UK borrowing costs have fallen further today as investors seem to look through reports of an expected downgrade to official productivity forecasts in the budget.
The yield on 10-year UK government bonds, regarded as a proxy for government borrowing costs, has fallen to 4.38 per cent, the lowest this year.
Bond investors seem to be more focused on the recent inflation data, which showed that the annual rate remained steady at 3.8 per cent in September, below forecasts of an increase to 4 per cent. This has increased market expectations of interest rate cuts by the Bank of England.
Recent comments from the chancellor, Rachel Reeves, about possible tax increases and spending cuts in the budget appear to have bolstered the confidence of bond investors and alleviated concerns about the government’s borrowing needs.
There are reports that the Office for Budget Responsibility is expected to cut its productivity growth forecast by about 0.3 percentage points, increasing the prospect of big tax rises.
TerraPower submits design for UK nuclear reactor
TerraPower, a nuclear innovation company founded by Bill Gates, has submitted a design for a new type of nuclear reactor and energy storage system for regulatory approval in Britain.
The application to the UK’s generic design assessment process marked the first regulatory step towards deploying its Natrium technology in a global market, TerraPower said.
“We look forward to working with the UK government as we work through the review process,” said Chris Levesque, TerraPower’s president and chief executive.
The company is looking to identify sites for its Natrium reactor in the UK in co-operation with the US engineering firm KBR.
Anglo American raises iron ore guidance
The Minas-Rio iron ore project in Brazil
ANGLO AMERICAN
Anglo American reported steady third-quarter production, reaffirmed its 2025 production guidance and raised its forecast for its Minas-Rio iron ore operation in Brazil.
Duncan Wanblad, chief executive, said the company was “well positioned” to meet next year’s goals as it continues to streamline its portfolio and prepare for its planned merger with Canada’s Teck Resources.
Copper production rose 1 per cent to 183,500 tonnes in the quarter, and manganese ore and nickel output were also higher. Iron ore production decreased by 9 per cent to 14.3 million tonnes in the third quarter, but Anglo American now expects Minas-Rio production of 23-25 million tonnes, up from 22-24 million tonnes previously.
The company has successfully divested its residual interest in Valterra Platinum for approximately $2.5 billion. It said preparations were under way to resume the formal sale process of its steelmaking coal business in the coming months, and the dual-track separation and structured sale of its diamond business, De Beers, was also “well under way”. Rough diamond production increased by 38 per cent to 7.7 million carats in the quarter.
London’s leading share index has edged to a new high for the fourth day in a row, with some corporate news buoying shares but little momentum.
The FTSE 100 rose 5.7 points, or 0.06 per cent, to 9,659.52. HSBC was one of the big risers after it nudged its full-year profit forecast higher despite posting a 14 per cent loss in third-quarter profit following Madoff litigation provisions.
Airtel Africa, the telecoms company, was the biggest riser after it reported a jump in first-half profits on strong demand.
Gold miners continued to fall, with Fresnillo and Endeavour the biggest fallers, after the precious metal slipped further below $4,000 an ounce — down 1.5 per cent to $3,923.04 an ounce — amid signs of a thaw in the US-China trade tensions.
The miners Rio Tinto and Anglo American were lower. Anglo American’s third-quarter production reports were mixed with copper slightly up but iron ore down.
Software provider Idox agrees £339.5m takeover
The British software provider Idox has agreed to be taken private in £339.5 million deal by its second-largest shareholder.
The US investment firm Long Path is offering 71.5p a share in cash, a 27.7 per cent premium to Idox’s closing price on Monday.
Idox is an Aim-listed company that makes specialist software for government planning, regulatory compliance and elections technology.
Long Path, which has a stake of about 12 per cent, plans to inject about £5 million into the business and reduce the headcount by about 5 per cent.
The offer has secured binding commitments from investors representing more than 35 per cent of Idox’s shares and is expected to close in the first quarter of 2026.
Barclay buys Best Egg in $800m deal
CS Venkatakrishnan, the chief executive of Barclays
CHRISTOPHER GOODNEY/BLOOMBERG/GETTY IMAGES
Barclays is buying the US personal loan originator Best Egg for $800 million.
CS Venkatakrishnan, the chief executive, said: “The deep and sophisticated US consumer finance market offers rich prospects for growth at Barclays.”
Barclays said the deal would help it build scale in America, where its personal banking presence lags much bigger incumbent domestic banks. The deal will add two million customers.
Barclays said it expected the deal to close in the second quarter of 2026.
BAE Systems to recognise £4.6bn from Turkey deal
Turkey has signed a deal with the UK to buy 20 Eurofighter Typhoon jets
DANNY LAWSON/PA
The British defence company BAE Systems has said it expected to recognise £4.6 billion from a UK government deal in which Turkey bought 20 Eurofighter Typhoon jets.
As part of the deal, the firm will manufacture airframe components, conduct final assembly of the aircraft and lead weapons integration activities in Lancashire.
The weapons package will be primarily provided by MBDA, a multi-national European group in which BAE Systems holds a 37.5 per cent stake. The Turkish Air Force will become the tenth air force to operate Typhoon aircraft.
BAE shares have risen 61 per cent so far this year, boosted by the increased spending on defence in Europe.
Rio tests quick battery swaps in electric mining trucks
Rio Tinto’s trial is a partnership with China’s State Power Investment Corporation (SPIC) Qiyuan
Rio Tinto has begun using electric mining trucks that can have their depleted batteries replaced in less than seven minutes, in a trial aimed at cutting emissions without compromising operational efficiency.
The FTSE 100 mining group said it had begun trialling the “battery swap electric haul truck technology” at its Oyu Tolgoi copper mine in Mongolia.
The trial involved eight trucks, 13 batteries and a battery swapping station. The trucks are about the height of a double-decker bus and weigh 61 tonnes apiece, according to a company specification, and can each haul up to 91 tonnes. They are powered by batteries capable of storing 800 kilowatt-hours of energy — about 20 times as much as the battery in a typical Nissan Leaf electric vehicle.
The trial is a partnership with China’s State Power Investment Corporation (SPIC) Qiyuan.
Shop price inflation slows but fresh food costs more
Shop price inflation slowed in October despite a sharp rise in fresh food prices driven by beef, poultry and fruits, figures from the British Retail Consortium and NielsenIQ showed.
Fresh food inflation rose to 4.3 per cent year-on-year this month, compared with 4.1 per cent in September.
Overall food inflation slowed to 3.7 per cent in October, against growth of 4.2 per cent the month prior, although prices remain elevated. The decrease was in part due to an easing of global sugar prices, which helped bring down costs for consumers buying chocolates and confectionery.
In some good news for consumers, prices of items other than food are now 0.4 per cent lower than a year ago as retailers brought in early bargains ahead of the Black Friday sales event.
HSBC third-quarter profit drops 14%
Georges Elhedery, the chief executive of HSBC, said the bank was becoming more focused despite taking legal provisions related to historical matters
TOM ARNOLD/REUTERS
HSBC has reported a 14 per cent drop in third-quarter profit after a $1.1 billion provision for a lawsuit seeking damages for a fund that was a victim of the swindler Bernie Madoff.
Pre-tax profit fell to $7.3 billion, from $8.48 billion in the third quarter last year. Before the surprise provision on Monday, expectations were for a pre-tax profit of $7.66 billion.
However, the bank has nudged up its forecast for net interest income for the year to $43 billion, up from about $42 billion in June, in expectation that interest rate cuts in Hong Kong and Britain will be slower than initially thought.
Georges Elhedery, the chief executive, said: “We are becoming a simple, more agile, focused bank, built on our core strengths. The intent with which we are executing our strategy is reflected in our performance this quarter, despite taking legal provisions related to historical matters.”
HSBC’s Hong Kong-listed shares rose 3.9 per cent in afternoon trade.
