Closing post
Time to recap.
Shares in advertising group WPP fell to their lowest level since 1998, after the FTSE 100 group slashed its revenue guidance for the year and its new chief executive Cindy Rose said its recent performance has been “unacceptable”.
The former Microsoft executive has announced a review of the business, saying she was taking action to address the “unacceptable” performance at the company, which has struggled to stem a growing exodus of clients and compete with the AI and data capabilities of its rivals.
Over in Frankfurt, the European Central Bank kept interest rates on hold on Thursday for the third meeting in a row despite concerns that a modest economic recovery across the eurozone would fuel inflation.
The ECB kept its key deposit rate at 2% despite annual price growth rising to 2.2% across the 20-member euro bloc in September, up from 2% in August and 1.7% a year earlier.
In the 27-member EU, annual inflation was 2.6% in September, up from 2.4% in August, according to Eurostat.
The ECB said its six-member governing council’s view of inflation was “broadly unchanged”. It said: “The robust labour market, solid private sector balance sheets and the governing council’s past interest rate cuts remain important sources of resilience.”
In other news, Virgin Trains is now on track to challenge Eurostar cross-Channel monopoly after the UK rail regulator approved its application to use a key depot in east London.
The Office of Rail and Road (ORR) approved Virgin’s application to use the Temple Mills depot in Leyton – which is used for maintaining and storing trains. It said this would unlock £700m of investment in new services and create 400 jobs.
Access to Temple Mills is a critical step in helping Virgin Trains challenge the monopoly held by Eurostar, which has been the only passenger service allowed to access the Channel tunnel since it opened in 1994. Temple Mills is the only train depot that can be accessed from High Speed 1, the line that runs between London and the tunnel.
Faced with a multibillion-pound shortfall in the public finances, if Rachel Reeves does, as reported, raise the basic rate of income tax in next month’s budget, she will be the first chancellor to do so since Labour’s Denis Healey, 50 years ago.
Healey announced his radical budget in April 1975, in which he raised the basic rate by two percentage points to 35%, and other rates by the same amount.
In the Guardian’s budget coverage the next day, political correspondent, Ian Aitken, told readers that “like a stern Edwardian head waiter at the end of a wild West End orgy, Mr Healey yesterday presented Britain with the bill for a year of reckless wage indulgence”.
The backdrop to his budget was an ‘economic crisis’, as some experts called it, with inflation galloping at nearly 20%, unemployment rising, and the pound falling.
The UK was, like other world economies, also suffering the consequences of a massive rise in oil prices.
Healey, quoted by The Guardian, defended his budget, saying, with reference to industrial relations and spiralling wage demands:
The tragedy is that a lot of the bitter medicine would not have been needed if so many people had not tried to get more than their share of what the country can afford.”
The new leader of the Conservative Party, Margaret Thatcher, called it a “genuine socialist budget”, consisting of “equal shares of misery for all”.
