'Spectre of no-deal' sends retail sales sliding to worst ever September

Londons biggest float postponed as bank puts $5bn plan on ice
Retail sector endures worst September since industry records began in 1995, latest data show
Thomas Cook bosses were warned ahead of its collapse that creditor claims could top ?10bn
BDO partners set for a ?602,000 payday
Economy takes ?20bn hit from business investment plunge since Brexit vote
Roger Bootle:It is high time the Conservatives put tax reduction and tax reform centre stage
Wrap up
European share indices have recovered after weak factory data from Germany pushed them into the red this morning. The FTSE 100, CAC 40 and Dax had all gained ground by the end of the day.
US shares are broadly flat so far. You can get the specific numbers using our handy tool above.
Thanks for joining our business and markets coverage today. Louis Ashworth will be back as usual tomorrow. Have a great evening.
Pizza Express in trouble?
'Spectre of no-deal' sends retail sales sliding to worst ever September

Rii Schroer
PizzaExpresshas hired financial advisers ahead of crunch talks with creditors over the restaurant group's soaring debts, according to reports.
The restaurant chain has called in corporate finance firm Houlihan Lokey ahead of talks with creditors as tough trading conditions continue in the casual dining sector.
The restaurant chain's debts currently stand at ?665m.
Separately, a group of secured bondholders for the business have also started working with advisory firm Perella Weinberg Partners in relation to the talks, Bloomberg reported. PizzaExpressdeclined to comment, Bloomberg said.
Sources close to the company told the PA news agency Pizza Express is "not a business that is contemplating a CVA (Company Voluntary Agreement) or close to collapse".
London to bear the brunt of HSBC's 10,000 job cuts
'Spectre of no-deal' sends retail sales sliding to worst ever September

Peter Nicholls/REUTERS
London willbear the brunt of 10,000 job cuts at HSBCas the bank battles to slash costs in the face of a slowdown gripping Europe, analysts havewarned.
Our Banking EditorLucy Burtonhas more:

"The axe is expected to fall hardest at the lender's global headquarters in Canary Wharf, where it employs40,000 people.
Deutsche Bank is cutting 18,000 roles worldwide, while its German rival Commerzbank is slashing 4,300 and 1,600 positions are being scrapped at French lenderSociete Generale.
It is the latest in a wave of cutbacks across the continent as banks grapple with years of ultra-low interest rates which cripple their ability to turn a healthy profit."

Michael Hewson, chief analyst at trading firm CMCMarkets, said the bulk of the cutsare likely to hit HSBC'sinvestment bank, adding:

"This latest round of cuts would be merely HSBC managements way of playing catch up with the rest of the sector."

Read the full report:
Fears axe will fall heaviest in London as HSBC slashes 10,000 jobs
Germany lurches closer to recession
Earlier, we learned that German factory orders slumped 6.7pc in August compared to a year earlier.
Now there is further bad news as investor confidence slumps.Our Economics Editor Russell Lynchexplains:

The closely watched Sentix benchmark found worsening pessimism among investors in the Continent, with sentiment at its lowest for more than six yearsdespite a major package of measures from the European Central Bank to stimulate growth last month.
Its sentiment index dropped to -16.8 in October, the weakest level since April 2013and down from -11.1 in September.
Alongside the ECBs resumption of money printing and decision to cut interest rates deeper into negative territory, the US Federal Reserve also trimmed rates for the second time in three months.

Read the full report:
German industry suffers again as investor sentiment slides lower
Audioboom on song as sales jump
'Spectre of no-deal' sends retail sales sliding to worst ever September

Andrew Crowley
PodcasterAudioboom has added presenter Sue Perkins and former Liverpool footballerJamie Carragher to its roster of hosts after unveiling record revenues.
Matthew Fieldhas more:

The Aim-listedcompany, which last month announced the departure of chief executive Rob Proctor, said revenuefor the three months ending in September hit $5.7m (?6.3m). The company continued to burn through cash, leaving it with just $2.5m in hand downfrom $3.9m in June...
Former Great British Bake Off presenter Ms Perkins is running a show called AnHour or So With..., billed as a series of intimate interviews with famous faces.
Mr Carragherwill speak to football stars in his seriesThe Greatest Game.
Audioboom said in a trading update that its revenues for the first nine months of the year had more than doubled fromthe same period in 2018, from $6.8bn to $15.5m.

Read the full report:
Podcaster Audioboom posts revenue jump as it unveils Sue Perkins show
Passport maker De La Rue calls on turnaround heavyweight to revive fortunes
'Spectre of no-deal' sends retail sales sliding to worst ever September

Chris Ratcliffe/Bloomberg
Troubled passport and bank note makerDe La Rue has appointed turnaround specialist Clive Vacher as its new boss.
Harriet Russellexplains some of the background:

"The move follows the ousting of previous De La Rue chief Martin Sutherland over the summer and the appointment of Kevin Loosemore as chairman designate, replacing Philip Rogerson.
Last year the company lost a ?400m government contract to print the new blue Brexit UK passports to French-Dutch competitor Gemalto, prompting demands by Mr Sutherland that then prime minister Theresa May visit the companys factory to explain the governments decision.
A month later, Mr Sutherland backed down by revealing that De La Rue would not contest the decision after taking legal advice on the matter.
Nonetheless, De La Rue has watched its share price halvein value since January."

Read the full report:
Passport maker De La Rue calls on turnaround heavyweight to revive fortunes
Londons biggest float postponed as bank puts $5bn plan on ice
'Spectre of no-deal' sends retail sales sliding to worst ever September

London's biggest float of the year has been called off due to tough trading conditions.
KazakhbankKaspi.kzwasdue to go public with a market value of $5bn (?4bn) but has shelved plans for a listing, in an unwanted blow to the City.
James Cookhas more details:

", which is part-owned by Goldman Sachs, said the delay was due to 'unfavorable and uncertain market conditions, particularly in the technology sector'.
The firm whichcontrols Kaspi Bank, Kazakhstans third-largest lender, and is a leading player in the countryspayments industry had planned to sell more than $500m of stock in a float which was seen as a coup for London.
It would have been the biggest listing by a central Asian company in the City since the financial crisis, and the largest new offeringoverall this year.

You can read James' full report here:
Londons biggest float postponed as bank puts $5bn plan on ice
Retail sales figures: more reaction
'Spectre of no-deal' sends retail sales sliding to worst ever September

Pantheon Macroeconomics
More reaction to those retail sales numbers. Economists atPantheon Macroeconomics have been trying to put the data into perspective.
They argue that falling mortgage rates andthe end of the freeze on the value of benefit payments in April 2020 will be among factors that help retailers in the coming months.
Samuel Tombs at Pantheon Macroeconomics said:
"In one line: Poor performance likely due to warm weather hitting demand for clothing."

He added that while September sales were weak, he doubts that household spending growth isfundamentally slowing.

"The poor performance in September likely has partly reflected the unusually warm weather; average temperatures were 0.5 degrees above their 1970-to-2018 September average. Clothing retailers introducing new winter ranges, therefore, likely struggled temporarily.
Note too that theBRCs survey is mainly comprised of large high-street retailers and so does not capture momentum in online sales. Moreover, consumers confidence remains in line with its long-run average, reflecting the recent strength of wage growth...
We continue to look for only a modest slowdown in year-over-year growth in households real spending to 1.8pc in 2020, from 1.9pcthis year."
Are remainers 'doomsters and gloomsters' on the high street?
'Spectre of no-deal' sends retail sales sliding to worst ever September

Frank Augstein/AP
In his first speech as prime minister, Boris Johnson bemoaned thedoomsters, thegloomsters opposing Brexit. But are remainers' political concerns feeding through to their shopping habits?
Richard Lim at Retail Economics said:

"Despite vast improvements in spending power, these figures suggest that Brexit fears are damaging confidence, particularly for buying non-essential items.
However, our research shines a light on the polarisation between 'remainers' and 'leavers'. Intuitively, this makes sense, but the differences are vast - much larger than I had expected.
Deep-rooted divisions have manifested into consumers spending intentions, with 30pcof remain voters claiming Brexit is the greatest source of concern affecting their confidence to spend, compared to just 6pcof leave voters.
Indeed, 86% of leavers suggested that Brexit was not important at all in their confidence to spend, more than twice the proportion of remainers (39pc)."
Brexit uncertainty is having a 'material impact on the consumer psyche'
The BRC-@KPMG September Retail Sales Monitor showed the worst September since records began in 1995. Unsurprisingly, sales decreased by 1.3% as the prospect of #NoDeal weighs increasingly on consumers minds. BRC (@the_brc) October 7, 2019
The latest retail figures make for pretty grim reading for the industry. Is the ongoing Brexit saga hurting consumer confidence?
Here's KPMG's Paul Martin:

Ongoing Brexit uncertainty is clearly having a material impact on the consumer psyche, with all but one non-food category being in decline in September. Consumers are choosing to focus on the essentials, with food one of the few categories delivering growth.
We will likely experience increased promotional activity to clear surplus stock, which doesnt bear well for retailers desperately trying to make up for lost ground after several difficult months."
'Spectre of no-deal' sends retail sales sliding
'Spectre of no-deal' sends retail sales sliding to worst ever September

The British Retail Consortium(BRC) and KPMG's Retail Sales Monitor has been released a day early and shows salesdecreased by 1.3pcin September, making it the worst September since the BRC's records began in 1995.
The figures show how pressure is continuing to be piled onto high street shops as consumers tighten their belts and continue to switch to online shopping.
In the three months to September, in-store sales of non-food items declined 3.2pc while food sales rose 1.2pc.
Online sales of non-food products grew 0.7pcin September, the worst ever recorded. Last September the growth figure was 5.4pc.
BRC chief executive Helen Dickinson said:

With the spectre of a no-deal weighing increasingly on consumer purchasing decisions, it is no surprise that sales growth has once again fallen into the red.
Many consumers held off from non-essential purchases, or shopped around for the bigger discounts, while the new autumn clothing ranges suffered from the warmer September weather.
The longer-term prospect continues to be bleak, with the 12-month average once again plumbing new depths at a mere 0.2 per cent. Online non-food sales growth was the lowest on record, though still compared favourably to the decline in growth at physical stores.
Japan to sign US trade deal in Washington today
'Spectre of no-deal' sends retail sales sliding to worst ever September

Alexander Shcherbak/TASS
Japan and the US will sign a trade deal in Washington today, the country's foreign minister has said.
Japan's foreign minister Toshimitsu Motegi said he would aim to bring the deal into force as soon as possible,Reuters reported.
"If the United States wants to begin the trade agreement from Jan 1, Japan has no objection," Motegi told reporters in Tokyo.
USPresident Donald Trump and Japanese prime minister Shinzo Abe agreed a limited trade deal last month.
That deal cuttariffs on USagriculturalgoods, Japanese machine tools and other products. It alsoaverted the threat of higher UScar duties.
Banks under pressure to stop financing coal as climate alarm grows
'Spectre of no-deal' sends retail sales sliding to worst ever September

Rupak De Chowdhuri/REUTERS
The increasing focus on climate change is causing new pressure for polluting companies. But it is also affecting the banks that finance them. India's coal industry makes for an excellent case study.
My colleagueVinjeru Mkandawirewrites:

Faced with the twin pressures of a fast-growing economy and a surge in its population, Indias demand for coal saw the biggest increase of any country in 2018.
But as the country ushers in reforms to open up its coal mining industry to global investors, it faces a drought in funding options from the worlds biggest banks who are trying to wean themselves off fossil fuels.
Tar-nished: the banks funding fossil fuels since the 2016 Paris agreement
Read the full story:
Banks under pressure to stop financing coal as climate alarm grows
Rockets tweet launches political firestorm
'Spectre of no-deal' sends retail sales sliding to worst ever September

Marco Garcia
NBA team HoustonRockets has landed itself in controversy after a tweet by the team's general manager supporting protestors in Hong Kong drew the ire of Chinese sponsors.
The tweet on Friday by Daryl Morey - now deleted - included an image with the message: Fight for Freedom. Stand with Hong Kong.
Moery said he meant no offence and the NBA has also apologised butChinese sportswear maker Li Ningand Shanghai Pudong Development Bank Credit Card Center suspended cooperation with the Rockets. Chinese broadcasterCCTV Sports said it will halt broadcasting the teams games.
But now the climbdown is attracting criticism in the US.
As a lifelong @HoustonRockets fan, I was proud to see @dmorey call out the Chinese Communist Partys repressive treatment of protestors in Hong Kong.

Now, in pursuit of big $$, the @nba is shamefully retreating. Ted Cruz (@tedcruz) October 7, 2019
Republican senator TedCruz, a Rockets fan, tweeted that the NBA is shamefully retreating and said he was proud to see Moreys original comment.
The incident highlights the difficulty international businesses face in navigating global political tensions.
SIG warns on profits as construction sector slows
'Spectre of no-deal' sends retail sales sliding to worst ever September

Jason Alden/Bloomberg
Building supplier SIG has warned on profits this morning, saying "deterioration in trading conditions has accelerated over recent weeks", particularly in the UK and Germany.
It said it expects"significantly lower annual profit" in both itsspecialist distribution and roofing merchanting businesses.
In an effort to shore up its balance sheet, the company has enteredagreements for the sale of its air handling division and itsbuilding solutions business.
The air handling division is set to be sold to to France Air for 223m (?199m) with Kingspan to part with?37.5m for the building solutions business.
Unilever aims to halve plastics
'Spectre of no-deal' sends retail sales sliding to worst ever September

Consumer goods behemoth Unilever is planning to reduce the amount of virgin plastic in its products by 50pc within six years.
In a bid to appeal to younger consumers, it willremove more than 100,000 tonnes of plastic packaging by boosting the use of refillable and reusable packaging. It will also remove plastic packaging where possible, using alternative materials and "naked" products.
The second prong of the new approachis to increase theuse of recycled plastic in its packaging.
The company estimates that 2.5bn people in over 190 countriesuse its products every day.
Unilever boss Alan Jope said:

We can only eliminate plastic waste by acting fast and taking radical action at all points in the cycle.
This demands a fundamental rethink in our approach to our packaging and products...
Our vision is a world in which everyone works together to ensure that plastic stays in the economy and out of the environment. Our plastic is our responsibility and so we are committed to collecting back more than we sell, as part of our drive towards a circular economy.
This is a daunting but exciting task which will help drive global demand for recycled plastic.
Can a hedge fund run a football club?
'Spectre of no-deal' sends retail sales sliding to worst ever September

Elliott, the activist investor, has become one of the most feared names in boardrooms across Europe.
Its targets have included Whitbread - which it pressured to sell the Costa Coffee - Pernod Ricard and Waterstones.
Now it has gained control of AC Milan, one of Europe's most successful football clubs. Milan fans are no stranger to high-profile owners. For years the club was run by Italian politician Silvio Berlusconi.
But can a hedge fund, skilled in streamlining businesses and selling off assets, run a winning football team? And can it make a return for investors?
The Financial Timeshas an interesting read(Paywall) on this question today.
Want to know more about Elliott?
My colleague Laura Onitatook an in-depth look at the activist investor in July after it swooped for bookseller Barnes & Noble. If you want to understand more about bookselling or Elliott, it's well worth a read:
Activist investor Elliott turns shopkeeper, with eyes on Barnes & Noble and Majestic Wine
House price growth sluggish
'Spectre of no-deal' sends retail sales sliding to worst ever September

House prices grew at the slowest rate since 2013 in September according to new data from Halifax.
The average UK home now costs ?232,574, 1.1pc higher than a year ago, the survey found.
Halifax's Russell Galley said:

Annual house price growth slowed somewhat in September, rising by just 1.1% over the last year. Whilst this is lowest level of growth since April 2013, it remains in keeping with the predominantly flat trend weve seen in recent months.
Underlying market indicators, including completed sales and mortgages approvals, continue to be broadly stable.
Meanwhile for buyers, important affordability measures such as wage growth and interest rates still look favourable.
Looking ahead, we expect activity levels and price growth to remain subdued while the current period of economic uncertainty persists.
Markets slip in wake of weak German data
Share in Europe are struggling this morning. Here is how the main indices stand:
FTSE 100: -0.17pc
FTSE 250: -0.3pc
CAC 40: -0.17pc
DAX: +0pc
German factory orders slump
#Germany Factory Orders month-on-month at -0.6% Trading Economics (@tEconomics) October 7, 2019
We have some new German factory orders data this morning and it's not good.
Orders in August were 6.7pc lower than a year earlier as Germany faces a slowdown in demand, including in its giant car manufacturing sector.
As the chart above shows, orders also fell month-on-month, dropping0.6pc in August compared to July. That was worse than the 0.3pc decline economists had expected.
Orders have now fallen 15 months on a row, calculated on an annual basis, as Europe's largest economy slips closer to the brink of recession.
Financial watchdog warns on possible no-deal disruption
'Spectre of no-deal' sends retail sales sliding to worst ever September

Chris Helgren/REUTERS
The Brexit chief atthe Financial Conduct Authority(FCA) has warned there are still unknown risks of disruption to the financial sector should the UK crash out of the EU without a deal.
The EU's "patchwork" approach to no-deal has left the financial sector vulnerable to possible disruption, Nausicaa Delfas said.
While the UK's financial watchdog has done "everything we can" to guard against the effects of a cliff-edge withdrawal over the past three years, the EU has not yet come up with a uniform approach, she told PA.
Ms Delfas said:

"In a nutshell, we have done everything we can to ensure continuity of business in the UK.
On the EU side, there's a patchwork of solutions and, because of that, if there is a hard exit, there could be some disruption....
Because there's a patchwork of solutions where everybody is playing their part to ensure continuity, there could be some gap between those that nobody has thought of, or that doesn't quite work."

The FCA and its EU counterparts "stand ready to take a pragmatic approach were anything like that to happen", she added.
HSBC prepares to slash 10,000 jobs in cost-cutting measure
'Spectre of no-deal' sends retail sales sliding to worst ever September

Hannah Mckay/REUTERS
HSBC is preparing to axe up to 10,000 jobs as part of a majorcost-cutting drive led by interim chief executive Noel Quinn.
The cuts are on top of the 4,000 redundancies announced in August when chief executive John Flint was ousted.
These will bethe banks most significant cutbacks in recent memory.
Hasan Chowdhury has the details:
HSBC prepares to slash 10,000 jobs in cost-cutting measure
Agenda: Markets await US-China trade talks
Good morning. Asia's main share indices have edged lower overnightafterBloomberg reported Chinese officials seem increasingly reluctant to agree to a broad trade deal pursued by USPresident Donald Trump.
Attention this weekwill be on the US-China trade negotiations expected in Washington on Thursday and Friday to see if the two sides can end a bruising year-long trade war that has hurt global growth and raised the risk of recession.

5 things to start your day

1)Thomas Cook bosses were warned ahead of its collapse that creditor claims could top ?10bn, as a complex network of off-balance sheet guarantees unwound.
Thomas Cook collapse | Read more
2)Uncertainty over Brexit has cut business investmentby around 11pc over the three years following the EU referendum equivalent to a ?20bn hit to the UK economy, according to new research. Almost 40pc of companies consistently rank Brexit as one of the three most important sources of uncertainty they faced.
3)Speculation is building thatNeil Woodford could be forced to keep his flagship equity income fund closedforanother six months as the veteran fund manager battles to offload assets in a bid to allow angry investors a chance at recovering their cash.
4)Bubbles are the bane of financial markets and economies, but much as economists try to learn from history, spotting bubbles in time remains a problem.So which markets around the world are showing bubbly characteristics that could cause trouble in future?
5)BDO partners are set for a ?602,000 paydayfollowing a year of strong sales and profit growth, marking the latest in a string of bumper payouts for Britains top accounts.

Coming up today

Londons blue-chip companies will be hoping for a smoother ride this week, after a painful set of trading sessions last week sawtens of billions wiped off, with Wednesdays drop the worst since early 2016.
The reporting calendar continues to be quiet.Today no major London-listed companies are scheduled to issue updates.
Economy:Factory orders (Germany),Consumer credit (US)
See also:
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