The British economy stalled in the three months to the end of October following slowdowns in manufacturing and construction. GDP growth in the three months slowed to 0.4% down from 0.6% in the third quarter of 2018, reinforcing fears that business is stalling in the face of uncertainty about the terms on which the country will leave the European Union on March 29 next year. According to the ONS, growth was flat in August and September, before rising to a lacklustre 0.1 per cent in October. The headline figure was dragged down by manufacturing, which shrank by 0.9% in October, the sector’s worst performance since March 2016. Construction shrank by 0.2% in October after growing by 1.7% in September. Only the services sector grew in October, expanding by 0.2% thanks to a strong showing from the IT and accountancy industries.
Sterling has dropped to a 17-month low of $1.2662 on reports that tomorrow’s vote in parliament on Theresa May’s Brexit deal may not go ahead. Earlier this morning a spokesman insisted that Mrs May was confident of winning the vote but the BBC’s political editor, Laura Kuenssberg, tweeted around midday: “Leadsom statement on Commons business expected to follow PM statement this afternoon, which implies they are indeed pulling the vote.” Downing Street said that the prime minister would make a statement to MPs at 3.30pm, having held an emergency cabinet conference call this morning. Andrea Leadsom, leader of the Commons, will speak at 4.30pm. Steve Hawkes, deputy political editor of The Sun, quoted a “well-respected trader” as saying: “It just comes across as a government in crisis.”
Christmas gloom settles on the high street. High street retailers will have little to celebrate this Christmas if dismal recent trends continue and the latest forecasts are right. Springboard, the retail insights company, expects shopper visits to the high street to decline by 4.2% this month compared with last year. The forecast comes after a 3.2% fall in footfall for November as Black Friday drove more purchases online, with one in every three pounds of non-food purchases made on the internet. The number of visits to bricks-and-mortar stores has dropped for 12 months running. The figures will renew concerns about high streets up and down the country as shops are boarded up. Black Friday has accelerated the shift online. “The 3.2% drop in November is indisputable evidence that Black Friday delivers no tangible benefit to bricks-and-mortar stores,” Diane Wehrle, Springboard’s marketing director, said. Since Black Friday began in 2013, footfall has declined in November every year bar 2017.
Big guns take aim at frigate contract for Royal Navy. Britain’s big defence maritime contractors BAE Systems (BA.) and Babcock International Group (BAB) have been joined by Atlas Elektronik, a Dorset-based, German-owned marine engineer, on the shortlist to design and build the next generation of Royal Navy frigates. The three bidders must submit specifications for five new Type 31e frigates at no more than £250 million each.
Interserve tries to calm investor nerves before stock market opens. Interserve (IRV) is braced for another chaotic day of share dealing today after it emerged that it was in talks to restructure its finances. Any deal agreed could result in significant losses for its lenders and may virtually wipe out the investments of existing shareholders. In a statement issued last night, Interserve sought to allay market fears that it was heading towards the precipice, a year on from the collapse of its erstwhile rival Carillion. The company said that it was in “constructive discussions” with its banks and other debt-holders regarding a plan to reduce its £614 million of borrowings, which would be presented to shareholders early next year. “Our lenders are supportive of the deleveraging plan, which will underpin the long-term future of Interserve,” Debbie White, its chief executive, said. The company confirmed reports that the deleveraging plan could result in “material dilution” for shareholders that already have seen the shares crash from 745p in 2014 to only 24½p at Friday’s close.
Hollywood Bowl lines up another dividend. Investors in Hollywood Bowl Group (BOWL) look set to strike it lucky amid forecasts that today the tenpin bowling operator will announce its second consecutive year-end special dividend. Analysts expect the group to accompany its full-year results with a special dividend of up to 4p a share, representing an outlay of £7.5 million, on top of ordinary dividends for the year of about 6.1p Last year, in its first full year since flotation, the company used the strength of its balance sheet to give shareholders 3.33p per share on top of ordinary dividends totalling 5.75p.
Faroe investors offload shares with hostile bidder on horizon. Three institutional shareholders in Faroe Petroleum (FPM) have sold a chunk of their shares before a hostile bid for the oil company is expected to be formally laid out to investors this week. JP Morgan Asset Management, the National Farmers Union and River and Mercantile Asset Management have each sold about a third of their holdings in the past two weeks, according to regulatory disclosures. JP Morgan and NFU now own 1.8% of Faroe, while River and Mercantile owns just under 1%. The sales could have been influenced, too, by turbulence in oil prices amid a deal by Opec to cut production that was secured on Friday. Crude prices crashed last week amid uncertainty ahead of the last-minute deal, leading to a fall in the shares of many oil companies, before they stabilised when Opec agreed to remove 1.2 million barrels of oil a day from the market.
