BUSINESS LIVE: Autumn Statement offers NatWest shares sale but OBR cuts UK growth forecasts

Just before close, the FTSE 100 was 0.16% lower at 7,470.05.

Meanwhile, the FTSE 250 was 0.73% higher at 18,481.29.

Households were dealt a blow today as the Government refused to cut tax that adds hundreds of pounds a year to the cost of insurance.

Insurance Premium Tax is a stealth tax that adds 12 per cent to the price of car, home and pet insurance, and 20 per cent on travel insurance and many forms of add-on cover.

The Office for Budget Responsibility (OBR) has published its latest forecasts for the UK economy, inflation, house prices and unemployment.

The Government will simplify Isas and provide more choice of opening in any given tax year – but allowances remain frozen, the Autumn Statement confirms.

The changes mean it should be easier for people to choose the best Isa accounts for their needs and move money between them.

(PA) – The company behind Pepsi and Robinsons has said the average price of its drinks rose by more than a 10th in the last year, but customers were still buying.

Britvic said it sold 1.75 billion litres of drinks in Great Britain in the year to the end of September.

The small drop – just 2.3% – came as the business faced wetter and windier weather in July and August.

Until then sales had held up well despite prices increasing during the year.

Britvic said that the average price per litre of its drinks had risen 10.6% to 67.9p during the year.

Other factors, such as the different brands bought by customers, can also increase or decrease the average price per litre.

It came as households faced the highest inflation rates in around 40 years.

Businesses hiked prices as their own costs rose.

“We have demonstrated that our portfolio of trusted brands has been able to take and hold significant price, with very limited volume impact,” the business said.

The Government is considering a NatWest share offer to retail investors in the next 12 months, as it looks to offload more of its stake in the bank.

In the Autumn Statement, the Chancellor announced this move would be ‘subject to supportive market conditions’ and ‘value for money’.

Grainger has hailed an ‘outstanding year’ as the housebuilder continued to benefit from soaring demand for rental accommodation.

Britain’s biggest listed residential landlord constructed around 1,200 new build-to-rent homes in 2023 and plans to deliver an additional 439 by the end of the calendar year.

The Newcastle-based company’s operational portfolio now totals over 10,200 private rental homes, while a further 5,634 units with an investment value of £1.6billion are in its pipeline.

The Government has extended the deadline on its Mortgage Guarantee Scheme, which aims to help those buying homes with small deposits.

In today’s Autumn Statement, Chancellor Jeremy Hunt said that the scheme, which was due to close on 31 December, would now be open for another 18 months until the end of June 2025.

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

The potential inclusion of fractional shares in ISAs is a positive development and could encourage new investors into the stock market. Fractional share trading gives retail investors the opportunity to benefit from the growth of companies they might otherwise have been priced out of.  

Although our clients have a strong bias to home markets, they are increasingly looking for value overseas but this often isn’t possible through individual holdings due to high share prices being carried by companies listed in the US.

Holding slices of some tech firms, in particular, is prohibitive for retail investors given the share prices are so high. The current price point of a single share in companies such as Berkshire Hathaway is a blocker for many retail investors.

Being able to buy fractions of Berkshire Hathaway could give people the opportunity to invest with Warren Buffett and not just like the Sage of Omaha.

Meanwhile, the FTSE 250 has risen 0.65% to 18,467.09.

Chancellor Jeremy Hunt has announced a cut to National Insurance contributions for millions of workers in today’s Autumn Statement.

Greater fiscal headroom has allowed Hunt to roll the dice ahead of an expected election next year.

Savers could be given the legal right to ask employers to pay pension cash into an existing pot rather open a new one every time they change jobs under plans announced by the Chancellor today.

Jeremy Hunt will launch a consultation on the proposal, which could lead to savers having ‘one pension pot for life’, he confirmed in the Autumn Statement.

Rain Newton-Smith, CBI Chief Executive, comments on the Autumn Statement:

With tough decisions to be made, the Chancellor was right to prioritise ‘game-changing’ interventions that will fire the economy.

While the move on National Insurance will give hard-pressed households some much needed breathing room, making full capital expensing a permanent feature of the tax system can be transformational for accelerating growth and improving living standards in the long-term.

Helping firms to unleash pent-up investment is critical to getting momentum into the economy. Making full expensing permanent will give firms the stability they need to press on with decisions on investment whilst keeping the UK at the top table internationally for investment incentives.

Moves to speed up planning and grid connectivity should also bolster business confidence to invest in high growth areas like green technologies, renewable energy and advanced manufacturing.

Paul Davies, CEO of Carlsberg Marston’s Brewing Company, comments:

We are pleased to see the Government respond to industry calls to refrain from imposing further increases to the headline duty rate for beer and to maintain the hospitality business rate relief.

We have already seen insurmountable pressure on our industry, with brewers across the sector absorbing more cost pressures than ever before to try and ensure beer stays affordable.

The Government’s acknowledgment today of these challenges comes as a relief, allowing businesses time to acclimate to the changes already introduced this year.

The brewing industry is so deeply integrated into the fabric of the UK and continues to drive growth for the economy, so these policy decisions are a much-needed show of support, providing the stability the great British beer and pub sector needs during these uncertain times.

The Chancellor has flagged a possible NatWest shares sale in the future with the Government selling off its stake.

Tell Sid, refers to British Gas campaign – one of the most famous privatisations of the Thatcher era.

But would you buy NatWest shares? Banks are certainly unloved and some analysts argue going cheap.

The Office for Budget Responsibility is estimating that Jeremy Hunt’s announcement to make ‘full expensing’ permanent will lead to an additional £14billion in business investment.

It said the measure will ‘improve the UK’s capital stock, help close the productivity gap and drive sustainable growth.’

Chancellor Jeremy Hunt revealed new measures to ‘get the economy back on track’ in his Autumn Statement on Wednesday as he lined-up ‘110 policies’ to boost growth.

While the Chancellor did not detail all 110 measures he unveiled the key tax adjustments intended to boost British business, including making the allowance for ‘full expensing’ permanent.

The rate of national insurance for self-employed people has been cut by 2 percentage points for those on income between £12,570 and £50,270.

Sarah Coles, head of personal finance at Hargreaves Lansdown, comments:

Self-employed people have lower average earnings than those who are employed, so this is a welcome respite from one of the many pressures which risk pushing many of them under.

However, this does nothing to protect those hard-working self-starters from the horrors of fiscal drag, which means tax bills will continue to rise for years to come.

It was perhaps what we could always expect from a Statement with an over-riding priority to keep a lid on inflation.

Toby Ryland, Corporate Tax Partner at accountancy firm HW Fisher, welcomes Jeremy Hunt announcing that ‘full expensing’ will be made permanent:

“Businesses across the UK will be celebrating today – finally a simple tax policy from the Chancellor!

“Full Expensing is a straightforward and easy tax relief that will make the decision to invest in new equipment much easier. It covers a wide variety of business necessities, from IT infrastructure, office furniture, certain commercial vehicles, warehouse and construction equipment, and fixtures for non-residential properties.

“It means that tax deductions will follow the financial cost of investing in real time rather than spreading the cost over a longer period. It’s simple to administer too – companies can claim the relief through their Corporation Tax return.

The Office for Budget Responsibility expects the UK economy to expand by 0.6 per cent this year, having previously predicted it would contract by 0.2 per cent.

But it has downgraded its forecast for the next two years, with growth of just 0.7 per cent anticipated in 2024 and 1.4 per cent in 2025.

The triple lock means older people will get an 8.5 per cent boost to the state pension next April, the Chancellor finally confirmed in today’s Autumn Statement.

That means the headline full rate state pension will increase to £221.20 per week – up £902 a year to around £11,500.

Sarah Coles, head of personal finance, Hargreaves Lansdown, comments:

There had been fears of an RPI rise in alcohol duties in the Autumn Statement, which could have pushed up the price of a bottle of red wine to £8. The announcement of a freeze in duty will give drinkers something to cheer.

It doesn’t mean drinkers are off the hook though. Inflation figures out earlier this month showed that the price of fortified wines is up 15.3% and beer is up 12%, thanks in part to higher alcohol duty. It means raising a glass this Christmas will still be an expensive business.

A record number of businesses closed across the UK last year, official figures have shown.

The data from the Office for National Statistics (ONS) also reveals that the so-called business death rate surpassed the “birth rate” of new businesses being founded in 2022 for the first time since 2010.

The figures show 345,000 businesses across the UK 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.

Meanwhile, 337,000 new businesses began trading nationwide in 2022 – down from 364,000 the year before.

Two adverts showing Toyota’s new Hilux pick-up truck being driven off-road have been banned by a UK watchdog for encouraging driving regardless of the environmental impact.

The Japanese car maker has been forced to remove a Facebook video that showed a number of the all-terrain vehicles travelling in unison across a wide open plain with mountains either side and over a river bed before joining a tarmacked road.

Severn Trent has hiked shareholder payouts after claiming it remains on track to meet its annual financial targets, despite a fall in profits over the first half.

The group’s pre-tax profit on ordinary activities fell by nearly a third to £70.7million in the six months to the end of September, down from £104.7million at the same point a year ago.

Sage Group has unveiled a £350million share buyback programme after sales surged over the last year.

The accounting software provider, which is one of Britain’s biggest technology companies, revealed underlying revenue rose 10 per cent to £2.18billion in the year ending September, thanks to bumper results across all regions.

At lunchtime, Chancellor Jeremy Hunt will publish his Autumn Statement – will he attempt to rebuild the Conservative’s reputation as a low-tax party?

Has that got you in the mood?

B&Q owner Kingfisher has cut its annual outlook for the second time in three months, amid a weak performance in France.

Group sales in the third quarter ending 31 October came in at £3.2billion, down 2.1 per cent on last year, with like-for-like sales slipping 3.9 per cent.

Adam Vettese, analyst at eToro:

‘This is a tough time for Kingfisher. Expectations are higher following the pandemic DIY boom, but the reality is this is a very different market to the one back then.

‘Now, consumers are spending less money on DIY, largely because of the cost-of-living crisis but also because many workers have returned to the office and so are in less of a rush to spruce up their homes.

‘The group is also facing intense competition in many of its key markets, particularly in Poland and France, which has led the DIY giant to lower its full-year profit expectations.

‘Having said that, we don’t think this troubled patch is down to a problem with Kingfisher itself. Market conditions are mostly to blame. Therefore, we expect things to improve as economic conditions become more benign and consumers are feeling better off.’

The future of OpenAI hangs in the balance as the board opens negotiations to bring back its ousted co-founder Sam Altman.

Talks kicked off late last night after 747 of its 770 employees – 97 per cent – threatened to quit unless he is reinstated as chief executive.

Sir Jim Ratcliffe’s petrochemicals empire Ineos is being sued in a row over the sale of a business – as the billionaire closes in on a £1.3billion stake in Manchester United.

One of the richest men in the country, Ratcliffe founded chemical engineering giant Ineos in 1998.

The humble asthma inhaler is set to be the latest casualty in the battle to cut greenhouse gases.

Pharma giant GSK is planning to create a low-emission version of its Ventolin medicine. That is because its Ventolin inhalers account for nearly half its total greenhouse gas output.

The Bank of England yesterday stepped up its battle against City expectations of an interest rate cut – warning that markets were ‘underestimating’ the persistence of inflation.

Bank governor Andrew Bailey told MPs that traders were placing ‘too much weight’ on recent figures showing that inflation has plunged to less than 5 per cent.

Markets expect that interest rates will start to be cut from their current level of 5.25 per cent from June next year and some experts even see them falling to 4 per cent by the end of 2024.

British software company Sage expects its profit margin to continue to increase this year after a bumper 2022/2023.

The group posted a 18 per cent rise in full-year underlying operating profit to £456million after its margin rose to 20.9 per cent.

Boss Steve Hare said: ‘We continue to help small and mid-sized businesses succeed, providing them with the tools and expertise they need to simplify their accounting and HR processes, streamline their operations, and make more informed business decisions.

‘Through the Sage Network, we are delivering innovative, AI-powered services to customers, faster and more efficiently than ever before.

‘Small and mid-sized businesses are continuing to digitalise, despite the macroeconomic uncertainty. We are building a resilient platform to deliver sustained, efficient growth, and I am confident that Sage is well positioned to take advantage of the market opportunity in 2024 and beyond.’

Kingfisher has downgraded its full-year profit outlook for the second time in three months after the B&Q owner’s third quarter underlying sales fell 3.9 per cent, with market trends in France weaker than expected.

The FTSE 100 group, which also owns Screwfix in Britain and Castorama and Brico Depot in France and other markets, said it now expected adjusted pretax profit of around £560million for the 12 months to the end of January 2024.

This is down from the £590million it was forecasting in September and the £758million made in 2022/23.

CEO Thierry Garnier said: ‘As we move into 2024, we are focused on what is in our control.

‘First, a continued focus on growing market share in the UK, France and Poland with delivery of our strategic growth initiatives. Second, driving productivity gains to offset wage inflation. And finally, delivering on our free cash flow and shareholder returns targets.

‘We expect to see some product cost price inflation, albeit at a significantly lower level, and expect rational retail pricing and competitive price indices at all our banners.

‘On the medium-to-longer term outlook, we remain very positive for home improvement growth in our markets, and our ability to grow ahead of our markets.’

Rio Tinto has reached a $28million settlement with the US securities regulator, drawing a line under a suit brought in 2017 concerning disclosure of the impairment of Rio Tinto Coal Mozambique (RTCM) reflected in Rio Tinto’s 2012 year-end accounts.

Without admitting to or denying the SEC’s allegations related to its books, records and reporting requirements, Rio Tinto will pay the penalty and retain an independent consultant to advise on its current policies, procedures, and controls related to impairment, disclosures and project risk.

Former chief executive Tom Albanese has also reached a settlement with the SEC and will pay a $50,000 penalty.

Rio Tinto said: ‘Rio Tinto welcomes closure of the SEC case on appropriate and reasonable terms.

‘With this settlement, all investigations of Rio Tinto regarding this matter have been finalised’