UK petrol prices near record; inflation dips; bitcoin hits new high – as it happened (2024)

Time to wrap up...

UK inflation has dipped, but the respite could be temporary. Consumer prices rose by 3.1% in the year to September, down from a nine-year high of 3.2% in August.

But the drop was due to last summer’s discount meal offer, Eat Out to Help Out, dropping out of the calculations. Economists predict inflation will keep rising, and could be over 4% by early next year.

Transport costs pushed up the cost of living, with petrol and second-hand car prices having risen sharply since pandemic restrictions eased.

The inflation data will be used to set UK pensions next year. They should rise by 3.1%, but would have jumped by 8%, in line with wages, if the government hadn’t suspended the triple-lock.

Age UK said it is “imperative” to revert back to the triple-lock to tackle pensioner poverty.

House prices inflation also accelerated, with prices up over 10% in the last year.

Petrol retailers warned that prices at the pump will hit new record highs by the end of October - blaming the surge in oil prices.

But motoring organisations accused forecourts of pumping up prices.

Rising petrochemical prices are also pushing up the cost of paint.

Dutch paints and coatings maker AkzoNobel warned this morning that “significant raw material cost inflation and supply constraints” are expected to continue until the middle of next year.

Bitcoin has hit a new record high, scaling April’s peak to climb over $65,000 for the first time. The move followed the launch of the first Bitcoin ETF, which makes it easier to invest in the crypto currency.

But the UK’s financial watchdog warned that young investors were being lured into high-risk products such as cryptocurrencies and foreign exchange trading by social media hype and the gambling-like thrill of competing to get rich quick.

In another intriguing development, short-seller Hindenburg Research launched a $1m “bounty” programme for information on Tether, the company at the centre of the global cryptocurrency market.

Shares in Pinterest have surged, after Bloomberg reported the PayPal was exploring acquiring the popular digital pinboard site.

Elon Musk, the world’s richest person, with an estimated $241bn fortune, could become the first trillionaire, Morgan Stanley predicted.

Facebook has been fined £50.5m for breaching an order imposed by the UK competition regulator during its investigation into the purchase of the gif creation website Giphy.

Rishi Sunak is preparing to announce a tax cut for Britain’s biggest banks at next week’s budget to maintain the competitiveness of the City of London after Brexit, according to reports, despite plans to raise taxes on workers.

MPs have warned that UK public sector pension schemes could deepen divisions in society unless they use their billions of pounds of investment to cushion communities pivoting away from carbon-intensive industries such as steel and carmaking.

Five of the UK’s leading manufacturing industries have called for more government financial support to boost capital investment in research and development as well as new factories and equipment with lower carbon emissions.

Burberry has appointed Jonathan Akeroyd as its next chief executive in a deal including a £6m “golden hello” to cover the loss of bonus and share awards for leaving his position as boss of rival Versace.

Deliveroo enjoyed a 59% increase in orders in the UK and Ireland between July and September despite the return of dine-in restaurant eating, as a partnership with Amazon more than doubled members of its premium subscription service.

The scourge of scam texts and calls has been laid bare by UK telecoms regulator research showing almost 45 million people received at least one in the last three months, while mobile network EE had to block 18,000 sim cards used for the fraud over that period.

Goodnight. GW

In London, the FTSE 100 index of blue-chip shares closed up just 5 points or 0.08%, with travel, hospitality, property developers and miners dropping.

The more UK-focused FTSE 250 index of medium-sized firms dipped by 0.4%.

British Airways owner IAG fell almost 5% and holiday operator TUI shed 6.6%, while easyJet dipped by 3.5%.

Hotel operator Whitbread lost almost 3%, while cinema operator Cineworld is down 3.6%.

The latest government figures show that Covid-19 cases and deaths have risen over the last week:

• There have been 49,139 new cases – and the total number of new cases over the past week is up 17.2% on the total for the previous week.

• There have been 179 more Covid deaths – and the total number of deaths over the past week is up 21.1% on the total for the previous week.

• And hospital admissions are up 11.2% week on week – although this data only covers the period up to Saturday, when there were 869 hospital admissions.

Earlier today Morocco said it was banning flights to and from the UK due to rising coronavirus case rates.

European shares have closed at six-week highs tonight, lifted by strong results from Swiss food giant Nestle.

The Europe-wide Stoxx 600 index gained over 0.3%, with Nestlé up 2.66% after reporting strong sales figures of products including coffee and pet food this morning, and passing on higher costs to consumers.

Shares in Pinterest, the image sharing and social media service, have surged by over 10% after Bloomberg reported that PayPal was exploring a possible takeover bid.

They say:

PayPal Holdings Inc. is exploring an acquisition of social media company Pinterest Inc., people with knowledge of the matter said, Bloomberg News reports.

San Jose, California-based PayPal has recently approached Pinterest about a potential deal, the people said, asking not to be identified because the talks are private.

Short-seller Hindenburg Research has launched a $1m “bounty” programme for information on Tether, the company at the centre of the global cryptocurrency market.

Hindenburg is seeking more detail on the reserves which back Tether, which has issued around $70bn of stablecoins which underpin the crypto market.

“We feel strongly that Tether should fully and thoroughly disclose its holdings to the public,” said Hindenburg’s founder Nathan Anderson.

“In the absence of that disclosure, we are offering a $1m bounty to anyone who can provide us exclusive detail on Tether’s supposed reserves.

Stablecoins are a bridge between cryptocurrencies and traditional financial assets, making it easier for traders to buy and sell crypto.

One tether is equivalent to $1, with Tether insisting for years that it held equivalent fiat assets to back the billions of tethers it was creating.

But in May, it revealed that much of its reserves were actually in commercial paper - short-term debt issued by companies.

Last Friday, Tether agreed to pay a $41m penalty to resolve a US regulator’s claims that it had falsely said its digital tokens were fully backed by dollars.

The Commodity Futures Trading Commission said Tether had made untrue or misleading statements and omissions of material fact, and that its Tether was not “fully-backed” by dollars for the majority of the time between June 1, 2016 and February 25, 2019.

Today, Tether has hit back at Hindenburg’s move, calling it a “pathetic bid for attention” (but not releasing any more details on their reserves):

This is not the first time Hindenburg Research has orchestrated an apparent scheme in pursuit of profit. Nor will it be the last. Tether abhors and denounces their actions and transparent motives.

The International Monetary Fund doesn’t believe Europe will be dragged into an inflation spiral, despite prices rising at the fastest rate in 13 years last month.

IMF European Department Director Alfred Kammer told a news briefing that the surge in energy costs should fade in 2022, Reuters reports.

“We don’t at this stage, expect any inflation spiral in Europe.

The high inflation which we are seeing right now is really driven by ... an increase in energy prices, and we expect that to fade out during 2022.”

Krammer added that labour market slack means inflation is unlikely to push up wages:

“Generally, the underlying inflationary momentum in the euro area is just not there,” he added.

Reuters: Europe won’t see inflation spiral as energy price spikes fade-IMF Europe chief

Samuel Indyk, senior analyst at uk.Investing.com, agrees that the launch of the first Bitcoin ETF this week has driven its price higher... but that doesn’t mean it will keep rising.....

”Bitcoin hit an all-time high on Wednesday, a day after the launch of the first ETF based on the world’s largest cryptocurrency. The ProShares Bitcoin Strategy ETF launched with a lot of fanfare and the recent run-up in price can be mostly attributed to expectations that a new method of investing in cryptocurrencies would give more investors exposure to Bitcoin and other digital assets.

A close above the all-time high could lead to further gains with the big round number of $70,000 the next port of call. With Bitcoin now trading at an all-time high and with no previous resistance levels above here, the path of least resistance is likely to be upwards for the time being and $100,000 should not be ruled out by year-end.

“On the other hand, as has been the case previously when major events occur in the cryptocurrency space, a correction could also be on the cards. For example, when the Bitcoin Futures contract launched on the CME in 2017, a bear market occurred shortly after, and it took almost three years for the price to recover. Similar price action was observed this year with the Coinbase IPO marking the previous Bitcoin peak.

“Those who expect higher prices in the coming months will be hoping that the launch of the first Bitcoin Futures ETF won’t see history repeating itself.

Bitcoin’s surge to a fresh record high comes despite warnings from UK regulators about the dangers of crypto.

The UK’s financial watchdog is worried that social media hype and the gambling-like thrill of competing to get rich quick are driving younger investors to turn to cryptocurrencies, foreign exchange trading and other high-risk products.

The Financial Conduct Authority said it was seeing more people chasing high returns and was concerned that many new investors were increasingly putting money into high-risk investments which may not be right for them.

It has launched an £11m campaign targeting inexperienced investors to help them understand the risks they are running.

And last week, Bank of England deputy governor Sir Jon Cunliffe warned that digital currencies such as bitcoin could trigger a financial meltdown unless governments step forward with tough regulations.

Likening the growth of cryptocurrencies to the spiralling value of US sub-prime mortgages before the 2008 financial crash, Cunliffe said there was danger that speculation could lead to a new crisis.

Though the state pension is set to rise in line with inflation, some pensioners may be disappointed – as they could be missing out on a wage increase of 8% because of the temporary suspension of the triple-lock.

With many elderly people heavily reliant on their state pension, and disproportionately affected by high heating costs, this confirmed figure is a worry for many. Age UK has said it is “imperative” to revert back to the triple-lock to tackle pensioner poverty.

Caroline Abrahams, charity director at Age UK, said:

Even taking into account the expected 3.1% increase following today’s inflation figures, the state pension is hardly a fortune, paying less than £9,000 a year on average and leaving about a quarter of pensioners reliant on means-tested benefits to top it up.

With surging household bills on the cards, many older people – including the two million currently living in poverty – will be feeling extremely anxious about how they’ll be able to afford to stay warm and well this winter. More than a million older households are already living in fuel poverty and rocketing energy prices are likely to push thousands more into trouble over the next few months.

The one year suspension of the triple lock, plus the ending of the universal credit uplift, means that areas with significant numbers of people of all ages living on low incomes will take a financial hit in the next few months. In these places it certainly won’t feel like there is much ‘levelling up’ going on.

There may have been good reason to suspend the triple lock for a year, given how exceptional its impact would have been as a result of the pandemic, but for the sake of millions of older people, as well as the local economies where pensioner poverty is concentrated, it is imperative that it reverts back to normal once the year is up.

Bitcoin has hit a fresh record high.

The cryptocurrency just hit $66,000 for the first time ever, bursting over the previous record high of almost $65,000 back in April.

Bitcoin has rallied sharply in recent weeks, since tumbling to $30,000 back in July.

The rally comes after the first US bitcoin exchange traded fund began trading on Wall Street -- a move which could pull new money into the digital asset market.

The ProShares Bitcoin Strategy ETF launched on the New York Stock Exchange on Tuesday. It gives investors exposure to bitcoin without having to buy the crypto asset itself, and will test whether Wall Street will treat cryptocurrencies as a serious asset alongside shares and bonds.

Bullish comments from billionaire investor Paul Tudor Jones, who told CNBC that bitcoin offered better protection against inflation than gold, also provided a lift.

Jones told CNBC’s “Squawk Box” on Wednesday:

“Bitcoin would be a great hedge. Crypto would be a great hedge,”

“There’s a plan in place for crypto and clearly it’s winning the race against gold at the moment ... I would think that would also be in very good inflation hedge. It would be my preferred one over gold at the moment.”

Mind you, the FT’s Robert Armstrong has criticised bitcoin ETFs, arguing they are an expensive way of getting exposure to crypto compared to simply buying it.

Bitcoin is not at all like standard financial products. It is supported by highly complex technology, the source of its value is fundamentally open for debate, and by far its most common current use is as a vehicle for the purest speculation.

If you can’t be bothered to learn the unique subtleties involved in owning this stuff, you can’t possibly understand the risks, and so you should not own it at all. Bitcoin ETFs should not exist.

Stocks have opened cautiously on Wall Street, with the Dow Jones industrial average rising 35 points or 0.1% to 35,492 points.

But Netflix shares dipped by 2.5%, despite the huge success of Squid Game. The streaming giant reported last night that 142m households have watched its dystopian thriller (for at least two minutes), its biggest hit ever.

Netflix also added 4.4 million subscribers in the last three months, comfortably beating Wall Street expectations, and that it expected the next quarter to be even better as more content comes online after a pandemic-related lull.

Fiona Cincotta, senior financial markets Analyst at City Index, says:

Netflix opened lower despite beating subscriber numbers and on earnings.

Thanks to the draw of “Squid Games” subscribers topped 4.4 million and earnings per share (EPS) came in at $3.19 ahead of $2.56 forecast.

However, EPS for the current quarter was $0.80 below forecasts and 32% lower YoY.

Five of the UK’s leading manufacturing industries have issued a plea for more government financial support to boost capital investment in research and development as well as new factories and equipment with lower carbon emissions.

Carmakers, aerospace, chemicals, pharmaceuticals and food and drinks manufacturers banded together on Wednesday to call for a long-term strategy for industry as the chancellor, Rishi Sunak, prepares for the budget next week.

Cutting industrial carbon output will be crucial to meeting the government’s legally mandated target of net zero emissions by 2050, and the manufacturers argue that they need government incentives to spend on decarbonisation.

The lobby groups said UK manufacturers needed help with energy costs, which can be as much as 80% higher than in some European countries. The UK is in the midst of an energy supply crisis, with high prices hitting manufacturers’ ability to make up for earnings lost during the pandemic.

Kevin Craven, the chief executive of ADS, the aerospace and defence group, said:

“Manufacturing is essential to achieving net zero, ensuring our national economic resilience and providing rewarding careers.”

Here’s the full story:

Elon Musk, the world’s richest person, with an estimated $241bn fortune, could become the first trillionaire, an investment bank has predicted.

Analysts at Morgan Stanley forecast that Musk, who has made most of his wealth from the electric car company Tesla, could make much more money from his fledgling space exploration business SpaceX.

The analyst Adam Jones said the company, founded in 2002, was “challenging any preconceived notion of what was possible and the timeframe possible, in terms of rockets, launch vehicles and supporting infrastructure”.

He added:

“More than one client has told us if Elon Musk were to become the first trillionaire ... it won’t be because of Tesla. Others have said SpaceX may eventually be the most highly valued company in the world – in any industry.”

Motoring groups have weighed in, warning petrol retailers not to sting motorists with higher fuel prices.

Following the PRA’s warning that petrol and diesel are approaching record levels, RAC fuel spokesman Simon Williams said retailers are taking a ‘bigger cut’ on petrol (via Sky News):

“The bioethanol component of unleaded has increased from 5% to 10% with the introduction of E10 in September and unfortunately that costs even more than petrol on the wholesale market.

“Retailers are also taking a bigger cut on petrol than they normally do at around 8p a litre which is a further blow to drivers, particularly as VAT is charged at 20% on top of this and the other increases.”

“We strongly urge retailers not to contribute further to the pump price rise”.

An AA fuel spokesman echoed the sentiment, adding:

“Someone in the fuel trade, whether retailer or supplier, is pumping up the cost of petrol and talking up the price to hide the extra profit.”

The surge in petrol and diesel prices could spur drivers towards electric cars.

The government’s net zero strategy, released on Tuesday, showed that car manufacturers in the UK will be mandated to produce a growing proportion of zero-emission vehicles each year, to push the transition from fossil fuels to electric cars.

Targets will be introduced from 2024 for zero-emission vehicle sales, before the 2030 deadline when the sale of new petrol and diesel cars and vans will be banned.

Environmental campaigners welcomed the move, while manufacturers gave a guarded response ahead of the detail of the scheme being announced. The exact targets and mechanisms will be set out for consultation in spring next year.

But as we covered yesterday, the Treasury says the UK will need new taxes or reduced public spending to cover the move to net zero.

The move to electric cars will erode revenues from fuel duty and vehicle excise duty, so new levies - such as road tax, potentially - could be needed to fill the gap.

The dip in UK inflation to 3.1% in September is unlikely to last, my colleague Phillip Inman writes:

Anyone concerned about rising prices could be forgiven for thinking that the momentum building in recent months had slipped a gear and forecasts of inflation running away to 4% or even 5% next spring could joyfully be put in the bin.

Not so fast. The coronavirus pandemic has wreaked havoc on most official data and the inflation figures are among the worst affected.

Lockdowns that closed most shops and government subsidies that propped up household spending power are among the many distorting effects of Covid-19 affecting prices.

The chancellor’s £850m eat out to help out scheme that offered 50% off meals up to £10 in August last year to lure consumers back to the high street is the latest to send the figures in an unexpected direction.

Rishi Sunak’s handout for bars and restaurants, which many health experts believe was a super-spreader event that contributed to the surge in the virus last autumn, was not only financially costly, it also allowed for a reduction in prices in August.

Subsequent price increases in September 2020 meant the cost of eating out increased at a slower rate relative to the same month this year....

More here:

Rising petrochemical prices are also pushing up the cost of paint.

Dutch paints and coatings maker AkzoNobel warned this morning that “significant raw material cost inflation and supply constraints” are expected to continue until the middle of next year.

The Dulux-maker said raw material inflation continued to intensify in the third quarter of the year. Its raw material and other variable costs increased by €278m compared with Q3 2020.

In response, the decorative and industrial paint maker, which took over ICI back in 2007, hiked its prices by 9% in July-September compared with the previous year.

But operating income dropped (to €226m from €326m in in 2020), as higher prices were “more than offset” by the impact of higher costs and lower sales volumes.

Thierry Vanlancker, chief executive of AkzoNobel, said that the cost pressures and supply shortages were widespread across many inputs including petrochemicals, additives and metal packaging.

He told the Financial Times:

“It’s probably easier to say where we don’t feel the pressure. It’s very much across the board.

We do believe this situation is going to be with us for most of the first half of 2022.”