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With 30 days to go until the UK general election, Boris Johnson has been given a significant boost by Nigel Farage, the leader of the Brexit party. Farage announced yesterday that his candidates would not be standing in Conservative-held constituencies, so as not to split the `Leave vote'. Although efforts to build a formal Leave alliance with the Tories had “come to naught”, Farage said he had decided to form a “unilateral” alliance.
Last week, the Liberal Democrats, Green Party and Plaid Cymru announced that they won't be standing candidates against each other in some seats. This is the self-styled “Remain alliance” that does not include Labour, who support a Final Say referendum, offering the public another chance to choose. This morning, Labour revealed they had suffered an unsuccessful “sophisticated and large-scale cyber-attack” on its digital systems from an unknown source.
The UK economy avoided a recession by growing 0.3% in the third quarter, following a 0.2% contraction in the previous quarter. The annual growth rate of 1% is the weakest in a decade, however, and the underlying statistics show an economy in a rut. Business investment and the manufacturing sector were both flat for the quarter. Meanwhile, UK business confidence has hit a seven-year low according to the accountant BDO and footfall on high streets is down 4.9% year-on-year, says the British Retail Consortium.
Global equity markets are having an uneventful start to the week after major US and European indices made advancements last week following positivity surrounding “phase 1” of the Chinese trade deal. There is also the expectation this week that President Trump will delay his decision on whether to place tariffs on European car manufacturers by six months.
Also in focus is the escalation of violence in the pro-democracy protests in Hong Kong. The battle between civilians and the state became more sinister on Monday when a protestor was shot, non-fatally, by the police and activists set fire to an apparent government supporter.
Vodafone upgraded its full-year earnings guidance this morning despite slipping to a first-half loss owing to its unsuccessful joint venture in India, which has resulted in $4bn worth of penalties. Cost-cutting methods prompted the UK telecoms company to predict a return to revenue growth and operating profit of up to €15bn.
ITV has announced that advertising revenue rose 1% in the three months to October, receiving a boost from the Rugby World Cup. Looking forward to the fourth quarter, the broadcaster forecast growth of 0-1% and for revenue to be down by about 2% over the full year, partly due to the timing of new shows.
Greggs shrugged off high-street concerns yesterday by delivering its fifth profit forecast upgrade within a year. After a surprise slowdown in trading last month, the bakery chain said that recent sales held up well against a strong period last year. Chief executive Roger Whiteside put the company's recent success down to an increase in popularity, with people “recognising that Greggs is a lot more than sausage rolls”.
J Sainsbury has struck a partnership with Coles, Australia's second biggest food and drink retailer, in a push to increase its activity in the wholesale market. Sainsbury's will supply 800 of Coles' 2,400 outlets, with a focus on own-brand essentials. Coles has 27% market share in Australia but is facing aggressive competition from Aldi.
EasyJet is planning to reveal details of its own package holiday business before Christmas, in a bid to fill the void left by the collapse of Thomas Cook. Although a plan of this kind has been in development since before Thomas Cook's failure, the timing is positive for EasyJet as it tries to increase ancillary revenues.
Finally, Informa has reported underlying revenue growth of 2.8% in the calendar year up until the end of October. The publishing and exhibitions group said that despite unfavourable economic and geopolitical backdrops, performance had been resilient and it remained confident of its 2% underlying growth target for 2019.
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