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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

Bank of England’s Dhingra warns of ‘downside risks’ for UK economy; Adam Neumann ‘seeking to buy WeWork out of bankruptcy’ – as it happened

British Petroleum United Kingdom United States Murray Auchincloss IEC IOC The British Retail Consortium
The Bank of England in London.
The Bank of England in London. Photograph: Yui Mok/PA

Closing summary

Time for a quick recap

Bank of England policy-maker Swati Dhingra has warned the BoE may be “underplaying the downside risks” for the UK economy by failing to cut interest rates, as she has been pushing for.

Dhingra told the FT:

“I’m not fully convinced there’s some kind of really sharp excess demand in the economy coming from the consumption side.

I’m more concerned that we might be underplaying the downside risks.”

Confidence among UK construction firms has hit a two-year high, on hopes that interest rates will be cut….

.. but activity dropped in the sector again last month, led by another fall in housebuilding.

WeWork founder Adam Neumann is trying to buy back the company after it filed for bankruptcy protection.

Neumann’s new real estate company, Flow Global, has sought to buy WeWork or its assets, as well as provide bankruptcy financing to keep it afloat, the New York Times’s Dealbook reports today.

The government’s sale of its stake in NatWest to the public could begin as soon as June, MPs have heard.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, says:

‘’The government is gearing up to launch the highest-profile public share offer since the Royal Mail IPO more than a decade ago. With confirmation from UK Government Investments (UKGI) that the sale of NatWest shares could happen as early as June, it’s clear it’s all systems go to get the process off the ground.

Between 2008 and 2009, it cost the government £45.5 billion to bail out the then Royal Bank of Scotland. This was at an average of 520p per share, much higher than the current price. Back in November, the Chancellor said any sale would be subject to market conditions and achieving value for money. It’s hard to see how that will be achieved, particularly given the current share price of 219p

The Treasury Committee also examined how much money has been lost through the UK’s investment in satellite operator OneWeb (quite a lot, by the sound of it).

BP has beaten profit expectations, and pledged to hand another $14bn to shareholders in buybacks over the next two years. Shares are up 5.5% this afternoon.

UK retail sales growth slowed to its lowest level in 17 months in January, as consumers cut back on non-food items.

Updated

Currently, WeWork’s bankruptcy plan proposes handing ownership to the company’s most senior debt holders, including those holding its credit line, first-lien notes and second-lien notes, according to court papers.

Third-lien noteholders and unsecured creditors are likely to be wiped out, Bloomberg reports.

Interestingly…Dan Loeb’s Third Point say they are still in preliminary discussions, and has not committed to financing Adam Neumann’s bid for WeWork.

Third Point said in a statement (via the FT):

“Third Point has had only preliminary conversations with Flow and Adam Neumann about their ideas for WeWork, and has not made a commitment to participate in any transaction.”

DealBook: Adam Neumann wants to buy back WeWork

An astonishing story is breaking in America – Adam Neumann, the founder of collapsed office rental company WeWork, is trying to buy the business back.

That’s according to the New York Times’s Dealbook, which reports today that Neumann has been trying to buy back the now-bankrupt business in recent months — with the help of the hedge fund mogul Dan Loeb, of Third Point.

Dealbook report that Neumann’s new real estate company Flow Global is pushing WeWork to consider its takeover approach, according to a letter his lawyers sent to WeWork’s advisers yesterday.

They say:

Flow which has already raised $350 million from the venture capital firm Andreessen Horowitz, disclosed in the letter that Loeb’s Third Point would help finance a transaction.

Flow has sought to buy WeWork or its assets, as well as provide bankruptcy financing to keep it afloat.

However, Flow’s lawyers are accusing WeWork of stonewalling for months.

They wrote:

“We write to express our dismay with WeWork’s lack of engagement even to provide information to my clients in what is intended to be a value-maximizing transaction for all stakeholders.”

WeWork filed for chapter 11 bankruptcy last November, after its share price fell by 98% last year. That left it with a market capitalization of less than $50m, down from $47bn at its peak.

WeWork was badly hit by the pandemic, as workers were forced to stay at home.

But investors also refused to accept its high valuation, concluding it was a property company not a hybrid tech one. That sunk its first attempt to float on the stock market, in 2019.

Neumann left the company in 2021 with a $445m exit package, and his personal wealth was estimated at $1.7bn last November by Bloomberg.

Updated

Swati Dhingra also told the FT that “we’re basically still looking at a pretty restrictive period of monetary policy” even if the Bank of England did cut rates (as she argues for).

That’s because the Bank raised interest rates 14 times between December 2021 and August 2023, from 0.1% to 5.25%.

The Bank estimates that around two-thirds of the impact of those rate rises have been felt in the real economy – as some households have yet to remortgage at higher rates.

Bank of England policymaker warns of ‘downside risks’ for UK economy

Newsflash: A Bank of England rate setter has warned that the central bank may be “underplaying the downside risks” for the UK economy by not cutting interest rates.

Swati Dhingra, an external member of the bank’s Monetary Policy Committe, argues that weak consumer spending and falling inflation mean the BoE should cut rates now.

Dhingra was the only policymaker to vote for a rate cut last week, when the Bank left interest rates on hold at 5.25%.

And today, she argues that not lowering borrowing costs is a risk.

Dhingra tells the Financial Times:

“I’m not fully convinced there’s some kind of really sharp excess demand in the economy coming from the consumption side.

I’m more concerned that we might be underplaying the downside risks.”

Last week, six BoE policymakers voted to leave interest rates on hold, while two pushed for higher interest rates due to concerns over persistent inflationary pressures.

Dhingra, though, is worried there are fewer “buffers” supporting households, as the savings built up in the pandemic are run down, and job vacancies fall.

She warns:

“You might see the real economy start to get negatively hit in a more profound way — and I don’t see why we should be risking that.”

More here: Bank of England policymaker warns of ‘downside risks’ for UK economy

Over in parliament, Labour MP Peter Dowd has asked ministers whether the sale of the government’s stake in NatWest will generate a better, or worse, return for taxpayers compared to previous sales.

Bim Afolami, economic secretary to the Treasury of the United Kingdom, doesn’t make any promises.

Afolami explains that the share sale plan is subject to “value for money concerns” and adds:

Of course, we will consider value for money at the heart of any sale of shares, and the House [of Commons] will be kept fully informed over the coming weeks and months.

NatWest shares are currently trading at 219p each.

That’s rather lower than a year ago. In May 2023, NatWest agreed to buy £1.3bn of its own shares back from the governmen at 268.4p each.

The government seems certain to make a paper loss on NatWest share sales, as it paid 500p each for them in 2008 when it rescued Royal Bank of Scotland (later rebranded as NatWest).

Updated

Streaming giant Spotify has fallen back into the red.

Spotify reported an operating loss of €75m in the last quarter, down from a €32m profit in Q3 2023, but better than the €231m loss in Q4 2022.

The company says “audiobooks start-up costs and severance related charges” ate into its profit margins.

Since last October, Spotify Premium subscribers in the UK and Australia have been able to access to up to 15 hours of audiobook content per month, from a catalogue of more than 150,000 titles. The Society of Authors warned this could have a ‘devastating effect’ on incomes.

The company also announced 1,500 job cuts in December.

Spotify also reports today:

  • Monthly Active Users exceeded guidance, growing 23% year-on-year to 602 million. The addition of 28 million new users represented the second largest Q4 performance in our history.

  • Subscribers exceeded guidance, growing 15% year-on-year to 236 million. The addition of 10 million new subscribers contributed to a record full-year of net additions of 31 million.

  • Total Revenue grew 16% Y/Y to €3.7 billion, in line with guidance.

  • Gross Margin finished at 26.7%, ahead of guidance.

A record number of rental and affordable homes were built last year, but overall new home completions fell 12%, according to new figures.

Some 45,649 new homes were completed in the rental and affordable sector, up 10% on 2022 and the highest figure ever recorded by the National House Building Council, the UK’s largest provider of new home warranties and insurance.

Overall, 133,213 new homes were completed in 2023, down 12% on 2022, with private sector completions falling 20% to 87,564.

A chart showing UK home completions

The outlook doesn’t look too rosy. Last year, there was a 44% drop in new home registrations – the process by which a developer registers their intent to build a new home - to 105,449. Across the UK, all regions saw a fall in registrations, with the biggest declines in the North West (-61%), West Midlands (-59%) and East (-52%).

Steve Wood, CEO at NHBC, said:

“Whilst there were considerable supply and demand pressures on the new homes market in 2023, it is very encouraging to see record numbers of new home completions in the affordable sector. Several major house builders have partnered with housing associations and Build to Rent providers, re-focusing parts of their output to help address the demand for affordable homes.

“The backdrop of high interest rates, significant inflationary pressures and challenges with planning consents has supressed private sale output in 2023. That said, there are some signs of demand returning to the market and we would expect an improved position in 2024 as consumer confidence begins to recover and mortgage rates start to fall.”

Looking to the year ahead, Wood added:

“With a general election looming, we may also see new home-buyer incentives that influence build volumes. In the mid to long-term, the industry would welcome measures that restore consumer confidence and encourage market growth.”

Updated

Today’s construction PMI report also indicates that the disruption to shipments through the Suez Canal has driven up costs for builders.

Overall construction input costs rose last month for the first time since September and at the fastest pace since May last year.

Tim Moore, economics director at S&P Global Market Intelligence, says:

“Higher prices paid for imported items contributed to a rise in overall cost burdens for the first time since last September.

The input price index in January’s PMI report rose sharply to 53.7; accountancy group RSM say “there could be further headwinds from the shipping disruption caused by the Red Sea crisis”.

Updated

UK government loses money on OneWeb deal

The UK taxpayer appears to have lost hundreds of millions of pounds through its shareholding in satellite firm OneWeb.

The Treasury committee has questioned UK Government Investments this morning about the government’s decision in June 2020 to spend £400m buying the then-bankrupt satellite company.

OneWeb was subsequently merged with France’s Eutelsat in 2022, giving the government a 11% stake in the Paris-listed communications firm.

Charles Donald, chief executive of UKGI (which handles the government’s stakes in various companies) told MPs that the 11% stake in Eutelsat is not, currently, worth the £400m investment in OneWeb.

He indicated it could be in the “tens of millions”, but didn’t have an exact figure.

When pressed on the value of the UK’s stake in Eutelsat, Donald indicated “it could be in excess of £200m”.

He also pointed out that Eutselsat withgrew its guidance for this year’s profitability and revenues last week, which knocked its share price.

But Donald insisted the shareholding in Eutelsat has a different longterm prospect than the original shareholding in OneWeb.

Harriett Baldwin MP, chair of the committee, was unimpressed, asking:

“So effectively the UK taxpayer has paid £400m for some intellectual property that now resides within a French company. And we’ve lost money on the transaction?”

Eutelsat currently has a market capitalisation of €1.75bn, meaning the UK’s 10.89% stake would be worth €190m, or £162m.

Last week, it revealed that OneWeb’s activities are “running behind schedule relative to the original roadmap”, although also “progressing well”.

OneWeb is building a “constellation” of hundreds of satellites in low-earth orbits designed to provide internet coverage everywhere on the plane.

Donald told MPs that UKGI assessed the £400m investment in OneWeb, and was “not in a position to confirm” it was good value for money. The government issued a “ministerial direction” to override concerns from civil servants.

Updated

NatWest is currently being run by Paul Thwaite, who was appointed as interim CEO after the resignation of Alison Rose last summer in the Nigel Farage debanking row.

Charles Donald, chief executive of UK Government Investments, was asked by the Treasury Committee this morning if it would be “very difficult” to sell the public shares in a bank that didn’t have a chief executive.

Donald replied that NatWest should provide ‘clarity’ about its leadership plans before the retail sale offering is launched.

Donald explained:

I think they need to provide clarity to the market on their proposals around either confirming the interim chief executive, or a process around appointing a permanent chief executive, for the market to be comfortable, yes.

Updated

Advertising agency M&C Saatchi is to orchestrate efforts to persuade millions of Britons to buy shares in NatWest Group, Sky News reported last night.

M&C Saatchi, whose founders in 1995 included Lord Maurice Saatchi and his brother Charles, has been appointed by the Treasury to devise a campaign promoting a retail offer of NatWest shares later this year, Sky say.

More here.

NatWest share sale could be this summer

The sale of shares in NatWest to the general public could happen as soon as June this year, UK Government Investments has confirmed.

Holger Vieten, who is leading the sale for the Treasury-owned company, told a group of MPs that there are some potential windows in which the share offering could take place.

“The very earliest could be around summertime, but we don’t have a exact date”, Vieten indicated. “Potentially it could happen in June”.

The retail offer which was announced by Chancellor Jeremy Hunt during his autumn statement last year, when he told MPs that the retail sale would take place within 12 months, “subject to market conditions and achieving value for money.”

Vieten also told MPs that UK Government Investments has engaged several advisors to help with its work, including legal firm Freshfields. Barclays has been hired as “retail coordinator” for the float, while Goldman Sachs is its overall privatisation strategy advisor.

The government currently owns 35% of NatWest, dating back to the rescue takeover of Royal Bank of Scotland after the 2008 financial crisis.

Updated

UK building companies remained cautious about staff hiring in January, today’s UK construction PMI report shows.

Total employment numbers fell fractionally, while sub-contractor usage was broadly unchanged since the previous month.

Brian Smith, head of cost management and commercial at global infrastructure consultancy AECOM, says shrinking workforces will hit future output:

“Construction output has continued to struggle throughout the winter, with five months of contraction. Wet weather can be partially attributed to some of the recent fall in activity, but the greater concern is the high inflation and tight credit conditions that continue to hamper housebuilding and are beginning to be felt in commercial development.

“These latest figures will hopefully provide greater ambition when it comes to the sector’s long-term approach to resourcing, which represents a growing risk.

Reducing workforce capacity in response to broader economic headwinds will ultimately impact future planning and projects at a time when competition for contracts is increasing.”

Updated

Interest rate cut hopes boost UK builders' optimism

Optimism in the UK construction sector has hit a two-year high, despite subdued order books and another fall in housebuilding.

The latest poll of purchasing managers at building firms has found a sharp upturn in business activity expectations, due to hopes of interest rate cuts.

Just over half of those surveyed forecast a rise in business activity during the year ahead, while only 12% predict a decline – the highest level of business optimism since January 2022.

Tim Moore, economics director at S&P Global Market Intelligence, which compiles the survey said:

“UK construction companies seem increasingly optimistic that the worst could be behind them soon as recession risks fade and interest rate cuts appear close on the horizon. The prospect of looser financial conditions and an improving economic backdrop meant that business activity expectations strengthened to the highest for two years in January.

Moreover, there were again signs that customer demand is close to turning a corner as total new orders fell to the smallest extent for six months.

However, the survey also showed that construction activity fell in January, for the 5th month in a row.

The increase in business confidence lifted the UK construction PMI up to 48.8 in January, from 46.8 in December, but still below the 50-point mark separating expansion from contraction.

House-building remained by far the weakest-performing category, while civil engineering and commercial construction work also fell.

Last week, the Bank of England pushed back against pressure to cut interest rates soon, saying it wants to see more evidence that inflation is falling sustainably to its 2% target.

The money markets predict interest rates will have fallen below 4.5% by the end of this year, down from 5.25% at present, with the first cut priced in by June.

Updated

Construction activity in Europe’s two largest economies was weak at the start of this year, new data shows.

Data firm S&P Global reports that French construction activity declined at the sharpest rate for three years in January.

S&P Global says:

France’s construction sector remained mired in a deep downturn at the start of 2024, with the contraction in total activity worsening further to its sharpest for three years.

Work carried out on all types of building projects fell in January, with housing and commercial construction activity exhibiting especially-notable slumps. The outlook was gloomy, with business confidence staying subdued amid a further rapid reduction in new orders.

While in Germany, the construction sector remained stuck in a slump at start of 2024, with a sustained sharp downturn in building activity in January.

S&P Global says:

Weakness remained centred on the [German] housing sector, while civil engineering showed greater resilience. With new orders continuing to fall sharply and firms maintaining a negative outlook for future activity, there were further job losses across the sector in January.

Updated

Although BP’s profits halved last year, it still made its second-highest earnings in the last decade.

BP’s $13.8bn profits in 2023 reported this morning are dwarfed by the whopping $27.7bn it made in 2022, thanks to soaring oil and gas prices. But they’re above the $12.8bn made in 2021.

In 2020 BP made a loss of $5.7bn, when the Covid-19 pandemic hit energy demand, and you have to go back to 2012, when BP’s annual profits were $17.1bn, for a higher number than last year (excluding 2022).

Chinese stocks surge on hopes of action by Beijing

Exchange Square in Hong Kong.
Exchange Square in Hong Kong. Photograph: Tyrone Siu/Reuters

In the financial markets, shares in China have jumped as hopes build that Beijing will take more forceful action to stem the recent stock rout.

The CSI 300 index of leading Chinese stocks has jumped by 3.5%, while Hong Kong’s Hang Seng is up 4%.

The rally came after Bloomberg reported that regulators plan to brief President Xi Jinping on market conditions and the latest policy initiatives as soon as today.

Kathleen Brooks, research director at XTB, says:

There has been a boost to market sentiment on Tuesday after a strong bounce back for Chinese shares. The Shenzhen Index rose by more than 6% on Tuesday and the Hang Seng was higher by 4% after the Chinese government put more pressure on institutions to actively buy Chinese stocks.

How long this will last, we shall have to see, as it may not be a long-term solution to China’s share price decline, but for now this is helping to boost market sentiment and US futures are also pointing to a higher open in the US later today.

Stocks in Europe are also higher, with the FTSE 100 index up 55 points or 0.75% at 7,668 points.

Updated

German factory orders lifted by aeroplane demand

German industrial orders have unexpectedly jumped, bringing some relief to Europe’s largest economy.

Factory orders jumped by 8.9% in December, Germany’s federal statistics office reports, beating expectations that orders would remain flat.

There were a very high volume of large-scale orders in a range of branches, including an “exceptionally large number of aircraft” being ordered.

There were also more large-scale orders for fabricated metal products and electrical equipment, which made up for a drop in orders for new cars, machinery and equipment, and chemicals.

Updated

BP’s shares are now up 6.6%, at the highest since the end of November, as investors welcome its plan to buy back more shares, after beating profits in the last quarter.

Updated

BP has a ricky balancing act ahead, says John Moore, senior investment manager at RBC Brewin Dolphin:

BP has beaten expectations for the final quarter of 2023, but fallen slightly short for the year. The company went through a significant amount of change last year and this, combined with a declining oil price, has had an impact on overall performance.

Nevertheless, BP is still in resilient shape – surplus cashflow remains positive, net debt has fallen, and the management team’s optimism can be seen in the 10% increase in dividend distributions. Questions have been raised over its future direction and BP will need to strike a tricky balance of continuing to invest in its core energy business to deliver returns in the short term, while maintaining its long-term transformation.”

BP shares jump

Shares in BP have jumped almost 5% at the start of trading in London.

They’re up 21p to 475p, a one-month high.

January was a harsh reality check for the retail sector, reports Victoria Scholar, head of investment at interactive investor, as shown by like-for-like sales growth falling from 1.9% in December to 1.4% last month.

The excitement of Christmas quickly faded with consumers tightening their purse strings to mark the beginning of a new year and the end of the festive splurge. While 2024 may be the year that interest rate cuts kick in and real incomes grow, consumers are still grappling with much higher prices than they were a few years ago and higher mortgage payments on top. That’s leading to lower consumer confidence and less spending in the economy including on discretionary retail items.

A two-speed retail sector has been emerging, separating the winners from the losers in the UK with luxury and certain discretionary retailers struggling amid the macroeconomic headwinds while supermarkets like Tesco continue to thrive despite intense price competition. Looking ahead, the threat of supply chain disruptions, product delays and shortages following the attacks in the Red Sea is an overhang to watch for the sector.”

Updated

BP delivered a “strong” underlying financial performance in 2023, insists CFO Kate Thomson.

Thomson explains:

We raised dividend per ordinary share by 10% and bought back $7.9bn of shares. We remain focused on strengthening the balance sheet, with net debt falling to $20.9bn, the lowest level over the past decade.

As we look forward, we are staying disciplined, tightening our capital expenditure frame and simplifying and enhancing our share buyback guidance through 2025.

Mathew Lawrence, director of the thinktank Common Wealth, says BP’s financial results show Big Oil cannot be trusted to deliver a clean energy future.

Lawrence

The fossil fuel giants cannot unhook themselves from their planet-destroying business model.

Doubling down on oil and gas investment guarantees deepening climate crisis and volatile, eye-watering energy bills. And while the sums for renewables investment are pitiful, they have still found billions to reward their investors.

Damaging as these outcomes are, they are the inevitable outcome of their climate-hostile business model. Real change requires ending the primacy of the for-profit model in who – and how – we organise the energy transition.”

BP's share buybacks criticised

BP says it plans to make share buybacks of at least $14bn by the end of 2025, as part of its policy of returning at least 80% of surplus cash flow to shareholders.

That implies quarterly buybacks of at least $1.75bn, up from the $1.5bn in the final quarter of 2023.

Share buybacks are a way of returning cash to investors – it pushes up the share price, and means dividends can be higher as the pot is split between a smaller number of shares.

But they’re also controversial – surely BP could find a better use for the money?

Joseph Evans, researcher at IPPR, says:

“BP has decided to prioritise its shareholders over investing in the green transition. With profits down on last year, you might expect BP’s executives to be looking for profitable investments in the growing industries of the future, like renewable energy. Instead, they’ve chosen to enrich their investors.

“It’s clear that BP and other fossil-fuel giants can’t be trusted to drive the green transition: they will always prioritise their shareholders over the needs of the economy and the planet. What we need now is a large programme of public investment in renewables and net zero. The government could fund that investment by taxing the excessive pay-outs that BP and other energy giants are handing to their shareholders.”

Global Witness report that BP’s shareholder payouts rose to £10.2bn last year.

Jonathan Noronha-Gant, Global Witness senior campaigner, says BP’s shareholders remain among the biggest winners of Russia’s war in Ukraine (which pushed up oil and gas prices in 2022).

“Shareholders should want to protect their long-term positions. That means demanding a rapid clean energy transition for companies like BP. These reckless shareholder pay-outs do the opposite.”

“As millions of struggling households begin to receive their cost-of-living payments today, BP’s shareholders, in contrast, celebrate with an eye-watering payout. BP is making huge profits off the back of a cost-of-living and energy crisis that has devastated the finances of so many in the UK and around the globe.”

Updated

BP’s drop in profits was partly due to weaker refining profit margins.

The company says there were “significantly lower industry refining margins” in the last quarter, due to narrowing prices for North American heavy crude oil differentials.

BP beats profit forecasts

Oil giant BP has beaten profit forecasts this morning, despite a drop in earnings.

BP made adjusted earnings of almost $3bn in the final quarter of 2023, ahead of expectations of $2.76bn, but down on the $4.8bn profits made in Q4 2022 when energy prices were higher.

For the full year, BP’s profits roughly halved to $13.8bn from $27.6bn in 2022.

BP will continue to pump money back to shareholders; it has announced a new $1.75bn share buyback – larger than the $1.5bn it executed in the last quarter – and is committed to $3.5bn worth of buybacks for the first half of this year.

Murray Auchincloss, BP’s CEO, says the company is pressing on with changing from an international oil company (IOC) to an integrated energy company (IEC).

Auchincloss explains:

Looking back, 2023 was a year of strong operational performance with real momentum in delivery right across the business.

And as we look ahead, our destination remains unchanged - from IOC to IEC - focused on growing the value of bp. We are confident in our strategy, on delivering as a simpler, more focused and higher-value company, and committed to growing long-term value for our shareholders.

Looking back, 2023 was also the year in which Auchincloss took on the top job at BP, after former CEO Bernard Looney failed to fully report details of relationships with colleagues.

Updated

Introduction: Retail sales slow as cost of living squeeze enters third year

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

UK retailers struggled through January as cost of living pressures continued to hit consumers.

Spending in the shops rose by just 1.2% year-on-year in January, a sharp slowdown on the 4.2% recorded in January 2023, new data from the British Retail Consortium shows.

With inflation running at 4% in December, that indicates a drop in sales volumes.

UK retail sales

The BRC also reports that people cut back on non-food items, with spending falling by 1.8% in the three months to January

Food sales increased 6.3% year on year over the three months to January, slower than the 8% growth in January 2023.

Helen Dickinson OBE, chief executive of the British Retail Consortium, says:

“Easing inflation and weak consumer demand led retail sales growth to slow. While the January sales helped to boost spending in the first two weeks, this did not sustain throughout the month.

Larger purchases, such as furniture, household appliances, and electricals, remained weak as the higher cost of living continued into its third year.

Households on low incomes will start to receive a £299 cost-of-living payment today – the last of three payments totalling up to £900 paid to eligible households on means-tested benefits over 2023/24.

Separate figures from Barclays this morning have confirmed spending was weak last month: consumer card spending grew 3.1% year on year in January – below the current headline rate of inflation of 4%.

Also coming up today

The US dollar is trading at a 12-week high, as hopes of an early cut to US interest rates fade.

This has pushed the pound down to $1.2515 last night, its lowest level of the year.

We get the latest healthcheck on the UK and eurozone construction sectors this morning, along with eurozone retail sales figures.

The agenda

  • 7am GMT: German factory orders for December

  • 8.30am GMT: Eurozone construction PMI for January

  • 9.30am GMT: UK construction PMI for January

  • 10am GMT: Eurozone retail sales for December

  • 3pm GMT: RealClearMarkets/TIPP index of US economic optimism

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