Brexit is a factor in fuel crisis says Transport Secretary

That's all from us today – here are some of our top stories:

• Sterling tumbles as cost of government borrowing hits pre-Covid high
• Euan Blair worth £160m after his start-up wins record investment
• French vaccine champion Sanofi abandons Covid mRNA jab after months of delays
• Homeworker rush to tourism hotspots risks shutting out locals

Thanks for following along!

Sir Stelios Haji-Ioannou, the Greek Cypriot billionaire who founded easyJet, has lost his grip on the budget airline he launched a quarter of a century ago, writes Oliver Gill.

His blocking stake has been diluted after the airline’s bosses launched a £1.2bn rights issue following a takeover swoop by low-cost rival Wizz Air.

Sir Stelios and his family now own 15.3pc of the airline, down from 25.3pc.

Going under the 25pc threshold means Sir Stelios is now unable to veto key decisions by the board that require the support of three-quarters of shareholders.

The dilution marks a watershed moment for the businessman, who founded easyJet in 1995 aged 28 with a £5m loan from his father. The airline came to prominence when Sir Stelios and his staff starred in the second series of fly-on-the-wall series Airline in 1998.

The company was floated on the London Stock Exchange, but the businessman retained around a third of the business until relatively recently.

Read more:  Stelios loses his grip on easyJet after 26 years

Global oil consumption will return to pre-pandemic levels in the third quarter of 2022 with Asia remaining the key source of demand growth, according to BP.

Eugene Leong, president of BP Singapore, said oil demand next year is expected to see an average gain of 3.8m barrels a day year-on-year, easing from growth of 5.4m barrels a day in 2021.

He added that stockpiles of crude and most products returned to normal levels by June following supply restraint from OPEC+ and an economic recovery.

Leong told Bloomberg: “We have seen oil demand recover from the lows witnessed in the second quarter of 2020, but it has not rebounded to the same levels as before.

“Oil demand recovery is expected to continue into the rest of this year and 2022.”

New data on the gender pay gap in British investment banking is due next week – and the numbers so far aren’t looking good.

Bloomberg has the details:

A sample of 10 large banks that have already reported ahead of an Oct 5 deadline show an average 44.5pc difference between male and female hourly wages as of April 2020, compared to 45.2pc reported the previous year.

That means women earned 56p for every pound that men earned when comparing their average hourly pay. 

HSBC Bank, the unit housing the lender’s UK investment banking operations, posted the largest divide at 54.4pc – an improvement of 0.7 percentage points on the previous year. While most of the 10 banks reported a smaller gap than in their last report, the progress in recent years hasn’t been swift.

Just 9pc of those in top pay quartile at HSBC Bank are women, making it the worst performer in the sample on this measure too. Not every bank has reported yet, after the government allowed firms to delay disclosures during the pandemic.

Gender pay gap reporting became mandatory in the U.K. in 2017 and has provided an insight into how far women’s earnings lag behind those of men.

The latest numbers are mostly a snapshot from early 2020 and a blunt assessment across the whole workforce, though. The figures don’t measure the pay of men and women doing the same job, or adjust for other factors, such as experience or location. Put simply, it shows who holds the highest paying jobs. In most companies, men do.

Euan Blair, son of former prime minister Tony Blair, is worth more than £160m after a record funding round for his education technology start-up.

My colleague Matthew Field reports:

Multiverse, which connects major companies and tech firms with apprentices and school leavers, achieved a valuation of $875m (£646m) after clinching new backing from US investors.

The $130m funding round is a record for a UK “ed-tech” company. Mr Blair’s company helps corporations recruit apprentices out of school, receiving a small placement fee or revenues that are paid through the UK’s apprenticeship levy. 

Mr Blair has previously spoken out against pressure on school leavers to attend university and argued the system leaves them ill-equipped for the world of work.

Multiverse helps students get a foot in the door at companies including Facebook and Morgan Stanley. It has also expanded to the US, where there are fewer formal apprenticeships for white collar jobs.

The former PM's son owns at least 25pc of Multiverse, according to Companies House filings, which list him as a “person with significant control”. 

His stake in the business, which he co-founded with entrepreneur Sophie Adelman in 2016, leaves Mr Blair with a paper fortune of £162m.

Read the full story here

The FTSE 100 closed lower today, dragged down by heavyweight homebuilders and financial stocks.

The blue-chip index fell 0.5pc to 7,028 points as concerns about inflation linger.

Higher costs and supply chain disruptions have recently pushed central banks to adopt a more hawkish tone, with Bank of England Governor Andrew Bailey hinting that the case for higher interest rates is building.

The wider homebuilder index fell 3pc, hitting its lowest level in more than two months. Taylor Wimpey, Bellway and Countryside Properties were down between 2.7pc and 4pc.

Keith Temperton, sales trader at Forte Securities, said: "When you've got hawkish language, interest rate-sensitive sectors such as house builders and other utilities are the ones hit."

Further losses were limited by gains in energy stocks , which tracked stronger oil prices.

Smiths Group also bucked the wider trend,  jumping 4.1pc after signing a binding agreement to sell its medical devices unit  and declaring a dividend of 26p on strong full-year results.

Meanwhile, the FTSE 250 fell  1.7pc, recording its worst session in over two months, with travel and leisure stocks among the top losers.

Five EU nations have reportedly called on the European Commission to work with the European Central Bank on outlawing €500 banknotes because they facilitate money laundering and tax evasion.

The request came in a position paper prepared by France, Italy, Spain, the Netherlands and Belgium that was submitted during the summer, according to Italian newspaper Il Sole 24 Ore.

The ECB stopped printing new €500 notes in 2016 but those still in circulation, worth some €200bn, remain legal tender. 

The banknotes are “an important facilitating factor in money laundering,” Il Sole cited the paper as saying. The five countries propose gradually removing €500 bills from circulation by swapping them with lower-denomination notes.

Time is running out to resolve a long-running steel dispute between the EU and the US, the bloc's trade chief has warned.

EU trade commissioner Valdis Dombrovskis said there was only about a month left to reach an agreement, and failure to do so would mean new EU tariffs will hit American products from Dec 1.

Dombrovskis told Bloomberg: “Allowing for internal decision-making procedures in the EU, we really need an agreement already by the beginning of November.”

He added: “We are now working very intensively to resolve this Trump-era steel and aluminum dispute. Time is, in a sense, running out.”

The two sides are meeting to discuss the conflict that started in 2018 when the Trump administration imposed tariffs on steel and aluminum from the bloc.

The EU retaliated by targeting €2.8bn of American imports with tariffs on a range of big-brand products, including Harley-Davidson motorcycles, Levi Strauss jeans and bourbon whiskey.

Amazon has started recruiting for 20,000 temporary positions in the UK to help cover increased demand over the Christmas period.

The company, which has 55,000 permanent UK employees, said the temporary jobs would be in its network of fulfilment centres, sort centres and delivery stations.

Google has come up with a novel way of boasting about how popular it is: by saying it’s the most frequently searched term on rival Bing.

A lawyer for the tech giant told an EU court that the company had evidence showing it was “by far” the most common search query on Microsoft-owned Bing.

Google has asked judges to scrap a record $5bn fine and overturn a 2018 ruling order that said Google unfairly pushed its search app on mobile phones running its Android software.

The European Commission alleged Google deliberately squeezed out its rivals to build near-monopoly market share – a conclusion the company argues is unfair.

Lawyer Alfonso Lamadrid said: “People use Google because they choose to, not because they are forced to.”

Chris Beauchamp, chief market Analyst at IG, comments: 

The prospect of higher energy prices, fuelling inflation, and rises in bond yields that appear to be preempting tighter monetary policy by central banks, have prompted widespread selling across global stock markets.

As yesterday, it is the highly-valued growth stocks that have taken the brunt of the selling, as investors fret that a lower growth, tighter policy environment will hurt these previous star performers, but overall there are few safe havens in stock markets this afternoon.

Investors are apparently eager to move back out of stocks, almost as eager as they were to move back into them last week.

Undoubtedly, some of the fabled month/quarter-end movements have a part to play here, fund managers being keen to book some profits as Q3 draws to a close.

This suggests we have some more volatility to come over the rest of the week. 

The pound has dropped sharply against the dollar, falling to $1.3531 - the currency's lowest point since January.

The fall in the risk-sensitive pound coincides with a steep rise in US Treasury bond yields and growing concern about the on-going gas shortage in Britain. The two events are overshadowing the Bank of England's comments about a possible interest rate rise.

US yields surged in response to last week's Federal Reserve meeting, where the bank said it may start tapering stimulus as soon as November and hinted interest rate increases could follow sooner than expected.

Federal Reserve chair Jerome Powell added today that the central bank would move against unchecked inflation if needed, warning that higher US prices and hiring difficulties could prove “more enduring than anticipated”.

His comments pushed US 10-year yields above 1.54pc to the highest since mid June and also led markets to price higher future inflation. 

BT could be forced to pay £500 each to more than two million customers after a tribunal backed a class action claim alleging it overcharged for landline contracts, reports Ben Woods. 

The Competition Appeal Tribunal (CAT) came to the "unanimous" verdict that Justin Le Patourel's £600m case against the telecoms operator should move to a full trial. 

The legal battle comes after the communications regulator Ofcom found BT had been short-changing landline customers following an investigation four years ago.

BT agreed to cut the bills of affected customers, but did not offer compensation payouts. 

If the claim is successful, the owner of mobile operator EE could face a compensation claim from 2.31m customers. 

Such an outcome would prove a costly distraction for BT boss Philip Jansen who is investing £12bn to rollout faster full-fibre broadband to 25m homes and businesses by December 2026.

BT said Ofcom found no evidence of excessive pricing or a breach of competition law when it investigated the issue in 2017. 

A BT spokesperson said: "We strongly disagree with the speculative claim being brought against us".

Goldman Sachs-owned Petershill Partners has been valued at £4bn in its debut on the London Stock Exchange, as buyout firms continue to cash in on a dealmaking boom, reports Simon Foy. 

Shares in Petershill Partners, a newly formed entity, were valued at 350p per share by the US investment bank, with the stock settling at that level on its first day of trading. 

The listing comes on the back of a surge in dealmaking and is the third float by a private equity manager in Europe in recent months, underscoring investor demand for high-growth assets.

Petershill raised nearly £550m on Tuesday by selling new stock, while some existing investors offloaded shares worth £465.

The firm said it will use the proceeds from the flotation to fund expenses and buy more stakes in alternative asset managers.

Petershill’s business model involves buying up minority stakes in private equity firms and asset managers. It currently owns stakes in 19 alternative asset companies with a combined $187bn (£138bn) of assets under management. 

Revenues at British online car retailer Cazoo have surged more than five times higher in the six months to June, compared to the same period last year. 

The business, which floated in New York last month, said revenues soared to £248m for the year's first half, compared with £40m over the same period last year.

The firm said it sold 20,454 vehicles last year amid strong lockdown demand for second hand cars.

US consumer confidence dropped unexpectedly to a seven-month low in September as concerns over the delta variant and inflation continue to weigh on sentiment.

The Conference Board’s index fell to 109.3 from a revised 115.2 reading in August, marking the third consecutive monthly decline.

Economists surveyed by Bloomberg had forecast an increase to 115.0.

The figures suggest concerns about Covid-19 cases and rising prices for household goods are dampening optimism about a post-pandemic economic recovery.

Lynn Franco of the Conference Board said: “Consumer confidence dropped in September as the spread of the delta variant continued to dampen optimism.

“Concerns about the state of the economy and short-term growth prospects deepened, while spending intentions for homes, autos, and major appliances all retreated again.”

The gauge of current conditions fell to 143.4, a five-month low, while the group’s expectations index dropped to the lowest since November.

Britain’s cost of borrowing has hit its highest level since Covid struck 18 months ago as fears over interest rates rises to curb inflation triggered a debt sell-off, reports Russell Lynch.

He writes: 

Investors are now charging more than 1pc to lend to the Government for 10 years for the first time since March 2020. 

On Monday the Bank of England Governor, Andrew Bailey, said rate-setters were ready to “step in'' if inflation lurched out of control.

The spike forms part of a wider international bond sell-off, driven by the Federal Reserve’s recent signal that it was ready to slow its $120bn a month money-printing programme from November. The cost of US 10-year debt also hit post-pandemic highs above 1.5pc.

Money markets predict the Bank will raise rates from their record low of 0.1pc to 0.25pc in February, followed by a further rise to 0.5pc in August.

The higher borrowing costs come as Britain relies on bond markets to fund the financial aftermath of the pandemic. In March, the Office for Budget Responsibility predicted borrowing of £234bn this financial year. 

Read Russell's full story here. 

UK natural gas prices have continued to surge today, rising above 200p per therm for the first time ever. 

Prices have jumped 57pc in the past month, adding another 5.6pc so far today. 

As a result of rocketing prices, 1.5m households have witnessed their energy supplier collapse in recent weeks.

The Government has rescued one of Britain’s biggest oil refineries from the brink of collapse, giving fuel supplier Essar Oil more time to pay a tax bill of hundreds of millions of pounds.

Essar Oil, which runs the 200,000 barrel-per-day Stanlow refinery, had been in talks with HM Revenues & Customs over extending a January deadline to repay hundreds of millions of pounds in deferred taxes.

Against a backdrop of fuel shortages across the country due to a shortage of truck drivers, Essar Oil said it had agreed a new time to pay agreement with HMRC. 

"With this time to pay arrangement, we now have significant runway to stabilise our balance sheet which has been adversely impacted by the pandemic," the company's chief financial officer Satish Vasooja said.

In April, the Stanlow oil refinery owner was granted another “time to pay” deal by HMRC. Read more about that story here. 

The Nasdaq dropped more than 1pc when Wall Street opened today, as technology stocks came under pressure from a surge in bond yields, expectations of higher interest rates and rising inflation.

There are signs that some investors are preparing their portfolios for an era of easy monetary policies to come to an end.  

Tech stocks - which are particularly sensitive to interest rate rises - tumbled, with Twitter, Qualcomm, Nvidia, Snap and Square all shedding between 1pc and 2pc. 

The Dow Jones also fell 0.3pc at the opening, while the S&P dipped 0.5pc. 

Oil companies however rose on surging oil prices. Exxon Mobil, Occidental Petroleum Corporation and Devon Energy both added over 2pc. 

Matthew Oxenford at Economist Intelligence Unit comments on the government's 5,000 temporary visas for lorry drivers to ease threat of fuel and food shortages.

He says: 

The government's proposals to address this crisis are likely to have only a modest impact.

For example, the 5,000 temporary work visas are only a drop in the bucket compared to the estimated 100,000 estimated driver vacancies, and as a temporary fix is not likely to lure many drivers back from the EU where they can work permanently.

Eventually we expect distributors to have to pay a premium for sufficient lorry capacity, which will translate to higher prices and exacerbate inflation further.

The combination of labour shortages in critical sectors and higher energy prices is likely to prove increasingly inflationary in the coming months, and increase the likelihood of further temporary shortages in other sectors over the coming months.

We have already seen consumer confidence decline in August and September, even prior to these shortages, a trend which is likely to continue.

Drivers have been told to brace for higher prices at petrol pumps just as the nation is gripped in a fuel crisis, following a surge in the price of oil, reports Harry Brennan. 

Brent crude oil has hit $80 (£59) a barrel for the first time in nearly three years. Oil prices could reach $90 by the end of the year as global demand picks up following a pandemic slump, according to analysts at investment bank Goldman Sachs. 

It is likely to result in prices rises in a matter of days, experts have said. 

Petrol prices have already reached 135.3p a litre, their most expensive for eight years. The average cost of diesel now stands at 136.9p.

Simon Williams of the RAC said the situation would only get worse. “When it comes to pump prices, it’s a pretty bleak picture for drivers." 

Read more on this story here. 

The Telegraph's Ambrose Evans-Pritchard has a new column about China's energy crisis.

He writes: 

The time-honoured cure for high energy prices is high energy prices. Demand wilts.

It is happening in front of our eyes with breath-taking speed in China, the elephant in the global energy boat.

Chinese coal stocks are down to 18 days’ cover, deemed dangerously low by Beijing. It has long been the nightmare of Communist Party planners that the US might weaponise China’s dependency on fuel imports in a crisis.  

State-run China Energy News said thermal coal inventories at power plants are critically low. “We are looking for coal everywhere, but no matter how high the price is, it is not easy to find,” said one utility. 

Read the full column here. 

Time for a lunchtime check in on the FTSE 100. 

The index is currently trading flat, despite gains made by Smiths Group (up 4.4pc), Royal Dutch Shell (up 3.3pc) and BP (up 3pc). 

Aveva (down 4.6pc), Intermediate Capital Group (down 4.5pc) and Sage (down 4.2pc) are currently the biggest drags. 

While the FTSE 100 has recovered most of its earlier losses, the FTSE 250 remains down 1.7pc.

Among the midcap stocks, First Group, Puretech Health, Bidgepoint Group and Darktrace have all shed more than 5pc today. 

French healthcare group Sanofi is dropping plans for its own mRNA-based Covid-19 vaccine because the market is already dominated by Pfizer-BioNTech and Moderna's shots, the company said today.

Reuters has more details: 

The move highlights the challenges of competing in particular with pioneer BioNTech, which rose from obscurity through its alliance with pharma major Pfizer last year. They have delivered close to 1.5bn doses so far to become the Western world's largest Covid-19 vaccine maker.

Sanofi will instead focus on efforts with British partner GlaxoSmithKline to bring another COVID-19 vaccine candidate to market based on the more conventional protein-based approach, where mass trials are ongoing.

The decision to drop clinical development of a shot based on mRNA, or messenger RNA, came despite today's positive Phase I/II study results, with participants' blood readings showing a strong immune reaction. Sanofi said the read-out encouraged it only to pursue the technology as a potential vaccine against influenza and other disease.

"Would it, responsibly, be the best use of this wealth of science afforded by mRNA vaccines to make a COVID-19 vaccine and try and bring another mRNA COVID-19 vaccine to people who already today may not want an mRNA COVID-19 vaccine? Clearly not," Thomas Triomphe, head of the Sanofi Pasteur vaccines division, said.

He  dismissed the prospect for annual repeat shots: "With a fourth dose you'd have extremely high antibodies and you absolutely would not need an annual COVID-19 vaccine."

Desperate motorists spent hours queuing outside petrol forecourts and motorway service stations this weekend, trying to fill up their tanks amid a nationwide supply panic. Others stayed at home, searching online for electric cars, reports James Titcomb.  

He writes:

According to Auto Trader, views of new electric cars on its website rose 28pc compared with the prior weekend, and views of used ones climbed by 61pc.

While about one in seven adverts viewed on the site are for battery-powered cars, over the weekend it was one in four.

Somebody contacted a retailer about an electric car every 1.8 minutes. Over weekends in August, this figure was one enquiry every 3.4 minutes.

Offline dealers noticed the same thing. “A number of franchised vehicle dealers have reported a spike in telephone enquiries and showroom visits, from both sales and aftersales customers, with a proportion of these referring to EVs,” says Sue Robinson of the National Franchised Dealers Association.

Read James' full story here. 

The British designer who defined the minimalist look of Apple gadgets has teamed up with Ferrari to help create the Italian icon’s first electric supercar. 

Ferrari and Exor, its holding company, said yesterday it had signed a long term agreement to collaborate with LoveFrom, the company Sir Jony Ive founded when he left Apple in 2019.

Mr Ive played an integral role designing and developing breakthrough Apple products such as the iMax, iPod, iPhone and iPad. He was one of the leading figures credited with Apple’s rise from a fading computer firm to one of the world’s most valuable companies.

A statement from the companies yesterday said the deal would “bring together Ferrari’s legendary performance and excellence with LoveFrom’s unrivalled experience and creativity that has defined extraordinary world changing products”. 

Read more about this story here. 

Asos has announced plans to open a new tech hub in Belfast in a move that will create 184 jobs over the next three years.

The online fashion retailer will pump £14m into the new site, which is set to be up and running in early 2022.

Asos is recruiting across a range of roles including engineering and data science.

Nick Beighton, chief executive of Asos, said: “As a rapidly growing business at the forefront of online retailing, we’re continually investing in our technology capabilities.

“Our new hub will provide us with cutting-edge tech expertise to support future growth. Belfast has a wealth of tech talent and we’re excited to be establishing a permanent base in such a vibrant city.” 

The pound has fallen to almost a 10-week low against the dollar today, after US treasury yields jumped to their highest in almost three months.

US yields have been surging since last week, when the US central bank announced it may start tapering stimulus as soon as November and hinted interest rate increases could follow sooner than expected.

The risk-sensitive pound was down 0.7pc, trading at $1.361, after hitting its lowest level since mid July at $1.359.

Today Federal Reserve chair Jerome Powell said higher prices and hiring difficulties could prove "more enduring than anticipated" and the Federal Reserve would move against unchecked inflation if needed.

Simon Harvey, senior FX market analyst at Monex Europe, said: "It is all about U.S. Treasuries today as yields climb higher in early trading, placing the whole G10 under pressure."

Toyota's China operations have been hit by the country's deepening power shortage that’s now impacting more than half of mainland provinces.

The automaker produces more than a million vehicles a year in the country, with its plants centred around Tianjin and Shanghai.

Toyota spokeswoman Shiori Hashimoto declined to provide further details on the status of Toyota's plants. She told Bloomberg the company is not providing a future outlook at this time as the situation is “still in flux". 

Sage Group is leading the FTSE fallers today, dropping 4.7pc to its lowest level in nearly two months.

It came after Goldman Sachs downgraded the software company from neutral to sell.

Analyst Gautam Pillai writes that Sage’s acceleration in topline growth has come at the expense of “limited” margin expansion.

He added that the firm needed to continue investing to win against competitors.

Staff at British tech company Blue Prism are facing job losses after an American private equity firm agreed a £1.1bn takeover, reports James Titcomb.

Vista Equity Partners said it planned to merge Warrington-based Blue Prism with Tibco, a Silicon Valley data company, upon completing the deal.

Up to 475 - or 10pc - of the combined company’s 4,750 employees are expected to be lost as Vista seeks to cut around 15pc of their costs. It did not say how many of those would be from Blue Prism, which has around 1,000 staff globally.

Blue Prism, founded in 2001, specialises in “robotic process automation”, which uses software to carry out clerical office tasks, and supplies customers including the NHS, eBay and the hotels group IHG. 

The company has faced pressure from major shareholders to sell the business, after recent slowdowns in growth.

It said shareholders representing 23pc of its base had committed to backing the £11.25 a share deal, which is 35pc higher than the company’s shares before the offer emerged.

However, the company may face hurdles to securing approval from the 75pc of shareholders who need to approve the deal. Shares traded above the offer price at £11.60 on Tuesday, suggesting investors may hold out for a higher bid.

US futures fell this morning as major tech stocks came under pressure from a rise in bond yields.

The two-year US Treasury yield surged to 18-month highs, weighing on shares of high-growth companies whose values rest heavily on future earnings.

It comes amid higher expectations of an interest rate hike following recent comments from the Federal Reserve.

Futures tracking the tech-heavy Nasdaq were down more than 1pc after the index closed down a similar amount on Monday.

Facebook, Amazon, Apple, Tesla and Google owner Alphabet dropped between 1.2pc and 1.5pc in early premarket trading.

S&P 500 Futures also fell 0.9pc while Dow Futures slipped 0.5pc.  

Here's the latest stories from The Telegraph's Money team: 

• Ring 159 for Britain's new emergency fraud helpline: Last year the public lost £470m to fraudsters pretending to be a bank
• ​'I ditched my 20-year teaching career to earn £20,000 more driving lorries': Salaries inflated by the haulage crisis are luring people to the HGV workforce
• Where to buy a home near a grammar school for under £400k: Southend-on-Sea and Maidstone each have four grammar schools and discount house prices

The UK’s fuel crisis is starting to stabilise as filling stations have begun to replenish some reserves, Transport Secretary Grant Shapps has said.

He told Sky News: “We're starting to see very tentative signs of stabilisation which won't yet be reflected in the queues.”

Mr Shapps urged motorists not to bring water bottles to petrol stations, adding: “We all need to play our part.”

Social media firms must do more to stop advertising “dodgy financial promotions” that fuel a surge in fraud, the City watchdog has warned.

Mark Steward, head of enforcement at the Financial Conduct Authority (FCA), said: “We are putting them on notice that we expect them to be involved in this process of protecting the community.”

Financial fraud has surged during the pandemic due to a shift to online shopping and working.

Earlier this month Google brought in a ban on investment ads that are not FCA-authorised, including for gold and cryptocurrencies.

Mr Stewart said the move was “having an impact already in curtailing the increase in suspicious financial promotions on Google searches”.

He added: “We are talking to all social media firms about this and it's important that all of them change their processes and procedures otherwise we will have to take action.”

Pest control and cleaning company Rentokil Initial has upped its growth targets today and announced plans to expand its hygiene division following booming pandemic demand.

Rentokil noted its hygiene revenues rocketed by more than a third last year, as the pandemic created an opportunity for the company to sell deep cleaning to businesses. Disinfection brought in £225.1m in revenue across 2020.

The group is now hoping its newly enlarged hygiene and wellness category- which will be expanded from January next year to also include services such as dental hygiene and cleanroom operations- can boost its revenues 6pc, even as the demand for disinfection wanes.  

Rentokil said the reason behind the division's expansion was "the increasing importance of hygiene and wellbeing services" since the pandemic.

The business said it is now eyeing ongoing operating profits growth of at least 10pc, up from around 10pc previously.

Shares fell 2.5pc. 

The competition watchdog is considering a probe into Admiral Taverns’ £222m takeover of the Hawthorn pub business, reports James Warrington.

Admiral inked a deal to buy the pub estate, which covers 674 venues across the UK, from retail property investor NewRiver in July.

The deal would make Admiral one of the country’s largest pub owners, taking its portfolio to more than 1,600 sites.

But the Competition and Markets Authority said it is now looking at whether the merger “has resulted, or may be expected to result, in a substantial lessening of competition”.

The CMA is inviting parties to comment on the competition impact of the deal, with a deadline of October 12. It will then decide whether or not to launch a phase 1 investigation into the deal.

Australia suffered a third straight month of plunging retail sales in August as more than half of its population were stuck in Covid lockdowns, reports Tom Rees. 

Sales slipped 1.7pc compared to the previous month, putting the Australian economy on track for a sharp contraction in the third quarter. The fall was slightly smaller than the 2.7pc hit in July.

However, economists expect a rapid bounce back as its vaccination campaign picks up speed and the reopening nears for many states. Many states are giving Australians who have been vaccinated more freedoms during the reopening amid huge anti-lockdown rallies in many of its biggest cities.

Stephen Wu, economist at Commonwealth Bank of Australia, said: "At reopening, spending will be driven by pent‑up demand after months of lockdown and accumulated savings.

"But we expect bumps along the way as some consumers will be initially wary of catching the virus or from coming into contact with the virus and being forced into isolation." 

European stocks have tumbled to their lowest in a week, as a surge in government bond yields pulled down high-growth technology shares and signs that the Chinese economy is slowing spooked investors.

The pan-European STOXX 600 index was down 1.3pc and technology stocks fell 3.7pc as a jump in US Treasury yields signalled that investors were bracing for higher rates and the risk of persistent inflation.

Tech shares are particularly sensitive to rising interest rate expectations as their value is heavily dependent on future earnings, which are discounted more deeply when rates go up.

Meanwhile, data showed profit growth at China's industrial firms slowed for a sixth month in August, with an unfolding power crisis further threatening output. 

Retailers have warned British households will face a disappointing Christmas this year unless the government extends a new visa scheme to allow foreign lorry drivers into the country, reports James Warrington.

Andrew Opie at the British Retail Consortium said: “Christmas is about more than just food, so to avoid disappointment for millions of households during the festive season we urge the government to rapidly extend this programme, both in size and scope, to HGV drivers in all sectors of the retail industry.”

The government has introduced a package of measures to help tackle the country’s supply chain squeeze, including temporary visas for 10,500 HGV drivers.

But Mr Opie warned it would take many months before there are enough new British drivers to cover the shortfall.

Octopus Energy has been valued at more than the owner of British Gas after the challenger supplier won a $600m investment from a fund run by Al Gore, the former US vice-president, reports Rachel Millard. 

She writes:

Generation Investment Management, the clean energy fund he set up in 2004 and still chairs, is taking a 13pc stake in Octopus to help it develop and supply more renewable power and expand its technology.  

The investment means the private company is now valued at £3.3bn - £300m more than Centrica. The latter's stock market value has declined by almost three quarters in the six years since Octopus was founded by Greg Jackson, who remains chief executive.

Octopus is at the forefront of a band of challengers who have taken about a quarter of the energy market from suppliers such as Centrica and EDF. Its Kraken software platform has also been licensed to growing numbers of rivals. 

Read Rachel's full story here. 

The FTSE 250's losses are accelerating this morning, with the mid-cap index down 1.3pc. 

The biggest drags on the index are technical products supplier Diploma (down 4.5pc), transport company FirstGroup (down 4.5pc), ventilation equipment manufacturer Volution Group (down 4.1pc) and South West Water owner Pennon (down 4.1pc). 

It is currently trading at 23,306.9, its lowest price since the beginning of August. 

Shares of Go-Ahead have slumped 18.6pc, after the group's Southeastern rail franchise was seized by the government. 

The company has postponed its annual results which were due this week. Its finance director, Elodie Brian, also stepped down after 2.5 years in the position. 

Read more on this story here. 

The ONS stats also showed that UK private rents increased by 1.3pc in the 12 months to August, rising to 2pc excluding London, reports James Warrington. 

 The fastest rates of growth were in the East Midlands (2.7pc) and the South West (2.6pc), while London was the only region to record a decrease (-0.4pc).

The RICS UK Residential Market Survey suggests that an imbalance between tenant demand and the supply of lettings could be contributing to the increase in rental prices.

In the three months to August 2021, RICS reported that tenant demand was accelerating while landlord instructions remained in decline.

It could be that some landlords are trying to capitalise on domestic tourism through holiday lets, leaving fewer long-term lets for prospective tenants.

This is a particular issue for those looking to rent in tourist hotspots, where rates of second home ownership are much higher than average.

Rising house prices during the pandemic are being led by rural and coastal areas, leaving young and low-paid workers at risk of being priced out, reports James Warrington.  

Despite falling from a record high in June, the average UK house price (£256,000) increased 8pc in July 2021 compared with the previous year, according to the Office for National Statistics.

House prices were rising at three times the national rate in some tourist hotspots, such as Conwy in North Wales (25pc), North Devon (22.5pc) and Richmondshire in the Yorkshire Dales (21.4pc).

Meanwhile, the seven areas that recorded house price falls in July were all London boroughs, continuing the trend seen during the pandemic as more people work from home.

The ONS warned that people living in rural and coastal areas – particularly the young and those on lower incomes – were at risk of being priced out of the housing market.

It added: “This could be contributing to hospitality businesses being unable to fill vacancies, with the industry being predominant in tourist areas and containing a high proportion of young and low paid workers.”

Irn Bru producer AG Barr warned it was struggling to make deliveries of its drinks as the company becomes the latest casualty of the HGV driver shortage.

Shares fell 2.9pc despite the company reporting pre-tax profits rose four-fold from £5.1m to £24.4m - due to a £7m writedown on its Strathmore water brand recorded in results last year.

"In recent weeks we have seen increased challenges across the UK road haulage fleet, associated in part with the COVID-19 pandemic, impacting customer deliveries and inbound materials," the company said. 

"In addition, the risks associated with the wider labour pool and the current COVID-19 pandemic response are areas we continue to monitor closely." 

Bosses said there had been a heavy shift to at-home drinking of their products, with its at-home cocktail sales rising 114.3pc to £10.2m.

Bar sales soared 229.5pc following the reopening of pubs, bars and restaurants. 

EasyJet raised £1.2bn in a stock sale, cash that will help the budget airline hold out for a post-pandemic travel recovery. 

Existing investors purchased 93pc of the 301m shares available in a rights offering at a discounted price of 410p each, EasyJet said today. Underwriters were working to place rest.

Earlier this month, EasyJet said it would raise the cash to go it alone rather than sell itself at a depressed price to suitor and rival Wizz Air. At the time, EasyJet also said it would borrow £400m. 

The shares sank 10pc on September 9, on concerns about the dilution. Since then EasyJet shares had gained 19pc in response to the relaxation of UK travel rules.  

The stock was down 2.2pc to 693.6p in early trading.  

Danish toy giant Lego posted record profits and turnover in the first six months of 2021, boosted by the pandemic and its expansion into China. 

In the year's first half, the company said its net profit rose by 140pc to 6.3bn kronor (£723.7m) kronor and it opened 60 new Lego stores, with the majority in China. 

Turnover in the period soared by 46pc to 23bn kronor(£2.6bn) , Lego said.

"Our performance was driven by strong demand for our portfolio, which has attracted new builders to the Lego brand," said chief executive Niels Christiansen.

Card Factory has announced it plans to expand into the gift market, as the company attempts to recover from its pandemic losses. 

"It is clear that the right way forward is to transition Card Factory from being a store led card retailer into a market leading, omni-channel retailer of cards and gifts," said Chief executive Darcy Willson-Rymer said. 

"Whilst cards will remain the largest part of our business in terms of total contribution, we will substantially increase our focus on the complementary gifting and party markets."  

The company's loss before tax in the six months to the end of July totalled £6.5m, compared to a £22.2m loss in the same period last year.

It said store footfall remained below pre-pandemic levels, while online demand had also been dented by the easing of lockdown restrictions. 

The board said results were in line with their expectations. 

Card Factory said it does not expect to pay any dividends this year. Shares are down 1.8pc. 

FTSE 100 has dropped 0.6pc in early trading, with the index dragged down by mining heavyweights on falling underlying metal prices.

Software company Sage Group led losses, down 4.3pc. Precious metals, industrial miners and industrial companies Relx and Experian were also among the stocks leading declines.

However Smiths Group defied the day's mood, topping the blue-chip index and rising 2.5pc after it signed a binding agreement to sell its medical devices unit, Smiths Medical, and declared a dividend of 26p following strong annual earnings.

The FTSE 100 has gained 9.8pc  from its lowest point this year, boosted by strong second-quarter earnings and dovish central bank policies.

However its recent pace of growth has slowed due to inflation concerns, with the index now underperforming its European and mid-cap peers.

On the FTSE 250, Capita rose 3.6pc while Volution Group tumbled 4.4pc. 

South West Water owner Pennon Group said revenue has been boosted by increased water use, noting the pandemic has led to a "substantial population increase" in England's south west.

The company said: "The COVID-19 pandemic has led to a substantial population increase in the regions we serve. Alongside this, as restrictions have eased businesses have ramped up demand, resulting in increased water usage and an increase in overall revenue." 

However bosses added that the higher number of users has put its network under pressure.

In a trading update, they said the "current inflationary environment" was also contributing to its costs but it expects these to be offset by higher revenues. 

My colleague Oliver Gill reports on the fall out of the takeover announcement and allegations that Southeastern did not declare over £25m of historic taxpayer funding which should have been returned: 

The two companies that ran Southeastern in a joint venture, FTSE 250 bus and rail operator Go-Ahead and state-backed French firm Keolis, said they had returned the money to taxpayers following an independent review.

Go-Ahead finance chief Elodie Brian has stepped down with immediate effect.

Govia Thameslink, a separate operator also run by Go-Ahead and Keolis, will continue run as normal.

Clare Hollingsworth, Go-Ahead chairman, said: “We recognise that mistakes have been made and we sincerely apologise to the DfT.”

The company's share price sank 11pc in early trading.

Southeastern is the latest network to be franchised by the state authorities. The east coast main line was taken into public ownership in 2018, Northern rail in 2020 and the entire Welsh railway was nationalised last year. Nicola Sturgeon is to take control of Scotland’s train network next year.

Read more here. 

The world’s second-biggest economy is in the grips of a deepening power crisis that is causing black outs across China and prompting banks to lower the country's growth forecast.  

At least 20 Chinese provinces and regions - which account for more than 66pc of the country’s GDP - have announced some form of power cuts.

There are two main reasons behind the outages: record high coal prices are causing power generators to trim output despite soaring demand, while some areas have pro-actively halted electricity flows to meet the year's emissions targets.

Officials in Guangdong province, the southern industrial hub with an economy larger than Australia’s, have curtailed as much as 15 gigawatts of power and asked offices to stop using elevators for the first three floors.

The Chinese province of Fujian, a major stainless steel and ceramics hub with an economy bigger than Malaysia and Singapore combined, will ration power from September 28 to 30 and again from October 4 to 16, according to Bloomberg. 

Goldman Sachs Group economists lowered their forecast economic growth for China to 7.8pc from 8.2pc this year because of recent sharp cuts to production in a range of high-energy-intensity industries.

Moonpig hiked its full-year sales outlook this morning, noting business was still benefiting from a pandemic boost in posting cards and gifts despite the lifting of coronavirus restrictions.

The group said it expects sales of between around £270m and £285m  "following a limited change in consumer mobility through the summer". 

The group has also been spending on promotions to drive business through app downloads, as well as adding customer reminders. 

Moonpig said: "As people return to offices and conditions normalise, the data we collect on customer behaviour will provide important insights.

"At the current time, our view on underlying growth trends, and our medium-term growth and margin targets, remains unchanged."

The FTSE 100 has opened 0.1pc lower at 7,053.17. 

The FTSE 250 has also edged 0.3pc down to 23,541.32. 

Brent oil has rallied above $80 a barrel as a dramatic surge in wholesale natural gas prices stokes bets that crude will benefit as users seek alternative fuels.

The leading crude benchmark rose for a sixth day to hit the highest since October 2018. It is currently trading at $80.56, as analysts forecast demand is running ahead of supply. 

Crude demand could rise 500,000 barrels a day as high gas prices force a switch, Commonwealth Bank of Australia analyst Vivek Dhar said in a note.

That would tighten markets further, especially with the OPEC+ alliance of oil producing nations only making conservative additions to supply, Dhar said. 

“It looks like the oil rally has still got some legs,” John Driscoll, chief strategist at JTD Energy Services Pte, added.

“Fundamentals are still pretty convincing, demand is recovering, backwardation is increasing. I just don’t see any evidence yet that the rally has topped out.” 

Transport Secretary Grant Shapps said "investigations have identified a serious breach of good faith by Southeastern." 

London and Southeastern Railway will be taken over by the Government next month, after an investigation uncovered a "serious breach" of its franchise agreement.

The Department of Transport found the company did not declare over £25m of historic taxpayer funding which should have been returned.

London and Southeastern Railway (LSER) connects London with Kent and parts of East Sussex. 

The Government said it will take over services from October 17. 

LSER said: "Our passengers will see no change in our day-to-day operations. All tickets will remain valid after transfer and new tickets can continue to be purchased in the usual way."

The £25m has been recovered and more investigations are being conducted. 

"There is clear, compelling and serious evidence that for years, LSER have breached the trust that is absolutely fundamental to the success of our railways," Transport Secretary Grant Shapps, said. 

"The decision to take control of services makes unequivocally clear that we will not accept anything less from the private sector than a total commitment to their passengers and absolute transparency with taxpayer support." 

Good morning.

Goldman Sachs has slashed China's economic growth forecasts as the superpower's ongoing energy crunch hits industrial output and pressures Beijing to turn to foreign imports of coal.

Electricity shortages sparked by China's lack of coal have triggered factory shutdowns for the likes of Apple and Tesla in Jilin province, the country's industrial heartland, with power being rationed in at least 10 other provinces.

Its governor called for more coal imports while a power company association said supply was being expanded "at any cost".

It is reported that the lack of power has led to outages of 3G coverage, as well as shutting down residential elevators and traffic lights in cities such as Shenyang and Dalian - home to more than 13 million people .

Goldman estimated that as much as 44pc of China's industrial activity has been affected by power shortages, potentially causing a one percentage point decline in annualised GDP growth in the third quarter, and a two percentage point drop from October to December.

It said in a note published on Tuesday that it was cutting its 2021 GDP growth forecast for China to 7.8pc, from the previous 8.2pc.

5 things to start your day 

1) Billionaire Wise founder fined  The money transfer provider boss has been fined hundreds of thousands of pounds by HMRC for deliberately defaulting on his taxes.

2) Recovery enters the 'hard yards', warns Bailey  Bank of England Governor warns of 'weakening' recovery as panic buying threatens to tip the economy into reverse in October.

3) Oxford academic in Huawei video row  Pinar Ozcan says she never agreed to appear in promotional videos for the Chinese telecoms company.

4)  Oil heads for $80 as energy crisis escalates  Brent, which is based on the North Sea industry, could rise to $90 per barrel by the end of the year, according to analysts at Goldman Sachs.

5) Electric car maker Polestar valued at $20bn in Spac deal  An upmarket electric car company backed by actor Leonardo DiCaprio becomes the latest challenger carmaker to go public.

What happened overnight 

Asian shares mainly drifted lower on Tuesday as investors continued to fret over China Evergrande Group's unsolved debt crisis and eyed the potential impact of a widening power shortage in China.

MSCI's broadest index of Asia-Pacific shares outside Japan was 0.13pc lower on Tuesday, following a mixed session on Wall Street.

In early trade on Tuesday, Australia's benchmark S&P/ASX200 index was down nearly 1pc, while Japan's Nikkei was off 0.6pc.

China's blue chip index CSI300 edged up 0.1pc at the open, as Hong Kong's Hang Seng Index gained 0.44pc.

Coming up today

• Corporate: Ferguson, Smiths Group, Close Brothers (Full-year results); Pennon Group, Moonpig (Trading update)
• Economics: House price index (UK, US); consumer confidence (US); BRC shop price index (UK)