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Live Reporting
By Bill Wilson and Dan Ascher
All times stated are UK
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Ex-boss questions sale of defense firm Cobham
Today Program
(BBC Radio 4)
(Getty Images)Copyright: Getty Images
Image caption: The Royal Air Force F – 35 Lightning contains parts made by Cobham Voices of concern are being raised about the sale of UK aerospace and defense supplier Cobham to US private equi ty group Advent International in a deal that values it at £ 4bn.
Former defense secretary Michael Heseltine has said “no other country in the world” would allow a sensitive takeover to pass without scrutiny.
Now the firm’s former chief executive Gordon Page has told Radio Four’s Today program that Cobham is being sold too cheaply.
“A lot of work has been done by current management to put back in place the fundamentals of the business, and that hard work is starting to pay off,” he said.
“The business is back on an even keel, a nd hasn’t lost any of its market position. Why would management sell when everything is getting back into place? “
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Hammond: ‘No Brexit progress’
Today program business presenter tweets …
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Asian markets mixed at close
Asi an markets were mixed on Tuesday.
In China, Hong Kong’s Hang Seng index was 0.3% lower while the Shanghai Composite firmed 0.2%
(Japan’s benchmark Nikkei) was flat.
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Pound could face ‘further pressure’
Some more thoughts about sterling’s immediate future.
“Today’s vote about a possible [Brexit] extension will determine the next course of action, and should MPs try and block a no-deal Brexit by obtaining an extension, the Prime Minister would likely call a general election, and that might put further pressure on the pound, “says David Madden, market analyst at CMC Markets UK.
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Building giant Ferguson to spin off plumbing firm
Today program business presenter tweets …
‘Sterling under the Cosh ‘
Quote Message: Sterling is under the cosh early doors and it could get worse before it gets better. It’s set to be a day of tumult in Westminster as rebel Tory MPs collude with the opposition to take control of parliamentary business and force the government to take no-deal off the table. Boris Johnson appears likely to lose the vote, which should almost certainly mean he will call for an election, likely to be 14 October. What happens next? Two-thirds of MPs must vote for the election. Boris will need opposition votes. Labor may not wish to fall into this ‘elephant trap’, yet Corbyn is almost duty bound to agree to it as the official opposition leader. The continued political uncertainty will do nothing to lift sterling from its torpor. from Neil Wilson Chief analyst, Markets.com
Sterling is under the cosh early doors and it could get worse before it gets better. It’s set to be a day of tumult in Westminster as rebel Tory MPs collude with the opposition to take control of parliamentary business and force the government to take no-deal off the table. Boris Johnson appears likely to lose the vote, which should almost certainly mean he will call for an election, likely to be 14 October. What happens next? Two-thirds of MPs must vote for the election. Boris will need opposition votes. Labor may not wish to fall into this ‘elephant trap’, yet Corbyn is almost duty bound to agree to it as the official opposition leader. The continued political uncertainty will do nothing to lift sterling from its torpor.
Pound dips below $ 1. 20
Copyright: Getty Images
Sterling has fallen below $ 1. 20 for the first time since January 2017 amid the political uncertainty surrounding Brexit.
Rebel Tories and Labor MPs are planning a bill to stop the UK leaving the EU on 31 October without a deal, but No. 10 officials have warned that Boris Johnson will call for a snap general election on 14 October if MPs succeed in seizing control of Commons business.
The pound had fallen more than a cent against the dollar on Monday, and it continued to slide overnight. In early London trade it hit a low of $ 1. 1991.
Exceptional charge pushes Restaurant Group into the red
Copyright: Getty Images
The Restaurant Group, own ers of the Wagamama, Frankie & Benny and Garfunkel’s restaurant chains, has seen its profits hit by an exceptional pre-tax charge of £ .7m.
The group’s like-for-like sales were up by 4% in the first half of 2019, and total sales up 58. 2% to £ 515 .9m, with the integration of the newly-purchased Wagamama restaurants into the business being a big factor.
But the charge – including the cost of restaurants which were seen as being “structurally unattractive” and some newly-identified leases – meant the group made a pre-tax loss of £ 87 .7m. This compared with a profit of £ 12. 2m in 2018.
Looking ahead, the group’s non-executive chairman Debbie Hewitt said: “We are mindful of the headwinds in the casual dining sector and the meaningful uncertainties created by the potential of a no-deal Brexit and are planning with this in mind.
“However, our business is now better diversified and purposefully positioned to benefit from multiple opportunities for growth.”
South Korea grew by less than previously thought in Q2
Copyright: Getty Images
South Korea grew by less than previously estimated, the Bank of Korea has said.
Gross domestic product increased by 1.0 percent in the second quarter of 2019 compared to the previous quarter, 0.1 percentage points lower than in the previous advance estimate,it said on its website.
Tesco sells mortgage portfolio to Lloyds
(AFP)Copyright : AFP
Tesco Bank has sold its mortgage portfolio to Lloyds Banking Group for £ 3.8bn.
The 23, 00 0 affected mortgage customers will transfer to Halifax, a division of Bank of Scotland, which is itself a wholly-owned subsidiary of Lloyds Banking Group.
The mortgage portfolio has a lending balance of £ 3.7bn and generated pre-tax profits of £ 9.1m in the 2018 / 19 financial year.
Gerry Mallon, Tesco Bank chief executive, said: “In May we announced our decision to stop new mortgage lending while we explored our options to sell the mortgage book.
” Our focus is on how we best serve Tesco customers and align our resources effectively to their needs while ensuring that our offer remains sustainable in the long term. “
US citizens may miss out on hurricane insurance payouts
Today Program
(BBC Radio 4)
(Reuters)Copyright: Reuters
Image caption: A flooded street in Nassau , Bahamas after it was hit by Hurricane Dorian Hurricane Dorian, which has caused devastation in the Bahamas,is heading for the south-east of the US, but many residents may not have insurance to cover any losses they may
Bruce Carnegie-Brown, the chair of Lloyds of London, told the Today program: “Natural catastrophe insurance is the biggest category of risk we protect and the US is our biggest market.
“The best estimates are upwards of $ 25 bn insured losses [from Hurricane Dorian], but one of the unspoken tragedies is of course that most people are under-insured.
“So in the United States in the last five hurricanes in the last two years – less than 25% of the economic loss was insured, even in a wealthy country like the US. “
General election ‘could push down sterling’
Today Program
(BBC Radio 4)
(PA Media) ************************** (Copyright: PA Media
Among all the debate as to whether a general election is about to be called – its effect on sterling is likely to be negative, according to a leading economist.
Jane Foley, of Rabobank, told the Today program that while anything that made a no-deal Brexit less likely would boost sterling, an election would have the opposite effect.
“Currencies, as a rule, do not like uncertainty.The idea is that there could of course be a no-deal Brexit, which investors do not like.They do not like the idea of the uncertainty or the potential chaos that that could bring.
“So the outlook for sterling is very much determined about the probabilities of a no-deal Brexit.
“If the members of Parliament do manage to block a no-deal Brexit at the end of next month, then that is likely to push sterling up.
“That said, political uncertainty and a general election will likely push sterling down.
“Sterling will remain a very vulnerable currency. “
Break-up on the cards at Arcadia?
(BBC Radio 5 Live)
Copyright: Getty Images
Staying with retail, David Shepherd, a key lieutenant in Sir Philip Green’s retail empire, has stepped down from his position as chief operating officer at Arcadia.
That has led to speculation that Arcadia, which includes such brands as Burtons, Dorothy Perkins, Topshop and Miss Selfridge, may be broken up.
Simon French is chief economist at stockbroker Panmure Gordon.
He tells BBC Radio Five live’s Wake Up To Money that he thinks there could well be a break up of the group.
“In any diversified retail portfolio there will be elements of it will be attractive, ”he adds.
He said that while some of the Arcadia brands were dated, “some of them remain quite fresh”.
‘Critical 12 weeks’ for Debenhams
BBC Radio 5 Live
(AFP)Copyright: AFP
As we reported yesterday, a deal that saved Debenhams from administration is being challenged in the High Court, putting the retailer’s future back into doubt.
A commercial landlord – backed by Mike Ashley’s Sports Direct group – is fighting the plan which saw Debenhams agree to shut 50 stores and secure rent cuts on others in May.
If successful, it could lead Debenhams to fall back into administration.
Retail expert Catherine Shuttleworth from Savvy Marketing tells BBC Radio Five live’s Wake Up To Money that the firm is now facing a critical 12 week period.
“The future for Debenhams is not looking great. And this court case is a difficult side show, ” she says.
She said it came against a backdrop where UK consumer confidence was “very soft ”.
“I can’t see any quick fix for Debenhams, whether Mike Ashley is involved or not, “she adds.
China files a tariff case against the US at WTO-report
Copyright: Getty Images
China’s commerce mi nistry has said it has filed a case against the US with the World Trade Organization over tariffs,Reuters has
TheUS imposed 15% tariffs on a series of Chinese goods on Sundayin the first of two rounds marking an escalation in the US-China trade war.
The ministry said the latest tariffs actions violated an agreement between US and Chinese leaders in a meeting in Japan in June, according to the report.
Asian markets broadly steady
(Copyright: Getty Images)
Asian makets were broadly steady on Tuesday.
In China, Hong Kong’s Hang Seng index fell 0.1% while the Shanghai Composite shed 0. (%.)
Japan’s benchmark Nikkei 225 was up 0. 07%.
Good morning
Good morning, and welcome to another day of news at Business Live.
As well as the latest companies and economics news we will be keeping an eye on developments around a possible no-deal Brexit.
With continued speculation that Prime Minister Boris Johnson could call a snap general election, that could once again have ramifications for the pound and London stock markets.
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