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Sterling and shares jump on hopes of a Brexit deal

Pound jumps on reports a Brexit deal may be close overall volatility is highest since referendum
FTSE 250 jumps to highest level in a year as investors pile into domestically-exposed stocks
Thomas Cook bosses grilledby MPs over companys collapse
Neil Wood sackedfrom his flagship fund
IMF warns over global growthand says Brexit could damage UK economy
UK employment falls for first time since 2017
RBS sought Monzo takeover before deciding to launch standalone rival
Questor:Why did Woodford fail? Because he broke these two key investment principles

4:49PM
Wrap-up: Traders buoyed by Brexit hopes
Sterling and shares jump on hopes of a Brexit deal

A journalist poses while looking at a computer screen with the Bloomberg display showing a rise in the value of the pound

Credit:
DANIEL SORABJI/AFP
Lets wrap up there while things are still fairly neat. Traders are clearly gasping for positive Brexit news, and any whisper coming from the EU side right now is sending domestically-focused stocks soaring, not to mention to the pound.
The sentiment was positive enough to maybe European bourses up by over a percentage point, with even the FTSE 100 ending the session flat*.
Could tomorrow bethe big day? Reports suggest we may see a draft Brexit treaty, including a major compromise by the UK side.
Thats all from me for now. Please join me again tomorrow morning for the latest on business, news and economics, as well as tech and money. Have a good evening!
*Corrected, apologies I had thought it was narrowly positive.
4:39PM
FTSE 250 closes at highest level in a year
It was a close-run thing, but the FTSE 250 has closed at 20,196.97 its highest closing price since October 3 last year. Sterling reached a five-month closing bell price against the euro, and four-month record against the dollar.
4:34PM
Round-up: Harrods owners pocket ?125m dividend, Northern irish farmers warn of raw milk flood, Carney defends Facebooks Libra coin
Sterling and shares jump on hopes of a Brexit deal

Harrods opened its Knightsbridge store in 1849
While we wait for the markets fix their closing prices, here after some of the afternoons top stories:
Harrods Qatari owners pocket ?125m dividend despite dip in profits:The Qatari owners of Harrods paid themselves a ?125m dividend last year despite a dip in profits.
Northern Ireland faces raw milk flood under no deal Brexit:Northern Ireland risks being swamped by thousands of litres of raw milk after a no-dealBrexit,farmers have claimed.
Carney defends FacebooksLibra in call for digital payments revolution:Mark Carney has leapt to the defence of Facebooks digital currency as he warned that the UKs slow and expensivepaymentssystem is not good enough in this day and age.
4:30PM
Guardian: Draft Brexit treaty could be published tomorrow morning
In the dying minutes of trading, the Guardian reports:

Boris Johnson appears to be on the brink of reaching aBrexitdeal after making major concessions to EU demands over the Irish border.
A draft treaty could now be published on Wednesday morning, according to senior British and EU sources.
It is understood that the negotiating teams have agreed in principle that there will be a customs border down the Irish Sea. The arrangement was rejected by Theresa May as a deal that no British prime minister could accept.
Read their full piece here.
4:23PM
Domestically-exposed stocks jump
Its a pretty happy scene for domestically-exposed stocks currently, with housebuilders, retailers, banks and landlords all performing strongly.
Barclays and Lloyds are putting the biggest upwards pull on the blue-chip FTSE 100.
The numbers arent quite like what we saw on Friday, but these are some healthy gains.
Sentiment may have blunted slightly in recent minutes, however: Irish PM Leo Varadkar is currently speaking to reporters, and has said there are still some snags. He said:
Its too early to say if an extension will be needed
As of a few hours ago, the gap between the UK and EU on customs was quite wide...
...but the state of the talks may have shifted since then
BREAKING: Taoiseach says gap is "still quite wide," particularly on the issue of customs. Tony Connelly (@tconnellyRTE) October 15, 2019
4:16PM
Royal Mail very disappointed by strike action
Royal Mail has said it is very disappointed to learn its workers have voted for strike action (see 3:50pm update). In a statement, it said:

A ballot result for industrial action does not necessarily mean there will be industrial action. We are still in mediation with the CWU. Under our Dispute Resolution Procedure,set out in the Agenda for Growth,we are committed to reaching a resolution. No industrial action can be taken, and formal notification of industrial action cannot be given, before the conclusion of the Dispute Resolution Procedure.
We want to reach agreement. There are no grounds for industrial action. Industrial action or the threat of it is damaging for our business and undermines the trust of our customers.
4:11PM
DAX hits one-year high
The relief isnt constrained to the UK apparently: in Germany, the DAX has jumped as much as 1.6pc, also hitting a one-year high.
The FTSE 100, which has spent most of the day in the doldrums, is now flat. Miners are still holding the blue-chip index down as trade worries worries and the IMFs warning dampen sentiment.
Markets.coms Neil Wilson says the excitement is palpable, but suggest foreign exchange traders may be getting overexcited based on a single report:

Sterling jumped to its strongest in four months against the US dollar and cleared a big technical level as reports said UK and EU negotiators are closing in on a draft Brexit deal...
...These kind of reports expose just how vulnerable sterling is to headline risk. At present these are unconfirmed reports and need to be verified we just have BBG citing two people with knowledge of the talks.
If a draft deal can be achieved we would expect another spike north to $1.30 on cable in very short order, and potentially $1.3170 could be targeted. It could get very choppy now.
However, as we consistently stress, there is yet a lot to overcome even if a deal is agreed - most importantly Parliament would need to back the agreement and this is far from assured.
3:58PM
FTSE 250 heads for second-best day since April
The FTSE 250 is absolutely loving reports that the UK and EU may be near a Brexit deal, rising further to stand 1.79pc up on the day currently. Putting aside its monster 4.19pc jump on Friday, that puts the index on course of its best daily gains since April 1. Thats put it at aone-year high.
3:53PM
Brexit hopes spill over markets
UK banks, house builders and domestic stocks getting a bid on Brexit deal hopes.

RBS, Lloyds, Barclays, Persimmon, Barratt Developments all leading gainers n FTSE100 Michael Hewson ?? (@mhewson_CMC) October 15, 2019
Clear risk-on moves seen on the back of this spike higher in GBP with the Dax hitting its highest level since August 2018. S&P500 back near 3000 handle and Gold below 1480 pic.twitter.com/gw5IyBE3Kd David Cheetham, CFA (@DavidCheetham3) October 15, 2019
3:50PM
Royal Mail workers vote for strike action
Sterling and shares jump on hopes of a Brexit deal

75.9pc of workers took part in the ballot

Credit:
Phil Noble/Reuters
Royal Mail workers have voted for strike action, according to the Communication Workers Union.
A yes vote of 97.1pc was recorded on a ballot of about 110,000 workers, with turnout at 75.9pc. Royal Mail shares are up (though they are probably feeling a Brexit-hope boost).
The vote set the stage for the first postal strike in a decade. The CWU accuses the delivery company of not honouring an agreement on working conditions.
3:46PM
FTSE 250 leaps on hopes of a deal
The FTSE 250, which has been solidly in the green all day, is now up more than 1.3pc following that Bloomberg report.
The index, which consists of 250 mid-cap companies, is seen as a Brexit sentiment bellwether because many of its constituents are heavily domestically-exposed.
3:43PM
US banks wrap: Wells Fargo profits slump
Sterling and shares jump on hopes of a Brexit deal

A Wells Fargo & Co. bank branch in Moline, Illinois

Credit:
Daniel Acker/Bloomberg
Heres a very quick wrap on US banks (several of which reported results today)before we get back to the Brexit excitement:
JP Morgan performed strongly, with revenues increasing 7.3pc to $29.3bn and profits up 8.4pc to $9.1bn.
Goldman Sachs was in line with expectations , posting a 5.6pc revenue fall to hit $8.3bn. Profits were $1.8bn, down 26.9pc.
Wells Fargo revenues edged up to $22bn, but profits fell 23.3pc to $4.6bn.
Citigroup revenues rose 1pc to $18.6bn.
3:34PM
Pound spikes on report sides edging closer to deal
The pound has leapedto a new three-month high against the dollar of just under $1.276 after Bloomberg reported the two sides are drawing closer to a deal. Thats the best level since June 25. Heres the report that is moving markets:

UKand European Union negotiators in Brussels are closing in on a draft Brexit deal with optimism that there will be a breakthrough before the end of Tuesday, two EU officials said.
Any draft legal text will hinge on whether Prime Minister Boris Johnson believes he has the support of the UKParliament, with the backing of the Northern Irish Democratic Unionist Party crucial.
3:26PM
Analysis: Six ways the government could boost the economy after Brexit
Sterling and shares jump on hopes of a Brexit deal

What to do after Brexit?
With the IMF warning over the potential impact of an unruly Brexit in its latest outlook, politicians might soon be looking for ways to stimulate growth.
Handily, my colleague Tim Wallace reports, the National Institutute of Economic and Social Research has come up with a series of proposals to address just that. Tim writes:

Brexit has numbed our brains. It has taken over our political, economic and business discourse to an extent scarcely imaginable when David Cameron promised to renegotiate Britains relationship with the EU and to hold a referendum on the outcome.
Other pressing national issues have had precious little attention in the past three years, with serious proposals to fix problems including housing, infrastructure, the climate and international trade barely getting a look in.

Hes put together half a dozen of NIESRs ideas, and looked at how they might work.
Read more here:Six radical ideas to boost the economy after Brexit
Economic Intelligence newsletter SUBSCRIBER (article)
3:18PM
Pound hits a five-month high against the euro
Among generally-upbeat sentiment today, the pound touched a five-month high against the euro at around 1pm, and is back near that level again now. As a reminder, you can use the selector on the top right of our Markets Hub tool (below) to view different dateranges:
2:46PM
Proposed Sophos merger lifts UK private equity activity to 12-year high
Sterling and shares jump on hopes of a Brexit deal

UK private equity merger activity is at its highest since 2007

Credit:
Splash News
Just in frommy colleagueVinjeru Mkandawire:

The proposed $4bn (?3.2bn) bid by a US buyout firm for Sophos Group has pushed private equity activity in the UK market to a 12-year high.
UK private equity deals have surged to $40bn, a 57pc jump on the amount invested by private equity firms for the whole of 2018. This is despite there being fewer deals compared to the same period last year.
Thoma Bravo this week announced its acquisition of the cybersecurity company four years after it went public. The deal is the second largest announced private equity transaction in the global technology sector so far this year.
Nearly a quarter of all private equity acquisitions of UK companies in 2019 have been in the technology sector.

Heres how those figures look:
2:13PM
FTSE falls as Europe advances
Sterling and shares jump on hopes of a Brexit deal

JP Morgan boss Jamie Dimon

Credit:
AARON P. BERNSTEIN/REUTERS
In among all the excitement today, I realise I have neglected to comment much on the markets.
Allow me to quickly rectify that: the FTSE 100 is underperforming its European peers, with a rising pound putting extra pressure on the exporter-heavy index.
Miners are suffering amid a joint exposure to trade war worries and currency movements, while heavyweights HSBC, GlaxoSmithKline and AstraZeneca are all falling.
Across the rest of Europe, most stock indices are up about half a percentage point.
City Intelligence newsletter (SUBSCRIBER) Article
Futures trading is currently pointing towards an upbeat open on Wall Street (in just over 20 minutes). Its a busy day in the US, where bank earnings are the days big story.
A slew of major lenders are reporting today, with JP Morgan delivering strong results to start things off earlier. Goldman Sachs has met expectations. Markets.coms Neil WIlson says:

The Dow Jones is being called to open about 100 points or so higher, though we would imagine that the market is already anticipating Q3 numbers to beat quite low bottom-up expectations. Whisper numbers are higher and the market seems more likely to move on trade expectations we will need considerably stronger beats than these to really drive the market.

Analysts have compared the days reporting to a fire hose, so Ill try to bring you a wrap-up once things are a bit more calm.
2:00PM
IMF warns over global growth amid trade tensions
Sterling and shares jump on hopes of a Brexit deal

IMF chief economist Gita Gopinath has warned that central bankers have limited room to tackle policy "mistakes"

Credit:
SHAWN THEW/EPA-EFE/REX
Just out: the International Monetary Fund hasblamed bitter trade tensions and a manufacturing slump for a global downturnas it slashed growth forecasts to the lowest level since the financial crisis, Russell Lynch reports. He writes:

The global lenders latest World Economic Outlook added that prospects are precarious".
And in an apparent dig at the White Houses crackdownon trade with China,the fund warned central bankers are running out of ammunition to fix policy mistakes.
Compared to its July update, the IMF cut growth estimates from 3.2pc to 3pc for this year the lowest for a decade - although it expects a slight bounceback to growthof 3.4pc in 2020. UK growth estimates meanwhile were cut to 1.2pc from 1.3pc three months ago.
Read more here:IMF fires warning on trade war as manufacturing pain hits global growth
1:53PM
Round-up: Car finance crackdown to save motorists millions, Renishaw profits collapse, WeWork plans to axe 2,000 jobs
Sterling and shares jump on hopes of a Brexit deal

WeWork is planning to cut employees and raise more money

Credit:
Luke MacGregor/Bloomberg
Here are more headlines from the worlds of business, tech and money today:
Motorists to save ?165m in crackdown on car finance kick-backs:Drivers could pay less for their vehicles under plans set out today by the City watchdog to ban unfair commissions on car finance loans.
Renishaw profit collapse fuels fears of global slowdown:Profits atengineering bellwether Renishaw have collapsed, raising fears about the prospects for the wider industry in the face ofBrexit and a potential global trade war.
WeWork to axe 2,000 jobs this week as new bosses battle to save it from collapse:The office space rental companyis preparing to announce global layoffs as soon as this week which are likely to affect employees in the UK.
Technology Intelligence newsletter - UK
1:45PM
Questor special: Why Woodford failed
Sterling and shares jump on hopes of a Brexit deal

Questor is now convinced that had Neil Woodford been part of an organisation that offered genuine checks and balances, much of the damage could have been avoided

Credit:
Tom Pilston
The verdict is in. Questor, the Telegraphs investment column, says Neil Woodford failed by breaking two key rules:
Have a clear, readily intelligible investment process andstick to it
Governance always matter
Questor editor Richards Evans writes:

Neil Woodford built his reputation as an equity income fund manager. The essence of the equity income style is to spot when a companys dividend is sustainable when the rest of the market has doubts and reap the rewards from both the dividend and the share price when you are proved right.
Stocks that pay no dividend clearly have no place in an equity income portfolio but Mr Woodfords reputation blinded us from making this simple observation in relation to his own fund for too long. The fact that some holdings were even unlisted should have been an even louder warning.
The demise of Woodford: where did it all go so wrong?
Read more here:Questor: Why did Woodford fail? Because he broke these two key investment principles
Sign up to the Telegraph's Questor WhatsApp group for daily alerts and exclusive audio updates
Investor newsletter REFERRAL (article)
Meanwhile, interim Treasury Select Committee chairCatherine McKinnell MP has said of the latest twist in the Woodford saga:

This appears to the beginning of the end of a sorry state of affairs. This will have been a troubling time for investors in the Woodford Fund, who may not get any money back until at least January.
If it hasnt doesnt so already, surely now the fund should waive its fees.
There is still some time to go in this uncomfortable episode, which has raised important questions about the functioning of the funds industry. Im sure the Committee will want to examine what lessons can be learned from this saga.
Telegraph Money has been speaking to readers, who have reacted to Links decision to sack Mr Woodford.
You can read their reactions (and contribute your own) here: Why did it take so long to get rid of him?Telegraph readers react to the dramatic sacking of Neil Woodford
1:24PM
In charts: Why the time might be right for Johnson to call an election
Logo: The Think Tank
With Brexit at the forefront of everybodys minds, one of the biggest question marks is over what might happen if a snap election is called.
Thats the focus of todays Think Tank, by Economics Editor Russell Lynch. He writes:

Polls at the beginning of October suggested a failure to leave potentially costing BoJo nine points and an overall majority. Thats why hes busy pinning blame on dastardly Europeans and Remoaner MPs for preventing the UK from leaving if he doesnt get his deal over the line and is forced by the Benn Act to ask for more time.
But Boris enjoys a double-digit poll lead over a deeply unpopular Labour leader. On top of that, if you cut through theWestminster bubbleand Brexit noise, the PM can also take heart from some wider economic factors in the general election that most expect this autumn.

Russell has pointed to three economic factors that favour the PM:
A low misery index of inflation and unemployment
Real-terms pay growth rising
Disposable income increasing
Heres how the former looks:
You can read his full piece here:Three charts that give Boris Johnson a boost for a Brexit general election
The Think Tank | Read more
12:44PM
Pound volatility hits highest level since EU referendum
Sterling and shares jump on hopes of a Brexit deal

Boris Johnson is running out of time to reach a Brexit agreement with the EU

Credit:
ANDY RAIN/POOL/EPA-EFE/REX
Lets bring it back back to Brexit.
The pound is still upsharply on the day, with its wild gyrations over recent session meaning its overall one-week volatility against the dollar has hit its highest level in three years:
The foreign exchange market can be carried on a whisper currently, and is proving particularly sensitive to pronouncements from the EU. Heres the latest from our political team:

Irelands deputy prime minister Simon Coveney has said that it is "possible" for Brexit negotiations to carry into next week.
He said that there had been slow progressand a big step forward needs to happen today.
It echoes comments from Michel Barnier, who reportedly told EU 27 ambassadors that an agreement would need to be reached tonight in order to come to a deal at this week's EU Summit.
Earlier, the EUs chief negotiator said a deal is still possible this week, as the Government claimed a great deal of progress has been made.
As technical talks continue in Brussels, the EUs chief negotiator said it would be difficult but not impossible to come to an agreement.
You can follow live Brexit updates here:Brexit latest news: Simon Coveney says negotiations may continue next week, unless there is big step forwardtoday
Heres the theoretical timeline for this week:
Countdown to Brexit | What to expect in Parliament this week
12:28PM
Round-up: Jobs market wobbles, Barnardos defends charity shops, Northern Irish business leaders warn of Brexit risks
Sterling and shares jump on hopes of a Brexit deal

The number of people in work has dropped to 32.7 million the biggest fall in four year

Credit:
Dominic Lipinski/PA
Here are some of the biggest stories from so far today:
Jobs market wobbles amid global slowdown and Brexit paralysis:Britainsjobs miraclecould finally have run out of steam as the slowing global economy combined with Brexit paralysis pushed employment down and slowed down pay growth in the three months to August.
Barnardos says charity shops are saving the high street, not hurting it:Think about the usual fare on offer from Britains armada of charity shops, and an ?800 designer suit does not immediately come to mind.
Northern Irish business leaders fear collateral damage from a kamikaze Brexit deal:Northern Irish business leaders fear they will become collateral damage if Boris Johnsons Government strikes a kamikaze Brexit dealwithout consulting them.
Business Briefing Newsletter REFERRAL (Article)
11:59AM
Marstons warning on profit spills onto shares
Sterling and shares jump on hopes of a Brexit deal

Marstons runs pubs and carveries
Shares in Marstons are down about6.5pc currently, after the pub group warned it anticipated a fall in profits this year after a food sales fall.
The group, which is based in Wolverhampton, said labour costs and higher investment would also weigh, pushing profits lower than last year.
The company said it was continuing to focus on paying down its debts, which ended the year to September at ?1.4bn.
Reaction from the City has been neutral to poor, with Jefferiesanalysts saying:

Despite commentary around debt reduction, we argue leverage will remain too high and funding the dividend out of asset disposals is not sustainable.
11:43AM
Whitbread: the price is right
Sterling and shares jump on hopes of a Brexit deal

Whitbread owners Premier Inn

Credit:
CHRIS RATCLIFFE/Bloomberg
Lets catch up with whats happening on the markets. First of all:Whitbread.
The Premier Inn-owner is up around 1.7pc currently, having risen as much as 3.2pc earlier in the day, buoyed by an analyst upgrade. The company, which operates hotels and pub restaurants, hasstruggled on the markets recently as it pursues aggressive expansion plans in Germany.
Analysts at UBS gave its shares a buyrating, saying a 15pc slump in the companys share price over the past three months is overblown, and presents a good opportunity for investors. Labelling it the dominant branded UK hotelier, with aproven model, UBS added Whitbread remains a quality business.
11:24AM
MPs wrap up Thomas Cook session
Sterling and shares jump on hopes of a Brexit deal

Rachel Reeves

Credit:
Parliament/Screenshot
Things are finishing up at Portcullis House, with BEIS Select Committee chair Rachel Reeves offering comments in summary.
She has accused the executives arrayed in front of her of a series of failures, including strategic missteps, poor production of accounts, and of denying the reality of the situation of emergency funding that occurred.
Ms Reeves said former chief executive Peter Fankhauser should do more to reflect on his own salary, and what he can do to support staff who have lost their jobs as a result of the travel companys collapse.
Thomas Cook timeline
She accused the bosses of a failure to do the basics, adding apologies are the easy bitand extolling them (and bosses more widely) to take responsibility when they see things going wrong.
Here are some of the key points we heard today:
Thomas Cook bosses only had one meeting with a Government minister in the build-up to last months collapse.
Former chief executive Peter Fankhauser says that if the Government had provided ?200m to secure the bailout from Chinese lender Fosun, then the tour company would have been saved.
Mr Fankhauser says he will consider whether to return some salary to support victims of the collapse.
The inquiry will hear further witnesses in the coming weeks, including Mr Fankhausers predecessor Harriet Green.
11:16AM
BBC: Johnson just spoke to Macron
A quick Brexit injection: BBC Political Editor Laura Kuenssberg says Boris Johnson had a conversation with French President Emmanuel Macron earlier this morning, in which the two men acknowledged their was positive momentum.
Like last time, sounds like France less keen on extending the process again compared to some other member states - in theory, that might be helpful to UK, altho last time round, Macron agreed with the others to extend again Laura Kuenssberg (@bbclaurak) October 15, 2019
The pound has lost some of its shine from earlier, but is up about four-fifths of a cent, at $1.264.
11:12AM
Woodford: What happens now?
Sterling and shares jump on hopes of a Brexit deal

Neil Woodford could be ousted from his investment trust, but would anyone else want the job?
Here are two things to read right away if youre a Woodford Equity Income Fund investor:
Woodford crisis: what the winding up of the Equity Income fund means for investors
Three managers who could take over Neil Woodfords fund
Woodford suspension | Contact the Telegraph
11:07AM
Back to bonuses...
MP Peter Kyle is asking questions .

Q: You knew collapse was likely. Did you consider cutting your own pay to support employees?


Mr Fankhauser says they were following guidance from advisors on their duties as executives. He says he will not try to defend his pay, but says he worked exhaustively and extremely hard for his salary. He repeats that he will decide (not today) about the possibility of giving some money back to staff.

Q: (To former chair) Did you provide value for money?


Former chair Mr Meysman says that is for others to judge, but says he personally invested into Thomas Cook and insists that he worked hard.

Q: (To remuneration committee chair) Was failure rewarded?


Former remuneration committee chairWarren Tucker says he cant argue with that perception, but says the failure only occurred at the end.
Mr Kyle contests that the failure only manifested itself at the end, but had occurred over a longer period of time. He asks if Mr Tucker would behave the same way if he were put in the same situation again (Mr Tucker is now a non executive director of the Foreign and Commonwealth Office).
Mr Tucker says he thinks if we had out time again, he would have probably tied pay more to actual cash generation rather than underlying profit, and the 2pc pay rises might not have occurred.
Mr Meysman and MsVerluyten says that they both offered to quit the other board they sit on in the wake of the collapse, but both said their resignations were rejected.
10:56AM
Full report: Neil Woodford sacked by his own flagship fund
Sterling and shares jump on hopes of a Brexit deal

Neil Woodford will cease to be the investment manager with immediate effect

Credit:
REUTERS/HANDOUT
My colleague Harriet Russell has a full report on this mornings other bid story: Neil Woodford being chucked off his own flagship fund. She reports:

Neil Woodford has been sacked from his frozen flagship income fund and it will be wound down, leaving the legacy of one of Britains most famous money managers in tatters.
Supervisor Link, which has managed the Woodford Equity Income Fund since it was closed to investors earlier this year, said liquidation isin the best interests of investors. It remains unclear how much of their cash will be returned sparking fears they could face heavy losses.
Mr Woodford immediately opposed the move. He said: This was Links decision and one I cannot accept, nor believe is in the long-term interests of LF Woodford Equity Income Fund investors.
Read more here:Woodford sacked by his own flagship fund as administrators prepare to wind it up
10:50AM
Thomas Cook never spoke to ministers again after first meeting
Mr Fankhauser says that after an initial conversation with Transport Secretary Grant Shapps, they only spoke to Department for Transport officials in the lead-up to the collapse.
The MPs have reacted with shock to this disclosure, asking why the company didnt push harder for a political intervention.
Peter Fankhauser is saying that five ministers in other countries spoke to Thomas Cook bosses in the lead up to the collapse, and chair Frank Meysman notes that its conversations with Chinese investor Fosun were via its chairman.

Q: Did you speak to anyone in the business department?


Mr Fankhauser says they communicated via official bodies, primarily the Department for Transport. He says they followed the Governments guidance on how they should communicate, so did not speak to anyone in the Department for Business, Energy and Industrial Strategy.
Mr Fankhauser says he was told not to speak to BEIS directly.
(NB, it worth remembering the BEIS department and BEIS Select Committee are distinct things the latter in a cross-party group of MPs, led by Labours Rachel Reeves)
Heres our blow-by-blow account of how the company collapsed:Why Thomas Cook collapsed: How debt, heatwaves and the internet sent travel giant into a spin
Thomas Cook in numbers
10:39AM
Fankhauser: Government could have saved Thomas Cook
Sterling and shares jump on hopes of a Brexit deal

Former chair Frank Meysman

Credit:
Parliament/Screenshot
More from Chair Rachel Reeves on the decision by Fosun, a major shareholder, to no bail out Thomas Cook. The questions are over an extra ?200m that was being sought by Fosun, which the tour group ultimately tried, and failed, to get from the government.

Q: Isnt Fosuns refusal to give the extra ?200m itself a sign of its lack of faith in Thomas Cook?


Mr Meysman basically swerves this question, but claims he had received assurances from the Government that it was closely following the situation.

Q: Did the Government fail taxpayers by not bailing out Thomas Cook?


Mr Meysman says he can only reflect that interventions elsewhere (such as Germanys bailout of German Thomas Cook airline wing Condor) were successful.

Q: When did you ask for bailout?


Former chief executive Peter Fankhauser says he met a high official from the Ministry for Transport on September 9, and that a formal proposal for a bailout was submitted on September 17 (the company collapsed in the early hours of September 23).

Q: Would bailout have saved Thomas Cook?


Mr Fankhauser says yes. He adds Thomas Cook would have been the best funded tour operator in Europe if its had received the extra ?200m from the Government (which they are referring to, somewhat chillingly for Brexit news followers, as a backstop).
He says that if the arrangement has passed, the company would have had a new start, with enough money to operate through the winter and have had the opportunity to develop further without a debt burden.
10:28AM
Why did collapse occur?
Sterling and shares jump on hopes of a Brexit deal

Thomas Cooks former chief executive Peter Fankhauser

Credit:
Parliament/Screenshot
More questions from Antoinette Sandbach currently.

Q: Why didnt lenders save Thomas Cook?


I cant answer that, says Mr Fankhauser. He claims lenders told him they would support the companys plans. When push came to shove, however, it appears they didnt.
Frank Meysman, former chair:Says they received indications from other creditors including Spanish hoteliers that they would be given some relief on their debts. Again, it doesnt seem that came to fruition in practice. Mr Meysman says companies said they would step up.
Rachel Reeves says that any commitments made by creditors were palpably untrue, given the company subsequently collapsed. She asks Mr Meysman, in a tone of irony,whether Thomas Cook is still trading. He says it is not (of course), and Ms Reeves says that is proof that the promises made by creditors were therefore not to be relied upon.
Mr Meysman is suggesting that the creditors wanted there to be a confirmation of support from the government. Things heating up a bit...
10:15AM
Tweet: Are Thomas Cook bosses avoiding criticism of former chief executive?
The Guardians Rob Davies tweets:
Interestingly none of the Thomas Cook directors have pointed the finger directly at previous CEO's aggressive expansionism and how that built up debt. Are they avoiding that on advice? https://t.co/7bDIkZ9ioa Rob Davies (@ByRobDavies) October 15, 2019
As a reminder, Peter Fankhauser took over as chief executive in 2014.
10:13AM
Did Thomas Cook downplay challenges?
Questions from MP Drew Hendry.

Q: How did Thomas Cook investors respond to what management told them?


Peter Fankhauser saysinvestors supported the companys strategy, including saying one particular investor was very active.

Q: Didnt you sense you were losing control?


Mr Fankhauser says he was convinced that the plans Thomas Cook devised with banks and lenders could work. He says that management checked every day at 4pm that their plan could work.

Q: So you were wrong at 4pm every day?


Mr Fankhauser says they were right based on the information they had at the time.
Thomas Cook's ghost hotels what will happen to its empty holiday resorts?
10:07AM
UK employment: Some snap reactions
Heres some reaction from Twitter to those UK employment figures (see 9:41am update):
Don't jump to assuming today's weaker UK labour market report opens the door to rate cuts from the MPC. The 3.9% unemployment rate still is below the MPC's estimate of its equilibrium rate 4.25%. And wage growth of 3.8% is still inflationary, when productivity is flat. Samuel Tombs (@samueltombs) October 15, 2019
(MPC is the Bank of England Monetary Policy Committee, which sets target interest rates)
The real change in the path of UK wages growth came in July which was originally reported as 4.2% but now has been revised to 3.9%. So still good but quite a revision posing questions for @ONS Shaun Richards (@notayesmansecon) October 15, 2019
The UK's regional employment divides. Approximately 10 percentage points separates top from bottom in the UKregional employment rate tables. The South & the East have distinctly higher then average rates, N. Ireland & N. East distinctly lower. pic.twitter.com/Xao5opaD2r Rupert Seggins (@Rupert_Seggins) October 15, 2019
10:03AM
Hopes for Hays
Questioned about Hays Travels takeover of Thomas Cooks 555 bricks-and-mortar stores, Mr Fankhauser has said I wish them all the luck, saying that the companys lean structure and lack of debt should make it viable.
Heres more on Hays Travel
Chair Rachel Reeves says Hays Travels financial situation shows how Thomas Cook could have succeeded if it had been better run.
Mr Fankhauser says I fully agree with you. It is fully out of my limits, the debt build-up. He says he did he best to address it, however.

Q: If retail stores were such a problem, how come the Insolvency service was able to so quickly sell your retail stores once Thomas Cook collapsed?


Mr Fankhausersays we were focused on saving the whole business, and notes that he does not know how much Hays Travel paid for the high street store business. He says we were bound to achieve something for the whole. he said Thomas Cook had received offers for parts of the business, but none of the proposals were strong enough to support the wider company.

Q: Was it a mistake to hold out for a bigger saviour?


Mr Fankhauser says he believes it was correct to try and find a way to protect the entire business. Pressed by Ms Reeves, he accepts he was ultimately correct, and apologises again.
9:55AM
Airline wing sale
Questions by MP Albert Owen are focused on Thomas Cooks decision to put its airline wing up for sale earlier this year.

Q: Why did it take you so long to decide to sell Thomas Cook airline business?


Peter Fankhauser: We haddecided to put the airline on its own feet in 2017, by introducing an agreement between the airline and tour operator. This gave the opportunity to consider a future sale.

Q: So why wait until February this year to begin sale?


Mr Fankhauser says conditions were not right. He says they had talks with major airlines, but they didnt receive sufficient interest.

Q: Was not selling sooner a mistake?


Mr Fankhauser concedes that it may have been.
9:49AM
...back to Portcullis House
Thing are getting fairly heated. MPs and Thomas Cook bosses are offering very different perspectives on why the company collapsed.
Martine Verluyten, the former audit committee chair, has said the bosses never hid from investors or the public that the companys accounts were not healthy.

Q: Were bonuses based on underlying profits, or actual profits?


Warren Tucker, former Chair of Remuneration Committee:Underlying profits were used.

Q: So that is the only part of the profit and loss sheet used to determine profits?


MrTucker says that is correct.
MP Stephen Kerr has branded that answer ridiculous, saying this board was rewarded for failure.
Thomas Cooks debt problem dates back to the acquisitions made by previous CEO Manny Fontenla-Novoa (who is not here today). As you can see from this chart, the groups debt level at year end remained stubbornly above ?1 billion at year-end for a decade. (Source: Berenberg) pic.twitter.com/IHqLZBNmzg Joel Hills (@ITVJoel) October 15, 2019
9:41AM
Newsflash: UK employment falls for first time since 2017
Quickly pulling out of Portcullis House for a moment the Office for National Statistics says UK employment fell by 56,000 in the three months to August. Analysts had been expecting a 26,000 jobs added, so that is a notable drop.
The ONS said:
The UK labour market showed signs of slowing, with the level of employment falling by 56,000 to 32.69 million and the level of unemployment increasing by 22,000 to 1.31m, in the three months to August 2019.
Over the same period, the employment rate for men remained unchanged (80.2pc) and that for women declined to 71.6pc.
#UK labour market looking markedly softer with #employment falling 56k (most for over 4 years) & vacancies down again. #unemployment up 22k taking jobless rate up to 3.9%. Annual #earnings growth dipped to 3.8% in 3 months to August from 11-year high of 3.9% in 3 months to July Howard Archer (@HowardArcherUK) October 15, 2019
9:35AM
Former audit committee chair: We felt that it was OK to leave the goodwill as it was
Were into the financial weeds already. Committee member Antoinette Sandbach is pushing the attendees over Thomas Cooks debt levels.
She has focused on the companys decision to say it had ?2.5bn of goodwill (intangible assets usually related to a purchase, such as staff skills or brand value), a figures which was subsequently significantly written-down this year.

Q: How did you justify the levels of goodwill that Thomas Cook claimed to have?


Martine Verluyten, former audit committee chair:We felt that it was OK to leave the goodwill as it was.
Frank Meysman, former chair: We came up with thew numbers in discussions with our auditors.
Sten Daugaard, former CFO:We had to recalculate goodwill based on trading conditions and our projection of profit. The situation was so bad in 2019 that we had to revisit numbers.

Q: So was goodwill based on business plan, rather that intangible asset?


Sten Daugaard, former CFO:Yes, that is what the accounting standards say. He says Thomas Cook followed IFRS audit standards.
9:22AM
Former CFO: Debt and competition brought down Thomas Cook

Q: Why did Thomas Cook collapse?


Sten Daugaard, former CFO:Arrived as CFO this year, large debts and competition within sector were big challenges.
Peter Fankfauser: My primary focus was to pay down the debt [but] we were not fast enough. The former CEO said some events outside of managements control led to the collapse, including (he says) debts restricting the ability of Thomas Cook to react to opportunities and challenges.
Side note: Several Thomas Cook staff have arrived (in their uniforms) and are sat behind the bosses. Here are some pictures of them turning up:
Sterling and shares jump on hopes of a Brexit deal

Former Thomas Cook employees arrive at Portcullis House

Credit:
Peter Summers/Getty Images Europe
Sterling and shares jump on hopes of a Brexit deal

Former Thomas Cook employees arrive at Portcullis House

Credit:
Peter Summers/Getty Images Europe
9:14AM
Thomas Cook inquiry begins
The Business, Energy and Industrial Strategy Select Committee inquiry into the collapse of Thomas Cook has begun. Here are paraphrased summaries of the opening questions:

Q: Would you have done anything differently?


CEO Peter Fankhauser: If Icould start from scratch, Iwould have probably pushed even harder on the pace of restructuring the company.

Q: Did you deserve the bonuses you were paid?


Mr Fankhauser says he is a reflective person and accepts pay was enormous, but does not directly answer question.
Former Thomas Cook boss Peter kicks off evidence to MPs by declaring he is deeply sorry for collapse and admits his base pay was enormous. Graham Hiscott (@Grahamhiscott) October 15, 2019

Q: Can any of your bonuses be clawed back?


Mr Fankhauser said he recieved no bonus in 2018/19, ?750,000 in 2017 (30pc of which he says was in shares). He says he worked hard to keep company together, and says that his pay was not his decision. Pressed by chair Rachel Reeves, he says he will reconsider whether he should act differently but will not decide today.
Read more:The Thomas Cook bosses who received ?20m in bonuses in last 5 years as company collapsed
The three golden rules for business leaders appearing before MPs: apologise, apologise, apologise. Ben Wright (@_BenWright_) October 15, 2019
9:02AM
What you need to know about Hays Travel, who have taken over Thomas Cooks stores
Sterling and shares jump on hopes of a Brexit deal

Irene and John Hays

Credit:
Asadour Guzelian
Heres more on the husband/wife team behind Hays Travel, the independent firm that has taken over the high street stores left empty after Thomas Cooks collapse:
Heres their story:
See also:
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