German exit from EU ‘would ruin economy’

Germany would wreck its economy if it copied Britain and left the EU, the country’s finance minister has claimed.

Christian Lindner said that the EU’s single market is of “utmost importance” for Germany.

In an interview with Bloomberg TV, he said that leaving the EU “would ruin our economy. This is why we have to tell people, OK, you maybe are not in line with government policies but this is no reason for changing the complete system and for changing what our wealth is based on”.

The comments come amid calls for a “Dexit” from the right-wing Alternative for Germany party. The party’s leader, Alice Weidel, has said that Britain was “dead right” to leave the European Union and that Germany could hold its own vote.

Last month, she told the Financial Times: “If a reform [of the EU] isn’t possible, if we fail to rebuild the sovereignty of the EU member states, we should let the people decide, just as Britain did.”

06:14 PM GMTSigning off

Thanks for joining us today. We’ll be back tomorrow morning ahead of the opening of the London Stock Exchange. In the meantime, I’ll leave you with some of our business stories elsewhere on The Telegraph website from this afternoon:

06:10 PM GMTArm bigger than all but three FTSE 100 companies after shares rocket

The British semiconductor champion Arm has eclipsed the value of all but two FTSE 100 companies as shares rallied after it posted booming sales. Matthew Field reports:

Shares in Arm were changing hands for more than $158 on Monday, up 33pc on its closing price on Friday, valuing the business at over $155bn (£123bn).

The jump in its valuation means Arm is now behind only Shell and AstraZeneca in the values of FTSE 100 companies, which are worth £162bn and £147bn respectively.

Arm’s stock has more than doubled so far this year as investors flock to the microchip designer and its value has soared 159pc since the company went public on New York’s NASDAQ exchange in September.

The company’s skyrocketing share price has seen its overall value climb above HSBC, Unilever and BP as investors buy into claims it stands to benefit from a groundswell of interest in artificial intelligence (AI).

Despite efforts from Rishi Sunak to lure the business back to the Square Mile, Arm opted for a bumper New York float which valued the business at around $55bn.

Last week, Arm reported an increase in revenues of 14pc to $824m. Rene Haas, Arm’s chief executive, told investors the company was seeing “strong momentum and tailwinds from all things AI”.

Technology shares in the US have driven the S&P 500 to record highs this year, prompting some analysts to warn of an AI-driven bubble.

Richard Windsor, an independent analyst, said after Arm’s results the company had benefited from comparisons to US rival Nvidia which would continue “as long as the AI bubble does not pop”. Nvidia overtook the value of Amazon on Monday with a price tag of $1.8 trillion.

He added: “The market loves anything that has exposure to the current frenzy.”

The British chip designer’s processors are a global standard – Arm/Bloomberg05:00 PM GMTFootsie closes in the green

The FTSE 100 closed almost unchanged, up 0.01pc, while the FTSE 250 rose 0.74pc.

In the FTSE 100, the biggest riser was Burberry, up 5.07pc, followed by Frasers Group (the Sports Direct owner), up 4.98pc. The biggest faller was Rolls-Royce, down 2.83pc, followed by AstraZeneca, down 2.66pc.

Meanwhile in the FTSE 250, Jupiter Fund Management rose 8.31pc, followed by holiday firm TUI, up 5.65pc. The biggest faller was real estate investment trust Tritax Big Box, down 4pc, followed by investment manager Ashmore, down 3.22pc.

04:55 PM GMTUpper Crust owner buys Australian rival

The railway and airport food company behind Upper Crust has struck a deal to buy an airport bar and restaurant firm in Australia to further expand its global footprint.

SSP has agreed to take over Airport Retail Enterprises for an undisclosed sum.

It will see SSP add 1,500 staff and 62 sites across seven airports.

The deal will give SSP access to four new airports in Australia where it does not already have a presence – Canberra, Gold Coast, Townsville and Mount Isa.

The acquisition is expected to complete by the end of June.

SSP has been operating in Australia since 2007 and already runs 40 sites across seven airports and one railway station.

Patrick Coveney, chief executive of SSP Group, said: “The Asia Pacific region offers a significant opportunity to build returns and drive growth for the group.”

Customers at an Upper Crust in London last month – Hannah McKay/Reuters04:45 PM GMTLosses triple at company behind Zizzi

The owner of Zizzi has reported widened annual losses despite cheering higher sales.

Azzurri Group, which also runs the Coco di Mama food-to-go and Ask Italian chains, revealed that pre-tax losses widened to £16.4m, for the year to July 2 2023 – more than triple the £4.2m losses seen the previous year.

But it notched up a 9pc rise in total turnover to £257.8m, although it did not provide like-for-like figures.

The widened losses follow a hit from rising interest payments on debts after interest rates were hiked over the year, as well as increased investment in the business.

Azzurri said that underlying earnings before interest, tax and exceptional items rose 21pc to £14.3 million, when stripping out the prior year’s boost from the temporary VAT reduction.

Azzurri, which acquired Irish-based Mexican restaurant chain Boojum last June, added that Christmas trading since its year-end had been “exceptional”, with like-for-like sales growth in the “mid-teens”.

It forecast “strong” revenue growth and underlying profitability in the current financial year.

Azzurri said:

The positive trading momentum has continued into the current year with an exceptional performance over the Christmas period.

Overall, we remain confident of delivering another year of revenue and profit growth.

Sales at the owner of Zizzi rose 9pc – Tony Buckingham04:34 PM GMTNext-gen warships will need half the crew of current vessels

The next generation of British frigates will be crewed by as few as 50 sailors amid a recruitment crisis at the Royal Navy, according to defence contractor Babcock. Our industry editor, Matt Oliver, reports:

John Howie, the company’s corporate affairs chief, said technological advances were expected to bring crewing requirements even further down following significant reductions on the most recent vessels.

He said while the Type 31 frigates currently being built for the Navy require a core crew of about 105 sailors, the company believes the next generation – often referred to as Type 32 – should only require half that number.

It comes as the armed forces battle recruitment shortages, with the Navy reportedly considering plans to mothball the amphibious assault ships HMS Albion and HMS Bulwark owing to a lack of personnel.

Continue reading to find out how effectively the Navy is falling short of recruitment target…

Workers look on at HMS Venturer at Babcock International at Rosyth Dockyard, 2023 – Andrew Milligan/PA04:26 PM GMTGlencore to sell off stake in nickel mine amid flood of cheap foreign supplies

Glencore is to halt nickel production at a south Pacific mine after prices for the battery metal were pushed lower by a slowdown in electric vehicle sales and a glut in global supplies. Matt Oliver has the details:

On Monday the FTSE 100 commodities giant said the Koniambo mine and processing operation in New Caledonia, a French island territory between Australia and Fiji, was “unprofitable” and could no longer be sustained.

The company is now seeking to offload its stake in the troubled business, which it acquired as part of a £56bn merger with Xstrata more than a decade ago.

It comes after the price of nickel plunged from a peak of more than $100,000 a ton in 2022 to around just $16,000 a ton more recently, after production of the metal boomed in Indonesia and China.

Prices have also been hit by a slowdown in demand for electric cars.

With the slide causing trouble for New Caledonia’s nickel industry – an important part of the island’s economy – the French government has been trying to convince miners to continue their operations with a rescue package.

It had offered around €200m (£170m) in state support to Koniambo Nickel SAS (KNS), the joint venture in which Glencore owns a 49pc share. French mining group Société Minière du Sud Pacifique (SMSP) owns the rest.

However, Glencore said it had already sunk $4bn (£3bn) into the business and that it would remain unviable even with the French support.

The company said: “The furnaces will remain hot for six months, and the KNS team will support the critical activities required to maintain the integrity of the asset and keep the site secure.

“Glencore is appreciative of the French government’s efforts to revitalise and rescue the nickel industry in New Caledonia. However, even with the proposed assistance, KNS remains an unsustainable operation and Glencore cannot justify continuing to fund losses to the detriment of its shareholders.”

04:15 PM GMTGas supplies at risk of sabotage, warns Europe's biggest producer

Europe’s increased dependence on Norway’s oil and gas has made the country’s energy installations more at risk of attack, the head of one of the agencies charged with securing them said on Monday.

Norway overtook Russia in 2022 as Europe’s biggest supplier of natural gas as Moscow’s invasion of Ukraine upended decades-long energy ties and sent prices soaring.

“I am concerned about dependency, and there is no doubt that Europe has become more dependent on Norwegian gas,” Lars Christian Aamodt, head of the National Security Authority, said in an interview with Reuters.

“As soon as the dependency increases, so will the threat and the risk,” he said.

Mr Aamodt’s agency said European dependency on Norwegian oil and gas could rise further should conflicts in the Middle East disrupt the petroleum market.

In addition, Norwegian oil and gas installations could be hit by “accidents, physical sabotage and destructive cyberattacks”, a separate report from Norwegian authorities said.

Russian surveillance and mapping of Norwegian infrastructure is continuing as “business as usual”, Admiral Nils Andreas Stensoenes, head of the Norwegian Intelligence Service, told Reuters.

03:42 PM GMTMacquarie mulls TalkTalk investment

TalkTalk is in talks to sell a stake in its wholesale division to the Australian bank Macquarie, according to a report.

Sky News said that City sources have revealed that Macquarie was discussing investing £450m into PlatformX, the name for TalkTalk’s wholesale business, in exchange for 40pc or more.

The struggling telecoms firm has been preparing to split into three as it seeks to pay down debt. Last year, it sold its business telecoms division to a company controlled by its main shareholders for £95m.

TalkTalk, which began life as part of Carphone Warehouse, was taken private by Toscafund and Penta Capital in a £1.1bn deal three years ago. At the time, Ian West, a non-executive director at TalkTalk, said:

The independent TalkTalk directors have taken into account the risks associated in achieving TalkTalk’s strategic ambitions and the wide support that Toscafund would provide in this regard.

Macquarie and TalkTalk declinded to comment.

TalkTalk started life challenging BT as part of Carphone Warehouse – Andrew Milligan/PA03:25 PM GMTEuropean carmakers raise £4bn for gigafactories in race to cut reliance on China

Europe’s largest car manufacturers have borrowed €4.4bn (£3.75bn) to build three new battery factories in the EU as the bloc seeks to cut dependence on China. Michael Bow has the latest:

A joint venture between Mercedes-Benz and Fiat-owner Stellantis has borrowed the funds to build new electric vehicle (EV) “gigafactories” across the continent over the next few years.

Automotive Cells Company (ACC), which is also co-owned by France’s TotalEnergies, said the €4.4bn fundraise was one of Europe’s largest ever debt issues in the EV sector.

Read the full story here

03:05 PM GMTBlackstone to create UK property giant amid bet on growing demand for warehouses

The merger of two warehouse landlords will create one of the UK’s largest owners of industrial property, under plans by private equity firm Blackstone.

Blackstone will merge St Modwen and Industrials REIT with assets from 25 other deals into a new company called Indurent, a memo to staff has revealed.

With more than 200 properties and 26 million square feet, it would become one of the largest owners of British commercial properties.

Blackstone is betting that firms shortening their supply chains and relying less on China will continue to drive up warehouse rents.

02:51 PM GMTFamilies could see £380 fall in energy bills in year from April

Typical households may see significant reductions in their energy bills over the next year, according to projections by BFY Group.

The utility consultant predicts the price cap will fall to £1,630 by April. But with prices expected to fall further, the average family is expected to pay £1,550 in the year to follow.

Energy costs for this summer and the coming winter have fallen by around 40pc in the last 90 days, according to BFY Group.

02:20 PM GMTScrap stamp duty on shares to boost sluggish London Stock Exchange, Hunt told

Investment Bank Peel Hunt has urged the Chancellor to abandon stamp duty on shares to attract more investors and companies to list in London.

The UK has one of the highest levels of tax on stock transactions, which analyst Charles Hall claimed was a “pernicious tax that is having a material impact on UK equity markets.”

Share transactions are taxed at 0.5pc in the UK, despite trading venues in the US, Germany and Australia having no equivalent charge.

Mr Hall said that scrapping the levy would prove cost-effective over time.

He said: “Whilst this would reduce tax in the very short term, it would materially raise tax due to enhanced economic activity and increases in other taxes.”

01:18 PM GMTBrexit condemned UK economy to lower growth and higher inflation, claims Goldman Sachs

The British economy has grown 5pc less than it otherwise would have since the EU referendum as a result of Brexit, analysts at Goldman Sachs have claimed.

In a note to clients, analysts said: “The UK has significantly underperformed other advanced economies since the 2016 EU referendum, with lower growth and higher inflation.”

They added: “The evidence points to a significant long-run output cost of Brexit. Our analysis suggests that the drop in trade has been roughly as expected, the underperformance in investment more pronounced than anticipated but the effect on overall immigration more muted.”

The analysts said that while the energy crisis and the pandemic were also behind lower growth, Brexit had played a significant role.

They highlighted that UK goods trade has underperformed other rich countries by 15pc since the referendum.

01:02 PM GMTLeaving the EU would be "ruinous" for the German economy, say its Finance Minister

Christian Lindner has warned that Germany’s economy would be ruined if it followed the UK out of the EU.

The Finance Minister’s warnings come after the far-right party Alternative for Germany said Brexit should be a “model for Germany” and suggested holding a referendum.

Mr Lindner told Bloomberg the single market was of “utmost importance” for Europe’s largest economy.

“It would ruin our economy (…) This is why we have to tell people, OK, you maybe are not in line with government policies but this is no reason for changing the complete system and for changing what our wealth is based on.”

12:51 PM GMTGerman offices suffer biggest hit to prices in 20 yearsGerman offices

German offices have suffered the sharpest decline in prices in at least two decades, as high interest rates and the shift to remote working throttle the commercial real estate market.

Prices fell by 13pc in the final three months of 2023 from a year earlier, figures from German banking association VDP show.

Across all of last year values dropped by a tenth, marking the most pronounced fall since records began in 2003.

Investors fear the deepening malaise in the sector could plunge banks into crisis, with scrutiny of German lenders intensifying.

A stand-off between buyers pushing for bigger discounts and reluctant sellers suggests prices have further to fall in 2024, according to VDP.

12:06 PM GMTShawbrook Bank owners considering London IPO in boost for beleaguered UK stockmarket

The owners of challenger Shawbrook Bank are reportedly exploring another public initial offering after its plans for a £2bn listing fell through in 2022.

Private equity firms BC Partners and Pollen Street Capital have put out feelers with City investors about a potential listing, in a story first reported by The Times.

Volatile markets and a dealmaking drought scuppered previous plans to sell or list the specialist lender two years ago.

11:43 AM GMTA Trump return to the White House could stoke inflation in the US, warns investorDonald Trump

Private bank and asset manager Pictet has warned that a return of Donald Trump to the White House could trigger a rise in inflation in the US and force the Fed to raise interest rates.

Xiao Cui, US economist, wrote in a note to clients: “Policy proposals from leading presidential candidates are both fiscally expansionary. More restrictive trade and immigration policies under Trump could be perceived as more inflationary.”

American voters will head to the polls in November in an unpredictable election that looks to be a repeat of 2020, with the incumbent Joe Biden again facing Mr Trump.

Ms Cui also highlighted that Mr Trump would not renominate Fed Chair Jay Powell when his term ends in 2026, leaving open the possibility that he would instead try to put an “unorthodox candidate” in charge of the world’s largest central bank.

11:31 AM GMTSantander cuts mortgage rates only three weeks after hiking

Santander is cutting rates on mortgages for borrowers looking to remortgage and for buy-to-let landlords.

The lender said residential borrowers would see cuts of 0.05pc and 0.16pc, while rates for property investors would be reduced by 0.05pc and 0.16pc.

It comes only three weeks after the bank became the first major lender to increase mortgage rates this year despite fierce competition in a sluggish market.

Justin Moy, managing director of EHF Mortgages, said the cuts suggested  that “we are currently in a yo-yo mortgage market.”

11:07 AM GMTSignificant job losses and store closures unavoidable for The Body Shop, experts warn

Struggling clean skincare retailer the Body Shop is expected to enter into administration this week, becoming the latest high street victim to succumb to high interest rates and low consumer spending.

The brand has more than 200 stores in the UK, meaning there could be significant redundancies.

Insolvency lawyer Gavin Kramer at Collyer Bristow warned: “It is an unfortunate reality that a business in this situation can seldom avoid significant job losses and store closures.”

He added: “Given its positive reputation, and the strong demand for ethically sourced consumer products, The Body Shop will hopefully, after entering administration, be able to find a buyer for at least some elements of the business, like its most profitable stores or its online retail business.”

10:52 AM GMTIMF's Georgieva warns over risk to global economy from Israel-Hamas war

Kristalina Georgieva, head of the International Monetary Fund, has warned unrest in the Middle East can hit global growth.

She told an audience in Dubai: “I fear most a longevity of the conflict because (if) it goes on and on, the risk of spillovers go up.”

Houthi attacks in the Red Sea in retaliation over Israel’s bombardment of Gaza are a key risk, she said.

Ms Georgieva said: “Right now we see a risk of spillover from the Suez Canal. But if there are other unintended consequences in terms of where the fighting goes, then it can become much more problematic for the world as a whole.”

10:28 AM GMTIMF head "very confident" on soft landing and imminent rate cuts

The International Monetary Fund’s chief, Kristalina Georgieva, has said the world economy will be able to recover from high interest rates without a significant downturn.

Ms Georgieva said: “We are very confident that the world economy is now poised for this soft landing we have been dreaming for.”

Speaking at the World Governments Summit in Dubai, the head of the world’s lender of last resort also said:

“I expect to see by mid-year interest rates going in the direction inflation has been going on for the last year”.

10:11 AM GMTWorst year for private equity since financial crisis

Private equity funds last year generated the lowest amount of cash for investors since the financial crisis, according to Raymond James Financial.

Limited partners received 11.2pc of funds’ net asset value, well below the 25pc median figure across the past 25 years and the lowest since 2009.

High interest rates, jittery markets and economic uncertainty mean private equity firms are struggling to sell their existing investments or do initial public offerings.

It means pension and sovereign wealth funds and other key investors are seeing far lower returns than in previous years.

10:02 AM GMTLondon rents show signs of slowing in January

Growing numbers of landlords in the capitals have had to reduce their asking prices after record rent increases have enticed many back into the market.

Estate agency Chestertons said there were 41pc more rental properties available in London than in January last year.

It comes as recent figures from Rightmove have found that the average time a property is listed on the market before getting snapped up has risen to 39 days, up from 33.

As a result, there has been a 76pc rise in investors reducing their asking rents from last year, the estate agent said.

Adam Jennings, head of lettings at Chestertons, said:

“We have seen a significant increase in landlords bringing their property to market as they have been attracted by the substantial rent increases over the last 18 months or so. This influx of properties has led to more choice for tenants and as a result, many landlords have decided to lower their rent expectations.”

09:28 AM GMTLabour vows to ‘modernise’ non-dom taxJohathan Reynolds

Labour has vowed to create a “modern” tax system for foreigners living in Britain receiving income from elsewhere to replace the “colonial-era” non-dom regime.

During a visit to India Shadow Business Secretary Jonathan Reynolds said the “the case for modernisation” is clear, in a story first reported by the Financial Times.

Mr Reynolds said Labour would aim to attract global talent who bring “ability” and “innovation”.

He warned however that “I don’t think we need to be supplicants”.

The non-dom scheme allows foreign nationals living in Britain to make money on capital abroad without paying tax on it for up to 15 year years.

Labour has long said it plans to scrap or significantly alter the scheme.

09:11 AM GMTAnnual pay rises to slow for the first since the pandemic

Employers’ expectations of how much they will have to increase pay over the next year have fallen for the first time since 2020.

Bosses in the private sector report they expect to increase pay by 4pc in 2024, down from 5pc.

Public sector workers will see a similar decline in wage growth, with bosses predicting wages will only rise 3pc – down from 5pc.

The survey by the Chartered Institute of Personnel and Development (CIPD) also showed that one in ten workplaces expect to reduce their headcount in the next three months, suggesting more workers will be faced with redunancy.

One in three are expecting to hire more people, however.

09:01 AM GMTNew FTSE 100 property giant created after Tritax buys rival

Property investment trust Tritax Big Box has put out an all-share bid for its smaller rival UK Commercial Property (UKCM), which will leapfrog it onto the FTSE 100.

The buyout means the firm will have a £6.3bn portfolio that generates more than £290m of rental income a year. Its market value is expected to surpass £4bn.

Tritax counts Amazon, Ocado and B&Q among the biggest tenants renting its distribution warehouses.

08:42 AM GMTUK stocks open higher ahead of crucial week

The benchmark British stock indices started the week higher, as investors brace for a flurry of crucial data that could determine the pace of rate cuts.

The bluechip FTSE 250 rose 0.7pc when markets opened, while the FTSE 100 received a 0.2pc boost.

It comes as figures on Tuesday and Wednesday will reveal whether wages and consumer prices are cooling as policymakers battle to bring inflation back to 2pc.

Traders are expecting pay rises to slow significantly while inflation is tipped to rise slightly to 4.1pc in January.

Should these figures come in higher, it will knock expectations that the Bank of England could soon start lowering interest rates from their 16-year-high of 5.25pc.

This week will also reveal whether the UK economy slipped into recession at the end of the year.

08:23 AM GMTWatch: Angry mob sets Waymo driverless car ablaze in San Francisco

A crowd vandalised a car and set it on fire with fireworks in the most destructive attack on driverless vechicles so far in the US over the weekend.

Read the full story here

08:12 AM GMTTUI shareholders to decide future of London listingTUI airplane

Europe’s largest travel operator could deliver another embarrasing blow to the struggling London Stock Exchange this week.

Shareholders will vote on Tuesday whether the travel agent, which is listed in London and Frankfurt, should abandon its UK listing.

The firm said in December it was considering the move.

It comes as the boss of IWG has branded Britain as being on “bit of a downer” and said the firm was still considering moving to the US.

08:04 AM GMTRecord drop deepens woes for Germany's office property market

The German market for office buildings has suffered its sharpest decline in two decades, as high interest rates and remote working have soured investor sentiment.

Prices fell by 13pc in the final three months of 2023 from a year earlier, figures from German banking association VDP show.

Across all of last year values dropped by a tenth, marking the most pronounced fall since records began in 2003.

Investors fear the deepening malaise in the sector could plunge banks into crisis, with scrutiny of German lenders intensifying.

07:54 AM GMTBitcoin on course for best week in more than a year

Bitcoin is flirting with a winning streak last seen more than a year ago after a sharp boost in early Asia trading.

It had risen by 1pc by 9.50am in Singapore on Monday morning, paving the way for a seventh day of gains.

The digital asset has attracted more than $9bn in inflows so far in 2024.

It remains about $20,000 below the record high the token hit in 2021, during a pandemic-era bull run oiled by ultra-low interest rates.

07:41 AM GMTFive things to start your day

Good morning,

The biggest stories to start your day:

1) Vodafone pays out more than $1bn in advisory fees since 2000 | Telecoms giant spends huge sums on bankers and lawyers as part of turnaround efforts

2) Labour donor urges party to borrow billions for green revolution | Entrepreneur Dale Vince argues that sustainable infrastructure will pay its own debt

3) Britain aims to revive plans for nuclear power station in Wales | Taxpayer-backed body looks to acquire Anglesey site in a bid to replace ageing reactors

4) EY borrowed $700m for failed spin-off plan | Debts at accountancy firm’s global operating business triple year-on-year to $983m

5) Buyout barons KKR set to win battle for British Gas smart meter installer | Majority of shareholders in Smart Metering Systems back takeover by US firm

What happened overnight

Markets across Asia – including Japan, China and Hong Kong – were broadly closed on Monday for Lunar New Year holidays.

Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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