Closing summary
The UK government will explore options for selling off its remaining 38.6% stake in the high street lender NatWest Group to the public within a year, bringing it back to full private ownership, Jeremy Hunt has announced.
Delivering his autumn statement in parliament, the chancellor said he would “explore options” for a retail share offer in the next 12 months but said it would be “subject to supportive market conditions and achieving value for money”. This means shares can be bought by anyone, whereas previous share sales were to financial institutions.
In a reference to the privatisations of the 1980s, when shares in British Gas were advertised to retail investors with the slogan “If you see Sid … Tell him”, the chancellor declared: “It’s time to get Sid investing again.”
Grangemouth oil refinery is to cease operations as soon as 2025, under plans announced by its owner, Petroineos, a joint venture between the Chinese state-owned oil firm and the petrochemicals empire owned by Monaco-based British billionaire Sir James Ratcliffe.
Amid warnings that the plan blew a hole in Scotland’s industrial base, trade unions and Holyrood politicians raised concerns about the job security of the 500 people directly employed at the facility, near Falkirk, and the impact the closure of one of Britain’s six remaining large oil refineries would have on the country’s fuel supply.
Petroineos, which has discussed its plans with the UK and Scottish governments, said it had had no choice but to adapt to global pressures affecting the refining market.
The culture secretary intends to ask the media watchdog to examine the Barclay family’s proposed deal to hand control of the Telegraph and the Spectator magazine to an Abu Dhabi-backed consortium.
Lucy Frazer said today she was “minded to” call in Ofcom to look at the investment fund’s plans to take over the titles in exchange for repaying £1.15bn of the family’s debts to Lloyds Banking Group.
In a statement to parliament on Wednesday, Frazer said her department had written to Lloyds, the Barclay family and the consortium, RedBird IMI, to inform them she was minded to issue a Public Interest Intervention Notice (PIIN).
Sam Altman is to return as chief executive of OpenAI after the ChatGPT developer said it had “reached an agreement in principle” for his reinstatement.
The San Francisco-based company made the announcement after days of internal turmoil after Altman’s surprise sacking on Friday. Nearly all of OpenAI’s 750-strong workforce had threatened to resign unless the board overseeing the business brought him back and then quit immediately afterwards.
The balance sheets of eurozone banks are showing “early signs of stress” after a rise in loan defaults and late payments by customers, the European Central Bank has warned.
Higher interest rates have boosted banks’ income and profits for the time being, the ECB said, but lenders are facing pressures from higher funding costs, worsening asset quality and lower lending volumes.
The central bank also warned in its twice-yearly financial stability review that higher interest rates and slower growth were posing problems for people, companies and governments in the euro area.
Tom Stevenson, investment director for personal investing at Fidelity International, said:
This was an autumn statement with references that may have only resonated with older voters. Jeremy Hunt promised to get ‘Sid’ investing again as the government prepares to sell its remaining stake in NatWest. It’s unlikely that anyone under the age of at least 50 will have recognised this reference to the 1986 sell-off of British Gas!
Will Howlett, financials analyst at the investment firm Quilter Cheviot, has looked at the government’s potential retail share offer for its remaining stake in NatWest Group.
The government is committed to exiting its 39% stake in NatWest by 2025/26 and will now explore options to launch a share sale to retail investors in the next 12 months. We see the government reducing their stake down to zero is more symbolic rather than having any implications for the bank’s strategy. As such, we believe it is the fundamentals of the business which are more important in driving share price performance rather than any technical overhang from a shareholder reducing their stake.
We do believe it reduces even further some of the remote risks with regard to introducing windfall taxes on banks ahead of the General Election as this would weigh further on already depressed valuations. In 2015, the government did propose something similar with regard to its stake in Lloyds but these plans were shelved. It will be interesting to see if this ends up going ahead or not.
US initial jobless claims fall more than expected
The number of Americans filing new claims for unemployment benefits fell more than expected last week, separate figures showed.
Initial jobless claims dropped 24,000 to a seasonally adjusted 209,000 for the week to 18 November, according to the US Labor Department. The decline more than reversed the jump in the prior week, which had lifted claims to a three-month high. Economists polled by Reuters had forecast 226,000 claims for the latest week.
The data was released a day early because of the Thanksgiving holiday tomorrow.
However, economists say the jobs market is still cooling.
Nancy Vanden Houten, lead US economist at Oxford Economics in New York, said:
Looking past seasonal noise, we think the claims data are consistent with a job market that is cooling enough to keep [interest] rate hikes off the table, but too strong to make rate cuts a consideration any time soon.
Updated
US durable goods orders plunge 5.4% due to transport
On the other side of the Atlantic, orders for US-manufactured durable goods plunged 5.4% in October, which was the biggest monthly drop since April 2020, and worse than expected.
The slump came after a 4.6% surge in orders in the previous month, according to US Commerce Department figures, and was caused by a sharp drop in orders for non-defence aircraft and parts, down 14.8% after an 11.6% jump in September.
Excluding the steep drop in orders for transportation equipment, durable goods orders were roughly unchanged in October after edging up by 0.2% in September.
Increases in orders for fabricated metal products and computers and electronic products were offset by declines in orders for primary metals and electrical equipment, appliances and components.
⚠️BREAKING:
— Investing.com (@Investingcom) November 22, 2023
*U.S. OCTOBER DURABLE GOODS ORDERS PLUNGE -5.4%; EST. -3.1%; PREV. +4.0%
*BIGGEST MONTHLY DROP SINCE APRIL 2020
🇺🇸🇺🇸 pic.twitter.com/40Veeh6hIc
Updated
Back to the mooted NatWest share sale to individual investors.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said:
Giving retail investors a slice of ownership in NatWest is a welcome move given that they have been left out of previous sales, which have been reserved for institutional investors. This is a recurrent theme, retail investors are rarely offered the full suite of investing opportunities, so this would buck the trend. Further sales would again bring NatWest closer to full public ownership and would bring to a close crisis actions taken during the Great Financial Crisis.
The government announced at the Spring Budget that it intended to fully exit the shareholding by 2025-2026, subject to market conditions and achieving value for money for taxpayers. But shares are down by almost a third since January, with a sharp fall prompted in October by some disappointing third quarter figures.
Markets were expecting a dip in net interest margin as consumers moved from non/low interest-bearing accounts to higher rate longer-term products in search of better returns, but the pace of switching took markets by surprise. NatWest isn’t alone in facing this challenge. But as a more traditional bank, interest income is a big part of the pie.
On a more positive note, provisions set aside for debt defaults were better than first thought and full-year guidance remains intact. At the current valuation the potential for returns, as some of present headwinds ease off, look attractive for both the business and existing and new shareholders.
Eurozone banks starting to show ‘stress’ as loan defaults rise, ECB warns
The balance sheets of eurozone banks are showing “early signs of stress” after a rise in loan defaults and late payments by customers, the European Central Bank has warned.
Higher interest rates have boosted banks’ income and profits for the time being, the ECB said, but lenders are facing pressures from higher funding costs, worsening asset quality and lower lending volumes.
The central bank also warned in its twice-yearly financial stability review that higher interest rates and slower growth were posing problems for people, companies and governments in the euro area.
Higher borrowing costs were likely to lead banks to set more money aside to cover bad debts, hitting future profitability, it said.
However, the rise in defaults and late payments has come from a historically low level, and the ECB believes the banking system should be able to cope with worsening asset quality thanks to strong capital buffers and liquidity levels.
The ECB’s vice-president, Luis de Guindos, said the turbulence seen in the spring, when several lenders in the US and Switzerland, including Silicon Valley Bank and Credit Suisse, either collapsed or had to be rescued, had now abated, but “while risks to financial stability may appear less acute, they remain elevated”.
Alasdair Haynes, chief executive of the “challenger exchange” Aquis Exchange, said:
A NatWest retail share offer reflects a crucial shift towards rebuilding an equity culture following a decade of de-equitisation. We need a wider cultural change alongside regulatory reforms, and this marks a positive first step to attract new retail investors to the UK markets. We strongly urge the government to accompany this initiative with education for individual investors around the fundamentals of long-term investment, risk/reward considerations, and balancing a portfolio.
Investing in equities not only benefits individual investors but also fuels the much-needed scale-up capital for the British economy and businesses, ensuring substantial returns through growth and tax contributions. The success of this approach is evident in the US, where higher volumes of retail investors contribute to deeper market liquidity.
Here’s our full story:
The UK government will explore options for selling off its remaining 38.6% stake in the high street lender NatWest Group to the public within a year, bringing it back to full private ownership, Jeremy Hunt has announced.
Delivering his autumn statement in parliament, the chancellor said he would “explore options” for a retail share offer in the next 12 months but said it would be “subject to supportive market conditions and achieving value for money”. This means shares can be bought by anyone, not just financial institutions.
In a reference to the privatisations of the 1980s, when shares in British Gas were advertised to retail investors with the slogan “If you see Sid … Tell him”, the chancellor declared: “It’s time to get Sid investing again.”
NatWest shares changed hands at 204.9p on Wednesday, down 1.2%, giving the company a market value of £18bn. They have lost a quarter of their value so far this year.
The government took an 84% stake in the high street lender during the2008 financial crisis, when it pumped £45.5bn into the bank, then known as Royal Bank of Scotland.
Anand Sambasivan, chief executive of the investment platform PrimaryBid, welcomed the move:
At this critical moment for the UK’s capital markets, involving the British public in Natwest’s privatisation makes complete sense. It’s an opportunity to rebuild engagement and ownership in our public markets. It’ll be tweet Sid this time.
Updated
Here is the full announcement on NatWest in the autumn statement:
The government is committed to exiting its shareholding in NatWest, subject to market conditions and sales representing value for money. The government intends to fully exit by 2025-26 utilising a range of disposal methods, including accelerated bookbuilds and directed buybacks with NatWest and also via continuing sales through the ongoing trading plan.
As part of the plan to return NatWest to the private sector, the government will explore options to launch a share sale to retail investors in the next 12 months, subject to supportive market conditions and achieving value for money.
“It’s time to get Sid investing again,” Hunt said.
This was a reference to a 1980s advertising campaign for the public to buy shares when British Gas was privatised, which used the slogan “If you see Sid… Tell him.” Sid is meant to represent the man on the street.
Government may sell remaining NatWest stake to the public
In parliament, the chancellor has announced that he will explore the options for selling off the government’s remaining shares in NatWest to the public within a year.
Jeremy Hunt said he would “explore options” for a potential NatWest retail share offer in the next 12 months, but said it would be “subject to supportive market conditions and achieving value for money”.
Updated
Sharon Graham, the general secretary of the trade union Unite, said the announcement of the Grangemouth closure “clearly raises concerns for the livelihoods of our members but also poses major questions over energy supply and security going forward”.
Grangemouth is the only major facility of its kind in Scotland. It accounts for just under a sixth of Britain’s domestically produced refined fuel products, although the mix of products varies between refineries.
Graham vowed:
Unite will leave no stone unturned in the fight for jobs and will hold politicians to account for their actions.
Here is our full story on the Grangemouth oil refinery closure in Scotland:
Grangemouth oil refinery in Scotland is to cease operations and could do so as early as 2025 under plans announced by its owner, Petroineos, part of the petrochemicals empire owned by Monaco-based British billionaire Sir James Ratcliffe.
Trade unions raised concerns about the impact on livelihoods of the 500 people directly employed at the facility, near Falkirk, and on the UK’s fuel supply from the closure of one of the country’s six large oil refineries.
Petroineos, which has discussed its plans with Westminster and the Scottish government, said it had had no choice but to adapt to global pressures affecting the refining market.
The company said it hoped to transform Grangemouth, which already imports liquefied natural gas (LNG) from the US, into a pure fuel import and export terminal within 18 months.
Franck Demay, chief executive of Petroineos Refining, said it was “business as usual” at the facility for now.
As the energy transition gathers pace, this is a necessary step in adapting our business to reflect the decline in demand for the type of fuels we produce,” he said. “As a prudent operator, we must plan accordingly, but the precise timeline for implementing any change has yet to be determined.
This is the start of a journey to transform our operation from one that manufactures fuel products into a business that imports finished fuel products for onward distribution to customers.
UK business closures hit record high in 2022
A record number of businesses closed across the UK last year, official figures show.
The Office for National Statistics said 345,000 businesses shut their doors in 2022, a 5% increase on the 328,000 that closed in 2021, and the highest figure since records began in 2002.
The so-called business “death rate” surpassed the “birth rate” of new businesses being founded for the first time since 2010. Some 337,000 new companies began trading nationwide in 2022, down from 364,000 the year before. The death rate rose to 11.8% while the birth rate fell to 11.5% from 12.4%. There were 2.9 million active businesses in the UK last year.
The Institute of Directors blamed the increase in business closures on the cost of living crisis, the economic fallout of Russia’s invasion of Ukraine, and the aftermath of the restrictions of the Covid-19 pandemic.
Roger Barker, director of policy and corporate governance at the institute, said:
2022 was a difficult year for UK businesses, as they emerged out of the restrictions of the pandemic and straight into the economic fallout from Russia’s invasion of Ukraine.”
Transport and storage businesses particularly struggled, with the highest death rate at 23.8%, almost double any other industry.
He blamed “higher business costs and declining disposable income”.
Information and communication businesses had the second highest death rate at 13.6%, while accommodation and food services, and retail industries had the joint-third highest at 12.8%.
At the same time, information and communication had a higher proportion of high-growth businesses than any other industry. A high-growth business is defined as a firm where the average annual growth in the number of employees surpasses 20% over a three-year period.
London had the highest birth rate at 12.7%, while the East Midlands had the highest death rate at 13.2%. But Northern Ireland businesses were the most robust, with just 8.2% closing last year - no other region had a death rate below 10%. Northern Ireland also had the highest rate of businesses surviving five years at 49%.
George Dibb, head of the Institute for Public Policy Research’s Centre for Economic Justice, said the data was a “potential warning sign for the British economy with more companies going out of business than started up for the first time in 2022 since the tail end of the financial crisis”.
Whilst this isn’t unexpected - high energy costs combined with the end of pandemic support schemes would always see a rise in company closures - it might signify that greater business support would have maintained higher economic activity.
The only regions with above average high-growth firms are London and the South East. If we want to reduce regional economic inequality and ‘level up’, we need to see more of these booming companies in every part of the country.
Updated
There was a power cut at parliament, but fortunately it seems to be fixed – just in time for Jeremy’s Hunt’s autumn statement. You can follow it on our politics live blog here:
Grangemouth oil refinery due to cease operations by 2025
Scotland’s sole oil refinery at Grangemouth is due to cease operations in 2025, its owners have announced, a move which could cost hundreds of jobs.
Petroineos, which owns the plant, said it will become a fuel import terminal, a move that will cut the UK’s oil refining capacity.
Grangemouth has a refining capacity of 150,000 barrels per day, and is responsible for 4% of Scotland’s GDP and approximately 8% of its manufacturing base, according to Petroineos.
The company said in a statement:
“The timescale for any operational change has not yet been determined but the work will take around 18 months to complete and the refinery is therefore expected to continue operating until spring 2025.”
The Unite union has pledged to “leave no stone unturned” in its fight to save jobs at Grangemouth.
Unite’s Scottish secretary Derek Thomson told STV News.
“The news will come as a shock to the local community but Unite is going to do everything it can to protect jobs in this vital industry.
Franck Demay, the chief executive of Petroineos Refining, said the Grangemouth announcement does not change anything at the refinery currently, adding:
“As the energy transition gathers pace, this is a necessary step in adapting our business to reflect the decline in demand for the type of fuels we produce.
“As a prudent operator, we must plan accordingly but the precise timeline for implementing any change has yet to be determined.
“This is the start of a journey to transform our operation from one that manufactures fuel products, into a business that imports finished fuel products for onward distribution to customers.
“Throughout this process, our focus will remain on the safe production and reliable supply of high-quality fuels to our customers in Scotland, the north of England, and Northern Ireland.
“As we start to make this investment in preparing for a future transformation, we are equally committed to a regular programme of engagement with our colleagues about the changes we are making to our business.”
Back in Westminster, chancellor Jeremy Hunt has headed to the House of Commons ready to deliver the autumn statement at around 12.30pm:
NEWS: Chancellor @Jeremy_Hunt has left Number 11 Downing Street as he prepares to deliver his Autumn Statement to the @HouseofCommons.
— HM Treasury (@hmtreasury) November 22, 2023
Watch the statement live on our channels at 12:30. pic.twitter.com/eud59r698E
UK factory order books weaken as high interest rates bite
Newsflash: UK factory order books have fallen to their lowest level since January 2021, the latest industrial trends survey from the CBI shows.
The CBI’s monthly poll of the manufacturing sector found that total order books “deteriorated sharply” this month, to well below the long-run average.
It also found that output fell in the last three months, and is likely to keep declining in the next quarter.
Anna Leach, CBI deputy chief economist, says the survey suggests increases in interest rates are hurting demand for goods.
Leach explains:
“Manufacturing output has been under pressure recently given the combination of slowing demand and the run-down of stocks of finished goods. This latest data will fuel concerns that the economy is slowing swiftly as the highest interest rates for 15 years take their toll on demand.
“The further softening in orders this month is a worry, with order books now in their weakest position since the start of 2021 when the economy was locked down amid the pandemic”.
The latest CBI Industrial Trends Survey found that manufacturing output volumes fell in the three months to November. Firms expect output to fall further in the three months to February #ITS pic.twitter.com/RK9F9BoLHF
— CBI Economics (@CBI_Economics) November 22, 2023
Total and export order books were reported as below “normal” in November, deteriorating to their weakest levels since January and February 2021, respectively. #ITS pic.twitter.com/I9tFmeT3fh
— CBI Economics (@CBI_Economics) November 22, 2023
Expectations for selling price inflation were broadly stable in November and remained close to the long-run average. Selling price expectations have declined steadily over the past 18 months from the multi-decade high seen in 2022 #ITS pic.twitter.com/wZY6vsuSiy
— CBI Economics (@CBI_Economics) November 22, 2023
Expectations for selling price inflation were broadly stable in November and remained close to the long-run average. Selling price expectations have declined steadily over the past 18 months from the multi-decade high seen in 2022 #ITS pic.twitter.com/wZY6vsuSiy
— CBI Economics (@CBI_Economics) November 22, 2023
Updated
Full story: Barclay family’s offer for Telegraph likely to be referred to Ofcom
Here’s our news story on the latest development in the Telegraph sale drama:
If Lucy Frazer decides to issue an Intervention Notice over the Telegraph sale to RedBird, then media regulator Ofcom would draw up a report on any public interest concerns.
The Competition and Markets Authority (CMA) would also investigate whether there are any competition issues.
Frazer would then devide whether to refer the matter for a more detailed investigation by the CMA, under section 45 of the Enterprise Act 2002.
Updated
Lucy Frazer adds that it is “important to note that I have not taken a final decision” on whether or not to intervene in the RedBird deal for the Telegraph.
The Secretary of State for Culture, Media and Sport explains:
The ‘minded to’ letter invites further representations in writing from the parties and gives them until 3pm on 23 November to respond.
Updated
UK government 'minded to' intervene over Telegraph sale
UK media minister Lucy Frazer has said she is “minded to” issue a public interest intervention notice relating to the sale of the owner of the Telegraph group to a fund backed by Abu Dhabi.
In a statement to parliament, Frazer says her department has today written respectively to Lloyds Banking Group, the Barclay family and RedBird IMI, to inform them that she is ‘minded to’ issue a Public Interest Intervention Notice.
Frazer says:
This relates to concerns I have that there may be public interest considerations - as set out in section 58 of the Enterprise Act 2002 - that are relevant to the intended loan repayment by the Barclay family and the planned acquisition of Telegraph Media Group by RedBird IMI and that these concerns warrant further investigation.
Frazer’s statement come after a group of Conservative MPs wrote to ministers, urging them to use the UK’s national security laws to investigate the Barclay family’s attempt to regain control of the Telegraph newspaper group with funding from Abu Dhabi.
Earlier this week, RedBird announced it had pledged to repay £1.1bn debts owed by their publishing group’s previous owners, the Barclay family, as part of a deal that would see it take control of the Telegraph and Spectator.
The sale of the Telegraph and Spectator was put on hold yesterday, until after a deadline for the Barclays to repay the debts at the start of December.
Updated
The financial markets are likely to respond rather more positively to UK tax cuts today, than they did after the ill-fated mini-budget of September 2022.
Matthew Ryan, head of market strategy at global financial services firm Ebury, says investors will give a positive reaction to a “slightly more growth-oriented budget”.
Ryan explains:
“Investors will be paying close attention to this afternoon’s Autumn Budget announcement from Britain’s government. PM Sunak and chancellor Jeremy Hunt have already pre-warned markets to brace for tax cuts, with adjustments to inheritance and personal incomes taxes seemingly on the table. Of course the last time the UK government announced a lowering in taxes (former Liz Truss’ infamous mini-budget disaster in September last year), the pound tanked to a record low on the US dollar.
“It is with a high degree of confidence that we can assume that this time will be different. Macroeconomic conditions are completely unalike to a little over a year ago, most notably the fact that UK inflation has dropped sharply from last year’s peak. Indeed, we think that a slightly more growth-oriented budget, which delivers larger-than-expected tax cuts and a focus on supporting households during the elevated cost of living, may actually be greeted positively by markets.”
ECB warns higher interest rates are hurting eurozone
The European Central Bank has warned that higher interest rates and slower growth are posing problems for people, firms and governments in the euro area.
In its latest Financial Stability Review, published this morning, the ECB warns that the full impact of tighter financial conditions on real economy have yet to be felt.
The ECB, which raised its key deposit rate to an all-time high in September, fears that higher borrowing and debt service costs will “increasingly test” the resilience of euro area households, firms and governments.
The FSR points out that a downturn is also underway in the eurozone real estate markets, where residential prices are falling as higher mortgage costs hit affordability.
It also warns that eurozone banks are facing pressures from higher funding costs, worsening asset quality and lower lending volumes.
Rising financing costs and sluggish growth imply lower demand for loans and a higher likelihood of borrower defaults, ultimately putting pressure on banks’ balance sheets.
— European Central Bank (@ecb) November 22, 2023
2/3
ECB vice-president Luis de Guindos says:
“The weak economic outlook along with the consequences of high inflation are straining the ability of people, firms and governments to service their debt.
“It is critical that we remain vigilant as the economy transitions to an environment of higher interest rates coupled with growing uncertainties and geopolitical tensions.”
Brockman: We are so back
Greg Brockman, freshly returned to OpenAI alongside Sam Altman, has posted a photo of himself with staff at the company – with smiles all round.
we are so back pic.twitter.com/YcKwkqdNs5
— Greg Brockman (@gdb) November 22, 2023
Helen Toner, one of the OpenAI board members leaving the company, has posted that “And now, we all get some sleep” after the deal for Sam Altman’s return was announced.
And now, we all get some sleep😴 https://t.co/33Shlm04EQ
— Helen Toner (@hlntnr) November 22, 2023
The average mortgage rates on offer from UK brokers have dipped again.
Data provider Moneyfacts reports that:
The average 2-year fixed residential mortgage rate today is 6.10%, down from an average rate of 6.13% yesterday
The average 5-year fixed residential mortgage rate today is 5.71%, down from an average rate of 5.75% yesterday
Wheat prices rise amid supply worries after Russian strikes on Odesa
In the commodities market, wheat has risen to a two-week high amid new concerns over disruption to UK supplies.
The most-active wheat contract on the Chicago Board of Trade climbed over 1% as high as $5.88-3/4 a bushel, the highest since November 9th.
Yesterday, Ukraine reported that a Russian strike had hit port infrastructure in Odesa Oblast.
Earlier this week, the United Nations World Food Programme warned that Ukraine’s wheat production may be unable to meet domestic and export demand in the years to come if Black Sea export routes remain blocked and attacks on food infrastructure continue.
Emmett Shear has changed his biography on X to “interim ex-CEO of OpenAI”, following the news that Sam Altman is returning to the company.
Interim ex-CEO of OpenAI pic.twitter.com/sYs7u83Dyx
— Vaughn Vernon (@VaughnVernon@mastodon.social) (@VaughnVernon) November 22, 2023
Shear (founder of Twitch) had been named as interim chief executive on Monday.
Updated
The Times’s Steven Swinford has posted a list of expected measures in the autumn statement.
Autumn Statement:
— Steven Swinford (@Steven_Swinford) November 22, 2023
* NI cut for 28m people
* Full expensing made permanent
* Benefits uprated by 6.7%
* State pension up by 8.5%
* Living wage up to £11.44
* Benefit claimants made to look for work
* Business VAT threshold up
Significantly, this suggests Hunt is expected to announce that benefits will rise by 6.7% – in line with September’s inflation reading, as usual.
There were concerns that ministers would use the lower October inflation figure of 4.6% instead, cutting the benefits bill by up to £3bn.
Darren Jones, shadow Chief Secretary to the Treasury, says the Labour party welcomes the suggestion there will be tax cuts for working people in today’s autumn statement.
Jones told Sky News:
We’ve been calling for that, in the Labour party, for some time.
But he adds that, on average, people are paying £4,000 per year more tax under the Conservatives, so “a couple of hundred quid off” is good, but won’t make too much difference.
What is Labour hoping to hear from the Govt's #AutumnStatement today?
— Kay Burley (@KayBurley) November 22, 2023
Here's @darrenpjones Shadow Chief Secretary to the Treasury #KayBurley FC pic.twitter.com/ToKnabIkA6
Updated
The Verge are reporting that OpenAI’s new board (Bret Taylor, Larry Summers, and Adam D’Angelo) will vet and appoint an expanded board of up to 9 people that will reset the governance of OpenAI.
Microsoft, which has invested over $10 billion into the company, wants to have a seat on that expanded board, as does Altman himself.
Updated
B&Q owner Kingfisher has cut its profit outlook again, as demand in France continues to wane.
It’s the second earnings downgrade from Kingfisher in under three months.
Kingfisher, which runs the Castorama and Brico Depot chains in France, says that French market trends are weaker than expected.
It told shareholders:
We continue to take decisive cost actions in France, more than offsetting the impact of inflation.
However, given continued market weakness, this is not sufficient to offset the impact of lower sales in this region.
However, sales in the UK and Ireland have remained “resilient” – an encouraging sign for the economy.
Kingfisher now expects full-year underlying group pre-tax profits of around £560m. In September, it had cut its guidance in September to about £590m, down from an original forecast of £634m.
Update: Kingfisher’s shares have dropped 6.8% in early trading.
Updated
Sam Altman’s dramatic return to OpenAI shows that the company realised it faced an “existential moment”, says Susannah Streeter, head of money and markets at Hargreaves Lansdown:
The Open AI hokey cokey dance has taken another twist – with Sam Altman, in, out and then apparently back in again. The chaos at Open AI has shaken up the industry. It’s even prompted Microsoft’s CEO to declare that Microsoft was self-sufficient and would continue to excel even if Open AI disappeared tomorrow.
Given the call to arms by staff and threats of a mass exodus if Altman was not brought back, the company clearly realised it risked an existential moment. The root of the dispute is thought to be a conflict between the speed of growth and safety concerns surrounding intelligent bots.
Given he’s walked back through the revolving door, Sam Altman’s views about how to run the company will dominate future direction, especially given he’ll be supervised under a new board.
Satya Nadella, the CEO of Microsoft, says he’s encouraged by the shake-up of OpenAI’s board (with Salesforce chief executive Bret Taylor and former US Treasury secretary Larry Summers joining).
Posting on X, Nadella says:
We are encouraged by the changes to the OpenAI board.
We believe this is a first essential step on a path to more stable, well-informed, and effective governance. Sam, Greg, and I have talked and agreed they have a key role to play along with the OAI leadership team in ensuring OAI continues to thrive and build on its mission.
We look forward to building on our strong partnership and delivering the value of this next generation of AI to our customers and partners.
We are encouraged by the changes to the OpenAI board. We believe this is a first essential step on a path to more stable, well-informed, and effective governance. Sam, Greg, and I have talked and agreed they have a key role to play along with the OAI leadership team in ensuring… https://t.co/djO6Fuz6t9
— Satya Nadella (@satyanadella) November 22, 2023
Emmett Shear, who had been appointed as OpenAI’s interim CEO just two days ago, says he’s “deeply pleased” that Altman is returning to the CEO’s seat.
I am deeply pleased by this result, after ~72 very intense hours of work. Coming into OpenAI, I wasn’t sure what the right path would be. This was the pathway that maximized safety alongside doing right by all stakeholders involved. I’m glad to have been a part of the solution. https://t.co/AGoDBbwhkq
— Emmett Shear (@eshear) November 22, 2023
Greg Brockman, who resigned from OpenAI after Sam Altman’s shock dismissal last week, says he is also returning to the company:
Returning to OpenAI & getting back to coding tonight.
— Greg Brockman (@gdb) November 22, 2023
Brockman had also agreed to join Microsoft on Monday, with Altman.
Altman: i’m looking forward to returning to OpenAI, and building on strong partnership with Microsoft
Sam Altman has posted that he’s looking forward to returning to OpenAI, following the deal announced by the company a few minutes ago.
Altman says he loves the company, and wants to build on its “strong partnership with Microsoft”.
i love openai, and everything i’ve done over the past few days has been in service of keeping this team and its mission together. when i decided to join msft on sun evening, it was clear that was the best path for me and the team. with the new board and w satya’s support, i’m…
— Sam Altman (@sama) November 22, 2023
Updated
Sam Altman to return as OpenAI CEO
The turmoil at artificial intelligence firm OpenAI has taken another dramatic twist this morning.
Sam Altman, who was ousted as OpenAI’s chief last Friday, is now poised to return to run the company.
Altman’s return follows a staff revolt, with hundreds of OpenAI’s staff threatening to move to major investor Microsoft, which had offered Altman a new position running its AI division.
OpenAI has also agreed in principle to partly reconstitute the board of directors that had dismissed Altman. Former Salesforce co-CEO Bret Taylor and former US Treasury Secretary Larry Summers will join Quora CEO and current director Adam D’Angelo on the board.
In a post on X (formerly Twitter), OpenAI adds:
We are collaborating to figure out the details. Thank you so much for your patience through this.
We have reached an agreement in principle for Sam Altman to return to OpenAI as CEO with a new initial board of Bret Taylor (Chair), Larry Summers, and Adam D'Angelo.
— OpenAI (@OpenAI) November 22, 2023
We are collaborating to figure out the details. Thank you so much for your patience through this.
OpenAI’s board had faced much scrutiny for its decision to fire Altman, who they accused of not being “consistently candid in his communications.”
That board had consisted of D’Angelo, plus Helen Toner, Tasha McCauley and Ilya Sutskever – the latter three appear to have now left the board.
Sutskever, OpenAI’s chief scientist, said earlier this week that he deeply regretted the board’s actions in dismissing Altman.
Updated
Rachel Reeves, Labour’s Shadow Chancellor, has declared that the Conservative Party have become the “party of high tax”.
Speaking ahead of today’s autumn statement, Reeves says:
“After thirteen years of economic failure under the Conservatives, working people are worse off. Prices are still rising in the shops, energy bills are up and mortgage payments are higher after the Conservatives crashed the economy.
“The 25 Tory tax rises since 2019 are the clearest sign of economic failure, with households paying £4,000 more in tax each year than they did in 2010. The Conservatives have become the party of high tax because they are the party of low growth. Nothing the Chancellor says or does in his Autumn Statement can change their appalling record.
“Under Keir Starmer’s leadership, the Labour Party has changed. Labour is now the party of fiscal responsibility, we are the party of business and we are the only party with a plan to make working people better off.”
Updated
Here’s a breakdown of what to expect from Jeremy Hunt today:
Introduction: Tax cuts expected in autumn statement
Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.
A year is a long time at the Treasury. A year ago, Jeremy Hunt was announcing a punishing package of £30bn of delayed spending cuts and £25bn of backdated tax increases, as he tried to mend the damage from the calamatious mini-budget a few weeks before.
Today, though, Hunt will deliver another autumn statement, and this time he’s expected to announce cuts to national insurance, benefiting millions of workers.
The chancellor is also likely to be a splurge of help for companies, with predictions of over 100 business-friendly measures. That could include extending the current, temporary “full expensing” system that lets companies offset investment from their tax bills.
Hunt’s message is expected to be that the government wants to “turbo charge” growth.
He does have more fiscal firepower, as borrowing so far this financial year is almost £17bn below expectations.
The chancellor is expected to say:
“After a global pandemic and energy crisis, we have taken difficult decisions to put our economy back on track,
We have supported families with rising bills, cut borrowing and halved inflation. The economy has grown. Real incomes have risen. Our plan for the British economy is working.
“But the work is not done … Conservatives know that a dynamic economy depends less on the decisions and diktats of ministers than on the energy and enterprise of the British people.”
Lower-paid workers received a boost last ight, when Hunt announced that the national living wage will rise to £11.44 per hour from April, an increase of almost 10%.
He’s accepting the recommendation from the Low Pay Commission for an increase of £1.02 from the current rate of £10.42.
It’s important to remember that any tax cuts today will only make a small dent in the squeeze on incomes. Millions of households have been dragged into high tax bands by the freeze on thresholds, which have not risen in line with inflation.
We’ll also receive an update from the Office for Budget Responsibility today, which will give its assessment of the UK economy and the impact of Hunt’s plans.
City economists predict the OBR will lower their forecasts for growth.
Mohit Kumar, Chief European Economist at Jefferies, says:
Current OBR forecasts look a bit optimistic and are likely to be revised lower. Our view is more in line with BoE which sees no growth until 2025.
The agenda
11am GMT: CBI’s industrial trends survey of UK manufacturing
12.30pm GMT: Jeremy Hunt delivers autumn statement
1.30pm GMT: US weekly jobless claims figures, and durable goods orders
2.30pm GMT: Office for Budget Responsibility holds Economic and fiscal outlook press briefing:
3pm GMT: University of Michigan’s survey of US consumer confidence
