PG Tips

Unilever is selling its tea division that includes some of Britain’s best-known brands such as PG Tips and Lipton in a €4.5bn (£3.8bn) deal that has taken almost two years to seal.

The FTSE 100 consumer goods giant has owned Lipton since the 1930s and bought PG Tips in the 1980s.

The declining taste for tea prompted Unilever to offload the world’s largest tea business now called ekaterra, which has 34 brands that also include Pukka and T2.

European buyout group CVC Capital Partners has emerged victorious in the battle against rivals Advent and Carlyle to to snap up the division.

The Telegraph first reported Unilever’s decision to consider a sale of the business in late 2019.

Sales of tea have been declining in recent years as consumers increasingly opt for coffee and kombucha despite winning a pandemic boost as workers stocked up on tea bags to make their own brews at home.

PG Tips

Its finance boss, Graeme Pitkethly, previously said those who "drink five or six cups of builder's tea a day… [were] unfortunately dying at a faster rate than Generation Z and millennials are consuming it.

“They might drink tea but they want to drink quite high-end, expensive products. They drink a lot of coffee. There’s a bit of a demographic challenge around that.”

Private equity firms were nevertheless keen to snap up the brands. CVC is said to be confident of reselling the tea business at a profit once it has improved its environmental, social and governance credentials.

Pev Hooper of CVC said: "Ekaterra is well positioned in an attractive market to accelerate its future growth, and to lead the category's sustainable development."

The deal is subject to regulatory approval, with completion expected in the second half of next year.

It does not include Unilever's tea operations in India and Indonesia, and ready-to-drink partnerships.

05:57 PM'They drink a lot of coffee'

Why did Unilever want to offload its tea division? Largely because there has been a wider shift among consumers to swap tea for drinks such as coffee and kombucha.

Story continues

Sales of tea have been declining in recent years, despite receiving a boost during the pandemic when office workers stocked up on tea bags to make their own brews at home.

The finance chief, Graeme Pitkethly, previously said those who "drink five or six cups of builder's tea a day … [were] unfortunately dying at a faster rate than generation Z and millennials are consuming it.

“They might drink tea but they want to drink quite high-end, expensive products. They drink a lot of coffee. There’s a bit of a demographic challenge around that.”

05:18 PMTea timeAlan Jope

Unilever's tea deal excludes its businesses in India, Nepal and Indonesia.

The acquisition is subject to regulatory approvals and is expected to complete in the second half of next year.

The sale marks a much-needed win for Alan Jope, the chief executive, who has been seeking to rejig the FTSE 100 company’s portfolio to keep up with changing consumer tastes.

Unilever abandoned a planned $1bn sale of a beauty product portfolio earlier this year after failing to attract sufficient demand from potential buyers, it is understood.

04:51 PM'Strong brands and global footprint'

More from Unilever and CVC on the tea transaction.

Alan Jope, Unilever chief executive, says: "We are proud of the place that our tea business has in our company's history. We look forward to seeing ekaterra, with its strong brands and global footprint, prosper under CVC's ownership. "

Pev Hooper of CVC says: "Ekaterra is a great business, built on strong foundations of leading brands … [it] is well positioned in an attractive market to accelerate its future growth, and to lead the category's sustainable development."

The Telegraph first reported that Unilever was considering a sale of its tea business almost two years ago.

04:29 PMUnilever sells PG Tips and Lipton

It's only taken about two years, but Unilever has finally found a buyer for its tea business called ekaterra.

The private equity firm CVC Capital Partners is paying €4.5bn (£3.8bn) for the portfolio of 34 brands including Lipton, PG tips, Pukka, T2 and Tazo.

The business had revenues of around €2bn last year.

03:58 PMUS Senator asks SEC to investigate Trump's social media Spac deal

American media outlet CNBC is reporting that Senator Elizabeth Warren has asked the country's Securities and Exchange Commission (SEC) to investigate a planned Spac merger between Donald Trump's fledgling social media business, Trump Media & Technology Group, and listed shell company Digital World Acquisition Corp (DWAC).

The former president announced plans earlier this month to take his new media company public via a Spac merger.

But there have been reports that the deal might fall foul of US securities regulations.

According to CNBC, Ms Warren has now flagged in letter to the SEC recent reports that DWAC "may have committed securities violations by holding private and undisclosed discussions about the merger as early as May 2021, while omitting this information in filing and other public statements".

Ms Warren also wrote: “The reports about DWAC and Trump Media and Technology Group appear to be a textbook example of a Spac misleading shareholders and the public about materially important information"

03:44 PMCVC agrees to buy Unilever tea business

There are reports that the US private equity firm has reached a deal with Unilever, to acquire its tea business for €4.5bn (£3.8bn). More to follow….

03:40 PMLosses widen at Jet2 amid rising prices and intense competition

Holiday firm Jet2 has warned it will make a loss this year amid rising costs and an industry price war.

Shares in the company fell by 7pc as it gave a gloomy outlook for the second half, blaming "aggressive" price competition in the market and rising costs for fuel, carbon offsetting and staff wages.

Low-cost carrier Ryanair said earlier this month it would slash prices to fill seats over the winter, despite also suffering half-year losses, in a move that has sparked a price battle in the sector.

"The travel industry continues to be subject to a range of cost pressures, most notably in relation to fuel and carbon costs," said a Jet2 spokesman.

"As a result, and as is typical for the business, further losses are to be expected in the second half."

Jet2 posted pre-tax losses of £205.8m for the six months to September 30, against losses of £68.7m a year earlier.

Its average load factor – a measure of how well it fills its planes – fell to 57.3pc from 69pc a year ago as travellers remained anxious over sudden traffic light changes for destinations, meaning lengthy quarantine periods.

03:33 PMFuller's rebounds as punters return to pubs

Shares in Fuller's were up more than 4pc on Thursday, after it said sales were now at 90pc of pre-pandemic levels. Here's a summary from Hannah Boland:

The pub chain reported revenue of £116m for the six months to the end of September, a rebound from the £45.6m posted a year earlier, when trading was constrained by lockdowns.

Fuller's said it was reinstating dividend payments, with the expectation sales would have fully recovered by the end of the financial year.

Chief executive Simon Emeny said: "There's no doubt people are coming back, and every single week that goes by, those big sites in central London and around train stations in the heart of the city are getting stronger."

Other pub groups with a heavier exposure to suburban or country sites have already recovered to 2019 levels. Mr Emeny said: "I always felt that our recovery would take slightly longer because of that weighting towards London. But I think it really bodes well for the next six months and hopefully getting back to normal by the spring."

People are flocking back to pubs03:28 PMEU sconsidering funding production of semiconductors

The European Commission said it could start to fund the production of semiconductors in the 27-nation bloc amid a global chip shortage and intense worldwide competition.

Semiconductors are a key component in everything from smartphones to cars. Car makers in particular have been among the hardest hit by the shortage, which has slowed or halted production.

Germany has a massive car industry, which employs hundreds of thousands of its citizens and makes a substantial contribution to the country's GDP.

Most of chipmakers are based in Asia, and the EU now wants to reduce its dependence by boosting production on its soil.

"The commission will consider approving support to fill possible funding gaps in the semiconductor ecosystem, in particular for European first-of-a-kind facilities," said Margrethe Vestager, the European commissioner for competition.

She said safeguards will be put in place to make sure the aid is "necessary, appropriate, proportionate and of course to make sure that undue competition distortion is limited".

02:52 PMShipping bottlenecks will increase inflation, hurting poor and small island economies particularly hard, UN warns

This is hot off the press from the Telegraph's deputy economics editor, Tim Wallace.

Sustained shipping problems could push up inflation around the world by 1.5 percentage points as shortages and delays add to the cost of living, potentially undermining the economic recovery, the UN has warned.

Prices of electronics such as smartphones from Asia are particularly likely to jump, rising by 10pc or more. They rely on a complex mesh of supply chains for raw materials and components that shuffle back and forth between manufacturing nations.

Similarly bulky and low value-added products such as furniture and textiles could also go up by about a tenth, threatening the business models of the often poor countries where they are made.

“These increases could erode the competitive advantages of smaller economies that produce many of these goods,” the UN Conference on Trade and Development said in its latest review of maritime transport.

“At the same time, these countries will find it more difficult to import the high-technology machinery and industrial materials they need to move up the value chain.”

Small island nations will also be seriously affected as they rely so heavily on shipping.

02:41 PMAccounting watchdog accuses auditors of not being tough on company managers

Here's a good news story unearthed by our eagle-eyed correspondent Simon Foy from a report from the Financial Reporting Council, the body charged with overseeing corporate governance in the UK.

The accounting watchdog has accused auditors of failing to challenge managers at companies where they check the books.

In its annual “developments in audit” report, the Financial Reporting Council said professional scepticism and challenging management remain two key areas where deficiencies continue and improvement needs to be made.

“The persistence of these issues over time is disappointing given that they are fundamental to the mindset required to deliver effective audits,” the regulator said.

The FRC has recently handed out a host of fines to accounting firms for botched audits at companies that eventually collapsed, such as cake chain Patisserie Valerie.

It comes as Kwasi Kwarteng is set to water down plans to shake-up the UK’s audit and corporate governance rules following backlash from businesses.

Last week, John Wood, head of the Chartered Institute of Internal Auditors, wrote to Mr Kwarteng, saying he was “increasingly concerned” that the government may be looking to “significantly soften and scale back its approach” to the reforms.

The FRC report also found that nearly two-thirds of audits by smaller firms were not up to scratch.

The watchdog itself is not without its own problems. Earlier this week, the Telegraph revealed that ministers are struggling to find a new chairman for the accounting watchdog, leaving it rudderless for months.

02:26 PMAirbus emerges as Dubai Air Show winner

Airbus has won orders and commitments for more than 400 planes at the Dubai Air Show.

It's the world’s first major air show since the start of the pandemic and Airbus has notched up 269 firm orders, including a 255-jet deal with a group of four discount airlines backed by Bill Franke's Indigo Partners.

The European aeroplane maker also secured commitments for 111 narrow and wide-body jets and the first sale for its A350 freighter.

The Dubai Air Show is in full swing

US plane-maker Boeing scored a major success with Indian startup airline Akasa’s purchase of 72 of its 737 Max jets. The agreement expands Boeing’s presence in a market dominated by Airbus. It is also a sign that the 737 Max jet is rebounding from groundings caused by two deadly crashes.

02:14 PMGoldman Sachs betting against the pound

Labour shortages mean the Bank of England will increases interest rates before any of its major peers, according to Goldman Sachs Asset Management.

The firm is betting that the BoE will raise borrowing costs next month, and then announce two further rate hikes before June next year.

It has also shorted the pound, meaning it believes the value of sterling will go down in relation to other currencies.

“The impact of Brexit is being felt mainly through its impact on labour supply,” Hugh Briscoe, a global fixed-income portfolio manager, told Bloomberg.

"While a global problem, the UK is facing a particularly severe labour shortage as it emerges from the pandemic."

01:57 PMThis is why Deutsche Bank's economists have slashed UK growth forecasts

Deutsche Bank has set out in a note published today the reasons why it cut growth forecasts for the UK economy pretty drastically last month. It said tax hikes, benefit cuts, higher interest rates and inflation – namely energy bills – would drain household spending power, leaving growth at 3.6pc, well below the Bank of England's 5pc forecast.

These four factors would cost the economy around £13.5bn next year, equating to roughly 0.6pc of GDP, or 1pc of annual household consumption. Some of this will be partly offset by stronger wage growth and the large savings pots that have accumulated over the past 18 months, which now amount to well over £200bn.

"We're still expecting household spending to rise next year," said senior economist Sanjay Raja. "But as we turn the page on 2021, one thing is clear: consumers are already starting to feel the pinch of eroding spending power.

"This has already started to filter through into recent consumer confidence data, which paints a bleaker picture of weakening confidence in both households' economic and personal financial outlooks….this was a key reason why we downgraded our 2022 growth projection more than a month ago."

01:43 PMTurkish lira continues to tumble as inflation soars

Here's an interesting piece from Tom Rees on Turkey's economic crisis and president Erdogan's bizarre obsession with interest rates.

The Turkish lira’s meltdown gathered pace on Thursday, slumping by more than 2pc against the US dollar, after Recep Tayyip Erdogan defied economic orthodoxy to force his central bank to cut interest rates despite soaring prices.

The Turkish central bank reduced its key rate by 100 basis points to 15pc – the third rate cut this year, as Mr Erdogan this week vowed to step up his battle against high interest rates, despite inflation hitting 20pc year-on-year.

The credibility of the central bank has been shredded by Mr Erdogan dictating policy and sacking three members of its monetary policy committee last month.

The under pressure president believes that lower interest rates fight rather than stoke inflation in defiance of mainstream economic theory. He has called rates the “mother of all evil” and doubled down on his attack this week.

“The bizarro world of Turkey keeps getting more and more bizarre,” said Brad Bechtel, currency strategist at Jefferies.

He warned Mr Erdogan’s interventions are “only a sign of more pain to come for the economy”.

Mr Erdogan has seen his popularity tumble as households are throttled by rocketing prices and a falling lira stokes inflationary pressure further.

Interest rates are the mother of all evil, according to Turkey’s president, Recep Tayyip Erdogan01:03 PMRoyal Mail warns of higher costs as inflation surges

Here's more from Hannah on Royal Mail:

The company warned of rising costs as inflation pushes higher. Employer National Insurance contributions are due to increase by 1.25pc in April, meaning Royal Mail will be spending around £50m more on employment costs in its next financial year.

Royal Mail recently reduced the working week for its staff by an hour under a pay settlement, which it said would cost around £40m next year.

Inflation risk "in fuel and energy is covered by existing hedges, although these will start to unwind," Royal Mail said. It said it was already weighing up efforts to offset these costs, including tariff increases on certain letter services from January and automating more of its systems.

12:51 PMRoyal Mail shares jump as investors set for cash windfall

Here's more detail on Royal Mail from our correspondent, Hannah Boland:

Royal Mail will return £400m to shareholders after an online shopping boom during the pandemic buoyed profits at the UK's largest delivery company, sending shares in the company up by more than 7pc.

The FTSE 100 business is kicking off a £200m share buyback immediately and is also paying a £200m special dividend amid a "permanent step up in the level of parcel volumes compared with pre-pandemic levels, driven by increased online e-commerce activity".

It comes as Royal Mail enters into the busy Christmas period and finds itself under pressure to deliver even as supply chain woes rage across the UK.

Royal Mail chief executive Simon Thompson maintained the company would be able to deliver items on time, saying it had not changed its final posting days for Christmas. "We expect it to be fine," he said.

12:44 PMCVC emerging as the lead bidder for Unilever's tea assets

CVC Capital Partners looks to be the lead bidder for Unilever's tea business, which includes the brands Lipton and PG Tips, according to reports from Bloomberg.

The Luxembourg-based private equity firm has been bidding for Unilever's tea business alongside rivals Advent and Carlyle. If the sale goes ahead, it will rank among the year's biggest European carve-outs, with a price tag rumoured to be around $5bn (£3.71bn).

Unilever is bidding farewell to PG Tips

An agreement could be announced in the coming days, Bloomberg reports, with CVC in advanced talks on a deal.

Unilever is constantly reshaping its portfolio as consumer tastes and trends shift. Demand for tea has fallen in recent years as consumers switch to herbal alternatives and artisan coffees.

The consumer goods giant, which is listed on the FTSE 100, announced a review of its tea business in January last year, but has said an eventual disposal would not include its tea units in India and Indonesia or its partnerships in the ready-to-drink tea market. Unilever has previously said it is also considering a partial sale or IPO of the business, which generates about £1.68bn in annual sales.

12:09 PMGSK scores win with HIV treatment after Nice approves the medication for NHS use

NICE, the body that decides which drugs the NHS should pay for, has recommended a long-acting HIV medication from UK pharmaceutical giant GSK.

This is the first time people living with HIV in England and Wales will have access to the injection, which reduces the number of times a patient has to take medication from 365 in one year to just six.

GSK is the UK’s second-largest pharmaceutical company

GSK will see patents on many of its top-selling HIV drugs expire over the next few years. This means generic manufacturers will be allowed to make them and sell them at much lower prices. Cabotegravir is not one of these, so GSK is hoping the new drug will become the cornerstone of its HIV portfolio. Success in rolling out Cabotegravir around the world – and getting health authorities to pay for it – is therefore seen as crucial within the company.

11:58 AMEnvironment Agency and Ofwat launch major investigation into sewage treatment companies after suspected breaches

The Environment Agency and water regulator Ofwat have launched a major investigation into sewage treatment after water companies admitted they could be releasing nasty waste products into rivers and watercourses.

“New information suggests there may have been very serious failings by water companies in treating wastewater,” said David Black, chief executive of Ofwat.

Thames Water was fined £20.3m in 2017 for polluting the River Thames with raw sewage

"We will find out what company boards knew and when, and if there has been management failure or misreporting of data to us and to the public. If we find there has been, we will use all of our powers to hold companies to account."

The investigation will involve more than 2000 sewage treatment works, with any company caught breaching their legal permits facing enforcement action, including fines or prosecutions. Fines can be up to 10pc of annual turnover for civil cases, or unlimited in criminal proceedings.

In recent years the Environment agency has been checking that water companies comply with requirements and has asked them to fit new monitors at sewage treatment works.

Several water companies have now revealed that many of their sewage treatment works may not be compliant.

Emma Howard Boyd, chairman of the Environment Agency, said: “Any water companies in breach of their permits are acting illegally. Only now, just before new monitors are installed, have companies reported concerns over potential problems.

“I would like to see the levels of penalties for corporate environmental crime in England go up significantly. More attention should also be paid to the directors of companies that are guilty of repeated, deliberate or reckless breaches of environmental law. Such directors should be struck off and in the most grievous cases given custodial sentences.”

Environment Minister Rebecca Pow said the information was “shocking and wholly unacceptable”.

11:32 AMRoyal Mail's recovery is signed, sealed and delivered, says commentator

Here's some market commentary on Royal Mail, from Nicholas Hyett, equity analyst at Hargreaves Lansdown:

“The pace of Royal Mail’s turnaround has hugely impressed, leaving the group in very real danger of becoming an attractive business.

"It would be easy to put the current windfall down simply to the effect of the pandemic on parcel demand. And that has played a part. But ramping up facilities to cope with the extra demand is no small achievement, and a quick glance under the hood shows a business which is in far better shape than before the pandemic. Overall the group is driving higher volumes with lower costs – doing wonders for margins."

He points out that the group has made big improvements in automation, with 50pc of parcels sorted automatically now, up from just 12pc in 2019.

"If the current rate of progress can be maintained that‘s a trend that could continue. However, we think the second half of the year will be crucial in demonstrating the group’s long term potential," Mr Hyett adds.

11:27 AMEurozone risks housing market crash, warns ECB

The eurozone housing market is at risk of a crash that threatens to derail the bloc's post-Covid recovery following a debt-fueled property binge, the European Central Bank (ECB) has warned.

Read the full story here from our economics correspondent, Tom Rees.

11:16 AMMitie reinstates interim dividend as trading picks up

Outsourcer Mitie has reinstated its interim dividend after swinging back into profit in the first half of the year.

Sales doubled to £1.91bn, boosted by Mitie’s acquisition of Interserve and a £259m windfall from short-term pandemic-related contracts. Pre-tax profits of £50m were up from a £0.9m loss last year.

“With our underlying business back to pre-Covid levels, we have reinstated our interim dividend,” said chief executive Phil Bentley. He said he expected the second half of the year to be stronger, despite a reduction in Covid contracts. Shares in the company are trading 1.38pc lower.

11:01 AMCrisps are in short supply says ONS

Crisps remain in short supply in almost one in three British shops, according to figures released by the Office for National Statistics following production difficulties at a major supplier.

Britain's biggest crisp producer Walkers, part of PepsiCo, had to scale back production of the popular potato snack at the start of the month after problems with an IT systems upgrade, which it warned could take weeks to fix.

Crisps are in short supply

Some 4pc of shops visited between Nov 12 and Nov 15 had no multipacks of crisps for sale, while 26pc had only limited supplies, according to market research by Kantar Public, published by the Office for National Statistics.

Britons each eat on average two packets of crisps a week, Kantar said.

Britain, like other Western economies emerging from the pandemic, has suffered sporadic shortages of specific goods in recent months.

10:53 AMDriver shortage is easing, but costs will go up, says refuse collection company Biffa

There are signs the lorry driver shortage is easing after households across the UK have suffered months of delays to rubbish services caused by the crisis, according to waste collection giant Biffa.

The group, which collects waste for more than 30 councils across the country, increased pay to retain and recruit drivers after suffering disruption to its services from a shortfall in drivers of its rubbish trucks.

But now the company says it has "seen signs of stabilisation in recent weeks".

It also said it would push up prices for its services between now and March, as it comes under pressure from rising costs and supply chain issues.

The comments came as Biffa announced operating profits in the first half of its financial year had more or less recovered to pre-pandemic levels, while sales up 2.5pc compared with two years ago.

10:26 AMNational Grid reaps rewards from higher energy prices

National Grid has enjoyed a strong start to the year, thanks to higher energy prices and its acquisition of Western Power Distribution. Profits were up by 47pc to £1.4bn in the six months to September.

The company has also upgraded its full-year growth guidance to “significantly above the top end of our 5pc to 7pc range”.

The North Sea Link, the longest subsea cable in the world

That’s thanks to much higher auction prices, which is the price energy producers pay to transmit their electricity through National Grid’s interconnectors, and a new interconnector between the UK and Norway, which carries electricity across the North Sea and was commissioned earlier than expected. The interconnector business alone is expected to generate a £100m profit boost for the full year.

“Our focus will be on delivering critical and green investment to enable the decarbonisation of power, transport and heat, and lead a clean, fair and affordable energy transition across the jurisdictions we serve," aid John Pettigrew, National Grid’s boss.

09:49 AMNaked Wines tumbles as it warns on profits

Shares in direct-to-consumer vintner, Naked Wines, have dived by nearly a fifth, as it cut its sales forecast.

Total sales are now expected to be within a range of £340m to £355m, down from earlier guidance of £355m to £375m.

Tough times for Naked Wines

The wine merchant's £2m investment to attract new customers hasn't pay off as expected, and it is experiencing disruption to its supply chains. That has made it difficult to transport wine and key materials, such as glass, around the globe. A shortage of workers has pushed up warehousing and transport costs.

It has also taken longer than expected to restock wine inventories, meaning many of its varieties were out of stock for long periods of time. There were delivery delays to customers.

09:31 AMAstraZeneca scores win with crucial Covid treatment

AstraZeneca has cemented its position as one of the leading companies developing a treatment for Covid, after revealing that its experimental drug reduces the risk of patients developing symptoms by 83pc, and that this level of protection lasts for at least six months.

Data from two phase three trials showed the antibody treatment, which is injected into patients, resulted in no severe disease or death and that it offered strong protection even after six months.

Protection was even higher for patients treated with the drug earlier, within three days of developing symptoms.

Hugh Montgomery, professor of intensive care medicine at University College London, called the results “compelling”.

“These results give me confidence that this long-acting antibody combination can provide my vulnerable patients with the long-lasting protection they urgently need to finally return to their everyday lives,” he said.

AstraZeneca has submitted the drug for approval to regulatory bodies around the world and has already sealed a deal with US authorities to supply 700,000 doses if it is granted approval from the Food and Drug administration.

The company believes the treatment could become a blockbuster, meaning annual sales of at least £1bn.

09:12 AMFTSE down as weak commodity prices hit oil and mining

Here's a quick round-up of what the FTSE has been doing so far this morning:

The FTSE 100 index fell 0.3pc as oil and mining companies took a hit from weaker commodity prices and after data published yesterday showed inflation was soaring in the UK.

Shares in Royal Dutch Shell and BP fell by more than 1pc as crude oil prices plunged to six-week lows after China said it was going to release reserves onto the market.

Miners fell 1.5pc after copper prices dropped to their lowest in more than a month, weighed down by rising inventories and a firm US dollar.

Yesterday's news that inflation had risen at its fastest pace in almost a decade, hitting 4.2pc in October, has increased the likelihood that the Bank of England will raise interest rates in the coming months, spooking equity markets.

Meanwhile, shares in online gambling software developer Playtech jumped after receiving a third takeover bid in the past two months,

Royal Mail climbed 4.8pc after the company reported strong first-half results and said it would return £400m to shareholders as it forecast higher annual earnings in its UK business.

Shares in drug maker GSK declined 1.7pc, as it traded ex-dividend.

08:46 AMGoldman Sachs bets on London to target super-rich

Goldman Sachs is beefing up its private banking team in London to target the world's ultra-wealthy, hiring at least nine private wealth advisors from rival City firms, according to reports from Bloomberg.

"We will continue to scale up as we see an opportunity to find the right talent and we see client demand," said Stefan Bollinger, Goldman Sach's co-head of private wealth management in Europe.

Like many of its peers, the investment bank is focusing on its wealth-management and consumer banking business to make it less reliant on volatile trading revenue.

08:31 AMCarlyle pulls plug on Metro Bank talks

US private equity firm Carlyle has pulled out of talks to buy Metro Bank, sending shares in the high street lender tumbling by 17pc.

The bank said it "strongly believes" it can carry on as a standalone business. Carlyle can come back to the table within six months, according to takeover code rules.

Carlyle had until December 2 to either make a firm bid for Metro Bank or walk away.

Metro Bank had seen its under-pressure shares soar earlier this month when it confirmed a takeover approach from Carlyle.

Metro Bank was valued at around £180m the day before Carlyle revealed it was in possible acquisition talks with the bank, having seen its share price drop by more than half since the pandemic hit last year.

The company has been among mid-sized lenders struggling with low interest rates and increased competition from rapidly digital-focused start-ups.

It has also been undertaking a significant transformation after a major accounting error in 2019 led to the departure of its top bosses.

Last month, Metro Bank cheered signs of a "gradual return to normality" as lending remained flat in its third quarter.

08:18 AMRoyal Mail returns cash to shareholders as it recovers from pandemic

Royal Mail is making use of its bumper cash reserves by returning £400m to shareholders, after after reporting a sharp rise in profits in the first half of its financial year.

Pre-tax profits totalled £315m in the six months to the end of September, up from just £17m a year earlier as the company appears to be recovery from the pandemic.

The cash return will be through a £200m share buyback and a £200m special dividend.

Royal Mail is focusing on parcel deliveries

"We now have more visibility on the strategic progress and performance of both businesses, and while there is more to do, the board has decided that we should re-examine our retained cash balance," said chairman Keith Williams.

"The board has decided that we should re-examine our retained cash balance. We believe it is appropriate now progressively to move towards a net nil cash position."

Domestic parcel volumes were up by a third, while letter volumes were down by a fifth.

"This reaffirms that our strategy to rebalance our offering more towards parcels is the right one, and demonstrates the need to start defining what a sustainable universal service is for the future," Mr Williams added.

08:10 AMDMGT warns rising costs could hit print titles

Daily Mail and General Trust (DMGT), owner of the Daily Mail newspaper, has a reported a £2m loss for its full financial year and warned of staff cuts, as its events and exhibitions business and commuter newspaper, Metro, were hit by the pandemic and as the cost of news print rises.

The company’s consumer media division, which includes print and online titles, reported higher profits, but sales at the Daily Mail and Mail on Sunday were down by 2pc to £348m, while revenue from Metro nearly halved, falling to to £26m. It comes hours after Geordie Greig, the Daily Mail editor, was ousted from the helm of the newspaper after just three years in the role.

The company warned of sharp rises in distribution and energy costs and "increases in the cost of newsprint at levels not seen since 1996" would hit profitability of DMGT's newspaper business. Newsprint is the second largest cost item for the consumer media division.

"DMGT is currently exploring a number of options to mitigate the impact of these cost increases, including a review of employee numbers" it said.

It added that circulation volumes of the Daily Mail newspaper and the i are expected to decline, while Metro's traffic would depend on commuter traffic.

Good morning and welcome to our live blog. We'll be keeping a close eye on the markets, following yesterday's news that inflation is climbing to record levels. There's also a fair amount of companies news around, with Royal Mail, National Grid, DMGT and Naked Wines reporting results.

5 things to start your day

1) Princess Beatrice told to quit after founder's sex assault claims David Cameron has already stood down as chairman of the tech firm's advisory board following the allegations.

2) IFS: Workers need 7pc pay rise to cope with higher prices Pressure is growing on the Bank of England and Government to act to curb inflation.

3) Geordie Greig ousted as Daily Mail editor Head of Britain's best-selling daily newspaper to be replaced by Mail on Sunday's Ted Verity, who will oversee both titles.

4) Eurozone risks housing market crash, warns ECB European Central Bank admits low interest rates have contributed to property binge that could derail the post-Covid recovery.

5) Canada's biggest video games maker plans London listing Leaf Mobile, which develops games based on shows such as RuPaul's Drag Race, expects to be valued at £130m.

What happened overnight

After all three main indexes on Wall Street ended in the red, Asia followed suit on Thursday morning. Hong Kong extended Wednesday's losses with tech firms among the biggest losers, while Tokyo, Shanghai, Singapore, Seoul, Wellington, Manila and Jakarta also suffered sizeable selling.

Today's data

  • Corporate: Daily Mail & General Trust, Grainger, Euromoney (Full-year results); Biffa, Halma, Investec, LondonMetric, Mitie, National Grid, Royal Mail, Pershing Square Holdings, TBC Bank Group (Half-years); Micro Focus, Close Brothers (Trading update)

  • Economics: Consumer price index (EU), jobless claims (US)

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