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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden (now), Julia Kollewe and Angela Monaghan

BP 'disappointed' after shareholders refuse to back pay deal - live

BP chief executive Bob Dudley

Summary: BP shareholders revolt against bloated pay deals

And finally (I think), here’s our updated news story on today’s AGM drama:

Shareholders sent a warning through Britain’s boardrooms at the first annual general meeting of the season by voting by a massive majority against bloated executive pay packages at BP.

Almost 60% of votes cast at the meeting opposed the remuneration report. The vote is non-binding, and Dudley will still get the bumper payout, which was awarded in a year when the oil company ran up its worst ever losses of $6.5bn. It will, however, force BP to respond to its shareholders’ anger.

Before the vote was published, BP’s chairman, Carl-Henric Svanberg, told the meeting that the board would listen to shareholders’ views, indicating there was trouble ahead. When the votes were announced, 59.11% had opposed the remuneration report.

A shaken Svanberg said the result, one of the biggest ever investor pay rebellions involving a FTSE 100 company, was advisory but accepted “it does not make it any less important”....

I’ll pop back if there are any more developments. Otherwise, thanks for reading and commenting. GW

It’s been a busy day for shareholder activists, with several annual meetings taking place:

Smith & Nephew says it ‘notes’ that it, like BP, has suffered a shareholder revolt on pay today.

Investors were angry that S&N used ‘discretion’ to boost bonuses to top executives by a total of £2.1m

The company is defending that decision, saying it was done to align executive pay with shareholder returns. But it has also promised to rethink its pay structure:

Looking ahead, as mentioned in our 2015 Annual Report, the Remuneration Committee is undertaking a thorough review of remuneration arrangements during 2016, ahead of putting a revised Remuneration Policy to shareholder vote in 2017. Over the summer, they will consult with a broad range of shareholders to solicit their views on how best to align executive reward with shareholder interests.

BP: We're disappointed by pay vote

BP has issued a statement to the City, confirming that shareholders rejected Bob Dudley’s £14m pay deal -- although that vote is not ‘binding’.

The final voting tally shows that 59.29% of shareholders voted against the remuneration report. That makes it the second biggest pay revolt ever, after RBS (see earlier table).

However, the company seems to be pressing on with the pay plans, despite shareholder anger. It is only promising to produce a ‘revised’ pay policy next year.

Mr. Carl-Henric Svanberg, Chairman, says:

After an outstanding operational year for the company in a very difficult oil price environment, we were pleased that we had the support of our shareholders on all the binding votes at today’s meeting.

We were disappointed that the advisory vote for this year’s remuneration report was not carried. We have already spoken to a number of shareholders and have a continuing dialogue. They are seeking changes to our remuneration policy for the future. We will continue that engagement and will bring a revised policy to our next AGM in 2017.

Revolution is in the air tonight, as a second FTSE 100 company suffers a bloody nose over its pay plans.

Smith & Nephew, the medical engineering company, reports that 53% of shareholders voted against its remuneration report. Here’s the official statement.

Chris Hughes of Bloomberg also argues that BP’s remuneration committee are culpable.

He writes:

For starters, the remuneration committee could have applied much more discretion last year and taken Dudley’s award down further. Instead, it seems to have absolved itself of responsibility by deferring too much to the shareholder-ratified pay policy. That shows poor judgement.

When shareholder discontent became evident in recent weeks, BP could have taken pre-emptive action and sought to persuade Dudley to return some of the award. This was a trick deployed effectively by British banks ahead of similar AGM rows, when CEOs pre-empted show-downs by sacrificing part or all of what they had been awarded.

Nils Pratley: BP Remcom chief should quit

Our City editor, Nils Pratley, argues that BP is guilty of deep corporate blindness.

The remuneration committee should surely have realised that Dudley’s massive pay package was unacceptable, when the oil company was also posting a whopping loss?

Nils writes:

Read the remuneration report and there is barely a hint of awareness that paying its chief executive, Bob Dudley, £14m in a loss-making year might cause a spot of bother with the owners. Ann Dowling, the chair of the remuneration committee, concludes by saying she is pleased that BP’s pay policy has “appropriately recognised” the company’s excellent performance.

Dowling’s remarks only make any vague sense within BP’s narrow view of how it measures its progress. Shareholders are thrown statistics of how few accidents happened last year, how many big development projects were completed on time and how much cash was generated against budget. These factors, rather than the oil price, are the things management can affect and thus should be measured against, runs the argument.

As a philosophy it is internally coherent, but it is crying out for somebody to apply common sense when the pay calculator spits out a plainly ridiculous figure of £14m, up 20%, for the boss in a year like the one BP has just had. The company imposed a pay freeze on staff and cut 7,000 jobs. Its share price fell 13% and it recorded a loss of $5bn (£3.5bn).

Here’s the full piece, which concludes that Dowling should deliver an “honourable resignation”.

David Pitt-Watson, Executive Fellow at London Business School, hopes that today’s rebellion could spur more shareholders into action:

“This is an interesting and unexpected result. However, rejection of pay awards which are widely regarded as unjustified should not be the exception. It should be the norm. Those who cast their vote didn’t “own” the shares. They hold those shares on our behalf. (Almost everyone in Britain who has a funded pension will have a share in BP). And this pay award was regarded as unreasonable.

Pitt-Watson suggests that advertising giant WPP could be next. It handed founder Sir Martin Sorrell a £63m package this year.

“The question now is whether we will see this result repeated at other companies like WPP. If so, maybe “fiduciary shareholder democracy” is working.That is what was intended when the shareholder vote was put in place.

If not, directors’ pay will remain out of control because we have no other practical way to bring it under control.”

Sacha Sadan, L&G’s director of corporate governance, has explained why his firm rejected BP’s pay deal today:

“LGIM voted against the remuneration report as we felt there was poor alignment between long-term shareholder returns and executive remuneration.

In LGIM’s view the remuneration committee should have used discretion to scale back bonus payments and long term Incentive awards (LTIP) to Executive Directors during the year.

“We welcome the Chairman’s speech to meet leading investors and we will continue to engage with BP to develop a policy better aligned to long term shareholder returns.”

BP also faced criticism today over its plans to drill in the Great Australian Bight - the area to the south of mainland Australia.

Environmentalists fear a repeat of the Deepwater Horizon disaster, which caused huge pollution in the Gulf of Mexico.

Anne-Marie Williams and Juliet Phillips of ShareAction collared BP’s chairman about the project:

And here’s why they’re so concerned:

Updated

The High Pay Centre, which campaigns against excessive boardroom pay, has hailed today’s vote.

Here’s their statement:

The 59% vote against BP’s remuneration report is a remarkable and welcome development.

Remuneration committees have got to use what is called “discretion”, that is, do their job.

The shareholders have said: you have gone too far, and this level of pay cannot be justified or accepted.

The board must think again.

Sky New’s Mark Kleinman also suggests Professor Dame Ann Dowling may be forced off the BP board.

After all, it was her remuneration committee that came up with Bob Dudley’s package.

Catherine Howarth, the head of the investor activist group ShareAction, attended BP’s AGM.

She reckons Ann Dowling, the Cambridge academic who chairs BP’s pay committee, had a rough day:

BP investors gasped when the initial voting figures were displayed on screens at today’s AGM, at the ExCel exhibition centre in east London, Reuters reports.

But it’s not clear whether BP are going to heed the vote, or simply revise its pay policies for 2017.

Ann Dowling, head of BP’s remuneration committee (at the moment, anyway) told shareholders:

“We will...review the overall remuneration package.

“I will report on this next year with our conclusions and with a new proposed policy based on the outcome of this review.”

That may not be enough to please critics, such as the Institute of Directors, who are pushing for significant reform.

Updated

UK satirists are weighing in too:

Cable: Investors must demand BP heads

Vince Cable, the former business secretary, also believes BP board members must step down.

Updated

IoD: City is in 'last chance saloon' over CEO pay

The Institute of Directors has has warned BP’s board not to ignore shareholders’ anger over their pay policy.

Simon Walker, the IoD’s Director General of the IoD, says it’s vital that today’s vote is heeded.

“How the board of BP reacts to this rebellion will determine the future of corporate governance in the UK. The shareholders have spoken, and BP cannot shrug of this significant expression of disapproval with the CEO’s pay package.

British boards are now in the last chance saloon, if the will of shareholders in cases like this is ignored, it will only be a matter of time before the Government introduces tougher regulations on executive pay.”

City firm: it's an "extraordinary" vote

Ashley Hamilton Claxton, corporate governance manager at Royal London Asset Management, is urging the BP board not to ignore today’s shareholder vote:

“We welcome the decision by a majority of BP shareholders to vote against the remuneration package for its executive directors. We believe the vote reflects a serious discontent between the board’s decision and the expectation of shareholders.

“The 59.1% vote against the executive directors remuneration is extraordinary and shows a lack of discretion by BP’s board.

“We hope that the board now seriously considers the views of its shareholders when deciding how to proceed.”

Labour MP: Dudley must go

Barry Sheerman, Labour MP for Huddersfield, has called for Bob Dudley to resign:

Updated

The Wall Street Journal call today’s vote a “stinging” rebuke to Bob Dudley and BP, even though the decision is ‘non-binding’ (so the board could technically ignore it).

Here’s their take:

BP Shareholders Reject Oil Giant’s Pay Policy

Updated

This really is a dark day for BP; it’s pretty rare for blue-chip firms to suffer this kind of humiliation at their investors’ hands.

More City reaction is coming in now:

Business pundit Nick Hood thinks heads should roll on the BP board, for offering Dudley such a huge package and failing to heed the warning signs.

Dame Ann Dowling, who chairs the remuneration committee, is one candidate.

Updated

More shareholder discontent at housebuilder Persimmon.

Guardian reporter Frances Perraudin was at the AGM in York and brings this report:

Persimmon has been forced to defend the appointment of non-executive director Nigel Mills after questions were raised about his links to the company’s financial advisers, Citi.

Shareholders elected Mills, a senior adviser at Citi, to the position by a narrow margin – with 107m votes in favour, 96m votes against and 730,000 votes withheld – despite investor bodies raising concerns that he would not be independent.

Speaking at the company’s AGM at York racecourse on Thursday, Nicholas Wrigley, the chair of the company’s board, said they had considered the issue very carefully and that they were “totally convinced” that Mills was the right person for the role.

“We respect shareholders opinions but we believe Nigel is independent and his appointment is line with the provisions of the UK corporate governance code,” he said.

Updated

US markets: roughly flat

US markets are roughly flat in early trading :

  • Dow Jones: -0.07% at 17,895.65
  • S&P 500: -0.03% at 2,081.87
  • Nasdaq: -0.2% at 4,937.06

It looks as though the BP vote could be the second biggest shareholder rebellion. Other notable revolts in the past are listed below.

Votes against pay at FTSE 100 companies

Source: Manifest

Updated

Institutional investor L&G says it was among shareholders voting against BP pay:

Guardian reporter Sean Farrell has been speaking to Roger Lawson of ShareSoc, the small shareholder’s group, about BP.

Lawson points out that the big vote against Dudley’s £14m package does not necessarily mean BP will radically alter it.

They need to totally review Mr Dudley’s remuneration package, rebase it and redesign the bonus and LTIP arrangements. That’s the only real solution.

They can try to get away with fiddling with it but it depends how forceful the institutional investors they talk to are. In my experience the concessions you get after a company loses a remuneration vote are not very large.

They say: ‘We’ve listened to shareholders and changed this and that’ and hope they can squeak it through next year.

We will be bringing you more reaction to the incredible shareholder revolt at BP as it comes in.

Choosing a second hand vinyl record in a record store

In the meantime, proof if proof were needed that vinyl records are still loved...

Sales have reached their highest level for 20 years and could be on track to return to their peak levels in the 1980s, an industry body said.

Figures produced by the BPI showed sales grew 60% between January and March, compared with a year earlier.

Geoff Taylor, chief executive of the BPI, said:

Vinyl is no longer the preserve of baby-boomers who grew up with the format. It now also appeals to a new generation of engaged younger fans and millennials.

The Guardian’s Energy editor Terry Macalister is at the AGM and has described the vote as “astonishing”...

BP shareholders vote against Dudley's pay

BREAKING: 59.1% of BP shareholders vote against Bob Dudley’s 2015 pay.

US jobless claims revisit 1973 low

Richard Nixon

Over in the US, new jobless claims fell unexpectedly last week, revisiting a level last seen in 1973 when Richard Nixon was President and Gladys Knight & the Pips had a number one hit with Midnight Train to Georgia...

Initial claims for state unemployment benefits fell by 13,000 to 253,000 in the week ended 9 April. Economists had forecast a rise to 270,000.

It matched the level recorded for early March, which was the lowest since November 1973.

It is the latest sign that the US labour market is improving despite a sluggish economy.

Shareholders at BP’s tense AGM are asking why lower oil prices are not exerting downward pressure on executive pay at the company...

Updated

BP’s chairman has told shareholders at the oil company’s AGM it will respond to concerns about the near-£14m pay package awarded to chief executive Bob Dudley. Here’s our full story.

Svanberg told the AGM:

Later in the meeting we will discuss and vote on the resolution on the director’s demuneration Report. That vote is advisory.

We know already from the proxies received and conversations with our institutional investors that there is real concern over the directors’ pay in this challenging year for our shareholders.

He said all investors recognised Bob Dudley’s achievements in improving BP’s operations. But he added:

On remuneration, the shareholders’ reactions are very strong. They are seeking change in the way we should approach this in the future. Let me be clear. We hear you. We will sit down with our largest shareholders to make sure we understand their concerns and return to seek your support for a renewed policy.

It looks like Persimmon could also face some difficult questions at its AGM...

Updated

The Chartered Institute of Management Accountants (CIMA) argues that the bonus given to BP’s chief executive Bob Dudley is justified – saying that his decision making will contribute to the company’s long term success.

Peter Simons of CIMA says:

Campaigners against ultra-high executive pay frequently have valid perspectives – and our own research shows that 61% of bosses admit their organisation’s incentive structures aren’t encouraging the right sort of decisions. But in my opinion this example is different.

Much of Bob Dudley’s proposed bonus relates to progress against major change objectives to ensure BP’s long term success. This is the right way to use bonuses, to encourage sustainable business, not just reward short term performance. So, while investors and analysts are right to be wary of any bonus with lots of zeroes - we’d suggest that incentives are more important in the bad times than they are in the good.

Mining giant Rio Tinto is also holding its annual meeting in London today, the last AGM for chief executive Sam Walsh. The company will hold another AGM in Brisbane on 5 May.

Rio Tinto has posted a speech by John Varley, the former Barclays boss who chairs the miner’s remuneration committee, on its website. He says about executive pay, always a sensitive issue –

Of course, we recognise that strong feelings exist about executive pay. We also know that there will never be a perfect consensus among our owners on this subject.

For this reason the remuneration committee seeks to maintain its constructive dialogue with our shareholders and we will continue these conversations in the months ahead.

You can read the speech here (pdf). The text of the opening speech by chairman Jan du Plessis can be found here.

Updated

The AGM season is getting under way. BP’s chief executive Bob Dudley is facing shareholders in London amid anger over his £13.8m pay package, while housebuilder Persimmon is holding its AGM at the racecourse in York.

The builder could face questions over its generous share bonus scheme, approved in 2012, and the composition of its boardroom. The share plan could hand an estimated £600m to 150 directors by 2022/

As far as BP goes, the Institute of Directors made a rare intervention on executive pay ahead of the AGM, urging BP shareholders to think twice before backing Dudley’s pay award.

Updated

Here is our full story on the Bank of England decision.

Katie Allen writes:

A vote to leave the EU could harm economic growth and have a serious impact on the pound and other UK assets, the Bank of England said on Thursday, as it took steps to prepare for June’s referendum.

Minutes to the Bank’s latest policy meeting showed its nine-strong monetary policy committee voted unanimously to leave interest rates at their historic low of 0.5%. The committee said uncertainty ahead of what is expected to be a close EU vote appeared to be weighing on investment decisions and policymakers said economic growth could slow as a result in the second quarter of the year.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, says:

The committee reiterated its judgment that “it is more likely than not that Bank Rate will need to increase over the forecast period” in order to keep inflation in check. It therefore clearly disagrees with the markets’ view that interest rates are more likely to fall than to rise this year and will not reach 0.75% until 2020.

All in all, the committee still is in ‘wait and see’ mode; it will take stock after the EU referendum has been concluded in June, likely with a vote to remain. We continue to think that inflation will surprise to the upside later this year and throughout 2017, compelling the MPC to raise interest rates at least once before the end of this year.

Here’s Ben Brettell, senior economist at Hargreaves Lansdown, on the Bank of England decision:

Consumer spending, aided by low inflation, low unemployment and rising wages, has been the engine of economic growth lately. But recent surveys suggest consumers reined in their spending in March - perhaps the first sign of nerves ahead of June’s EU referendum.

Today’s minutes from the Bank of England note that uncertainty over the referendum has begun to affect the real economy.

The BoE also admits that UK economic data will be hard to assess until the June referendum is over.

BoE: Brexit fears are hitting the economy

Bank of England policymakers have also warned that uncertainty over the European Union referendum is hitting economic growth.

The Monetary Policy Committee say that uncertainty relating to the EU referendum has begun to weigh on certain areas of activity.

The minutes of this month’s meeting state that:

Some decisions, including on capital expenditure and commercial property transactions, are being postponed pending the outcome of the vote. This might lead to some softening in growth during the first half of 2016.

The Bank has also warned that Britain could be plunged into a long period of uncertainty if the public vote to leave the EU in June. The pound could be hit hard, they say:

The Committee considered the likely implications for monetary policy of a vote to leave the European Union. Such a vote might result in an extended period of uncertainty about the economic outlook, including about the prospects for export growth. This uncertainty would be likely to push down on demand in the short run. Uncertainty regarding the supply side of the economy might also increase, reflecting any alterations to product or labour market regulation, adjustments in labour flows or changes in the rate of technology adoption as a result of different arrangements governing foreign trade and capital flows.

A vote to leave could have significant implications for asset prices, in particular the exchange rate.

And the Committee also hints that it could be forced to cut interest rates to fresh record lows, to fight off the threat of deflation:

Ultimately, monetary policy would be set in order to meet the inflation target, while also ensuring that inflation expectations remained anchored. Whatever the outcome of the referendum, the MPC would use its tools to achieve its inflation remit.

Updated

The Bank of England says there has been “mixed news” on the prospects for global growth in the near term.

The minutes of this month’s MPC meeting state that:

Immediate downside risks around Chinese activity have lessened; in the United States, indicators of GDP growth in the first quarter of the year have been disappointing, but those for the second quarter are more encouraging. Movements in the prices of risky assets suggest that investors have regained their risk appetite, possibly reflecting more positive global economic data and policy action by central banks.

Nevertheless, given weak supply growth, the Committee continues to expect global growth to be somewhat subdued by historical standards.

Updated

UK interest rates have now been hold for 85 months running, going all the way back to March 2009.

There are children at school who weren’t even born when borrowing costs were last above 0.5%.

BoE leaves rates on hold again

Breaking: The Bank of England has voted 9-0 to leave interest rates unchanged, at 0.5%.

That’s largely as expected, despite some chatter that one policymaker might be tempted to vote for a cut.

In all honesty, this isn’t the most eagerly anticipated central bank decision in history:

Burberry drags London shares down

Burberry’s sales woes have dampened the mood in the City this morning.

Shares in the luxury retailer are still down 7%, as investors react to the 5% fall in like-for-like sales in the last quarter.

Mining shares are also down, following a rise in the US dollar against the pound today (which pushes down commodity prices)

Burberry's share price since 2014
Burberry’s share price since 2014

The wider FTSE 100 is currently down 3 points, seemingly becalmed ahead of the Bank of England rate decision at noon.

Other markets are equally dull, with Germany’s DAX up 0.05% and France’s CAC down 0.1%.

Joshua Mahoney of IG sums up the mood:

These Bank of England meetings have turned from a monthly must-see to a somewhat mundane ritual, given the clear remoteness of any near-term monetary policy shift. One thing that has changed is inflation is finally starting to pick up. Thus, any shift in tone from the committee will be closely tracked as a cue to draw forward rate hike expectations.

Burberry shares tumbled heavily at the release of a lacklustre set of earnings today, with the company representing the second luxury retailer this week to be hit by falling footfall in Europe. Interestingly, Burberry sales in China continue to grow, providing the latest sign that despite the economic slowdown, consumption is on the rise in the Chinese middle class.

Having said that....Jeremy Cook of World First predicts that the Bank of England will vote 9-0 to leave interest rates unchanged at today’s meeting.

Which Bank policymakers could be tempted to vote to cut interest rates?

Chief economist Andy Haldane is one candidate. Twice last year, he suggested that borrowing costs could be cut from the current 0.5%, if economic conditions worsened.

Another option is Gertjan Vlieghe, the hedge fund economist who joined the MPC last summer. in January, he warned of “the possibility that real interest rates will remain well below their historical average for a very long time”.

Updated

We have one hour to wait until the Bank of England releases its interest rate decision.

Sky News’s Ed Conway suggests that some Bank policymakers are close to voting to cut interest rates.

Updated

Greece’s economic plight has claimed another victim - electronics chain Elektroniki Athinon.

The company is shutting its 45 stores, after declaring bankruptcy. The Kathimerini newspaper reports:

In a statement released on Wednesday, the company cited the state of the local economy, the weakening of Greek consumers’ purchasing power, the imposition of capital controls last year and a suspension of a restructuring plan among the reasons behind its insolvency.

According to Elektroniki, the company’s 450 employees were not owed unpaid wages, while compensation would be paid in about 8 months.

A glimmer of good news from Europe -- the eurozone is no longer in deflation.

New data from Eurostat show that consumer prices were unchanged across the region last month, rather than falling by 0.1% as first estimated.

However, plenty of countries are still experiencing deflation, despite the European Central Bank’s stimulus efforts:

Updated

Speaking of Royal Bank of Scotland....

A branch of The Royal Bank of Scotland in the City of London.

More than seven years after the financial crisis, Britain’s government should accept that it may never make a profit on its shareholding on Royal Bank of Scotland.

That’s the view of the top civil servant at Her Majesty’s Treasury, Sir Nick Macpherson, a man who has played a key role behind the scenes for decades.

Macpherson, who is stepping down from the Treasury, told the Financial Times that it will be “tricky” for the state to sell all of its £19.2bn stake in RBS before the next election.

“My one experience of running banks is that the longer they stay in the public sector, the greater the likelihood that you will lose value.”

So a judgement must be made on whether to bite the bullet, and sell at a loss, Macpherson believes.

RBS’s shares are changing hands at just 227p today, compared to the ‘break-even’ price of around 502p which the taxpayer paid in 2008 and 2009.

So it’s hard to argue with Macpherson’s logic – given chancellor George Osborne’s desire to wash his hands of RBS.

Swallowing a multi-billion pound loss will also be problematic, even though the bailout did prevent the collapse of Britain’s banks.

JD Sports has smashed City expectations, sending its shares up 2%.

My colleague Julia Kollewe explains:

JD Sports has reported a 45% surge in annual profits and booming sales in sports fashion as it rolls out stores across Europe.

Strong demand for trainers made by Nike and other leading brands, as well as for women’s sportswear, meant that like-for-like sales at JD’s sports fashion division rose by more than 10% for the second year running....

More here:

A display of children’s clothes in a Mothercare Plc store in London, U.K.

There may be tears before bedtime at Mothercare.

Shares in the parent and baby chain have slumped by 15% this morning, to the lowest level since October 2014.

In its latest results, Mothercare reported that international sales have slumped by around 10%, due to turmoil overseas:

It says:

International continues to be affected by ongoing economic and currency headwinds.

Retail sales in constant currency were down (9.7%) with currency further impacting retail sales in actual currency which were down (10.8%).

Sales fell in all four international regions - the Middle East, Asia, Europe and Latin America.

It says:

In the Middle East consumer sentiment was impacted by the sustained lower oil price, resulting in a significant decline in constant currency sales. In Asia, China in particular, was affected by weakening consumer confidence.

Europe and Latin America were impacted by adverse currency moves.

That took the shine off a 2.1% rise in UK sales, as the company’s turnaround plan gathers pace, and triggered something of a tantrum in the City:

Mothercare’s shares over the last two years
Mothercare’s shares over the last two years Photograph: Thomson Reuters

Updated

Unilever hasn’t impressed the City either, despite reporting underlying sales growth of 4.7% and hiking its dividend.

Shares in the consumer giant are down almost 1% in early trading, after it warned that markets remaining volatile.

The company behind Lynx deodorant, Persil soap powder and Ben & Jerry’s icecream is experiencing “challenging macro-economic conditions” in the Americas.

And in Europe, sales growth was more than wiped out by price deflation.

Financial officer Graeme Pitkethly summed it up to Reuters:

“We expected tougher markets and we’re finding tougher markets.”

Burberry shares out of fashion

Shares in Burberry have slumped by 6% at the start of trading, after it hit investors with more bad news.

Burberry reported that like-for-like sales have fallen by 5% in the last quarter. And it also warned that profits for the current financial year are likely to only reach the bottom of analyst expectations.

The luxury fashion chain blamed weaker tourist spending in Europe, following recent terrorist attacks. It is also suffering from tough trading conditions in China and Hong Kong, which is a key area for the company.

Currencies slide after Singapore eases policy

A swathe of emerging market currencies have slumped today, after Singapore surprised investors by announcing it won’t allow its currency to strengthen.

Bloomberg has the details:

Singapore’s dollar slumped the most since August, dragging down other Asia-Pacific currencies, as surprise easing by the central bank fueled speculation other policy makers in the region will follow suit.

New Zealand’s dollar, Malaysia’s ringgit and Indonesia’s rupiah also weakened after the Monetary Authority of Singapore said it would seek a policy of zero appreciation against an undisclosed basket of currencies, returning to a neutral stance it adopted in the global financial crisis in 2008.

Singapore’s central bank cited “a less favorable external environment” in its policy statement, adding to concern the outlook for global growth is worsening.

Singapore Surprise Policy Easing Spurs Asia-Wide Currency Rout

More here: Singapore Surprise Policy Easing Spurs Asia-Wide Currency Rout

Updated

Asian markets hit four-month highs

Asian stock markets have posted solid gains today, picking up the baton after yesterday’s strong performance in Europe and the US.

Japan’s Nikkei surged by over 3%, while the Australian S&P/ASX rose by 1.2% and the South Koreas’ market gained 2%.

This sent markets across the region to their highest level since late November, as Reuters explains:

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5%, reaching its highest level since Nov. 26. It has risen 5 percent since Friday, breakingabove several resistance levels to signal further gains.

The rally was partly driven by optimism over global economic prospects, after China posted better-than-expected export figures yesterday.

It was also triggered by the surprise news that Singapore’s central bank has eased monetary policy overnight. It will not allow the Singapore dollar to appreciate against other currencies.

Updated

The agenda: Bank of England setting interest rates today

A war memorial statue in front of the Bank of England in the City of London.
A war memorial statue in front of the Bank of England in the City of London. Photograph: Toby Melville/Reuters

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

It’s Bank of England interest rate decision day!

At noon BST, the Bank’s monetary policy committee will announce whether it has left borrowing costs at the record low of just 0.5%, and whether it has altered its quantitative easing stimulus programme.

Economists don’t expect any changes, even though inflation has just risen to a 15-month high of 0.5%.

But the minutes of this month’s meeting will show how concerned the Bank is about financial conditions, and the upcoming UK referendum in just over two months.

Meanwhile, the earnings season will get into full swing this morning, with results from consumer giant Unilever and Nestle, fashion chain Burberry, UK high street retailers Debenhams and JD Sports, and housebuilder Persimmon.

Wall Street’s Bank of America and Wells Fargo are releasing their results later today too.

European stock markets are expected to open positively, extending yesterday’s rally which sent the FTSE 100 to its highest level of the year.

And oil giant BP is holding its AGM in London, where CEO Bob Dudley will face criticism over his $20m pay package.

We’ll be tracking all the main events through the day....

Updated

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Every "Groundbreaking" Outfit From Anne Hathaway's 'The Devil Wears Prada 2' Press Tour
This fashion marathon isn't moving at a glacial pace.
Marie Claire
Marie Claire
“I believe with all my heart that it will translate to something good”: Lindsey Buckingham teases reunion with Stevie Nicks following renewed interest in their pre-Fleetwood Mac album
The two publicly fell out in 2018 and Buckingham subsequently left Fleetwood Mac
Guitar World
Guitar World
Newly spotted Clone Wars Easter egg in Ahsoka season 1 might be a huge hint at the season 2 plot
One Ahsoka detail might be a huge hint for the future
Total Film
Total Film
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