(Bloomberg) -- Hi, I’m Leo from Bloomberg's UK Breaking News team, catching you up on this morning’s business stories — including fresh figures from the Office for National Statistics.
The UK government’s borrowing is running 15% below (!) official forecasts, which sets the stage for Chancellor Jeremy Hunt to announce fiscal giveaways in his Autumn Statement tomorrow. Speculation has been mounting in recent days about cuts to inheritance tax and national insurance, especially after Rishi Sunak said his government can begin to cut taxes now it hit a goal to halve inflation.
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Key Business News
Cranswick Plc, the supermarket meat supplier expects an “extremely busy” Christmas period as demand for UK pork and poultry remained resilient in recent months. Its first-half profit jumped 25% compared to last year on the back of slowing cost inflation.
Shares in online electronics retailer AO World Plc popped 6.6% in early trading after it raised its guidance, saying it made more profit in the six months through September than it did in the whole of its prior financial year. That’s particularly interesting because the group’s sales fell year-on-year. What helped AO World was cutting down on advertising as well as introducing charges for all deliveries.
Government contractor Capita Plc's shares rose as much as 6.3% after announcing plans to cut 900 jobs as it seeks to save £60 million per year. The company employs 43,000 people.
RedBird IMI agreed a loan package with the Barclay family that would let it take control of the Telegraph newspaper and Spectator magazine, a prospect that’s sparked concern among Conservative lawmakers because of the fund’s ties to Abu Dhabi.
Markets Today’s Take
Bank of England Governor Andrew Bailey warned the central bank may have to raise interest rates again and that food and energy costs remain an upside risk to the inflation outlook. Bailey’s comments are the most detailed pushback so far from the central bank against market expectations for interest rate cuts next year, though really don’t expand much on what he and his fellow policymakers have already said.
That’s likely to be the back-and-forth pattern for the time being. Markets will watch data flowing through and make their bets on what that means for the rate path — and they have decided that rates will be cut a few times next year. That’ll be met with circumspection and caution by central banks as they try to manage those expectations. Until the data fits neatly enough to mark a change in view for the central bank itself, that dance will continue.
— Sam Unsted
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The Autumn Statement will take centre stage at midday tomorrow. Overnight, the government announced it will be investing £320 million in domestic science and technology startups.
On the corporate front, we’re expecting results from B&Q-owner Kingfisher Plc, software maker Sage Group Plc, Coventry-based water company Severn Trent Plc, and Britvic Plc, which makes and sells Pepsi in the UK.
--With assistance from Dayana Mustak.
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