BUSINESS LIVE: Natwest cuts ex-CEO’s pay package; GDP growth flatlines; Diageo suffers demand dip

Natest will now pay almost £7.6million in potential payments to former boss Dame Alison Rose, who left the comapny in July in the fallout of the Nigel Farage ‘debanking’ row.

More to follow…

Britain’s love affair with fake meat was more of a fleeting romance, as consumers turned their back on it as quickly as they fell for it.

It’s claimed the vegan market may be worth as much as £50billion globally by 2030, but sales in the UK seemed to have flatlined.

Robert Alster, CIO at Close Brothers Asset Management:

‘Today’s GDP figures will come as a surprise, showing the economy flatlined in the third quarter, avoiding a contraction. This may complicate the Bank of England’s path, with less of a basis to delay further rate hikes and even consider rate cuts.

‘It will reinforce the Bank’s hawkish tone from last week’s meeting, and Andrew Bailey will probably continue to dampen talk of cuts, sticking to the message that interest rates need to remain elevated for quite some time.

‘However, despite the more positive numbers, the Bank still has flexibility. With grocery inflation in the UK dipping below double digits, the upcoming inflation data on the 15th November will be key to demonstrating how much further the Bank of England has to go, and the possibility of rate cuts next year.

‘It’s a relatively dramatic turnaround over a relatively short period of time.’

Analysts at ING said:

‘UK GDP was a little better than expected, but in reality, the economy has largely stagnated this year.

‘We expect that trend to continue over coming quarters as the impact of higher rates continue to bite, though a recession can’t be ruled out.’

Shell is suing Greenpeace for £1.7million after its protesters occupied an oil rig for 13 days.

The oil giant said it supports the right to peaceful protest but the ‘unlawful and extremely dangerous’ action put the lives of both the protesters and crew at risk.

Struggling Home REIT has once again sold off a chunk of its portfolio for a fraction of its purchase price as it scrambles to raise cash.

The homeless housing firm –which has been under scrutiny since November last year following a report by short-seller Viceroy Research – announced it had sold another 153 properties at a series of auctions earlier this week, raising around £23.4million.

Households are struggling under the weight of rising car and home insurance premiums – and no sign of when prices are likely to fall again.

Redrow expects annual profit and revenue to be at the lower end of its forecast range as the builder suffers a subdued autumn housing market.

The latest warning from a UK housebuilder on challenging conditions in the housing market comes as elevated mortgage costs and broader economic worries drive homebuyers away.

Earlier this week, Redrow’s bigger peers Taylor Wimpey and Persimmon flagged uncertainty in the coming months.

The business has had to adapt to a ‘more difficult trading environment’ in terms of build rate and operating costs, Redrow Chairman Richard Akers said.

In September, the company had forecast fiscal year 2024 profit before tax of £180million to £200million, and revenue of £1.65billion to £1.7billion.

Emma Mogford, manager of the Premier Miton Monthly Income Fund:

‘A flat economy isn’t usually something to cheer about. However, given the pressures from the cost-of-living crisis and higher interest rates, it’s a decent outcome.

‘While pressures from higher rates remain, I think we can go into the festive season with a dash of optimism about the British economy.’

Diageo expects organic operating profit growth to decline in the first half of its current financial year due to ‘materially weaker’ performance in Latin America and Caribbean.

‘Macroeconomic pressures in the region are resulting in lower consumption and consumer downtrading,’ the world’s biggest spirits company said in a statement.

‘These impacts are slowing down progress in reducing channel inventory to appropriate levels for the current environment.’

Latin America and Caribbean makes up nearly 11 per cent of the Johnnie Walker maker’s net sales.

Sales in the region are now expected to decline by more than 20 per cent, year-on-year, in the first half of fiscal 2024, the company added.

Michael Field, Europe market strategist at Morningstar:

‘UK GDP growth came in at 0.2% in September, against economists’ expectations of a flat performance. This comes on the foot of August’s reading of 0.1% growth. While this level of growth is far from robust, the important thing here is that the UK economy is in the black, and flat growth quarter on quarter means that the UK will not enter a technical recession in 2023.

‘Manufacturing usually takes the rap for slow economic growth in the UK, and rightfully too in many ways. Manufacturing activity, shown by manufacturing PMIs, has been in decline since the middle of 2022. With manufacturing contributing less than 20% to GDP however, this is just part of the problem.

‘The bigger issue lies with the service industry, which contributes almost 80% of GDP, and accounts for almost the same percentage in employment. Here, a large pullback in spending over the last 18 months by both businesses and consumers has hurt the economy. The somewhat bright news however is that service output rose by 0.2% in September, following a 0.7% fall in August.

‘With interest rates at the highest level since the global financial crisis, the cost of interest on debt is really starting to bite for both businesses and households. With interest rates likely to stay high for an extended period of time, it is hard to see any quick reversal on service spending, meaning low GDP growth may persist for some time yet.’

The British economy stalled in the third quarter, registering flat gross domestic product growth between July and September, and surpassing expectations of a 0.1 per cent dip, fresh data from the Office for National Statistics shows.