As expected, the Bank of England (BoE) raised its base rate to 3% yesterday

As expected, the Bank of England (BoE) raised its base rate to 3% yesterday, an increase of 0.75 percentage points. The biggest hike since the 1980s, interest rates are now at a level not seen since 2008, having been hiked for eight months in a row. "These are big changes, they'll have a real impact on people's lives," governor Andrew Bailey said in a press conference following the decision, He argued that there will be "worse pain in long-run unless forceful action is taken to quell inflation". Inflation is too high and "it's the Bank's job to bring it down", he said, adding that "it could begin to fall back from the middle of next year, "probably quite sharply". However, he also said he believed interest rates may have to go even further up in the coming months. The BoE also issued a warning that Britain could be on course for its longest recession since reliable records began a century ago, falling into eight consecutive quarters of negative growth if current market expectations prove correct. The previous longest recession, in 2008, lasted for 18 months, five consecutive quarters.

The US Federal Reserve stepped up its fight against the highest inflation in 40 years yesterday, also increasing interest rates by 0.75%, the sixth consecutive increase, bringing the federal funds rate to between 3.75% and 4%. However, the central bank signalled future increases in borrowing costs could be made in smaller steps to account for the "cumulative tightening of monetary policy" it has enacted so far.

Bloomberg cites two officials at the Treasury who claim the government is considering cutting the tax-free allowance for dividend income, reducing the amount shareholders can earn in dividends before they begin paying tax from the current level of £2,000. "All options are under consideration," said a government source when asked about the report. The Telegraph, meanwhile, is reporting that Chancellor Jeremy Hunt is also looking at increasing the headline rate of capital gains tax (CGT).

Prime Minister Rishi Sunak is expected to put off the proposed privatisation of publicly-owned broadcaster Channel 4, the Financial Times said this morning.

The Financial Conduct Authority (FCA) has ordered 32 lenders to pay around £12m in compensation to borrowers that were forced to meet “unaffordable” mortgage and loan repayments during the Covid pandemic. The city watchdog said compensation handed back to borrowers covers 60,000 customers, and that lenders "must do a lot better to support borrowers in financial difficulty". “’Given the current cost of living challenges, it’s vital that the sector continues to learn lessons to make sure they support struggling customers,” the FCA said. Just 15 out of 50 (30%) firms reviewed sufficiently explored customer’s circumstances, which meant repayment agreements were often unaffordable and unsustainable for many. It is reviewing a further 40 firms in the coming months to make sure they are meeting its expectations to protect customers from harm.

The UK service sector has witnessed the steepest drop in business activity since January 2021 when pandemic lockdowns restricted economic activity. Output declined sharply, largely due to squeezed household budgets, recession worries, delayed business investing because of rate hike fears and supply chain woes due to the legacy of pandemic lockdowns and Russia's invasion of Ukraine. The S&P Global UK Services Purchasing Managers' Index (PMI) fell to 48.8 in October, slipping below the 50.0 growth threshold level, which is where the index sat in September.

Retail footfall fell in October according to the latest BRC-Sensormatic IQ Footfall Monitor. Although footfall increased 2% in the month year-on-year, once the impact of the covid lockdowns and other pandemic restrictions were stripped out, it slumped 11.8% on 2019, 2% worse than in September. High street fell most sharply, 11.6% down compared to October 2019. Retail parks fared better, down 3.7% on 2019, while shopping centres recorded the steepest slump at 21.8% down from October 2019, although that was a 0.9% rise on the previous month.

According to new research from Retail Economics and HotUKDeals, consumers are also expected to cut back during Black Friday sales with spending expected to dip 15% to £1.7bn as the cost of living crisis forces UK households to cut back. Shoppers will spend an estimated £177 on average, a sharp decline from previous Black Fridays, where consumers would spend well above the £200 mark, the research suggests. The most affluent households however, are expected to spend around 13% more than the average, as they look to bring forward Christmas purchases to take advantage of discounts, given inflation.

Interim financial results from online ticket-selling platform Trainline suggest rail travel is recovering from Covid restrictions, with part of the recovery being driven by visitors from the US cashing in on the stronger dollar. Revenues for the six months to 31st August more than doubled to £2.16bn, while adjusted earnings were £30m higher at £45m. International sales rose 152% to £452m, with tickets purchased by US travellers up 89%. UK rail passenger volumes have also recovered to around 85%, Trainline said, with domestic sales coming in at £1.4bn. The firm also noted that government plans to create a new centralised online ticket retail announced when Boris Johnson was Prime Minister, had yet to materialise "with no firm visibility on future timings".

National Grid has announced the detail of a scheme whereby households will be offered discounts on their electricity bills if they cut peak-time use on a handful of days over the winter. The inducement, part of National Grid's efforts to avoid blackouts, is said to be able to save households up to £100. There will be 12 "test" days initially, designed to see how customers respond, between November and March. Only homes with smart meters will be able to take part.

Following on from yesterday’s news that BT is looking to make an additional £500m in cost savings, the telecoms firm has now warned of more job cuts and a 3.9% price hike on top of inflation next year. “We are leaving no stone unturned to make sure BT can be the most-efficient organisation it can be,” CEO Philip Jansen said.

Aldi was the cheapest supermarket in the UK in October, with an average household basket full of groceries and other essentials coming in at £75.79. The same basket would cost shoppers £77.68 at Lidl according to consumer group Which?, while Asda’s basket came in at £84.98. The same items cost £86.21 at Tesco £86.36 at Sainsbury’s, £92.72 at Morrisons and £93.99 at Ocado. Waitrose was the most expensive supermarket — with a basket of 48 general items coming to £101.17, making it £25.38 more expensive compared to Aldi.

FTSE 100 miner Glencore has been ordered to pay a total of £281m after its UK subsidiary admitted bribing officials in African countries for access to oil. Glencore Energy UK pleaded guilty to seven corruption offences in June. The fine, handed down by Judge Peter Fraser at Southwark Crown Court yesterday, includes a penalty of £182.9m, a £93.5m confiscation order, and £4.6m in costs. The total must be paid within 30 days. Fraser said the offences Glencore had pleaded guilty to represented "corporate corruption on a widespread scale, deploying very substantial sums of money in bribes".

"The corruption is of extended duration, and took place across five separate countries in West Africa, but had its origins in the West Africa oil trading desk of the defendant in London. It was endemic amongst traders on that particular desk," he added. Glencore's chair Kalidas Madhavpeddi said the company's conduct had been "inexcusable" and it had taken "significant action" to implement an ethics programme.

London-listed National World, a UK-based company formed for the purpose of acquiring news publishing businesses, is rumoured to be in the early stages of exploring a possible offer for larger rival Reach Plc, which publishes the Daily Mirror and Sunday Mirror. National World, which currently owns the Scotsman and Yorkshire Post, said in response to press speculation that it had not yet approached Reach directors about the possible offer. In a separate statement, Reach said it had not received an approach from National World and “strongly advised” shareholders to take no action.

Netflix has launched its 'Basic with Ads' streaming plan in 12 countries. The new plan costs £4.99 a month in the UK, a roughly 30% discount to the firm's cheapest ad-free option.

RS Group - formerly Electrocomponents – has announced that CEO Lindsley Ruth is to take a leave of absence with immediate effect for personal reasons. David Egan will assume his duties in addition to his role as CFO.

In Germany, the soon-to-be-nationalised gas importer Uniper has reported a record €40bn net loss in the first nine months of this year, after Russia stopped its supplies. It is the biggest loss in German corporate history according to Mark Spoerer, chair for economic and social history at the University of Regensburg, dwarfing the €25bn loss Deutsche Telekom disclosed for 2002. Since the start of the year shares in Uniper have lost 93% of their value, giving it a current market value of €1.1bn, down from €15.2bn at the beginning of the year.

Morgan Stanley is said to be planning a fresh round of global layoffs, according to insiders who have spoken to Reuters. Sources were cites as saying that in Asia Pacific, the bank has drafted up a list of staff members considered redundant, who will mainly come from teams that focus on China-related business. It was understood that some of the cuts will come from capital markets teams in Hong Kong and mainland China, and most of the rest are expected to be from other teams focusing on China business, both onshore and offshore.

Twitter's new owner Elon Musk is looking to cut roughly 3,700 jobs – some half of the total workforce - as part of an effort to cut costs. Bloomberg says those affected will be informed today. Bloomberg said Musk is also expected to reverse Twitter's existing work-from-anywhere policy and require employees to work from its offices.