Chancellor Rachel Reeves will later today announce what is expected to mark the biggest round of tax hikes in 30 years, as well as billions of pounds of extra borrowing.
Labour’s bid to fix public services and revitalise the British economy has driven a degree of market anxiety, with borrowing costs gradually rising to their highest level since before the general election.
The FTSE 100 is down 0.5 per cent in early trading. Among the companies with reports and trading updates today are Next, GSK, Aston Martin Lagonda and CAB Payments. Read the 30 October Business Live blog below.
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Fire at BAE Systems shipyard
A huge blaze has broken out at BAE Systems’ shipyard that builds Britain’s nuclear submarines but there is no major risk from the incident, police said on Wednesday.
Pictures online showed what looked like flames and black smoke emerging from the top of the vast Devonshire Dock Hall building that is visible from miles away. Covering around six acres, it is the second biggest shipbuilding complex of its kind in Europe, according to the company.
Cumbria police in north-west England said in a statement that two people had been taken to a hospital after suffering from suspected smoke inhalation and that there were no other casualties.
Police said the emergency services were called to the site at 00:44 GMT.
MARKET REPORT: Budget jitters hit shares of online trading firms
Online trading platforms suffered a pre-Budget sell-off yesterday amid fears over the contents of the Chancellor’s red box.
While businesses and households have much to fret about – from higher employer national insurance contributions to a hike in bus fares – firms such as CMC Markets and IG Group were hit by speculation over what might happen to capital gains tax.
Keir Starmer last week sparked outrage when he insisted that anyone who owns shares is not a ‘working person’ – the implication being they are fair game for a revenue-hungry Treasury.
GSK expects weaker vaccine sales as demand struggles
GSK has lowered its 2024 vaccine sales forecast for the second time this year, hit by weak demand for its respiratory syncytial virus (RSV) and shingles vaccines.
The British drugmaker now expects 2024 vaccine sales to decrease by low-single digit percentage in turnover. It had previously expected the business to grow by a low to mid-single digit percentage.
The company reported core earnings per share of 49.7p on sales of £8billion for the three months to 30 September, compared with an EPS of 43.6p on sales of about £8billion forecast by analysts.
It kept full-year total sales and earnings forecasts unchanged.
‘Strong growth in specialty medicines helped to offset lower vaccine sales and reflected successful new product launches in oncology and HIV,’ GSK CEO Emma Walmsley said in a statement.
Next profits to top £1bn as retailer continues to outperform
Next expects annual profits to exceed £1billion as the fashion retailer upgraded guidane for the third time in four months on Wednesday.
The group said the upgrade reflected a better-than-expected 7.6 per cent rise in third quarter full price sales, driven by the early arrival of colder weather this year, versus an unusually warm September and early October last year
FTSE 100 set to open lower amid Budget uncertainty
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
‘The FTSE 100 looks set to open lower, as uncertainty swirls about the contents of the UK Budget, the first from a Labour Chancellor in 14 years.
‘UK investors are braced for a shovel of tax hikes to fill a yawning black hole in the UK government’s finances. There is speculation that Rachel Reeves will try to find ways to raise revenue and cut spending to cover a shortfall of up to £40 billion.
‘The details of how debt rules will be changed to enable the government to borrow more without breaking its self-imposed borrowing limits are set to be announced.
‘This strategy has been widely trailed to avoid a temperamental attitude from bond investors breaking out, and so far, it appears to have done the trick, although institutions financing government borrowing will keep a keen eye trained on what the swelling investment budget will be spent on.
‘Already her expected Budget plans have been judged by bond dealers to push UK government bond issuance towards £300 billion this year, around a 6% increase on the existing target.
‘Any sign of profligacy may well be punished by investors demanding a greater return to hold UK debt. Already nervousness has increased, with UK gilt yields pushing higher to around 4.3%, but they are still lower than levels reached in July.
‘Part of this rise has been down to changing interest rate expectations and overall, markets still appear quietly confident that the Chancellor will keep focusing on carving out a reputation for prudence and responsibility. It’s looking unlikely that investment pledges announced today will max out the government’s new borrowing facility under the rule change.’
It’s our worst NIGHTMARE: Business braced for ‘perfect storm’ in Halloween Budget
Rachel Reeves was last night accused of turning her back on economic growth as business braces for a Budget onslaught that will drive up costs and threaten livelihoods.
The Chancellor will today hit corporate Britain with an increase in employer national insurance contributions of up to 2p having previously branded the levy a ‘tax on jobs’.
The national insurance raid – which could raise as much as £20billion – comes alongside an inflation-busting 6.7 per cent increase in the minimum wage and a workers’ rights package costing firms £5billion a year.
