Live Blog

October 31, 2014, 12:45pm
Game Group's appeal against a landmark decision forcing retailers to pay rent even after they have filed for administration has been rejected by the Supreme Court. 
The test case was brought by landlords British Land, Hammerson, Land Securities and Intu, and the February ruling in their favour paved the way for so-called “pay as you stay” rules to be introduced. 
Previously administrators had to carry the cost of unpaid rent as an expense, and in the case of Game meant it had three months rent-free while part of the business was sold on to private equity group OpCapita.  
Today's rejection by the Supreme Court was greeted as “a relief” by the British Property Federation. 
Director of policy Ian Fletcher said: “Had the appeal been allowed, the property industry would have been stuck in a state of flux with a longer wait for an answer to this critical question. As it is, common sense has prevailed and those administrators who had been holding back on paying rent due to landlords will now have to accept the inevitable. 
He added: “The decision has paved the way for a much fairer and sensible system and we would like to see the Insolvency Service take steps to ensure that this case is used as best practice for all future retail insolvencies, to ensure that landlords’ interests are safeguarded in the future.” 
Draghi Nowotny
October 31, 2014, 12:39pm

We cannot rule out quantitative easing in the Eurozone: that was the message European Central Bank governing council member Ewald Nowotny gave CNBC today.

"I think that we have all learned in life that we should never say 'never',” Nowotny told the channel.

Nowotny is generally considered a hawk, preferring the austere German methods of monetary policy. This makes his remarks all the more surprising.

The Eurozone is facing multiple economic challenges. Inflation just ticked up to 0.4 per cent, but is still in Mario Draghi’s designated sub one per cent danger zone.

GDP in the single currency bloc is even slower, coming in at 0.1 per cent in the third quarter, while unemployment has been stuck at 11.5 per cent for four months.

Of the three spectres of economic doom, Nowotny told CNBC he believed that sustained low growth was the bigger threat. "I think this is the biggest challenge we face right now,” he said. 

Amazon logo on box
October 31, 2014, 12:02pm

One of the most powerful people in the publishing world has compared Amazon to the Islamic terrorist group IS.

Andrew Wylie, agent to literary stars such as Martin Amis and Salman Rushdie, called the online retailer a “sort of Isis-like distribution channel” in a speech at the International Festival of Authors on the future of the industry.

In a  single statement, Wylie has managed to take up a notch an ongoing, contentious and very public battle between the traditional publishing world and the online book retailer over ebook pricing that’s been rumbling on for a while now.

The literary agent, nicknamed “the jackal”, labelled Amazon’s tactics brutal and called on publishers to stand firm in their negotiations with the US firm over royalties for ebooks, the Guardian reports.

He told an audience in Toronto: “I believe with the restored health of the publishing industry and having some sense of where this sort of Isis-like distribution channel, Amazon, is going to be buried and in which plot of sand they will be stuck, [publishers] will be able to raise the author’s digital royalty to 40% or 50%. Writers will begin to make enough money to live.”  

Famous authors have sounded off against Amazon about its desire to lower ebook prices which they say will cost writers much needed royalty money. Amazon meanwhile, has rounded on the big publishers for wanting to keep ebook prices artificially high rather than offering customers good deals, even urging readers to email Hachette boss Michael Pietsch about the issue.

Eurozone unemployment
October 31, 2014, 11:51am

It is a reflection of the economic times that a flat unemployment figure inspires a sense of relief, but today analysts breathed a sigh of relief as EU unemployment remained stable at 11.5 per cent in September.

Although it was the fourth consecutive month the rate had stayed the same, the total number of unemployed persons in the Eurozone dropped by 19,000 or 0.08 per cent: a small figure when 24.5 million are without work.

Analysts had not forecast a change, and any positive movement seems protracted. Last September the rate was 12 per cent.

The country with the highest unemployment was Greece, with 26.4 per cent, followed by Spain with 24 per cent. Germany, despite apparent weakening in its economy, has a rate of just five percent.

By comparison, the unemployment rate is six per cent in the UK and 5.9 per cent in the US.

Howard Archer of IHS Global Insight, was almost optimistic:

Modestly improving labour markets, along with consumer price inflation of just 0.4 per cent in October, offers hope that Eurozone consumers will gradually step up their spending over the coming months.

Eurozone consumer confidence also edged back up in October after recent softness, with consumers seemingly more prepared to make major purchases. However, wage growth remains muted and unemployment is still elevated.

October 31, 2014, 11:29am

Inflation in the Eurozone ticked up a tenth of a percentage point in October, which will do little to allay fears about the state of the economy in the single currency zone.

According to the latest flash estimate (which will be confirmed next month) the rate was 0.4 per cent in October, compared with 0.3 in September. However, the rate is still anaemic, deep in the below-one-per cent region labelled a "danger zone" by European Central Bank chief Mario Draghi.

Meanwhile unemployment in the single currency bloc remained steady, if high, at 11.5 per cent. By way of comparison, the rate is six per cent in the UK and 5.9 per cent in the US.

According to Eurostat, which collects official data on the EU, the services sector is expected to be the strongest annual rate in October (1.2 per cent) while tobacco, alcohol and food should come in at 0.5 per cent compared with 0.3 per cent in September.

Analysts are hoping the Eurozone economy will recover and that the European Central Bank’s move to buy asset-backed securities will help avoid deflation. Eight European economies, including Spain, were suffering deflation last month.

October 31, 2014, 10:57am

So much for the softly-softly approach to monetary policy taken by most central banks at the moment.

Russia has hiked interest rates by 1.5 percentage points to 9.5 per cent, in an effort to stave off further slides in the rouble.

The value of Russia's international reserve stockpile has fallen more than $30bn since the start of the year, from $469.5bn to $439.1bn. The rouble has fallen 23 per cent against the dollar, from 0.0304 at the beginning of 2014, to 0.0232 on Wednesday, fuelled by sanctions against Moscow and sliding oil prices.

Yesterday, the currency rallied to 0.024 against the dollar on confidence the central bank would act decisively to prevent it sliding further. And although the bank duly obliged, the sheer size of the hike took analysts - many of whom had predicted a rise to 8.25 per cent - by surprise. 

But even tougher measures may be needed, particularly considering the fact that after a spike, the rouble fell to 0.0237 per cent against the dollar, reversing some of yesterday's gains.

To compound its woes, earlier this week research by Goldman Sachs suggested oil prices would drop further in the first quarter of next year, although a new deal with Ukraine to resume gas supplies over the winter may bring some welcome relief to the beleaguered Russian economy: the deal includes a $1.45bn up-front payment, and another $1.65bn by the end of the year.

million pound house
October 31, 2014, 10:23am

London house prices might be cooling, but things are certainly hotting up at the premium end of the market.

Sales of properties costing more than £1m have reached record levels in the UK with 6,143 houses sold in the first half of the year- 70 per cent of which were in London.

That’s nearly 2,000 more than the same time last year and a rise of 46 per cent.

An additional 1,358 of those additional homes were in London, bringing the total number of properties sold in the capital worth more than £1m to 4,259.

The figures from Lloyds Bank reveal Kensington and Chelsea, Westminster and Wandsworth had the most properties priced at £1m or more, and one in every five sales of million pound homes in the country was in a London borough.

Outside the capital, the south east had the highest number of £1m plus property sales- just over a thousand- while the biggest increase occurred in the north east, where high value house sales more than doubled from six to 15.

Lloyds Bank private banking director Sarah Deaves said:

The number of homes sold for at least £1m is at a record high, with this sector of the housing market growing by almost a half in the first six months of this year compared to the same period in 2013. Property values in prime locations have been boosted by growing demand from wealthy, and often cash rich, buyers from the UK and overseas, as well as limited supply of such properties.

Rainy days
October 31, 2014, 10:19am
Has this October really been “unseasonably warm”? 
This week two retailers have blamed the weather for poor sales. First up it was Next, which has become renowned for generally being so cautious on its guidance that it surprises on the upside. It was forced to lower its full year guidance, however, saying autumn had been too mild for the season's thicker clothing
This morning SuperGroup followed suit. The young fashion brand SuperDry has also come unstuck because of “continuing weather-related uncertainty”. Its full year profit guidance has similarly been dropped down, leading its share price to tank.  
Retailers are obsessed with weather, arguing not unreasonably that consumers will not refresh their wardrobes until the seasons change. But are their memories playing on tricks on them?
Met Office data shows this October has not been the mildest in recent history. Not even close. 
In 2014, the average temperature (up to October 28) was 11°C. Last year it was 12.5°C. Admittedly, in 2012 it was 9.7°C, but that was actually the coldest October since 2002.

In fact the median October temperature for the past 20 years up to and including 2013 is 11.2°C, from which it appears this year has been in fact colder than average. Just.
Looking back 50 years, you start to see the pattern that has got climate scientists worried, but while the increments are no doubt significant when considering global warming, they do not appear to be at the level to have made consumer habits dramatically shift from cable knit jumpers and wool coats to skimpy summer dresses.

The pattern since records began back in 1659 again shows a definite upwards trend. But if retailers are basing their production calendar on weather from the era that brought us witch ducking and the plague, we might politely suggest it's time for an update. 

Martin Sorrell
October 31, 2014, 9:44am

Growth at the world’s largest advertising group, WPP, has unexpectedly slowed in the third quarter as geopolitical tension and global economic woes take their toll.

Like-for-like net sales in the three months to 30 September grew three per cent, compared with expectations of 3.3 per cent and 4.1 per cent in the first half of the year. Stripping out currency costs, net sales were up 6.1 per cent as the pound continued to strengthen against the US dollar and the euro.

The ad group, led by Sir Martin Sorrell, said it expects this slowdown to continue into fourth quarter as clients remain risk averse.

“All in all, whilst clients may be more confident than they were in September 2008, they broadly remain unwilling to take further risks, particularly given multiple geopolitical flash points,” the company said.

Like-for-like revenue for the quarter was up 7.6 per cent, or 10.6 per cent on a constant currency basis.

WPP reiterated its full year targets, however, and shares were up 0.4 per cent in early trading.

Sorrell also added two new "black swans" to its economic outlook - events with unknown effects - Ebola and protests in Hong Kong. 

Fireworks over blackheath
October 31, 2014, 9:34am

It’s that time of year, the fifth of November- remember? And that means the skies across London will be lit up with stunning firework displays.

So get your sparklers ready, here’s where you can watch the best firework displays in the capital this weekend.

Look on the map below for a spot near your, or take a look at the list below.