vote to quit the European Union. 

"The fact that their first attempt to buy long dated gilts has failed raises significant question marks over whether the Bank of England will find enough willing sellers of gilts, to complete this round of asset purchases," said Mitul Patel of Henderson Global Investors.

"Gilts have significantly outperformed other markets as a result, and the fall in gilt yields is likely to inflict further pain on pension schemes, insurance companies and banks," he added.

The Bank has said it will announce its response to the shortfall tomorrow at 8am - and we will, of course, bring you the news when we get it. 

Facebook takes aim at ad-blockers

Facebook logo
Getty Images

Facebook is changing the design of adverts so they can bypass ad-blocking software aimed at reducing the number of adverts seen online. 

However, the social media giant will let account holders control the type of adverts they see on the site by selecting and de-selecting suitable subjects. 

Users of Facebook on desktops will be able to edit their advert preferences to block adverts from some businesses. 

The social network said its decision to alter the design of its adverts comes after commissioning a study into consumer opinion on online adverts. More than two thirds of those surveyed said they used an ad-blocker because they found adverts disruptive.  

An estimated 22% of UK internet users now using an ad-blocker.

Stealing company secrets

What happens when a bio tech company finds someone digging up their seeds?
What happens when a bio tech company finds someone digging up their seeds?

(A seedling, copyright: Shutterstock)

Grayling: RMT wants to turn clock back

Chris Grayling
Getty Images

More on members of the RMT union working on Virgin East Coast line voting in favour of a strike.

The Transport Secretary, Chris Grayling, said the strike was unnecessary - and accused the union of standing in the way of progress:  

The transport system that we are presiding over is moving forwards all the time. We are opening new stations, we are opening new lines, we're investing hundreds of millions of pounds in new trains, new opportunities for making things better for passengers around the country. We can't have a situation where unions want to turn the clock back and do things the way they were done 40 or 50 years ago, when we're trying to bring state of the art systems and trains and equipment to our railways.

Chris GraylingTransport Secretary

Trump 'is right'

Chris Johnston

Business reporter

Donald Trump
Getty Images

Interesting comments from billionaire activitist investor Carl Icahn on CNBC today: he thinks Republican presidential candidate Donald Trump is "right on the economy". 

Speaking a day after Trump unveiled his economic plan, Mr Icahn said "the Archie Bunkers of the world" are going to vote for Trump. 

Bunker was, of course, the fictional conservative blue-collar worker on TV sitcom All In The Family in the 1970s.  

RMT: Virgin Train cuts a threat to service and security

BBC News Channel

Virgin train
PA

As we reported earlier, workers on the Virgin East Coast line have voted to strike in a dispute over jobs, working conditions and safety. Read more here

The RMT union has accused the company of trying to "bulldoze through" cost-cutting measures which it says would "decimate" jobs. 

Virgin says the changes are aimed improving customer experience, and has promised to run a full timetable during any strike.

But Craig Johnston from the RMT says the strike is a vote of no confidence in the company.

Virgin East Coast have decided that they want to do away with around 200 posts. Many of those posts are engaged in ticket office functions, platform staff, on train staff. We believe that that will damage the quality of the service that's provided to passengers in the long term. And in addition to that we also believe there's a serious risk that it could undermine safety as well.

Craig JohnstonRMT union

If at first you don't succeed ...

BBC Capital tweets

Growth industry: artificial grass

Here's a story we missed when it was first broadcast, but we thought it was worth another listen ...

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FTSE closes up on positive economic data

London Stock Exchange sign
Associated Press

The FTSE 100 closed at a 14 month high of 6,851.17 - up by 0.62% or 42.17 points - helped by encouraging economic figures out of China and Europe, plus a steady oil price. 

Shares in financial companies did well. The biggest climber was insurer Standard Life which hit its highest level post-Brexit after reporting an increase in assets under management.  

The day's biggest loser was Legal & General whose shares fell despite the company reporting a rise in half-year profits.

L&G reported a 10% rise in operating profits to £822m, but its shares ended the day down 5.2% as investors focused on a fall in profits at its investment management and general insurance businesses.

That overshadowed news of a 44% rise in profits at L&G's retirement division.

 The FTSE 250, which contains more UK-focused companies than the FTSE 100, closed at 17,687.40 - that's a rise of 129.66 points or 0.74%.  

Betting on a recession

Two of our earlier stories come together in this latest post ...

Bookmaker William Hill says it believes a UK recession before the end of 2017 is an odds-on shot and it's offering 8/11 - a 57% chance - that it will happen, but even money that it will not.

 'We believe there is slightly more chance than not that the UK will experience another recession before the end of 2017' says William Hill's spokesman Graham Sharpe. 

Delta cancels 250 flights

BBC World Service

Delta plane on tarmac
Reuters

The American airline, Delta, said it was cancelling nearly 250 flights on Tuesday as it looked to restore operations after a power outage on Monday that hit its computer systems, reports World Service. 

Delta said the airline was still recovering from the disruption, even though systems were back on line, and flights had resumed. 

More than a thousand Delta flights were cancelled on Monday, with passengers stranded at airports around the globe. 

William Hill rejects £3.6bn takeover approach

William Hill signs
Reuters

More on the news we brought you earlier about the takeover bid made for betting shop operator William Hill by rivals 888 and Rank Group ...

William Hill has just announced it's unanimously rejected the proposal as it "substantially undervalues William Hill".

"In addition, the Board of William Hill does not believe that a combination of William Hill with 888 and Rank will enhance William Hill's strategic positioning or deliver superior value for shareholders compared against William Hill's strategy, which is focused on increasing the Group's diversification by growing its digital and international businesses," the company says in a statement. 

The cash and shares offer would result in William Hill shareholders owning 44.6% of the combined group. 

This conditional proposal substantially undervalues William Hill, is highly opportunistic and does not reflect the inherent value of the business. It is a very complex three-way combination at a low premium involving substantial risk for William Hill shareholders: execution risk, integration risk and risks of materially increased leverage. The Group has a strong team to deliver against our strategy to grow our digital and international businesses so we strongly advise that shareholders take no action.

Gareth DavisChairman, William Hill

EU waives Spain and Portugal fines

BBC World Service

Euro coins on map of Spain
Getty Images

The European Union has agreed to waive fines for Spain and Portugal over their excessive budget deficits, reports BBC World Service.

Both governments had breached the EU rule of ensuring that budget deficits do not exceed three per cent of their economic output or GDP.

The EU Council said Spain has two more years to bring its deficit below the limit, while Portugal would be given a year to reduce its shortfall to 2.5% GDP. 

The waivers come with a rising anti-austerity sentiment across Europe, and growing economic uncertainty following Britain's vote to leave the EU.  

Wall Street edges higher on oil price rise

Wall Street sign
Getty Images

Wall Street opened slightly higher on Tuesday as oil prices steadied, a day after the S&P 500 index hit a record intraday high.

Oil edged further above $45 on estimates of a drop in US inventories and speculation of that some oil producing countries will freeze output.

"We expect a steady to higher opening as oil prices come back into the spotlight, said Peter Cardillo, chief market economist at First Standard Financial in New York. "Today, it seems like whatever oil does, equities will follow." 

A short while ago the Dow Jones at 18,558.49 - a rise of 0.16%.

The Nasdaq was at 5,225.34 - that's up 0.23%.

And the S&P 500 was up 0.13% at 2,183.68. 

Technical recession by end of 2017?

Latest monthly estimates from the National Institute of Economic and Social Research (Niesr) suggest the economy grew by 0.3% in the three months to the end of July.

That compares with GDP growth of 0.6% in the three months to the end of June. 

The think tank says the figures suggest output declined in July by 0.2%.

It adds this estimate is consistent with its latest quarterly forecast, which forecasts a contraction of 0.2% in the third quarter of this year, as a whole. 

As a result, it forecasts there's an "evens chance of a technical recession between the third quarter of 2016 and the final quarter of 2017".

However, Niesr does say monthly data are volatile so it advises against relying on them too much in assessing the fundamentals of the economy.  

We estimate that in the three months to July the UK economy grew by 0.3%, a marked economic slowdown. The month on month profile, suggests that the third quarter has got off to a weak start, with output declining in July. Our estimates suggest that there is around an evens chance of a technical recession by the end of 2017.

James WarrenResearch fellow, Niesr

Pound's poor run continues

Pound coin and note
Getty Images

The pound is trading at lows not seen since early July - before Theresa May became Prime Minister and markets were nervous about the mix of political uncertainty and an impending interest rate cut.

The fall is partly explained by this morning's weaker-than-expected manufacturing data for June, said Christ Saint of stockbroker Hagreaves Lansdown.  

Sentiment towards sterling has also been knocked, he said, by comments from one of the Bank of England’s members that more monetary stimulus is likely to be needed.  

The pound is 0.5% lower against the dollar at $1.2970 and is down 0.4% against the euro to €1.1709.   

Why rivals will have to follow Vodafone's lead

Vodafone shop
Getty Images

Vodafone's decision today to scrap line rental charges for UK broadband customers may have put pressure on its more established rivals to follow suit, but in reality they will have no choice but to.

In May, the Advertising Standards Authority detailed stronger rules for advertising fixed broadband price claims to avoid customers being misled.

The rules, which come into force at the end of October, mean that firms will have to:

  • Show all-inclusive up-front and monthly costs; no more separating out line rental
  • Give greater prominence for the contract length and any post-discount pricing
  • Give greater prominence for up-front costs

Starbucks before it was famous

Starbucks co-founder Zev Siegl talks about how it feels to have sold the business in 1980 before it became the world's biggest coffee shop chain.

Zev Siegl co-founded the Seattle coffee in 1971, but sold up in 1980. How does that feel?

What do the banking reforms mean for you?

BBC presenter Ben Thompson quizzes Anthony Browne, the chief executive of banking industry body The British Bankers' Association, on what may change following the report. 

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Treasury Committe chair criticises bank report

Yet another person has come out to say that today's banking report from The Competition and Markets Authority, aimed at making retail banking more competitive, doesn't go far enough. 

Treasury Committee chairman Andrew Tyrie says he's not optimistic the report's suggested remedies will work:

“The CMA is relying on the rolling out of new technology to do the heavy lifting on competition. But many customers will not have the tools or skills to do this. Customers are also – understandably – wary of the data-sharing required for this to be effective.

"The Committee has been at this issue for six years. Its recommendations, and those of the Banking Commission, were unequivocal on the need for much greater choice. We are not giving up now.”

Hinkley 'litmus test' for Anglo-China relations

Hinkley Point artists' impression
AFP

The UK government's surprise decision to delay a decision on Hinkley Point until early autumn could threaten China's relationship with Britain, its ambassador to the UK has warned.

BBC business correspondent Simon Jack says the £18bn project, of which China is expected to fund a third, is now the "the litmus test for Anglo-China relations under the new regime at number 10".

"There may be legitimate security concerns over having sensitive infrastructure assets under Chinese management but a decision to back out will clearly take the shine off the 'golden era' of collaboration between the two countries proclaimed during Xi Jinping's state visit last year," he says.

Read more from Simon here.    

FTSE nears 14-month high

FTSE 100
BBC

The FTSE 100 is close to its highest level in 14 months.Currently up 0.3% at 6830.18, the index, which has gained around 9% so far this year, is just below a high reached in June 2015.

Most of today's gains have been driven by financial and insurance stocks.

The FTSE 100 is mainly made up of large, global firms, a factor which has driven its rise, says City Index analyst Fawad Razaqzada:

"Sentiment remains upbeat for global equities mainly because of the (stimulus) actions of central banks, rebounding oil prices and the mostly better-than-expected US corporate earnings results."

Monster job site gobbled up in $430m deal

Monster mascot at its stock market listing
Getty Images

Job listing website Monster, which was an early pioneer in e-commerce, has been bought for $429m (£330m)

Randstad, the world's second largest staffing company, is buying the US firm in a bid to expand its presence in America. 

Monster Worldwide, a dotcom-era survivor, also owns jobs.com and made $309m in revenue in the first half of the year.

The deal strengthens Dutch firm Randstad as it looks to take on rival employment agency Adecco, and comes just weeks after Microsoft agreed to buy networking website LinkedIn for $26bn.

Virgin East Coast rail workers to strike

BBC producer Johny Cassidy tweets

Vodafone customers 'won't pay much less overall'

Vodafone
Getty Images

Mobile-phone giant Vodafone says it is scrapping line rental charges for new and upgrading home broadband customers in the UK.

The move means customers will not be billed the current £18 ($23) monthly charge, but only if they commit to an 18-month contract. Prices will start at £22 a month.

Redburn analyst Mandeep Singh says the change makes Vodafone's prices cheaper than all its rivals - at £25 a month for 38mb speeds and £28 a month for 76Mb speeds. 

But BBC technology correspondent Rory Cellan-Jones says it is unlikely that consumers will find they are paying much less overall.

"Shop around for a new broadband deal, and you can easily miss the fact that there's something nasty hidden beneath an attractive offer - the chunky monthly line rental fee. 

"It now seems inevitable that the others will follow [Vodafone] - and that should help consumers by making the complex deals a little easier to understand.

"But the UK's broadband market is already pretty competitive compared with many across Europe."

William Hill receives '£3.6bn takeover bid'

William Hill banner behind a horse race
William Hill

The UK's biggest betting shop operator, William Hill, has received a takeover offer from rival gambling firms Rank and 888, according to the Financial Times.

William Hill said last month it had been approached by the two companies about a possible merger.

Since then a formal bid has been tabled, which values William Hill at up to £3.6bn, the FT reported.

Shares in the bookmaker have risen 2% following the report. 888 shares are 0.6% higher so far today, while Rank is 2.5% lower. 

Brexit latest: How is the UK doing?

European Union (L) and British Union Jack flags hang at a meeting for British citizens living in Germany to discuss the implications of Great Britain leaving the European Union
Getty Images

This morning's industry and trade figures give a picture of the UK's performance before the EU referendum. 

But for an idea of how things have gone since the Brexit vote, we've got this handy summary on the main developments so far for the economy, and housing and jobs markets.

European Union (L) and British Union Jack flags hang at a meeting for British citizens living in Germany to discuss the implications of Great Britain leaving the European Union

How has the economy fared since the Brexit vote?

With the UK about to trigger Article 50, the BBC looks at how the economy has fared since June 2016.

Read more

Bank stocks 'brush off' regulator report

'Making banks work harder for you' report
PA

Bank shares have been left largely unscathed by the Competition and Markets Authority's attempted "shake-up" of the industry.

Most banking shares on the FTSE 100 and FTSE 250 are higher as they have largely "brushed off" the report, said Jasper Lawler, an analyst at CMC Markets. 

RBS shares were up over 2% before dropping back slightly, Barclays is up 1.5%, while challenger banks Aldermore, Virgin Money and Shawbrook are all currently flat.

The FTSE 100 as a whole is 0.3% higher at 6,831 points. 

Stockbroker Cenkos fined £530,000

Financial Conduct Authority sign
Reuters

UK stockbroker Cenkos has been fined by the financial watchdog for its failings relating to troubled insurance group Quindell.

The Financial Conduct Authority (FCA) hit Cenkos with a £530,000 fine for not doing enough research into the firm.

In particular, the broker wasn't thorough enough when it recommended Quindell, now renamed Watchstone, for a premium stock market listing, the regulator ruled.

Cenkos "failed to act in its sponsor role with the level of diligence and professional care that the FCA expects", the watchdog said.