(Bloomberg) — Hi, I’m Leo from Bloomberg’s UK Breaking News team, catching you up on this morning’s business stories.
Britons are more willing to splash out on big-ticket items, with consumer confidence rebounding in November. The “dramatic” recovery, as research firm GfK described it, bodes well for retailers hoping to benefit from Black Friday (yes, that’s today) and Christmas.
What’s more — we can expect a further boost to confidence in December after Chancellor Jeremy Hunt this week announced the biggest tax cuts since the 1980s.
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Key Business News
Nissan Motor Co. will significantly ramp up electric-vehicle production in the UK with a £2 billion investment at its Sunderland site. The move follows recent announcements by Jaguar Land Rover owner Tata Motors Ltd. to build a £4 billion battery factory in Somerset and BMW AG’s decision to manufacture electric Minis at its Oxford factory.
Legal & General Group has agreed a £4.8 billion buy-in with Boots’ pension scheme, the UK’s largest single transaction of its kind by premium size. Higher interest rates make buy-ins, where insurers take over liabilities from companies’ pension plans, more attractive as higher bond yields help insurers meet future payments to pensioners. This has led to “unprecedented” demand for this type of deal, Legal & General said.
The festive consumer mood I mentioned above is also evident at London’s Selfridges store, which stands out as a winner among the assets of Rene Benko — the mogul who this month lost control of the property empire he built.
Meanwhile, Italian telecom operator Fastweb is exploring a potential deal for Vodafone Group Plc’s Italian operations, people familiar with the matter told Bloomberg. Vodafone has also held on-and-off discussions in recent months with French billionaire Xavier Niel’s Iliad SA about a potential merger of their Italian businesses. Last year, Vodafone rejected an €11.25 billion bid for its Italian unit from an Iliad-backed consortium.
Finally, the breakup of Four Seasons Health Care — one of Britain’s biggest care home operators which was previously owned by Guy Hands’ Terra Firma Capital Partners — has accelerated with the sale of a fresh tranche of sites, handing debt holders the first significant dividend since it collapsed into administration.
Markets Today’s Take
In an interview with the FT released this morning, Bank of England Chief Economist Huw Pill struck a hard line, warning that inflation remains “stubbornly high” and the BOE has to resist the temptation to “declare victory and move on.”
That’s noticeably tougher than the tone he took earlier this month, when he shocked markets by appearing to suggest it was reasonable to expect rate cuts next year.
Other BOE officials have since pushed back against that idea, with little impact on markets, and it took yesterday’s PMI data, which raised the spectre of price pressure again, to prompt them to pull back bets on cuts next year to two, from more than three earlier in November.
Pill, who was speaking to the FT last week, obviously before the PMI data, said that when it comes to markets “we are making our judgments. They are making their judgments.”
After the past few days, it looks increasingly like the judgement of investors is based more on data than BOE rhetoric.
— David Goodman
For more news and analysis throughout the day, follow Bloomberg UK’s Markets Today blog.
Fidelity International’s CEO Anne Richards is stepping down. UBS rehired George Dramitinos, a fixed-income portfolio manager at Brevan Howard, to oversee its euro swaps trading business. And HYCAP, a green-energy investor backed by some of the world’s super-rich, hired Advent International veteran Scott Lanphere as chief investment officer and onetime Goldman Sachs executive Damian Ordish as head of people.
Property portal Rightmove Plc will hold an investor day on Monday. We’ll also get results from EasyJet Plc on Tuesday, and Dr. Martens Plc on Thursday.