(Bloomberg) -- One of the UK’s largest family-owned businesses has bought stake in Sainsbury in a surprise move that’s likely to prompt speculation about the future of Britain’s second-largest grocer. Meanwhile, Direct Line announced that its CEO, Penny James, will be stepping down. Later today, Chancellor Jeremy Hunt will be speaking at Bloomberg’s London office. 

Here’s the key business news from London this morning:

In The City

J Sainsbury Plc: British family-owned Bestway Group took a 3.45% stake in Sainsbury and said it may look to buy more.

  • Bestway plans to hold the shares for “investment purposes” but said it’s not considering making an offer for Sainsbury
  • Bestway is one of the largest family-owned business in the UK with a turnover of about £4.5 billion

Direct Line Insurance Group Plc: Chief Executive Officer Penny James is stepping down and Chief Commercial Officer Jon Greenwood has been appointed to take over as acting CEO. 

  • The insurer’s shares slumped earlier this month after saying it no longer expects to pay a final dividend for 2022 due to a rise in claims

Marks & Spencer Group Plc: Chairman Archie Norman warned further political division and higher food prices in Ireland if the UK and European Union fail to get a deal on trade right.

  • Just a day after branding the UK’s Brexit plan for Northern Ireland “baffling,” Norman again warned that a flawed deal — with needless requirements such as extra food labeling — would not only lead to higher food prices but could become a visible problem in the north-south divide

On the Beach Group Plc: The package holiday provider said bookings since Christmas have “materially increased,” with the company’s total transaction value since the start of the financial year to date up 68% compared to the same period in FY 2022. 

In Westminster

Chancellor Jeremy Hunt is expected to disappoint investors and his critics in the Conservative Party today by rejecting calls for tax cuts, even as he argues that Brexit will drive economic growth. Hunt will use a speech at Bloomberg’s European headquarters in London at 10:30 a.m. to suggest he can use freedoms secured by leaving the EU to tackle a crisis in economic inactivity and improve sluggish growth figures.

Meanwhile, the introduction of a “sugar tax” on the soft-drinks industry in the UK may have helped to prevent thousands of older primary school children from becoming obese, according to a new study. 

In Case You Missed It 

AstraZeneca Plc’s Covid antibody drug is no longer authorized for use in the US, regulators said, as it’s unlikely to work against strains of the virus that are now dominant across the country. In the meantime, the company said it’s testing a next-generation long-acting antibody to prevent Covid in immune-compromised people, and aims to make the drug available in the second half of this year. 

A 50% rally has made shares of HSBC Holdings Plc the most overbought in more than three decades, as investors piled back into the retail favorite given a brighter outlook from China’s reopening. 

Finally, Europe’s top securities watchdog wants London-based hedge funds and asset managers to prove they have built up a presence in the EU after Brexit.

Looking Ahead 

The Bank of England’s interest rate decision will take centre stage next week. Bloomberg economists expect the central bank to lift its benchmark rate by 50 basis points one more time before slowing the pace to 25 basis points in March and eventually stopping to raise rates. 

On the corporate front, we’ll see more FTSE 100 bellwethers reporting results, including pharmaceutical giant GSK Plc, commodities trader Glencore Plc and telecommunication firms Vodafone Group Plc and BT Group Plc.

For a more considered take on the UK's economic and financial news, sign up to Money Distilled with John Stepek.

--With assistance from Charles Capel.

©2023 Bloomberg L.P.