Closing summary
Mike Ashley’s Frasers Group has decided not to make a further bid for the British luxury handbag maker Mulberry, following the rejection of its previous offers, expressing concern for what it called the brand’s “clear lack of a commercial plan”.
Frasers, which already owns 37% of the company, had made a series of offers for the luxury fashion brand, all of which have been rebuffed.
Mulberry’s largest shareholder, Challice, a group controlled by the Singaporean entrepreneur Christina Ong and her husband, had previously said it had no interest in selling its shares. Challice has a 56% stake, meaning that is able to block any deal.
The final offer from Frasers on 22 October, of 150p a share, was rejected by Mulberry’s board as being “untenable”.
The dollar has rallied, rising by 0.3% to 104.44 against a basket of major currencies. Against sterling, it firmed by 0.3% to $1.2945.
The US economy has been boosted by strong economic data and investors betting that Donald Trump can clinch next month’s presidential election.
Gold prices hit a new all-time high amid rising geopolitical tensions in the Middle East. Spot gold hit $2,752 an ounce but is now trading 0.8% lower at $2,727 an ounce.
Oil prices fell more than 2% earlier and Brent crude, the global benchmark, is now down by 0.7%, or $0.54 a barrel, at $75.51 a barrel, after industry figures pointed to a rise in US inventories.
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Thank you for reading. We’ll be back tomorrow. Take care! – JK
Bank of Canada cuts rates by half point
The Bank of Canada has cut interest rates by half a percentage point to 3.75%, and economists are expecting another cut of the same magnitude at the next meeting in December.
It said in a statement:
With inflation now back around the 2% target, Governing Council decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range. If the economy evolves broadly in line with our latest forecast, we expect to reduce the policy rate further.
Stephen Brown, deputy chief North America economist at Capital Economics, said:
The weak economic backdrop means there is a strong case for the Bank of Canada to follow its larger 50bp cut today, which took the policy rate to 3.75%, with another 50bp move at the next meeting in December.
it seems unlikely to us that the 50bp cut today will be a one-off. The Bank seemed to leave the door open to another larger move.
With little sign that economic growth is accelerating fast enough to close the output gap, and assuming further encouraging CPI [consumer price inflation] data releases, we continue to expect another 50 basis point cut from the Bank in December. That would take the policy rate to 3.25% by year-end, the top end of the Bank’s 2.25% to 3.25% neutral range estimate, after which we would expect the Bank to revert to 25bp cuts until the policy rate reaches 2.25% in mid-2025 - although the risks to that terminal rate forecast now seem to lie to the downside.
