Investec cuts jobs, retail rebounds, pound gains

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world:

Investec axes jobs

International banking giant Investec (INVP.L) said today that it’s planning to cut 210 jobs in London to “simplify and focus the business.” The statement was made as part of its trading announcement for the first half of the year.

The business added that a challenging economic backdrop, primarily caused by COVID-19, resulted in reduced economic activity and increased market volatility for the business.

Adjusted operating profit for the six months to the end of September was expected to be between 50 and 60 per cent behind the £175.6m ($228m) posted in the same period last year, the company said.

Retail sales registered their fourth month in a row of growth in August, the Office for National Statistics (ONS) said on Friday.

Spending in shops and online rose by 0.8% between July and August. Analysts forecasted growth of 0.7%. Compared to a year earlier, retail sales were up 2.8% in August, with economists expecting an annual growth of 3%.

The data showed a continued solid rebound in consumer spending, which began after shops were allowed to reopen in June. Retail sales surged back to pre-pandemic levels in June and sales grew far faster than economists had expected in July.

Fears of strict new lockdown rules hit UK stocks on Friday, fuelling a sell-off in travel, leisure, banking and housebuilding.

Reports in the Financial Times that the UK government may impose a two-week nationwide lockdown in October rattled investors in listed firms most reliant on domestic income.

Health secretary Matt Hancock said a nationwide lockdown would be the “last line of defence,” but the BBC reported a shutdown of hospitality firms could instead be announced next week.

Britain’s FTSE 100 (^FTSE) shed 0.4%, with the Bank of England’s decision on Thursday to hold fire on fresh stimulus also weighing on markets.

Concerns over rising infection rates, testing shortages and speculation over stricter restrictions on the UK economy hit travel firms the hardest.

BA owner IAG (IAG.L) dropped 6%, plane engine maker Rolls-Royce (RR.L) lost 5.4%, EasyJet (EZJ.L) fell 4.6%, Carnival (CCL.L) dropped 4%.

The pound was up on the news that scientists from the Scientific Advisory Group for Emergencies (SAGE) and the Scientific Pandemic Influenza Group on Modelling (SPI-M) proposed a second national lockdown in October.

Sterling was up 0.8% against the dollar (GBPUSD=X) to 1.2979 and up 0.01% against the euro (GBPEUR=X) to 1.0955 by around 9:30 AM on Friday in London.

Meanwhile in Europe, stocks dipped as infections rise and central banks “sit on their hands.” European stocks fell on Friday, after leading central banks held off announcing fresh stimulus and coronavirus infection rates rose in several countries.

The Europe-wide Stoxx 600 (^STOXX) opened down 0.1%, while Britain’s FTSE 100 (^FTSE) opened 0.2% lower after falling on Thursday. Germany’s DAX (^GDAXI) and France’s CAC 40 (^FCHI) were both down 0.1% in early trading in Europe.

Japan’s Nikkei (^N225) rose 0.2%, the Hong Kong Hang Seng (^HSI) rose 0.5%, and China’s Shanghai Composite (000001.SS) rose 2.1%.

What to expect in the US

Wall Street looked set for a mixed open later on Friday. It came after the Bank of England its major monetary policies unchanged on Thursday, keeping interest rates at record low levels and maintaining the Bank’s programme of bond buying at £745bn ($966.6bn).

The US Federal Reserve had also held interest rates near zero and signalled they were likely to stay that way until at least 2023 on Wednesday.

US futures were mixed. S&P 500 futures (ES=F) were up 0.1%, Dow Jones futures (YM=F) dropped 0.1% and Nasdaq futures (NQ=F) were up 0.4% as markets opened in Europe.

Watch: UK considers second national lockdown