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You can find the current article at its original source at https://www.theguardian.com/business/live/2016/jul/18/uk-economy-firms-slash-spending-financial-news-brexit-arm-holdings-softbank-live
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| Version 0 | Version 1 |
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| UK firms slash spending plans after Brexit vote – business live | UK firms slash spending plans after Brexit vote – business live |
| (35 minutes later) | |
| 8.40am BST | |
| 08:40 | |
| ARM’s soaring share price has helped to drive the FTSE 100 towards the 11-month intraday high hit last week. | |
| The Footsie is up 45 points in early trading to 6715, while the smaller FTSE 250 has gained 1%. | |
| Other European stock markets are also up in early trading, as traders remain sanguine despite Brexit concerns and the instability in Turkey. | |
| 8.26am BST | |
| 08:26 | |
| Overnight, a top City fund manager warned that Brexit will be “horrible” for the UK economy. | |
| Richard Buxton, the chief executive and head of UK equities at Old Mutual Global Investors (OMGI), says the referendum vote is “stupendously final.” | |
| “I don’t always agree with Martin Wolf [the Financial Times columnist], but when he wrote the day after that this is probably the single worst event in British postwar history, yeah, I don’t disagree | |
| Buxton also laid into the Leave campaign for failing to have a strategy for actually leaving the EU: | |
| “You can criticise the Brexit team for a) an utterly mendacious campaign and b) not expecting that they would really win, so never having a plan. I mean the whole thing is literally unbelievable. It is extraordinary how we have ended up where we are.” | |
| Related: Brexit impact is going to be horrible, says leading City fund manager | |
| 8.16am BST | 8.16am BST |
| 08:16 | 08:16 |
| Shares in chipmaker ARM Holdings have surged by 45% at the start of trading, as the City reacts to Softbank’s takeover offer. | Shares in chipmaker ARM Holdings have surged by 45% at the start of trading, as the City reacts to Softbank’s takeover offer. |
| They’re changing hands for £17.32 each, slightly over the Softbank offer of £17. | They’re changing hands for £17.32 each, slightly over the Softbank offer of £17. |
| That suggests investors expect the deal to go through, and there may be some speculation of a rival offer (even though Softbank are paying a 43% premium). | That suggests investors expect the deal to go through, and there may be some speculation of a rival offer (even though Softbank are paying a 43% premium). |
| 8.09am BST | 8.09am BST |
| 08:09 | 08:09 |
| UK government back ARM takeover | UK government back ARM takeover |
| Britain’s new finance minister has decided that the takeover of ARM Holdings by Softbank is a jolly good thing. | Britain’s new finance minister has decided that the takeover of ARM Holdings by Softbank is a jolly good thing. |
| Philip Hammond argues that the deal shows that the Brexit vote hasn’t hurt Britain’s place in the world, saying: | Philip Hammond argues that the deal shows that the Brexit vote hasn’t hurt Britain’s place in the world, saying: |
| “Britain has lost none of its allure to international investors. Britain is open for business - and open to foreign investment.” | “Britain has lost none of its allure to international investors. Britain is open for business - and open to foreign investment.” |
| He’s tweeting the same message: | He’s tweeting the same message: |
| Decision by SoftBank to invest in @ARMHoldings shows UK has lost none of its allure to global investors - Britain is open for business | Decision by SoftBank to invest in @ARMHoldings shows UK has lost none of its allure to global investors - Britain is open for business |
| This would be largest ever Asian investment into the UK & would double size of ARM's UK workforce.Big vote of confidence in British business | This would be largest ever Asian investment into the UK & would double size of ARM's UK workforce.Big vote of confidence in British business |
| However... the deal is also a reminder that the slump in the pound makes UK assets more affordable to overseas investors. The yen has surged by almost a third against the pound over the last year, including a 12% spike since the referendum. | However... the deal is also a reminder that the slump in the pound makes UK assets more affordable to overseas investors. The yen has surged by almost a third against the pound over the last year, including a 12% spike since the referendum. |
| Softbank's purchase of Arm largely facilitated by FX shifts, with GBPJPY falling around 30% over the past 12 months | Softbank's purchase of Arm largely facilitated by FX shifts, with GBPJPY falling around 30% over the past 12 months |
| 8.01am BST | 8.01am BST |
| 08:01 | 08:01 |
| Brexit vote drives business pessimism to record high | Brexit vote drives business pessimism to record high |
| British firms are slashing their spending plans in the face of uncertainty following last month’s EU referendum vote. | British firms are slashing their spending plans in the face of uncertainty following last month’s EU referendum vote. |
| In a worrying signal, anxiety among UK bosses has hit a five year high, according to accountancy firm Deloitte. | In a worrying signal, anxiety among UK bosses has hit a five year high, according to accountancy firm Deloitte. |
| Its survey found that 82% of chief financial officers from FTSE 350 and large private companies are planning to cut capital spending in the next year. | Its survey found that 82% of chief financial officers from FTSE 350 and large private companies are planning to cut capital spending in the next year. |
| That’s the biggest amount since the survey began a decade ago, up from 34 percent in the first quarter. | That’s the biggest amount since the survey began a decade ago, up from 34 percent in the first quarter. |
| And 83% are planning to rein in their hiring plans, in a blow to workers seeking new jobs. | And 83% are planning to rein in their hiring plans, in a blow to workers seeking new jobs. |
| How Brexit works: 82% of top UK firms shelve spending plans after EU vote - Deloitte https://t.co/XS5mFj3Gh3 | How Brexit works: 82% of top UK firms shelve spending plans after EU vote - Deloitte https://t.co/XS5mFj3Gh3 |
| Alarmingly, businesses are more pessimistic than after the financial crisis in 2008. | Alarmingly, businesses are more pessimistic than after the financial crisis in 2008. |
| Ian Stewart, Deloitte’s chief economist, sums up the situation: | Ian Stewart, Deloitte’s chief economist, sums up the situation: |
| “Perceptions of uncertainty have soared to levels last associated with the euro crisis five years ago. | “Perceptions of uncertainty have soared to levels last associated with the euro crisis five years ago. |
| “The spike in uncertainty has had a toxic effect on business sentiment, with optimism dropping to the lowest level since our survey started in 2007 -- lower, even, than in the wake of the failure of Lehman in late 2008.” | “The spike in uncertainty has had a toxic effect on business sentiment, with optimism dropping to the lowest level since our survey started in 2007 -- lower, even, than in the wake of the failure of Lehman in late 2008.” |
| Updated | Updated |
| at 8.02am BST | at 8.02am BST |
| 7.46am BST | 7.46am BST |
| 07:46 | 07:46 |
| The Agenda: Brexit, ARM and Turkey | The Agenda: Brexit, ARM and Turkey |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| There are three things on the agenda in the City today. Firstly, the Brexit vote, as companies continue to chew through the implications of last month’s EU referendum. | There are three things on the agenda in the City today. Firstly, the Brexit vote, as companies continue to chew through the implications of last month’s EU referendum. |
| Second, investors are watching the situation in Turkey closely after last weekend’s failed coup attempt. | Second, investors are watching the situation in Turkey closely after last weekend’s failed coup attempt. |
| President Erdoğan remains in power, and is now pledging to purge the Turkish state of dissidents. But the sight of tanks on the streets may shake confidence in the country, which is already facing high inflation and a troubled tourism industry. | President Erdoğan remains in power, and is now pledging to purge the Turkish state of dissidents. But the sight of tanks on the streets may shake confidence in the country, which is already facing high inflation and a troubled tourism industry. |
| Analysts at RBC Capital Markets explain: | Analysts at RBC Capital Markets explain: |
| Following a turbulent weekend, markets are actually quite calm. The weekend’s main highlight was the failed attempt to overthrow the Turkish government in a military coup d’etat and the subsequent mass detentions of military and judiciary personal. | Following a turbulent weekend, markets are actually quite calm. The weekend’s main highlight was the failed attempt to overthrow the Turkish government in a military coup d’etat and the subsequent mass detentions of military and judiciary personal. |
| Related: Recep Tayyip Erdoğan mourns coup casualties – and vows retribution | Related: Recep Tayyip Erdoğan mourns coup casualties – and vows retribution |
| And thirdly, we have some early morning takeover action. ARM Holdings, Britain’s biggest technology company, is being taken over by Japan’s Softbank in a £24bn deal. | And thirdly, we have some early morning takeover action. ARM Holdings, Britain’s biggest technology company, is being taken over by Japan’s Softbank in a £24bn deal. |
| Encouragingly, Softbank are promising to at least double the number of UK employees at ARM, in what looks a massive bet on the Internet of Things [the idea that every object will be linked to the web] | Encouragingly, Softbank are promising to at least double the number of UK employees at ARM, in what looks a massive bet on the Internet of Things [the idea that every object will be linked to the web] |
| Related: ARM Holdings to be sold to Japan's SoftBank for £24bn | Related: ARM Holdings to be sold to Japan's SoftBank for £24bn |
| Watch shares of @ARMHoldings at open...#Softbank offers £24b = 45% premium to current £16.7b market cap pic.twitter.com/PpolzamMYt | Watch shares of @ARMHoldings at open...#Softbank offers £24b = 45% premium to current £16.7b market cap pic.twitter.com/PpolzamMYt |
| We’ll be tracking all the main developments through the day. | We’ll be tracking all the main developments through the day. |
| Updated | Updated |
| at 7.55am BST | at 7.55am BST |