Below are the key afternoon headlines from today’s papers, featuring the Financial Times, The Times, The Telegraph, The Daily Mail & more - see the full Press section here.
Bank of England needs to stay out of Brexit politics, warns Sentance. The Bank of England is jeopardising its reputation for independence by getting drawn into the political debate over Brexit, one of its former policymakers has said. The criticism from Andrew Sentance follows a coruscating intervention by Lord King of Lothbury, the former governor, who broke protocol on Tuesday to attack the Bank for warning that Brexit could plunge the UK into a catastrophic recession. Mr Sentance, a member of the monetary policy committee between 2006 and 2011, said the Bank’s independence today “doesn’t seem as strong as it was in its first ten to fifteen years”. It became independent in 1997. Its worst-case Brexit scenario, published last week, was “pretty extreme”, he told MPs on the Treasury select committee.
Thomas Cook Group (TCG) ‘fundamentals remain robust’, says fund management titan. Thomas Cook’s biggest shareholder has come out fighting for the 177-year-old travel giant, blasting a stock market sell-off as an “overreaction”. As fears grow over the company’s future, Invesco insisted Thomas Cook’s “fundamentals remain robust”. Almost 60% was wiped off the company’s market value in eight days after Thomas Cook last week announced its second profit warning in two months, suspended its dividends and revealed it had opened talks with its lenders in the wake of a burgeoning debt pile. But Invesco global equities fund manager Stephen Anness said: “Much of what we heard from Thomas Cook last week was a repeat from what we already knew – that trading suffered from the exceptionally hot summer. That was exaggerated by the unexpected change to accounting, a change we very much approve of as it more clearly reflects the underlying business. “The market has taken fright but from what we see, the fundamentals remain robust. From our conversations with the company, the balance sheet and liquidity is intact. This seems an overreaction.”
Service sector growth weakest since EU referendum. Britain’s dominant services sector dropped sharply last month to its lowest since just after the vote to leave the European Union. Business and consumers cut back spending in the face of Brexit uncertainty, according to the closely watched IHS Markit/CIPS purchasing managers’ index. A reading of 50.4, down from 52.2 in October and well below forecasts, in the lowest since July 2016. It points to GDP growth of about 0.1% in fourth quarter.
Ryanair Holdings (RYA) faces legal action over refusal to compensate strike-hit passengers. The Civil Aviation Authority (CAA) has launched an enforcement action against Ryanair after the low-cost airline refused to pay compensation to passengers for flight disruptions caused by recent strikes. Ryanair had argued that the widespread strikes over the summer amounted to “extraordinary circumstances” and it was therefore not obliged to pay out compensation. The CAA refuted this claim and said that the low-cost airline was not exempt, meaning Ryanair customers should be compensated. Ryanair has suffered a number of strikes this year by cabin crew and pilots after the airline recognised unions for the first time in 2017.
British housebuilders and domestic stocks rallied amid rising optimism that a Brexit deal will be agreed. The chances of a no-deal Brexit appeared to recede yesterday after MPs backed a proposal for parliament to be given a free hand to decide what should happen next if they reject Theresa May’s Brexit deal in a vote next week. The move effectively gives MPs the power to stop a no-deal Brexit. Berkeley Group Holdings (The) (BKG) led a rally in domestic stocks after analysts at Barclays predicted that the housebuilding sector would surge if a Brexit deal is agreed. A weakening of consumer confidence in the event of a no-deal Brexit would be expected to put pressure on the sector. Berkeley, Barratt Developments (BDEV) , Persimmon (PSN) and Taylor Wimpey (TW.) all gained between 5.5% and 7%
Joules Group (JOUL) sales rise as fashion brand braces for Brexit. Fashion brand Joules, known for its brightly coloured designs, has taken early deliveries of its spring and summer ranges and set up European a warehouse as it braces for a no-deal Brexit. The company said that it was also preparing for increased paperwork that could result from stricter customs checks and had hedged its US currency requirements for the next year “to mitigate the expected disruption that could arise in the event of a hard Brexit”. Joules joins the growing list of British companies, including drugs firm AstraZeneca and drinks merchant Majestic Wine, that are scrambling to stockpile products and looking for alternative routes in fear that the ports at Dover will be thrown into chaos from increased checks. The fashion brand said that it anticipates trading conditions in the UK to “remain challenging over the near term, with continued macroeconomic uncertainty, rapidly changing consumer shopping behaviours and a highly competitive environment”
The £46bn merger between Shire Plc (SHP) and Takeda has won approval from shareholders, paving the way for the deal to be completed as early as January and creating one of the biggest pharmaceutical companies in the world. More than 88% of shareholders in Japanese company Takeda voted in favour of the acquisition, defying speculation that investors would reject the controversial deal. Anglo-Irish Shire, meanwhile, received the backing of more than 99% of its shareholders. The deal will be the largest ever foreign takeover by a Japanese firm and will rank among the 10 biggest acquisitions ever in the pharmaceutical sector. The tie-up will create a drugs powerhouse with close to £22bn of annual sales, roughly equivalent in size to AstraZeneca.
Patisserie Valerie’s parent company has hired a former boss of a veterinary firm as its new interim chief financial officer. Nick Perrin, former finance head at veterinary group CVS, will take up the role while the board searches for a permanent replacement for predecessor Chris Marsh. Mr Marsh was arrested on suspicion of fraud following the discovery of a £40million black hole in Patisserie Valerie’s accounts in October, but was later released on bail. Chief executive Paul May resigned in November and was succeeded by Stephen Francis, who was chief executive of pork farmer Tulip. In a statement on Perrin’s appointment, Mr Francis said: ‘I am pleased to welcome Nick to Patisserie Holdings (CAKE) .’He brings with him the necessary experience to help strengthen the team as the Company works tirelessly to put the events of the past months behind it and look forward to the future.’
Stagecoach Group (SGC) tries to hitch a ride out of American bus division. Stagecoach is looking to sell its north American buses business as it took an £85 million balance sheet hit on Wednesday due to bleaker growth prospects in the division. The buses and rail operator, which also owns about half of Virgin Trains in the UK, said it was in discussion about a potential sale of the unit, which operates across 30 states through the Coach USA and Coach Canada brands. The “strategic review” will examine a full or partial sale of the division, it said. Management took a non-cash impairment charge of £85.4 million based on future cashflow forecasts in America due to more intense competition there. The company, which has faced issues growing the Megabus brand in the US, was forced to revise long-term assumptions on growth rates after trading fell below its internal budget.
Taptica International (DI) (TAP) has also updated on its situation after its shares tumbled yesterday. This is a long story this one but investors should know the ins and outs. Yesterday it was announced chief executive Hagai Tal was stepping down after he was found liable yesterday for certain statements made in relation to the sale of Plimus in 2011 to private equity, where he was chief executive and a shareholder. Plimus was separate to Taptica which he set-up in 2014. Taptica has appointed Rivi Bloch as interim chief executive and its shares rose 6p at 197p
