Closing summary
McDonald’s restaurants in multiple countries including the UK and Australia have been hit by a “technology outage”, as the fast food chain denied it had been hit by a cybersecurity attack.
Services in Australia, the UK, Japan and China have been affected, with unconfirmed reports of problems elsewhere, with restaurant, drive-through and online orders affected.
A global spokesperson for McDonald’s said the company was working to resolve the unspecified problem.
“We are aware of a technology outage, which impacted our restaurants; the issue is now being resolved. We thank customers for their patience and apologise for any inconvenience this may have caused. Notably, the issue is not related to a cybersecurity event,” the spokesperson said.
A UK spokesperson for McDonald’s said the outage affecting restaurants had been “resolved” in the UK and Ireland. In the UK, the Downdetector site, which flags outages on apps, reported more than 600 outages on the app on Friday morning with a spike at about 7am.
Other other main stories:
Thank you for reading, and have a great weekend. Take care – JK
Boeing cockpit seat switch mishap reportedly led to Latam flight incident
Another Boeing jet is facing scrutiny after the planemaker reportedly told airlines to check the cockpit seats of 787 Dreamliners following a terrifying drop during a flight from Sydney to Auckland.
Dozens of people on Latam Airlines Flight 800 were said to have been hurt this week when the plane fell sharply, throwing passengers around the cabin.
Boeing has recommended that airlines inspect cockpit chairs of 787 jets for loose covers on switches, according to the Wall Street Journal, which reported that unnamed US industry officials said the incident was the result of a mishap: a flight attendant serving a meal hit a switch on the pilot’s seat, pushing the pilot into the controls.
In a memo issued late on Thursday, seen by the newspaper, Boeing said that closing a spring-loaded seat back switch guard on to a loose rocker switch cap could “potentially jam the rocker switch, resulting in unintended seat movement”.
Boeing did not immediately respond to a request for comment. It is already grappling with a safety crisis grappling with a safety crisis, after a cabin panel blowout during an Alaska Airlines flight of a brand-new 737 Max 9 jet in January.
Regulators grounded 171 Max 9 aircraft for several weeks, and are still inspecting the planemaker’s production line. Boeing’s CEO, Dave Calhoun, has acknowledged the company faces a “serious challenge” to win back the confidence of officials and airlines.
Reckitt Benckiser shares plunge after $60m verdict in Enfamil baby formula case in Illinois
Shares in Reckitt Benckiser fell to a 10-year low after its Mead Johnson division was ordered to pay $60m to the mother of a premature baby who died of an intestinal disease after being fed the company’s Enfamil baby formula.
The jury in an Illinois state court in St. Clair County on Wednesday found that Mead Johnson was negligent and that it failed to warn of the risk of necrotising enterocolitis. The disease, which causes the death of bowel tissue, mostly affects premature newborns and has a fatality rate of about 15% to 40%.
Reckitt shares fell as low as £45.03, and are still down 14% at £45.13.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said:
The $60m sum includes compensation for the plaintiff Jasmine Watson’s loss and grief and for the pain and suffering of her baby in what is clearly a tragic case. Chance Dean was born prematurely and died of an intestinal disease, after being fed Enfamil baby formula, made by Mead Johnson.
This ruling has come at a bad time for the Reckitt which had already been struggling with falling volumes across its household goods and hygiene ranges. It’s not simply the size of this payout which has caused nervousness, but the fact a long line of other lawsuits are pending, which could mount up to be huge sum for the company.
Based on the size of this fine, the share move is massively overstating the initial impact, which suggests investors are preparing for more to come. Plaintiffs are accusing its division, Mead Johnson, and rival Abbott, of concealing the higher risks of formula for premature infants compared to donor milk.
Although nutrition is Reckitt’s smallest division, it’s also been another volume drag, and hitting the headlines for the wrong reasons could also lead to reputational damage. After missing expectations in the fourth-quarter, investors were always going to be highly sensitive to set-backs and this judgement has led to a fresh loss of confidence.
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JD.com walks away from bidding for Currys
Chinese online retailer JD.com said it will not make a takeover offer for the UK electrical goods chain Currys, a day after US investor Elliott Advisors walked away.
Currys shares slumped to 52.45p, and are currently trading 6.6% lower at 55p.
The Chinese company said in a short statement:
JD.com today confirms that, following careful consideration, it does not intend to make an offer for Currys.
On Monday, Elliott, which owns Waterstones, told the markets that it had made several attempts to engage with the Currys board but all had been rebuffed.
It said it did not have enough information to make an improved offer and therefore would not be pursuing a third bid.
The confirmation comes after Elliott’s £742m bid, at 67p a share, was rejected last month, with the Currys board saying it “significantly undervalued the company and its future prospects”.
Back to our main story. McDonald’s said earlier that it has fixed its tech issues in the UK and Ireland. The problems, which the company said were not related to a cyber attack, also affected restaurants in the US, Japan, Australia and Hong Kong and forced some to close temporarily.
Sarah McLean, who owns a franchise across the Midlands, said all of her 21 branches had been affected.
“My restaurants were impacted very early in the morning, so thankfully the impact wasn’t too significant, about an hour and a half,” she told the BBC. But during that time they “couldn’t serve anyone”.
Downdetector, a system used to monitor IT problems in businesses, noted a spike in issues with the McDonald’s UK app from around 05:00 GMT today.
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UK company insolvencies jump 17% to 2,102 in February
More than 2,000 UK firms went bust last month, nearly a fifth more than the same time last year, according to new official figures.
The level of company insolvencies spiked in February with the cosmetics chain The Body Shop among the highstreet brands to collapse into administration.
The number of registered company insolvencies jumped 17% year-on-year in February to 2,102, according to the Insolvency Service.
This is higher than levels seen during the Covid-19 pandemic, when government support measures were propping up struggling firms, and higher than pre-pandemic numbers.
Last year, insolvencies hit a 30-year high, when more than 25,000 firms went out of business.
Construction businesses faced the most casualties last year, as the sector faced a protracted slowdown amid soaring mortgage costs and materials inflation.
David Hudson, a restructuring advisory partner at FRP, said:
Rather than fresh starts, the spring brings with it additional challenges for already distressed businesses, particularly those in the strained retail and hospitality sectors.
Despite hopes of some respite from the chancellor in last week’s budget, many will see large rises in their business rate bills from the start of April as well as having to shoulder increased wage costs as the new national living wage takes effect.
Honda and Nissan team up on electric vehicle technology
Japan’s Honda and Nissan have put aside the “traditional approach” of fierce rivalry to join forces and work together on electric vehicle technology, in an attempt to catch up with Chinese competitors.
The Japanese manufacturers will work together on technology for EVs, including components and software, after signing a memorandum of understanding on Friday.
Honda and Nissan, respectively the country’s second and third-largest carmakers behind Toyota, aim to cut costs by using their combined resources.
Traditional manufacturers are struggling to compete profitably with upstart rivals as the electric vehicle sector grows rapidly, adding significant development costs.
China’s BYD and Li Auto gained market share in a competitive industry, with Elon Musk’s Tesla – valued at $509bn – also a significant player.
Earlier this year BYD, which stands for Build Your Dreams, overtook Tesla as the world’s top selling electric carmaker.
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In the UK, Maria Avram, who works at a McDonald’s restaurant in London, told CNN that there was a system outage between 6 am and 7 am local time, and staff had to take orders in person and tell colleagues in the kitchen what to cook.
Of the countries known to be affected, Japan has the largest number of McDonald’s stores — nearly 3,000 — followed by the UK and Ireland, with 1,450 restaurants, and Australia, with just over 1,000.
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McDonald's: Technology issue resolved in UK and Ireland
The technology outage also affected McDonald’s restaurants in the UK and Ireland, but has been resolved in these countries.
A McDonald’s spokesperson said:
We are aware of a technology outage which impacted our restaurants. The issue has now been resolved in the UK and Ireland. We thank customers for their patience and apologise for any inconvenience this may have caused. The issue is not related to a cybersecurity event.
McDonald's says technology issue impacting restaurants 'now being resolved'
Here is the statement from McDonald’s Corporation:
We are aware of a technology outage, which impacted our restaurants; the issue is now being resolved. We thank customers for their patience and apologize for any inconvenience this may have caused. Notably, the issue is not related to a cybersecurity event.
McDonald’s has been hit by technical problems, leaving customers unable to order food in several countries including Australia and Japan.
McDonald’s Australia confirmed there was a technology outage and apologised to customers.
McDonald’s Japan said on X that many stores across the country had temporarily suspended operations because of a system failure. It issued an apology, and asked customers to “wait for a while until the service is restored”.
In the UK, people have also been reporting problems on social media. One person posted on X: “All McDonald’s in Eastbourne closed due to technical issues.”
However, the McDonald’s branch in London’s Kings Cross looked to be running as normal.
McDonald’s runs more than 1,450 restaurants across the UK and Ireland, and around 40,000 globally, and relies on an IT system to process in-store, drive-thru and online orders.
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UK public's inflation expectations fall to three-year low
The British public’s expectations for inflation over the coming year have fallen to a near three-year low, according to a Bank of England survey.
People are now expecting price growth in the year ahead to fall to 3%, while in November they had expected it to move to 3.3%.
This is the lowest level in nearly three years and is closer to the long-term average, and will bolster the case for interest rate cuts this year.
Vodafone selling Italian business to Swisscom for €8bn
Here is our full story on Vodavone selling its Italian business to Swisscom.
Vodafone is selling its Italian business to Swisscom for €8bn (£6.8bn) cash and plans to return €4bn to shareholders.
The telecoms company said it had reached an agreement to sell Vodafone Italy as part of wider plans to reshape its European operations and that some of the proceeds would be returned to investors via share buybacks.
Vodafone and Swisscom have agreed that Vodafone will continue to provide certain services to Swisscom for up to five years, as part of the deal.
The disposal in Italy is one of a number of steps that the chief executive, Margherita Della Valle, has made since she became chief executive to reposition Vodafone.
Her actions have also included a disposal in Spain and a proposed merger with Three in the UK – which would create the UK’s largest mobile phone operator.
McDonald’s said it was aware of a technology outage which impacted its restaurants, adding that the issue is now being resolved, Reuters reported.
The outage is not related to a cyber attack.
McDonald's restaurants hit by technology outage
McDonald’s has been hit by technical problems, leaving customers unable to order food in several countries including Australia and Japan.
McDonald’s Australia confirmed there was a technology outage and apologised to customers. A spokesperson said:
We are aware of a technology outage currently impacting our restaurants nationwide and are working to resolve this issue as soon as possible.
We apologise for the inconvenience and thank customers for their patience.
Some restaurants in Australia shut temporarily, while others reverted to taking orders with pen and paper, according to reports.
McDonald’s Japan said on X that many stores across the country had temporarily suspended operations because of a system failure. It issued an apology, and asked customers to “wait for a while until the service is restored”.
Elsewhere, including in the UK, people have been reporting problems on social media. One person posted on X: “All McDonald’s in Eastbourne closed due to technical issues.”
McDonald’s runs more than 1,450 restaurants across the UK and Ireland, and around 40,000 globally, and relies on an IT system to process in-store, drive-thru and online orders.
McDonald’s UK has been approached for comment.
McDonald’s is experiencing a system outage in several parts of the Asia-Pacific that’s left customers unable to order at its stores, as well as from electronic kiosks and mobile apps https://t.co/JUt6W7JS8N
— Bloomberg (@business) March 15, 2024
McDonald’s customers in Australia, Japan and Hong Kong reported having trouble ordering at the fast-food restaurants on Friday, as some operators cited technical problems with ordering systems. https://t.co/2Hg6glJZKz
— The New York Times (@nytimes) March 15, 2024
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Bitcoin retreats from record high
After scaling new highs in recent days, bitcoin has retreated this morning to a one-week low in volatile trading, amid profit-taking and a rethink on US interest rate cuts.
The world’s best-known crypto currency is now trading at around $68,300, down 3.3% on the day, as traders take profits. Earlier, during the Asian session bitcoin fell more than 5% to $66,629.96.
Only yesterday, it had touched an all-time high of just under $74,000 ($73,699.99).
City Index analyst Matt Simpson said:
Bitcoin has an established history of getting volatile and ruthless after hitting a record high.
And not only did it recently hit a record high, but it looks like the Federal Reserve won’t be as dovish as traders had hoped.
US data out yesterday showed that that while US retail sales rebounded less than expected in February, producer prices increased more than forecast.
Markets reacted by paring the chances of Fed interest rate cuts beginning in June, with futures now pointing to a roughly 60% chance of a rate cut that month, down from roughly 74% a week ago.
Bitcoin remains nearly 60% higher so far this year.
During the recent trading frenzy, the crypto currency was boosted by the approval by the US financial regulator of exchange-traded funds [ETFs] in January – a basket of assets that can be bought and sold like shares on an exchange – that track the price of bitcoin.
BlackRrock, the world’s biggest asset manager, runs the biggest bitcoin ETF, which has seen $15.5bn flow into it since the start of the year.
Then on Monday, the UK financial regulator said it would “not object” to investment exchanges creating a UK-listed market segment for cryptoasset-backed exchange traded notes [cETNs], a financial product that can be traded like a stock – although it will not permit the sale of these cETNs to members of the public.
Another major factor behind the recent bull run is the “halving” event in April (this happens every four years) when the number of new bitcoin entering the market will be permanently reduced by 50%.
Politicians and regulators have been clear about the dangers of investing in crypto because it is so volatile. But industry leaders believe it is the future of finance.
Oil prices edge lower but head for near 4% weekly gain
Oil prices have slipped 0.2% this morning but are on track for a near-4% gain this week.
The Paris-based think tank, the International Energy Agency, yesterday raised its forecasts for global oil demand higher and predicted a small oil deficit this year, as the Opec cartel and allies are expected to extend their output cuts. US stockpiles of crude fell unexpectedly.
Brent crude is trading 16 cents lower at $85.26 a barrel while US crude is at $81.1 a barrel.
House prices in Chinese cities fall as property slump deepens
House prices in China’s major cities continued to fall in February, as the country’s property slump deepened.
Average prices for new homes in the most affluent cities fell 1% from a year earlier, while those for second-hand homes dropped 6.5%, according to the National Bureau of Statistics.
The NBS published its 70-city housing prices data, which showed primary and secondary market prices declining for the 9th and 10th consecutive months respectively.
New home prices have dropped 4.9% and secondary market values are down 10.1% since their respective peaks in 2021.
In the southern cities of Guangzhou and Shenzhen, new home prices fell by 4.6%and 4.8%, respectively. This week, the credit rating agency Moody’s downgraded the debt of Vanke, a large state-backed developer based in Shenzhen.
Analysts at ING said in a note:
Within the NBS’s 70-city sample, the secondary market prices of 46 cities have now seen double-digit declines from their peak, with three of those 46 cities seeing declines of over 20%. The primary market has fared relatively better, with two cities still at all-time highs, and only 11 of 70 cities seeing a double-digit decline from their peaks.
They said that stabilising the property market remains key to the Chinese economy.
Given the heavy weighting of property in household portfolios, it is of the utmost importance for China to stabilise the property market if it is to restore confidence. Declining property prices will create a negative wealth effect, acting as a headwind to consumption. Measures including scrapping purchase restrictions, property project whitelists, and the February cut to the five-year loan prime rate to help lower mortgage rates are steps in the right direction, but further supportive policies may still be needed. Establishing a trough for house prices would go a long way towards stabilising sentiment.
We anticipate that real estate will remain the main drag on growth in 2024, and this drag is likely to persist over the medium term, as it will take time to work through excess housing inventories. Real estate investment is likely to remain in negative growth for the year, and the property sector and connected industries will likely continue to see pressure for consolidation.
The CMA’s probe of the Barratt-Redrow deal comes as the watchdog is investigating eight big housebuilders – including Barratt and Redrow – after it found evidence they may be sharing commercially sensitive information that could affect the price of homes.
It launched the investigation in late February into some of the sector’s biggest operators after it found evidence that suggested some were sharing non-public information, including sales prices and details of incentives for buyers.
It said this behaviour “prevented and distorted” competition, and could influence decisions around pricing levels, as well as the rates at which the companies built new homes.
It released a report after a year-long investigation into the housebuilding sector, in which it expressed “fundamental concerns” over the housebuilding market, pointing to the complex planning system and the limitations of speculative private development as the key reasons for the too few homes being built.
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Introduction: UK competition watchdog to investigate Barratt's proposed £2.5bn Redrow acquisition
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The UK’s competition watchdog has said it will investigate the country’s biggest housebuilder Barratt’s proposed acquisition of its rival Redrow for £2.5bn. It said:
The Competition and Markets Authority (CMA) is considering whether it may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.
The two companies last month reached an agreement over an all-share offer from Barratt, which will cement its position as the country’s largest housebuilder.
The merged group, to be called Barratt Redrow, is expected to build about 23,000 homes a year and have a turnover of more than £7bn. The combined market value is around £7.2bn.
Berkeley Group, an upmarket house builder, said today that sales between November and February were a third lower than a year earlier but added:
Enquiry levels are good, with customers looking for the prevailing political and economic uncertainty to recede and interest rates to begin to fall.
Pricing has been stable across our sites during the period and above business plan levels, while build cost inflation is negligible across most trades.
Berkeley reaffirmed that it aims to deliver at least £1.5bn of pre-tax profits in the three years to 30 April 2026, including a £550m profit this year – down from £604m last year and returning to 2022 levels.
Anthony Codling, housing analyst at RBC Capital Markets, said:
A short and snappy trading update from Berkeley Group this morning saying that everything is on track despite those pesky market headwinds and uncertainties. Berkeley seems to be able to deliver whatever the weather.
In other corporate news, Vodafone has sold its Italian business to Swisscom for €8bn, which will merge it with its Italian subsidiary Fastweb. The deal will create Italy’s second-biggest fixed-line broadband operator behind TIM.
Yesterday’s mixed bag of US economic data, which pointed at higher-than-expected inflation and lower-than-expected spending in the US, forced the market to reconsider the Federal Reserve expectations.
The probability of a June interest rate cut fell to 60%, bond yields jumped, the dollar index rose sharply and stocks declined.
The Agenda
2pm GMT: US Michigan consumer sentiment for March (forecast: 76.9)
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