Food inflation has continued to surge with prices rising at the fastest rate for 18 months, new figures show, with the cost of chocolate, butter and eggs in particular pushing prices higher. Food inflation lifted to 4.2 per cent this month from 4 per cent in July, according to the British Retail Consortium.
In stock markets news, the FTSE 100 fell after the London Stock Exchange was closed yesterday for the bank holiday, with investors facing two key matters: Nvidia’s earnings report on Wednesday and Donald Trump announcing he would remove Federal Reserve governor Lisa Cook from her role.
Elsewhere, Royal Mail is to stop accepting parcels to be sent to the US, with a new fee to be introduced soon, while Marks & Spencer are to sell second-hand clothes on an eBay store.
Follow The Independent’s live coverage of the latest stock market and business news here:
Key points
- Food inflation rises to 4.2% with eggs and butter prices surging
- FTSE 100 falls 0.6% as stock markets tumble
- The budgeting methods to try if you're struggling with your money
- Poundland saved from administration after judge agrees deal
Business and Money live - 26 August
08:09 , Karl MatchettMorning all and welcome back to our live business and finance coverage on The Independent.
This morning we’re looking at food inflation rising, the stock market reopening in London and plenty more.
Let’s get into it.
Food inflation rises to 4.2% - fastest rate in 18 months
08:13 , Karl MatchettWe start off with the morning news on food inflation continuing to rise.
British Retail Consortium data shows it at 4.2 per cent - up from 4 per cent in June - which places it at the fastest rising rate in 18 months, since February 2024.
“Retailers continue doing everything they can to limit price rises for households, but as the Bank of England acknowledged, the £7 billion in new costs flowing through from last year’s budget has created an uphill battle for retailers,” said Helen Dickinson, chief executive of the BRC.
Food inflation: The key facts and risers
08:26 , Karl MatchettButter, chocolate and eggs all rose in price to contribute significantly to overall food inflation in July.
Below is the full report - but it’s estimated that food inflation could hit 5 per cent later this year and the Bank of England has cited fears that food prices could contribute to overall increases in inflation too.
Food inflation jumps to 18-month high as chocolate and butter prices rise
M&S to sell second-hand clothes online
08:44 , Karl MatchettMarks & Spencer got themselves fully back up and running a couple of weeks ago with the return of their click and collect service.
Now the next phase of their digital push will see them move into the second-hand clothes boom, selling garments on eBay.
Customers can also pick up £5 gift vouchers if they donate M&S clothes to Oxfam.
The charity will benefit from sales of these second-hand clothes.
FTSE 100 falls 0.6%
09:06 , Karl MatchettA sharp enough fall this morning as stock markets open around Europe, with the FTSE 100 down 0.64%.
In Germany the DAX is down by around the same, while France’s CAC 40 is plummeting, at -1.98%.
Much of this is over concern around the removal of a key Fed member by Donald Trump - more on that shortly.
Business rates ‘double hit’ to cost English firms £2.5 billion
10:21 , Karl MatchettBusinesses in England are to face an “unavoidable double hit” to their property tax payments next year, which will see total payments surge by about £2.5 billion, according to new figures.
Analysis from global tax firm Ryan indicated that inflation and a government tax change will combine to drive up business rates bills further.
Business rates are the property taxes paid on commercial properties across the UK and particularly affects high street businesses. They are devolved in Scotland, Wales and Northern Ireland.
From April next year, a nationwide revaluation process will take place on business rates in England, linking payments to values in the property market from April 2024.
Business rates ‘double hit’ to cost English firms £2.5 billion next year
FDF explains food price rise
10:35 , Karl MatchettThe Food and Drink Federation (FDF) say energy prices and National Insurance rises have contributed to food costs going up for consumers.
“The latest food and drink inflation figures show that food and drink manufacturers are being squeezed on all sides,” Jim Bligh, director of corporate affairs at the FDF, said recently.
“Energy prices remain high, and the cost of some key ingredients has surged in recent years. Cocoa prices are at a 45-year high, and both olive oil and butter prices have doubled since 2020.
“With high commodity prices, the new £1.4 billion packaging tax, and increased National Insurance costs, it’s no surprise that many food and drink manufacturers have seen their costs increase by 10% or more this year.
“Manufacturers have absorbed as many of these costs as possible, but consumers will still see higher prices at the till. We expect that high food and drink inflation will persist through the year, so any fresh costs for businesses in the Autumn Budget will inevitably put yet more pressure on shoppers' pockets.”
LSE becomes first PISCES operator
10:52 , Karl MatchettA few months ago the FCA announced the launch of PISCES - an exchange to buy shares in unlisted private companies through.
Today, they have confirmed the London Stock Exchange is the first operator given the green light to run such an setup.
“We are delighted to be the first venue operator to have been granted a PISCES Approval Notice by the FCA...the London Stock Exchange has now taken a significant step towards the launch of our Private Securities Market later this year,” said LSE’s CEO.
“This new market demonstrates our commitment to the creation of a genuine funding continuum from the private to public markets so that businesses in the UK and around the world can be effectively supported across all stages of their growth.
“We look forward to welcoming the first private companies to utilise the market when they have completed their preparations and to expanding the options they will have to realise their ambitions.”
Thousands of pensioners claim £10,000 each in overcharged tax
11:05 , Karl MatchettAbout 2,400 pensioners successfully reclaimed more than £10,000 each after being overcharged tax on their pension withdrawals, new analysis has revealed.
A small number of people in the UK even received refunds exceeding £100,000.
The HMRC figures, which were obtained by Royal London through a Freedom of Information (FOI) request, show a notable increase in the number of refunds claimed in the 2023-24 financial year.
More from PA:
Thousands of pensioners claim £10,000 each in overcharged tax
Trump impacts on investors once more
11:30 , Karl MatchettDonald Trump speaks, the investment world wobbles. His constant changing of timings and direction in state matters make it tough to predict what’s next for businesses and money markets - and the markets hate uncertainty.
“A jump in US Treasury yields indicates that bond investors aren’t happy about how Trump continues to meddle with the Fed and threaten its independence,” says Russ Mould, investment director at AJ Bell.
“Equity markets were in the red across Europe and Asia, and futures prices imply Wall Street will follow suit when it opens for trading later today.
“Donald Trump is being relentless in his quest to lower interest rates. He has publicly called for the Federal Reserve to cut the cost of borrowing and has repeating criticised Fed chair Jerome Powell for not pursuing looser monetary policy.
“Even though Powell last week indicated a shift in Fed strategy with the implication that rates will be cut next month, Trump seems unsatisfied. He’s proceeded to sack Fed governor Lisa Cook which will drive speculation that the US president will push for a replacement governor more in line with his way of thinking. Cook has refused to resign, and the whole incident has caused financial markets to wobble once again.
“Importantly, the VIX volatility index has jumped 10% which suggests that investors have quickly switched from party-mode last Friday to now being cautious once again.”
The 50/30/20 budget is dead - here’s what to try instead
12:00 , Karl MatchettThe 50/30/20 budgeting method was popularised by US politician Elizabeth Warren, in her 2005 book All Your Worth: The Ultimate Lifetime Money Plan, and it remains a frequently recommended strategy for beginner budgeters 20 years later.
This method allocates 50 per cent of your post-tax earnings to essential spending (such as your rent or mortgage, bills, groceries and transport), 30 per cent to non-essentials, and 20 per cent to savings and investments.
Plenty are drawn to the apparent simplicity and attainability of this approach – but many find they have difficulty following it and fall far short of their savings goals.
Here’s what to try instead:
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FTSE 100 biggest risers and fallers
12:30 , Karl MatchettNot a good day for investors in UK markets - the FTSE 100 is down 0.5 per cent.
Here are the best and worst of the day so far:
- Bunzl +5.1%
- Fresnillo +2.0%
- Endeavour Mining +1.2%
- Shell +1.1%
- Babcock +1.1%
- Kingfisher -4.1%
- Associated British Foods -3.9%
- Standard Chartered -2.6%
- Convatec Group -2.6%
- Rentokil Initial -2.5%
Households set to learn energy bills to rise by around 1% in October
13:00 , Karl MatchettHouseholds are expected to learn that their energy bills will rise by around 1% in October when the regulator updates its price cap on Wednesday.
Ofgem, which sets the limit on what energy companies can charge customers, is set to confirm its latest price cap on August 27.
In their last forecast last week ahead of the update, experts at Cornwall Insight predicted the typical household energy bill will rise by £17 to £1,737 per year when the new price cap comes into force.
More details here.
Poundland to run out of money in days if restructure not approved, court told
13:30 , Karl MatchettPoundland will run out of money within days if a restructuring plan is not approved, the High Court has been told.
The company is asking a judge to approve a plan which would save it from entering administration, with barristers telling a hearing on Tuesday that it is set to run out of money by September 7 if the scheme is not sanctioned.
Poundland, founded in Burton upon Trent, Staffordshire, in 1990, has approximately 14,700 staff members and operates around 800 stores.
It announced plans to shut 68 stores in June after being sold by Pepco Group to Peach Bidco, a subsidiary of private equity firm Gordon Brothers, for £1.
More here from PA:
Poundland to run out of money in days if restructure not approved, court told
UK tech firm Filtronic wins ‘landmark’ SpaceX contract
14:00 , PABritish tech firm Filtronic has secured its biggest ever contract with Elon Musk’s SpaceX worth £47.3 million.
The London-listed defence and telecoms equipment maker – which is based in Sedgefield, County Durham – saw its shares leap as much as 13% higher at one stage on Tuesday morning after announcing the “landmark” agreement.
The deal will see it supply its next-generation gallium nitride E-band technology, which is a type of radio frequency (RF) tech designed for high-performance wireless communication.
Filtronic said the order is set to boost its revenue in 2026-27, when it will begin shipping product units under the contract, as well as in 2027-28.
More here:
Tomorrow is another big day for stock markets - with Nvidia reporting earnings after the close of play in the US.
Even if you don’t directly hold stock in the chipmaker, the world’s biggest public company is now so big it impacts...well, kind of everything.
That means from your other tech stocks, to several types of tracker index, to even pensions or automated investment pots that you don’t specifically manage yourselves - they can all feel the ripple effects when this firm announces profits.
Tom Stevenson, investment director at Fidelity International, explains what to look for.
“Just as the banks kick off the quarterly results round, Nvidia, the world’s biggest company, now brings it to a close. Tomorrow’s earnings call from the AI-focused chip maker will be closely scrutinised for signs that the artificial intelligence boom might be running out of steam.
“Tech stocks, fuelled by investor enthusiasm for AI, have pushed the S&P 500 9% higher so far this year, building on the strong returns in 2023 and 2024. But recently concerns about the high valuations attached to anything AI-related have seemed to puncture the bubble.
“Nvidia’s results are expected to be strong again. Growth of 53% is pencilled in. That’s less than the previous quarter’s 69% but still impressive for such a large company (worth more than $4trn now) and well ahead of the rest of the market’s growth prospects.”
Poundland saved from administration as judge approves restructuring plan
15:29 , Karl MatchettEarlier we head that Poundland was in danger of going under within days - that has been averted for now.
PA’s Callum Parke gives the latest:
Poundland has avoided entering administration after a restructuring plan was approved by a judge at the High Court, days before the company was due to run out of money.
Barristers for the retailer had told a hearing earlier on Tuesday that it would be placed into administration by Friday and was set to run out of money by September 7 if the plan was not approved.
The scheme will see up to £60 million of new funding injected to keep the retailer afloat, among other terms.
Poundland saved from administration as judge approves restructuring plan
US stocks steady after European markets fall
16:30 , Karl MatchettThe FTSE 100 and European markets have been on the low today but US stocks have started by treading water.
It’s flat at zero with the S&P 500, with the Nasdaq up 0.1 per cent.
The Euro Stoxx 50 is down a full 1 per cent today.
