Closing post
And finally…. Britain’s stock market has ended the day at a new high.
The FTSE 100 share index has posted a new closing high of 9578.5 points, after new US sanctions on Russia drove up the value of UK energy companies. This takes its gains so far this year to over 17%
Earlier in the day the ‘Footsie’ hit a new intraday high to 9594.82 points.
BP (+3.7%) and Shell (+2.9%) were among the risers, after Donald Trump announced new sanctions on Russia’s two biggest oil producers, Rosneft and Lukoil.
In another blow to Russia, European Union countries agreed a new package of sanctions against Russia for its war against Ukraine that includes a ban on Russian liquefied natural gas imports.
Following Trump’s move, there were reports that Chinese state oil majors have suspended purchases of seaborne Russian oil.
Crude oil rallied too, with Brent crude up 5.2% at $65.76 per barrel this afternoon, while stocks in Moscow took a tumble.
Pest control firm Rentokil (+8.3%) ended the day as the top riser, after cheering the City by reporting improved trading at its US pest control division.
The London Stock Exchange Group (+7.1%) was also in demand, after reporting strong growth, an investment by a consortium of banks into its Post Trade Services division and a new £1bn share buy-back programme.
The mood in the City was not shaken by the news that UK manufacturing orders have fallen at their fastest rates since July 2020, with factory bosses expecting further weakness.
Bank of England policymaker Swati Dhingra warned that Brexit has demonstrated the “corrosive effect of policy uncertainty on trade, productivity, and business investment”.
The estate agency Foxtons has warned of weak sales for the rest of the year as economic uncertainty and potential property tax changes in next month’s budget deter buyers, sending its shares sharply lower.
The London-focused company, known for its green-and-yellow Mini cars, said buyers had been holding off ahead of the budget on 26 November, which is a month later than usual.
Slower-than-expected interest rate cuts from the Bank of England are also having an impact by affecting the cost of mortgages, it said. As a result, “sales are likely to remain subdued for the rest of the year”, with a risk that revenues in the fourth quarter could fall below management’s expectations.
The bounce in energy prices has also hurt bonds, with EU and US rates 2 to 3 basis points higher, points out Bob Savage, head of markets macro strategy at BNY.
That suggests traders are anticipating an inflationary impact from higher oil prices.
UK bonds, though, are slightly stronger, which has pushed down the yield (interest rate) on 10-year gilts by 1 basis point (a small move!) to 4.42%.
That follows a more significant drop in UK yields yesterday, following September’s lower-than-expected inflation reading.
Moscow Times: Russian stocks slide after sanctions
Russia’s stock market plunged has plunged today, the Moscow Times reports, as investors reacted to new US sanctions targeting the country’s largest oil producers Rosneft and Lukoil.
They explain:
The MOEX Russia Index, which tracks 40 of the country’s largest publicly traded companies, fell as much as 3.6%, hitting a low of 2,546, its weakest level in more than a week.
The RTS Index, which tracks Russian stocks in U.S. dollars, fell by a similar margin.
Shares of Rosneft and Lukoil, the two oil giants targeted by U.S. President Donald Trump’s latest sanctions, fell by 3.78% and 5.85% respectively, erasing much of their October gains.
Another significant development in the oil market: The European Union has added two Chinese refiners with combined capacity of 600,000 barrels per day (bpd) as well as Chinaoil Hong Kong, a trading arm of PetroChina to its Russia sanctions list, its Official Journal showed on Thursday.
The two refineries are Liaoyang Petrochemical and Shandong Yulong Petrochemical. The sanctioned plants account for 3% of China’s 19 million bpd refining capacity.
Reuters: China state oil majors suspend Russian oil buys due to sanctions
Oof! Reuters are reporting that Chinese state oil majors have suspended purchases of seaborne Russian oil after the US sanctions on Rosneft and Lukoil, Moscow’s two biggest oil companies.
They say:
The move comes as refiners in India, the largest buyer of seaborne Russian oil, are set to sharply cut their crude imports from Moscow, to comply with the U.S. sanctions imposed over the Kremlin’s invasion of Ukraine.
A sharp drop in oil demand from Russia’s two largest customers will put a strain on Moscow’s oil revenues and force the world’s top importers to seek alternative supplies and push up global prices.
Over in Istanbul, Turkey’s central bank has cut interest rates by a full percentage point.
However, that meaty cut still leaves Turkish interest rates at 39.5%, as policymakers struggle to rein in inflation.
Turkey’s central bank warned that the battle against rising prices was not over, saying:
“While recent data suggest that demand conditions are at disinflation levels, they also point to a slowdown in the disinflation process.
BoE's Dhingra on the economic damage caused by Brexit
Brexit has demonstrated the “corrosive effect of policy uncertainty on trade, productivity, and business investment”, Bank of England policymaker Swati Dhingra is warning today.
In a speech to a research conference hosted by Ireland’s central bank today, Dhingra will cite Brexit as “the defining instance of de-globalisation backlash”.
And almost 10 years on from the EU referendum, Dhingra says evidence is building that Brexit has damaged UK trade, and slowed the economy.
She says:
From the standpoint of 2025, it’s hard to see that British households and businesses have reaped the putative economic benefits of leaving the EU.
A global pandemic broke out in the intervening period, complicating efforts to identify the impact of Brexit on the development of the British economy.
But, nearly a decade after the referendum vote, an emerging body of evidence suggests that Brexit has been a contributing factor to stagnant investment and productivity, as well as a drag on the UK’s trade performance.
Dhingra, a member of the Bank’s monetary policy committee, goes on to explain that the Trade and Cooperation Agreement (TCA), which was implemented in January 2021, created non-tariff barriers which reduced goods trade.
And, citing a ‘forthcoming update’ on the Bank’s work on the impact of Brexit, Dhingra explains:
Trade weakness has combined with uncertainty in the UK to weaken both investment and productivity. A combination of micro and macro estimates suggest that the Brexit process had reduced UK GDP by 6% to 8%, investment by 12% to 18%, employment by 3% to 4%, and productivity by 3% to 4%.
Updated
FTSE 100 lifted to new high by energy companies
Newsflash: Britain’s blue-chip share index has hit a new alltime high.
The FTSE 100 index of the largest one hundred shares listed in London has just risen over its previous record high, to touch a new peak of 9,579 points. That takes it slightly above the previous intraday high, set two weeks ago.
Today the ‘Footsie’ has been lifted by its two oil giants, BP and Shell, who are both up around 3.5% today after new US sanctions on Russia’s Rosneft and Lukoil pushed up the price of crude.
The top riser today is Rentokil (+11.9%), the pest control company, after it reported that trading at its US pest control division is improving.
The London Stock Exchange Group itself is another riser (+6.8%) after reporting strong growth, an investment by a consortium of banks into its Post Trade Services division and a new £1bn share buy-back programme.
Fiona Cincotta, senior market analyst at City Index, says:
“The FTSE is rising for a fourth straight session on Thursday….boosted by strength in energy stocks and upbeat earnings.
So far this year, the FTSE 100 index is up 17%, amid a wider rally in equities this year.
Updated
UK manufacturers see weakest outlook for orders since 2020
British manufacturers see the weakest prospects for orders over the next three months since 2020, new data from the Confederation of British Industry shows.
The CBI’s latest healthcheck on manufacturing has found that business sentiment deteriorated this month, with goods producers expecting the total volume of new orders to decline in the three months to January.
Business sentiment deteriorated in October. Export optimism for the year ahead also declined further. pic.twitter.com/v9ogaRdbMn
— CBI Economics (@CBI_Economics) October 23, 2025
The industrial trends report also found that new order volumes fell in the last quarter, for both domestic customers and exports, fell at their fastest rates since July 2020, early in the Covid-19 pandemic.
The latest CBI Industrial Trends Survey found that output volumes fell in the quarter to October, at a similar pace to the quarter to September. Firms expect volumes to fall again in the three months to January. pic.twitter.com/C9OsCwEy5c
— CBI Economics (@CBI_Economics) October 23, 2025
Ben Jones, lead economist at the CBI, says:
“Manufacturers are finding the going tough. Order books are weakening, cost pressures remain stubbornly high, and uncertainty is rising ahead of the Budget. This is making businesses increasingly reluctant to commit to new hiring and investment.
“To get manufacturing moving again, firms need to see the government accelerate energy cost support. That will help address a significant factor crippling the sector’s competitiveness. The Chancellor must also commit to no further business tax rises at the Budget and to boosting resources for exporters that will help firms maximise trading opportunities while raising productivity and growth.”
Brent crude hits two-week high
The oil price is pushing higher, as traders digest the new US sanctions on Rosneft and Lukoil.
Brent crude is now up 4.7% so far today at $65.53 per barrel, a two-week high.
Joshua Mahony, chief market analyst at Scope Market, says:
Oil prices are moving sharply higher as Trump seemingly ran out of patience with Putin. The Ukrainians are unwilling to give up any land that they currently control, while the Russians want the rest of the crucial Donbas region which has huge strategic and economic significance.
With the US going straight after Russia’s biggest oil producers, and Europe banning Russian LNG, there is a hope that we will see Putin come to the table in a bid to find some sort of resolution. Notably, the failure of previous sanctions have been related to the Russian ability to sell their oil to India and China, but there are claims that India finally looks ready to slash its Russian imports to zero.
That move would be done in a bid to reduce US tariffs from 50% to 15%, although the speed at which their energy supply transition would take hold is currently uncertain.
Could the Bank of England cut rates in November?....
Yesterday’s weaker-than-expected UK inflation report has sparked chat that the Bank of England could cut interest rates sooner than expected.
Deutsche Bank say there is now an “interesting debate” on whether there may be enough ammunition for the Bank’s monetary policy committee to cut borrowing costs as soon as its next meeting in early November.
Their chief UK economist, Sanjay Raja, says the question of a November rate cut is now “a close call.”
Raja told clients:
What’s the case for November? Relative to the Bank’s projections, growth has surprised to the downside, private sector AWE growth has surprised to the downside, unemployment has risen in line with Bank expectations, and inflation now sits a healthy amount below the Bank’s projections. Indeed, one could make the argument that the ingredients for a November rate cut are there.
So, why not November? We think three things will be important for the MPC to see before dialling down restrictive policy again. One, the MPC may want to see some indicative signs that inflation expectations are coming down – and we should see some signs of tempering in the coming months as spot CPI slows in Q4-25. Two, the Budget. Consolidation is one part of the puzzle. The other is what the Chancellor does to trim 2026 CPI – something we think will be very important given our projections of ~2.6% y/y CPI next year. And third, pay settlements. The MPC has yet to see the Low Pay Commission’s NLW announcement and subsequently what that does to pay settlements. We won’t have much detail on private sector pay deals until after the November meeting. Put simply, there’s a lot more information to be had in December than November.
The City money markets are now indicating there is a 40% chance of a rate cut in November, rather high than before we learned yesterday that inflation stuck at 3.8% in September.
Japanese car makers Nissan and Honda are the latest car manufacturers to face the risk of shortages of semiconductor following the Chinese ban on exports of the chips Nexperia in the wake of the Dutch government decision last week to take control of the firm, my colleague Lisa O’Carroll reports.
The Japan Automobile Manufacturers Association revealed today that Japanese auto parts makers received the warning about supply from Nexperia.
The Association explained:
“The chips manufactured by the affected manufacturers are important parts used in electronic control units, etc., and we recognize that this incident will have a serious impact on the global production of our member companies.
“We hope that the countries involved will come to a prompt and practical solution.”
Germany’s Volkswagen warned Wednesday that its car production could be hit by a shortage.
Dutch officials invoked a Cold War-era law last month to effectively take control of the Netherlands-based but Chinese-owned Nexperia, citing national security concerns, as the sector increasingly becomes a focus of geopolitical tensions.
The company then said Beijing had banned it from exporting certain goods from China since early October - potentially a serious problem for carmakers as its chips are widely used in vehicles’ electronic control units.
Volkswagen, Europe’s biggest carmaker, confirmed some Nexperia components are used in its vehicles but said production was “currently unaffected”.
“However given the dynamic nature of the situation, an impact on production cannot be ruled out in the short term,” added the company, whose 10 brands range from Audi to Seat and Skoda, without giving further details.
Shares in Tesla dropped by almost 4% in early Frankfurt trading this morning, after the electric carmaker missed Wall Street expectations for quarterly profits.
Earnings fell despite record vehicle sales, thanks to a rush to buy electric vehicles before a US tax credit for them disappeared.
Victoria Scholar, Head of Investment at interactive investor, explains:
Tesla shares are under pressure in Frankfurt after investors shrugged off a 12% increase in third quarter revenue to $28.10 billion, beating analysts’ expectations.
Instead, they were disappointed by its earnings per share which hit 50 cents, below forecasts for 54 cents. Net income also plunged by 37% year-on-year to $1.37 billion driven by lower electric vehicle prices.
Tesla is also dealing with higher costs associated with investments into AI and robotics and pressure from the expiration of tax credits for EVs from the White House.”
China: trade talks with US set for Friday in Malaysia
Trade war news: China’s commerce ministry has announced that Vice Premier He Lifeng will hold four days of economic and trade talks with US officials in Malaysia, starting tomorrow.
The meeting will take place in Kuala Lumpur, and run from 24 October to 27 October.
China’s state news agency Xinhua adds:
The two sides will hold consultations on important issues in China-U.S. economic and trade ties in accordance with the important consensus reached by the heads of state of the two countries during their phone calls this year, a ministry spokesperson said in a statement
Shares in oil companies are rising, tracking the jump in crude prices, pushing London’s stock market back towards a record high.
BP (+3%) and Shell (+2.2%) are among the top risers on the blue-chip FTSE 100 index in early trading.
The FTSE 100 is up 30 points, or 0.3%, at 9544 points, not far from the record high of 9577 points reached two weeks ago.
Musk urges Tesla investors to back his $1trn pay deal
Overnight, Elon Musk has pleaded with Tesla investors to ratify his upcoming $1trn pay package.
The last few minutes of Tesla’s Q3 earnings call with shareholders was devoted to the controversial proposal, which will be voted on by investors next month.
Musk claimed that the deal, which would hand him instalments of company shares if he hits ambitious targets, was about giving him increased voting control, rather than the money (!), saying:
“The point is.. there needs to be enough voting control to give a strong influence. But not not so much that I can’t be fired if I go insane.”
Other major tech company achieve this control through “supervoting stock”, a class of shares which gives founders more influence – but that’s not possible once a company (such as Tesla) has already floated on the market.
Musk also blasted the proxy advisory services who have advised shareholders to block the pay deal.
Like I said, I just don’t feel comfortable building a robot army here and then being ousted because of some asinine recommendations from ISS and Glass Lewis who have no freaking clue. I mean, those guys are corporate terrorists.
Musk then claimed it was dangerous that many index funds and passive funds, who hold Tesla stock, vote along the lines of whatever Glass Lewis and ISS recommend.
Europe adopts 19th sanctions package against Russia, including LNG import ban
The European Union is also tightening the screws on Russia’s energy economy.
EU countries have formally adopted a 19th package of sanctions against Russia for its war against Ukraine that includes a ban on Russian liquefied natural gas imports.
The package was approved last night after Slovakia dropped its block.
The EU’s LNG ban will take effect in two stages, Reuters reports:
Short-term contracts will end after six months and long-term contracts from January 1, 2027. The full ban comes a year earlier than the Commission’s proposed roadmap to end the bloc’s reliance on Russian fossil fuels.
The new EU package also adds new travel restrictions on Russian diplomats and lists 117 more vessels from Moscow’s shadow fleet, mostly tankers, bringing the total to 558. The listings include banks in Kazakhstan and Belarus, the [EU] presidency said.
Here’s Deutsche Bank strategist Jim Reid on the jump in the oil price:
Overnight, the biggest market move has come from oil prices, after the US Treasury announced sanctions against Russia’s two largest oil companies, citing “Russia’s lack of serious commitment to a peace process to end the war in Ukraine”.
These are the first material US sanctions against Russia introduced since Trump re-entered the White House in January and mark a sharp shift in tone compared to a week ago, when the two sides had talked about a possible meeting in Budapest between Trump and Putin.
And with increased risks of oil supply disruption, Brent crude is +3.10% higher overnight at $64.53/bbl, extending a +2.07% gain yesterday, which if sustained would be its biggest 2-day jump since July.
Oil price jumps after US sanctions Russia's Rosneft and Lukoil
The oil price has jumped after the US has sanctioned Russia’s two largest oil companies to increase pressure on the Kremlin to negotiate an end to its war against Ukraine.
The White House’s new measures against Rosneft and Lukoil are the US’s first sanctions against Russia since Trump’s return to office in January. All assets belonging to the two companies in the US have been frozen, and US companies and individuals will be barred from doing business with them.
Significantly, the US is also threatening secondary sanctions on foreign financial institutions that do business with Rosneft and Lukoil – which could include banks that facilitate sales of Russian oil in China, India and Turkey.
India state refiners are reported to be reviewing their purchases of Russian oil barrels to ensure that no supply will be coming directly from Rosneft and Lukoil.
Following the US move, Brent crude is up 3.8% at $64.95 per barrel, on top of a 2% rise on Wednesday.
That lifts the oil price away from the five-month low of $60 hit on Monday, which had fuelled hopes that inflationary pressures were easing.
Updated
Asian markets retreat as US considers software curbs on China
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Trade worries have resurfaced after the Trump administration confirmed it is considering new restrictions on software exports to China.
The possible restrictions could cover a wide range of software-powered exports to China, from laptops to jet engines, in retaliation for the clampdown on rare earth exports to the US.
This would open up another flank in the US-China trade war, undermining hope that Washington and Beijing could succeed in cooling the situation.
US Treasury Secretary Scott Bessent has told reporters that “Everything is on the table,” later when asked about limits on software exports to China, after Reuters reported the plan.
Bessent explained:
“If these export controls, whether it’s software, engines or other things happen, it will likely be in coordination with our G-7 allies.”
This suggestion has knocked markets across the Asia-Pacific region today – China’s CSI 300 index has lost 0.75%, while South Korea’s KOSPI 200 is down almost 1%.
The agenda
11am BST: CBI industrial trends
1.30pm BST: Chicago Fed National Activity Index
2pm BST: Bank of England’s Swati Dhingra speech at the Central Bank of Ireland ESCB Cluster 2 academic conference
2.30pm BST: Bank of England’s Jonathan Hall speech on “Balancing financial stability and growth: the BoE Financial Policy Committee’s mandate and the search for a social optimum”
