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Sterling slumps to new two-year low below $1.23 amid no-deal Brexit fears – business live Sterling slumps to new two-year low below $1.23 amid no-deal Brexit fears – business live
(32 minutes later)
The field of European candidates to lead the International Monetary Fund (IMF) has narrowed to three, the Financial Times (£) reports.
Traditionally (and for no obvious reason, given the “I” in IMF) the top job at the IMF has gone to a European. The process is set to run until October.
Reportedly in the running are former Dutch finance minister Jeroen Dijsselbloem, World Bank boss Kristalina Georgieva and Finnish central bank boss Olli Rehn.
New: there are now three Europeans in consideration to lead the IMF. The field has been narrowed to Jeroen Dijsselbloem, Olli Rehn and Kristalina Georgieva. Calvino and Centeno both knocked out which suggests softening in southern European objections to "northern" MD at the fund
Picking Georgieva would require a change to the bylaws of the IMF which prevent an incoming managing director being 65 years old or above. There was no consensus to change the law at an IMF meeting last Friday but officials involved say it can be done at any time in the process
Another big deal on a day of mega-mergers: US drug company Pfizer is buying Mylan in an all-stock deal and combining the $10bn generic pharmaceutical company with its own off-patent branded and generic business.Another big deal on a day of mega-mergers: US drug company Pfizer is buying Mylan in an all-stock deal and combining the $10bn generic pharmaceutical company with its own off-patent branded and generic business.
The Pfizer business, called Upjohn, makes well known drugs such as Lipitor, Celebrex and Viagra, whose patents recently expired. Mylan, based just outside of Pittsburgh, is best known for its EpiPen, an injector used to halt life-threatening allergic reactions.The Pfizer business, called Upjohn, makes well known drugs such as Lipitor, Celebrex and Viagra, whose patents recently expired. Mylan, based just outside of Pittsburgh, is best known for its EpiPen, an injector used to halt life-threatening allergic reactions.
Pfizer shareholders will own 57% of the combined new company and Mylan shareholders will own 43% after the all-share merger.Pfizer shareholders will own 57% of the combined new company and Mylan shareholders will own 43% after the all-share merger.
The new company is expected to have revenues of $19-$20bn in 2020.The new company is expected to have revenues of $19-$20bn in 2020.
The pound has fallen further as American traders get to their desks: it has now hit a low of $1.2282 against the US dollar, a decline of 0.8% over the course of the day.The pound has fallen further as American traders get to their desks: it has now hit a low of $1.2282 against the US dollar, a decline of 0.8% over the course of the day.
That is the first time that the pound has fallen below $1.23 since mid-March 2017.That is the first time that the pound has fallen below $1.23 since mid-March 2017.
The mid-cap FTSE 250 has followed the lead set by its weightier counterpart in rising by 0.4% – despite two big dents.The mid-cap FTSE 250 has followed the lead set by its weightier counterpart in rising by 0.4% – despite two big dents.
The pain for Sports Direct has lessened somewhat, with shares now down by 9% following its announcement late on Friday evening.The pain for Sports Direct has lessened somewhat, with shares now down by 9% following its announcement late on Friday evening.
However, corporate services company Sanne Group is the biggest faller, with shares down by an eye-watering 33%. Sanne cut its profit forecasts and analysts at RBC cut their target price for the stock.However, corporate services company Sanne Group is the biggest faller, with shares down by an eye-watering 33%. Sanne cut its profit forecasts and analysts at RBC cut their target price for the stock.
Here’s Sanne’s share price performance over the past year:Here’s Sanne’s share price performance over the past year:
The pound just came within a whisker of that $1.23 mark – it traded at $1.2301 against the US dollar, a loss of about 0.6% over the day. Sterling is down by 0.5% against the euro.The pound just came within a whisker of that $1.23 mark – it traded at $1.2301 against the US dollar, a loss of about 0.6% over the day. Sterling is down by 0.5% against the euro.
The FTSE 100 is now up by 1.5% for the day.The FTSE 100 is now up by 1.5% for the day.
It’s a somewhat more mixed picture across the rest of Europe. Germany’s Dax is flat, while France’s Cac 40 has lost 0.1%.It’s a somewhat more mixed picture across the rest of Europe. Germany’s Dax is flat, while France’s Cac 40 has lost 0.1%.
Digital bank Revolut has poached the finance director of Metro Bank, it announced on Monday.Digital bank Revolut has poached the finance director of Metro Bank, it announced on Monday.
David MacLean stepped down from the high street lender to join the London-based fintech firm.David MacLean stepped down from the high street lender to join the London-based fintech firm.
Metro and Revolut both sell themselves as upending the traditional banking model, but the latter is among the new crop of app-based banks who eschew branch banking. Metro has followed a “bricks and clicks” model that uses prominent branches.Metro and Revolut both sell themselves as upending the traditional banking model, but the latter is among the new crop of app-based banks who eschew branch banking. Metro has followed a “bricks and clicks” model that uses prominent branches.
Both banks have suffered blows to their reputations in recent months. While MacLean was at Metro it mischaracterised loans, a major accounting error which was only noticed by the Bank of England. Revolut, meanwhile, has faced serious questions over its compliance processes and work culture.Both banks have suffered blows to their reputations in recent months. While MacLean was at Metro it mischaracterised loans, a major accounting error which was only noticed by the Bank of England. Revolut, meanwhile, has faced serious questions over its compliance processes and work culture.
The FTSE 100 has gained almost 100 points, or 1.3%, to reach 7,640 points.The FTSE 100 has gained almost 100 points, or 1.3%, to reach 7,640 points.
The index has been buoyed by the London Stock Exchange Group, up 14%, and Just Eat, flying along at a 30% gain.The index has been buoyed by the London Stock Exchange Group, up 14%, and Just Eat, flying along at a 30% gain.
The latter’s increase is particularly notable. A Just Eat share will set you back £8.24 at the time of writing, compared to an implied offer price of £7.31 per share in this morning’s announcement.The latter’s increase is particularly notable. A Just Eat share will set you back £8.24 at the time of writing, compared to an implied offer price of £7.31 per share in this morning’s announcement.
The offer represents a premium of only 15% over Just Eat’s share price on Friday, so the scale of the move suggests that investors may be eyeing a possible counter offer.The offer represents a premium of only 15% over Just Eat’s share price on Friday, so the scale of the move suggests that investors may be eyeing a possible counter offer.
Analysts at Peel Hunt this morning doggedly stuck to their target price of £5.20 and a “sell” rating on the stock – “nothing changes just yet” because Just Eat still faces the same tough competition and there will be little chance of cutting costs because of its different footprint to Takeaway.com.Analysts at Peel Hunt this morning doggedly stuck to their target price of £5.20 and a “sell” rating on the stock – “nothing changes just yet” because Just Eat still faces the same tough competition and there will be little chance of cutting costs because of its different footprint to Takeaway.com.
Just Eat was a pure-play, high margin takeaway platform, focusing on restaurants that do their own delivery, but it is now investing in its own delivery as competition takes its toll. Uber will dominate the smartphone real estate, as its Taxi app will accelerate the distribution of its Eats app. It can also take advantage of a fast-growing, captive audience inside the taxis themselves by making timely suggestions.Just Eat was a pure-play, high margin takeaway platform, focusing on restaurants that do their own delivery, but it is now investing in its own delivery as competition takes its toll. Uber will dominate the smartphone real estate, as its Taxi app will accelerate the distribution of its Eats app. It can also take advantage of a fast-growing, captive audience inside the taxis themselves by making timely suggestions.
Moreover, as Uber opens its platforms to restaurants that do their own delivery, its margins will improve, while Just Eat’s diminish as it does the opposite.Moreover, as Uber opens its platforms to restaurants that do their own delivery, its margins will improve, while Just Eat’s diminish as it does the opposite.
But Jocelyn Paulley, a partner at law firm Gowling WLG, said that the deal will allow cross-border scale in a business that can vary significantly from country to country. She said:But Jocelyn Paulley, a partner at law firm Gowling WLG, said that the deal will allow cross-border scale in a business that can vary significantly from country to country. She said:
Whilst technology can cross borders, other issues which are specific to each country such as taxes, traffic, urban settlement patterns and customer expectations would explain why an international tie-up is preferable compared to pushing into a new market and having to redesign systems to cope with local variations.Whilst technology can cross borders, other issues which are specific to each country such as taxes, traffic, urban settlement patterns and customer expectations would explain why an international tie-up is preferable compared to pushing into a new market and having to redesign systems to cope with local variations.
A big media job move today: the boss of the company that owns the Mirror, Express and Star newspapers will step down to be replaced by a former betting executive.A big media job move today: the boss of the company that owns the Mirror, Express and Star newspapers will step down to be replaced by a former betting executive.
Simon Fox, the chief executive of Reach (formerly Trinity Mirror), will be replaced by the former Ladbrokes Coral boss Jim Mullen, writes the Guardian’s Mark Sweney.Simon Fox, the chief executive of Reach (formerly Trinity Mirror), will be replaced by the former Ladbrokes Coral boss Jim Mullen, writes the Guardian’s Mark Sweney.
Under Fox, Reach’s share price has almost tripled as the business has made a series of acquisitions to build scale as the newspaper market has struggled from declining sales of printed copies and the shift of digital advertising spend to Silicon Valley giants Google and Facebook.Under Fox, Reach’s share price has almost tripled as the business has made a series of acquisitions to build scale as the newspaper market has struggled from declining sales of printed copies and the shift of digital advertising spend to Silicon Valley giants Google and Facebook.
You can read more here:You can read more here:
Simon Fox to step down as chief of Daily Mirror owner ReachSimon Fox to step down as chief of Daily Mirror owner Reach
An update on Neil Woodford has come through this morning: the investor could be kicked out as manager of the fund he founded.An update on Neil Woodford has come through this morning: the investor could be kicked out as manager of the fund he founded.
The board of the Woodford Patient Capital Trust today said it will assess other options for the fund. While it bears his name, legally it is a separate company from Woodford Investment Management, so the board has the ability to kick him out.The board of the Woodford Patient Capital Trust today said it will assess other options for the fund. While it bears his name, legally it is a separate company from Woodford Investment Management, so the board has the ability to kick him out.
It all follows the suspension of client money redemptions from his separate Equity Income Fund last month after a string of investments went sour. An announcement is due later today on whether the fund will remain suspended.It all follows the suspension of client money redemptions from his separate Equity Income Fund last month after a string of investments went sour. An announcement is due later today on whether the fund will remain suspended.
Neil Woodford himself sold shares in the Patient Capital Trust between 3-8 July, according to a separate regulatory filing.Neil Woodford himself sold shares in the Patient Capital Trust between 3-8 July, according to a separate regulatory filing.
The investor sold the shares, which Reuters reports would have netted him just under £1m, to cover a tax bill, according to the statement.The investor sold the shares, which Reuters reports would have netted him just under £1m, to cover a tax bill, according to the statement.
The number of Boeing 737 Max planes available to Ryanair next summer could fall to zero unless the planemaker “gets its shit together”, Michael O’Leary said, according to Reuters.The number of Boeing 737 Max planes available to Ryanair next summer could fall to zero unless the planemaker “gets its shit together”, Michael O’Leary said, according to Reuters.
The Ryanair boss has never been one to hold back, and says that Airbus – Boeing’s major rival – has cut prices. “The world has moved in their favour,” O’Leary said.The Ryanair boss has never been one to hold back, and says that Airbus – Boeing’s major rival – has cut prices. “The world has moved in their favour,” O’Leary said.
O’Leary also said that he expects more airlines to fail this winter. He predicted the same thing last year as well.O’Leary also said that he expects more airlines to fail this winter. He predicted the same thing last year as well.
Ryanair boss Michael O’Leary has warned that the airline will not rule out making job cuts if the return to service of the Boeing 737 Max plane is delayed further.Ryanair boss Michael O’Leary has warned that the airline will not rule out making job cuts if the return to service of the Boeing 737 Max plane is delayed further.
The Irish budget airline reported a 21% drop in quarterly profit on Monday as price wars in several European markets drove ticket prices lower, but it stuck to its annual profit target as passengers continued to spend on onboard extras, Reuters reported.The Irish budget airline reported a 21% drop in quarterly profit on Monday as price wars in several European markets drove ticket prices lower, but it stuck to its annual profit target as passengers continued to spend on onboard extras, Reuters reported.
However, O’Leary said that Boeing has pushed back the date at which it will carry out software upgrades to the grounded 737 Max fleet from September to October. The planes have been banned from flying across the world after two fatal crashes.However, O’Leary said that Boeing has pushed back the date at which it will carry out software upgrades to the grounded 737 Max fleet from September to October. The planes have been banned from flying across the world after two fatal crashes.
Connor Campbell, financial analyst at Spreadex, a spreadbetting firm, said:Connor Campbell, financial analyst at Spreadex, a spreadbetting firm, said:
It is effectively a worst-case-scenario end to July for the pound, one that sets up three months of intense Brexit anxiety heading into All Hallows’ Eve.It is effectively a worst-case-scenario end to July for the pound, one that sets up three months of intense Brexit anxiety heading into All Hallows’ Eve.
The decline in sterling came against the dollar, even as the US Federal Reserve prepares for an interest rate cut, usually a “headache” for owners of the greenback that would drive down its value.The decline in sterling came against the dollar, even as the US Federal Reserve prepares for an interest rate cut, usually a “headache” for owners of the greenback that would drive down its value.
Will we see the pound below $1.23 today? The day’s low point is now $1.2318 against the US dollar.Will we see the pound below $1.23 today? The day’s low point is now $1.2318 against the US dollar.
Analysis by US investment bank J.P. Morgan suggests it could get worse for the pound before it gets better.Analysis by US investment bank J.P. Morgan suggests it could get worse for the pound before it gets better.
Dialogue with the EU is ongoing but is likely to prove fruitless, and may segue into a general election and subsequent extension of Article 50 later this year. In the interim, the expectation is for him to push toward a “no deal” outcome as negotiations make little progress.Dialogue with the EU is ongoing but is likely to prove fruitless, and may segue into a general election and subsequent extension of Article 50 later this year. In the interim, the expectation is for him to push toward a “no deal” outcome as negotiations make little progress.
At the same time, there is a “deteriorating macro landscape” – the economy may even have contracted in the second quarter. And the UK is highly dependent on fickle foreign investors.At the same time, there is a “deteriorating macro landscape” – the economy may even have contracted in the second quarter. And the UK is highly dependent on fickle foreign investors.
Layering Brexit concerns with downward momentum in the local economy and a concerning balance of payments setup should therefore allow GBP shorts to extend yet further.Layering Brexit concerns with downward momentum in the local economy and a concerning balance of payments setup should therefore allow GBP shorts to extend yet further.
The Bank of England also published its latest mortgage data on Monday, showing that banks approved lending for 66,400 house purchases in June – 800 more than the previous month and slightly more than economists had expected.The Bank of England also published its latest mortgage data on Monday, showing that banks approved lending for 66,400 house purchases in June – 800 more than the previous month and slightly more than economists had expected.
Net mortgage borrowing for the month by households was £3.7bn, close to the average of the previous three years, the Bank said. This followed a slightly weaker net flow of £2.9bn in May.Net mortgage borrowing for the month by households was £3.7bn, close to the average of the previous three years, the Bank said. This followed a slightly weaker net flow of £2.9bn in May.
British consumer borrowing growth slowed in June to a five-year low, according to new Bank of England figures published on Monday.British consumer borrowing growth slowed in June to a five-year low, according to new Bank of England figures published on Monday.
Consumer credit, which includes borrowing such as credit cards and unsecured loans but excludes mortgages, grew at an annual rate of 5.5% year-on-year, the lowest level of growth since April 2014.Consumer credit, which includes borrowing such as credit cards and unsecured loans but excludes mortgages, grew at an annual rate of 5.5% year-on-year, the lowest level of growth since April 2014.
Consumer credit growth has fallen steadily since its late 2016 peak. While many economists believe that credit growth has been unsustainable for years – meaning a slowdown is in some ways welcome – its link to households’ willingness to spend also means that it can act as a bellwether for broader economic weakness.Consumer credit growth has fallen steadily since its late 2016 peak. While many economists believe that credit growth has been unsustainable for years – meaning a slowdown is in some ways welcome – its link to households’ willingness to spend also means that it can act as a bellwether for broader economic weakness.
The dealmaking and the weak pound (which boosts multinationals’ foreign currency earnings) have helped the FTSE 100 to a flying start to the week.The dealmaking and the weak pound (which boosts multinationals’ foreign currency earnings) have helped the FTSE 100 to a flying start to the week.
London’s benchmark index is now up by 1% at 7,628 points, after shortly after hitting its highest point since August 2018.London’s benchmark index is now up by 1% at 7,628 points, after shortly after hitting its highest point since August 2018.
On currency markets your new low point for the pound against the US dollar is $1.2324.On currency markets your new low point for the pound against the US dollar is $1.2324.
An earlier post has been corrected. Please refresh to see the updated version.An earlier post has been corrected. Please refresh to see the updated version.