Closing post
No US jobs report means an earlier Friday finish!
A quick recap:
Growth also slowed slightly in the US services sector this month
The oil price is on track for its biggest weekly drop in over three months, as traders anticipate an output increase from the Opec+ group this weekend.
Prices rose today, though, after a fire broke out earlier today at Chevron’s El Segundo refinery in Los Angeles.
Investors were deprived of enjoying the latest US jobs report by the government shutdown, which is preventing new economic data being released
The boss of pub chain Wetherspoon’s has pledged to keep price rises to a minimum
Updated
US service sector growth softens a little
Just in: growth in the US services sector slowed last month, but remained rather faster than in the UK.
Data firm S&P Global’s latest US services PMI report shows that business activity expanded again last month, but at a weaker pace.
The report has found:
Business activity growth softens, while selling prices rise at weakest rate in five month
Softer increase in demand also recorded
Limited rise in hiring but confidence in business outlook improves
Tariffs continue to drive operating expenses higher
This pulled the S&P Global US services PMI business activity index down to 54.2 in September, down from 54.5 in August, but still in growth territory (50 points = stagnation).
Chris Williamson, chief business economist at S&P Global Market Intelligence, says:
“Service sector growth softened slightly in September but remained strong enough to round off an impressive performance over the third quarter a whole.
Combined with sustained growth in the manufacturing sector, the expansion of service sector activity is indicative of robust third quarter annualized GDP growth of around 2.5%.
Growth is being fueled principally by rising financial services and tech sector activity, though we are also seeing more signs of improving demand for consumer-facing services such as leisure and recreation, likely linked in part to lower interest rates. Lower borrowing costs have also fed through to a broadbased improvement in business optimism about the outlook for the next 12 months.
European Central Bank board member Isabel Schnabel has piled into the issue of regulation too – arguing that goverments should be tightening, not loosening, scrutiny of the financial sector.
Schnabel says:
“Rather than softening bank regulation, we should make sure that those areas of the financial system that pose new risks to the economy and banks, such as non-banks or stablecoins, are regulated appropriately without stifling innovation.
“Governments should therefore resist joining a ‘race to the bottom’ when it comes to financial regulation.”
Record highs on New York stock market
With no jobs report to frighten the horses on Wall Street, the US stock market is hitting new highs at the start of trading.
The Dow Jones industrial average, the S&P 500 and the Nasdaq have all just hit new intraday record highs.
The DJIA has gained 205 points, or 0.44%, to 46,725.54 points. The S&P 500 has gained 0.3% and the Nasdaq is up 0.2%.
BoE governor warns of "growing challenge" to post-crisis system of financial regulation
The governor of the Bank of England is warning that the system of financial regulation built up after the financial crisis two decades ago is facing a growing challenge.
Speaking at a Farewell Symposium for Klaas Knot, President of De Nederlandsche Bank, Andrew Bailey cites the dangers that people forget the mistakes that led to crises in the past.
Bailey says:
One is an old point made by Hyman Minsky, that as time passes memories of a financial crisis fade and this leads to a questioning of the continuing need for the responses. This creates the risk of history showing signs of repeating itself, remembering back for instance to the strength of the deregulation argument before the financial crisis.
Those of us, like Klaas, who are veterans of dealing with the financial crisis, don’t tend to forget, but I can see evidence in today’s world of the truth of Minsky’s observation.
[Hyman Minsky is the US economist who created the idea of a Minsky moment -- a sudden, major collapse of asset values at the end of the growth phase of a cycle in credit markets or business activity].
Bailey also cites pressure for “regulatory simplification”, and concerns about the distributional effects of regulatory changes which have ended up creating winners and losers.
[In the UK, for example, the government has been pushing for a new regulatory system that supports innovation and economic growth].
Towards the end of his speech, Bailey also nods to the possible productivity boost we could get from artificial intelligence, saying:
All of that said, we need a financial system that is ready and able to finance the next general purpose technology advance, which I would guess is AI. This is the important question today.
In my view this must be a stable financial system, grounded in the core areas and principles of financial stability, but one that must be set up to support growth.
Back in the markets, the cocoa price has hit its lowest level in a year.
Reuters has the details:
Cocoa futures on ICE fell to near one-year lows on Friday as the main crop harvest gets underway, with farmers in both Ivory Coast and Ghana incentivised to sell by higher farmgate prices.
London cocoa fell 3.8% to 4,380 pounds a ton at 1214 GMT, having hit its lowest since early October last year at 4,367.
World No. 2 cocoa grower Ghana raised the 2025/26 farmgate price by another 12% to 58,000 Ghana cedis ($4,640.00) a ton, marking the second price increase this year.
The move was in response to top producer Ivory Coast announcing on Wednesday a 2025/26 farmgate price 55.6% above last season at 2,800 CFA francs per kg or $5,050 a ton.
Alternative US jobs report shows pay softening, layoffs up....
With today’s US jobs report scuppered by the government shutdown, Glassdoor’s chief economist Daniel Zhao just published a breakdown of four key indicators from September…
…and the labor market doesn’t look too strong!
Zhao explains:
Pay softened: Salaries dipped 0.4% month-over-month, with annual growth slowing to its lowest pace since April.
Mentions of layoffs are up 26% year-over-year: Mentions of layoffs in reviews fell 2.3% from August, but are still up 26% year-over-year
Candidate leverage declined: Fewer job seekers are turning down offers, suggesting that more workers are settling for job offers they may not have accepted just a year ago.
Confidence rose: The September edition of the Employee Confidence Index ticked up to 47.7%, its highest since November 2024. Employee confidence rose in September in several sectors that rely on consumer spending, perhaps as tariffs have not crimped consumer spending as much as originally concerned.
Somewhere in a parallel universe, traders and investors are gripped by the release of the latest US jobs report.
Where we are, though, there’s no excitement as the release of September’s Non-Farm Payroll has been stymied by the US government shutdown.
This means we have less idea how well, or badly, the US jobs market is faring under president Trump.
NO NFP DATA THIS MORNING ❌
— TrendSpider (@TrendSpider) October 3, 2025
The Bureau of Labor Statistics said it won't release or collect any economic data during a government shutdown. https://t.co/eNkHe71cm5
We do have inklings that all is not well, though – private sector payrolls shrank last month, according to payroll operator ADP, while hiring plans so far this year are the weakest since 2009.
Net-Zero Banking Alliance folds after many members quit
The banking sector’s global alliance for setting climate targets has ceased operations after many of its members dashed to the exit over the last year.
The Net Zero Banking Alliance (NZBA), which was led by banks, committed members to align their lending, investment and capital markets activities with cutting planet-warming greenhouse gas emissions to net zero by 2050.
But several major banks, including British lenders HSBC and Barclays, left the group within the last year, amid pressure and criticism from right-wing politicians.
US banks showed a particular lack of backbone, with JP Morgan, Citigroup, Bank of America, Morgan Stanley, Wells Fargo and Goldman Sachs all leaving NZBA in the weeks after Donald Trump won the US election last November.
Remaining NZBA members have now voted to stop being a member-based organisation, the alliance announced on Friday.
A spokesperson for the group said:
“As a result of this decision (vote), NZBA will cease operations immediately.”
In other news, the death tolls and the billion-dollar losses from wildfires have been piling up, the world’s biggest capital cities face 25% more extremely hot days each year than in the 1990s, and the UN says we need faster and deeper emission reduction cuts to address the climate crisis. But, at least banking bosses won’t have to worry about annoying Donald Trump.
Speaking of hybrid working…Working three days a week in an office is now the preferred choice for employees of all ages, research has found.
A survey of more than 1,100 workers by jobs site CV-Library found a trend for a balance between healthy living and work, PA Media reports.
The report said there has been a shift in working preferences, with 16% of respondents saying they prefer to work remotely, compared with 22% who favour being entirely office-based, whilst an overwhelming 40% prioritise hybrid working.
More than half of those polled said they believed an in-office presence supported career progression, enabling them to learn from colleagues and improve prospects for promotion….
Updated
Santander UK boss who didn't work five days a week in the office is stepping down
Santander UK is on the lookout for a new chief executive after Mike Regnier decided he would step down from the role by the first quarter of next year.
Tom Scholar, chair of Santander UK, says the bank has ‘strong succession plans’ in place, explaining:
“The Board is very grateful to Mike for his leadership and drive over the last four years. He has maintained a strong team culture and cohesion through a period of significant change which is a testament to his abilities as a leader.
With strong succession plans in place, we expect to be able to conclude the process to appoint a successor in the early part of 2026.”
Last year, Regnier told us that he wouldn’t have taken the job if he had had to commute all week. He splits his time between London, and his family home in Harrogate, Yorkshire.
At a time when other banking bosses have been urging staff back to the office, Regnier has taken an admirably lenient attitude with Santander’s 19,000 UK staff, with office-based workers only expected to be onsite two days a week (as of last year, anyway!).
Ireland's deputy PM told EU is no longer Trump's enemy
The EU is no longer Donald Trump’s enemy, the US commerce secretary has told Ireland’s deputy prime minister, my colleague Lisa O’Carroll in Dublin reports.
Simon Harris told the Institute of International and European Affairs conference on trade that the attitude of Trump’s administration had significantly changed.
He had an hour long meeting with Howard Lutnick last week in the US and said there was “genuine satisfaction on the US that there is now a framework agreement” and there was now “certainly warmer language”.
“In fact it was said at our meeting that “Europe is not our foe, Europe is not the enemy”. Lutnick told him the two continents were “interdependent” economically, he said.
In the past Trump has expressed deep antipathy towards the European Union calling it “nastier than China” and “ a foe” because of “what they do to us in trade”.
EU trade commissioner Maroš Šefčovič is hoping the new warm relations will deliver a quick solution on the continuing 50% tariffs on steel which the European industry has said is crippling exports.
Also causing huge problems for EU exporters is the list of 407 steel derivative products now facing extra tariffs, from dishwashers to steel cutlery to tables with steel legs.
EU trade commissioner Maroš Šefčovič, who is speaking at a number of events in Dublin, has said he hoped the reset in the relationship with the UK could be sealed within the year.
He said he believed European member states, in a matter of “weeks, would agree the “mandate” to kickstart negotiations to remove Brexit barriers on agri-food exported from the UK to the EU and in the opposite direction.
Šefčovič told a British Irish Chamber of Commerce conference:
“Based on the trust we have rebuilt over the last years, I’m convinced that we can proceed with the SPS negotiations very quickly. We are now very well advanced in getting the mandate from the member states to do that.”
Updated
EU close to starting talks on agrif-food deal with UK
The EU is close to sealing a mandate from European leaders to start full-blown negotiations on a new agrif-food deal which will allow goods including British sausages and cheese into the single market with few trade barriers, the EU’s commissioner for trade Maros Sefcovic has revealed.
It is also close to agreeing the terms of permitting the UK, a non-EU member, to participate in bids for defence procurement in the bloc, as part of the SAFE programme to increase local military ammunitions capacity and reduce reliance on the US.
The potential agreements come four months after Keir Starmer and Ursula von der Leyen met in London to agree a framework to “reset” relations between the two sides with a plan to meet again next May.
While it has subsequently emerged that the deal could take up to 2027 to agree, sources close to the talks say they are keen “they have something to show” on removing the Brexit sanitary and phyto-sanitary (SPS) checks on food exports a “mid way” summit possibly in December.
Sefcovic, who is in Ireland to discuss the reset and attend a conference on trade, told reporters:
“I believe that very soon we will finalise our agreement of SAFE: this is how the UK can join the European public procurement for arguments.
“We are expecting that in coming weeks [that] we will have the mandate to negotiate an agreement on sanitary, sanitary standards, the SPS… I believe that we can negotiate this agreement very fast, because it would clearly reproduce quite a lot [of immediate benefits] on both sides trading of products.”
Talks are also closing in on electric trading system and a deal on carbon emissions trading.
Sefcovic says:
“These are technically extremely complicated issues, and I think that when we’ve been negotiating the trade and cooperations agreement, it was difficult to foresee how complex these issue are.. but you [we] want to restore high level of the cooperation.”
UK business activity growth falls to five-month low
Newsflash: growth in the UK service sector has slowed to a five-month low, hit by budget uncertainty and weak demand from overseas, slowing the wider economy.
Services companies have reported that activity only rose marginally in September, deue to “sluggish demand conditions”, data firm S&P Global has reported.
Their latest poll of purchasing managers at British firms has found that “seak sales pipelines and pressure on margins from sharply rising staff costs” led companies to cut jobs again.
This pulled the S&P Global UK Services PMI Business Activity Index down sharply to just 50.8 in September, from August’s 16-month high of 54.2.
That puts the PMI index closer to the 50-point mark showing stagnation.
It’s also weaker than the ‘flash estimate’ of 51.9, which suggests growth weakened towards the end of September.
Tim Moore, economics director at S&P Global Market Intelligence, says:
“UK service providers experienced a disappointing end to the third quarter as weak consumer confidence, delays to business spending decisions and falling exports all weighed on demand. Business activity expansion hit a five-month low, while new order gains were much softer than the 11-month high seen in August.
Consequently, this summer’s acceleration in output growth is now looking like a flash in the pan as elevated political and economic uncertainty has reasserted itself as a constraint on service sector performance. Many survey respondents suggested that corporate clients had deferred spending decisions until after the Autumn Budget, while households were also hesitant about major purchases.
Outside of the UK, service providers were unable to escape challenging market conditions. Total new work from abroad returned to contraction territory in September. Lacklustre demand across Europe was a common theme reported by survey respondents.
Growth across the overall private sector also fell to a five-month low, with little expansion at all, after data earlier showed that UK manufacturing output shrank in September.
Updated
The eurozone economy expanded at its fastest rate in over a year in September, but growth remains muted, new data show.
The HCOB eurozone composite PMI output index, which tracks activity in the euro area private sector, has increased to 51.2 last month, from 51.0 in August. That shows a gradual acceleration in output growth, and is the highet reading since May 2024.
France’s stock market is having a good morning, with the CAC 40 index gaining 0.44%.
The rally comes after new French prime minister Sebastien Lecornu vowed to end a political deadlock and get a budget passed through parliament by the end of the year.
European stocks at record highs
European stocks are on track for their strongest week since May after rising this morning.
The pan-European Stoxx 600 index has risen by 0.4% this morning to hit a new record high, and has now gained 2.8% this week. That would be its biggest monthly rise since late April, when markets were recovering from the initial shock of Donald Trump’s trade wars.
Investor still seem to be in optimistic mood, despite the US government shutdown and persistent warnings that market valuations have risen too high.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, says:
Valuations are high, and some investors wonder whether this is another tech bubble. But a bubble – by definition – isn’t a bubble until it bursts.
That leaves global investors with an unbearable FOMO – fear of missing out on a further rally – which keeps valuations elevated. Prospects of multiple Federal Reserve (Fed) rate cuts in the coming months also help support risk assets.
Oil rising after fire breaks out at Chevron's El Segundo refiner
Back in the oil market, prices are rising after a fire broke out earlier today at Chevron’s El Segundo refinery in Los Angeles.
The refinery is one of the largest on the US West Coast; according to a county official, the flames had been confined to one area.
California governor Gavin Newsom’s press office posted on X:
“Our office is coordinating with local and state agencies to ... ensure public safety.”
Brent crude is now up 1% today at $64.71, suggesting concerns that the fire could disrupt supplies. But, it’s still on track for its biggest weekly fall since June.
Chevron have said that emergency responders from the city of El Segundo and Manhattan Beach are “actively responding to an isolated fire” inside the refinery.
Happily, the company has also said that “all refinery personnel and contractors have been accounted for and there are no injuries,” Reuters reports.
Updated
Wetherspoon’s boss vows to keep price rises to a minimum as he criticises energy bills
The boss of the pub chain Wetherspoon’s has vowed to keep price increases to a “minimum”, after blaming a beefed-up packaging tax and rising energy bills for extra costs.
Tim Martin said the recently introduced “extended producer responsibility” levy on packaging will lead to the company’s costs from the tax tripling from £800,000 to £2.4m a year.
Martin also criticised the impact of what he termed “non-commodity” energy costs – taxes or levies added to the pub chain’s bills for the electricity it uses – which he said will add £7m a year from this month.
More here:
No US jobs report expected today due to US shutdown
Today was due to be one of the more exciting days in the markets, with the publication of the latest US jobs report.
After two weak non-farm payroll reports in a row, September’s data would have given a good insight into whether the US labor market had continued to cool over the summer, as the Trump trade war hit the economy.
However, the US government shutdown means no official economic data is being released, so investors and news junkies will not get their NFP shot at 1.30pm UK time.
Democratic Senator Elizabeth Warren yesterday called for September’s jobs report to be released today, but there’s no sign yet that this will happen.
While that might make for a quieter Friday, it’s a blow to policymakers who are trying to read the economic runes. It could make it harder for America’s central bank, the Federal Reserve, to have confidence to keep cutting interest rates.
Stephen Innes, managing partner at SPI Asset Management, says the lack of jobs data, and inflation data, leaves the Fed trying to steer through fog with the radar switched off.
Innes adds:
For traders in Asia this morning and around the globe, the absence of NFP is a guilty relief—a rare first week Friday without the thunderclap risk of a headline payroll surprise.
The screens are quieter, the alerts still ping, but the heartbeats are slower. Some will take the early cut, step into the weekend before the next wave of OPEC headlines or AI hype rolls across the Pacific.
Others will watch the tape’s flicker and note the irony: when the market flies blind, risk can feel both safer and scarier at the same time.
Updated
RAC: Pump prices creep back up
Despite the downward pressure on the oil price in rcent months, drivers are facing rising prices at the pumps.
Motoring body the RAC has reported that petrol and diesel prices rose by around a penny a litre during September, even though crude prices were effectively flat during the month.
RAC Fuel Watch data shows that the average price of a litre of unleaded petrol went up from 134.64p to 135.41p (+0.77p) while diesel increased from 142.19p to 143.14p (+0.95p).
The RAC point out that fuel prices have risen in eight of the past 12 months but are still well below the highs seen in late February (when petrol hit a 12-month peak of 139.65p per litre).
RAC head of policy Simon Williams argues that price increases are unjustifiable:
“Sadly, pump prices crept up by a penny a litre in September reversing the drop drivers saw in August.
The fact prices have risen at all was made worse by the fact that there was little to no movement in the price of oil, or the pound-to-dollar exchange rate – the prime determiners of fuel prices – and therefore seemingly no justifiable reason for an increase.
Last week, the UK’s competition watchdog said it was “deeply concerned” by signs that companies have ramped up profits at the expense of consumers.
Williams says:
“It was also disappointing to have the Competition and Markets Authority confirm what we have known for some time that retailer margins remain above historic levels. We’re grateful for this level of scrutiny, but it appears yet to have had the effect on retailer behaviour we’d hoped it would.
The comparison with average prices and margins in Northern Ireland makes the point that it is possible to sell fuel more cheaply and still make money.
Introduction: Oil on track for steepest weekly drop in 3.5 months
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The oil price is on track for its steepest weekly drop in three and a half months, as crude prices slide to a four-month low.
Predictions that the OPEC+ group will keep increasing oil output have pushed down energy prices in the last few days.
Brent crude, the international benchmark, has fallen 8% so far this week – from $70.13 per barrel last Friday night to $64.59 per barrel today, and yesterday hit its lowest level since 2 June.
OPEC+ are due to meet on Sunday, and could hike output further despite concerns that the oil market is already oversupplied.
Unicredit analysts says the alliance of oil producers is expected to approve a further 137,000b/d increase in output on Sunday.
This would extend “its gradual pivot from price defence to market-share expansion” Unicredit say, adding:
Talk of larger increases has surfaced, but these appear improbable. Quotas have risen by over 2.5mb/d since April, and Brent crude has largely hovered around USD 67/bbl in recent weeks, with geopolitical events – from Israeli strikes in Doha to Ukrainian drone attacks – having had only fleeting impacts on pricing. This suggests oil markets are predominantly shaped by structural dynamics.
Falling oil prices are boost for consumers, and many businesses, and might also reassure central bankers that inflationary pressures will ease.
JPMorgan analysts said in a note:
“We believe September marked a turning point, with the oil market now heading towards a sizeable surplus in Q4 2025 and into next year.”
The agenda
8.30am BST: UN FAO food price index
9am BST: Eurozone service sector PMI report for September
9.30am BST: UK service sector PMI report for September
9.30am BST: ONS: The impact of the motherhood penalty on monthly employee earnings and employment status in England
10.40am BST: ECB President Lagarde speaks at the Klaas Knot farewell symposium
2.20pm BST: Bank of England governor Andrew Bailey gives keynote speech at the Klaas Knott farewell symposium, ‘Macro-financial stability in a fragmenting world’
