Monday, October 7, 2024

The London Rush: Weak Shell

Shell warns on weaker third quarter.

Hi, I'm Louise from Bloomberg UK's breaking news team, catching you up on this morning's business stories.

Shell's third quarter may not be all too rosy.

The oil giant expects margins earned for refining crude to shed 29% in the period, to $5.50 per barrel, while the performance in oil trading weakened. It also expects to lose money in its chemicals business. 

It follows a similar update from rival Exxon Mobil last week, with the price of brent crude having plunged in the period on concern about the strength of the Chinese economy. The third quarter is typically one of the strongest seasons for demand.

Still, it's a volatile market. The conflict in the Middle East and OPEC+ delaying the restart of some production is putting upwards pressure on oil prices.

What's your take? Ping me on X, LinkedIn or drop me an email at lmoon13@bloomberg.net. Oh, and do subscribe to Bloomberg.com for unlimited access to trusted business journalism on the UK, and beyond.

What We're Watching

Frasers Group edged up its stake in Mulberry again, after its takeover bid was rejected.

Dovid Efune, the owner of the New York Sun, is reportedly close to buying The Telegraph for more than £550 million. A deal could come this week.

Salaries in the UK grew at the weakest pace since 2021 last month. Wage inflation is being closely watched by Andrew Bailey (when he isn't chatting to TikTok influencers), ahead of November's interest rate decision.

It also nods to a wait-and-see approach by business, with worries about what the budget will hold. The Treasury has already acknowledged it is reviewing key tax-raising plans as doubts hang over Labour's fiscal plans.

Plus, house prices have climbed again. Markets Today's Sam Unsted has a wrap of all things prices and affordability below.

Global Catch Up

Markets Today: Don't Forget the Rent

Here's your daily snap analysis from Bloomberg UK's Markets Today blog:

House prices in the UK are continuing to sneak higher and there's an increasing amount of talk about affordability getting better.

That's certainly broadly true, wages have got better and interest rates have moved lower, meaning mortgages are somewhat cheaper. Though data from the REC and KPMG today indicates those wage gains are slowing.

For first-time buyers, however, the picture isn't much better. The average price they now pay, according to Halifax, has increased by about £9,000 in the past year. And that leaves out a key component for that demographic — rent.

Landlords leaving the market as interest rates were hiked and some rules were changed has meant supply in the rental market has plummeted. Demand, however, has only got higher — rental landlord Grainger in its update said demand has been "rapidly accelerating" while supply is still being squeezed.

If that dynamic continues, then saving to buy for those in rental property will remain tough. Affordability, remember, is all relative.

Sam Unsted

Check Bloomberg UK's Markets Today blog for updates all day.

What's Next

Tobacco giant Imperial Brands gives a fourth quarter update. Performance was ahead of expectations at the half year mark with price increases outweighing lower volumes.

As consumers shift away from cigarettes, eyes are on if next generation products (vapes etc) can contribute more to sales and be a viable replacement.

Quick Coffee with: Arsalan Karim

Arsalan Karim is the co-founder of healthwords.ai, an AI-powered health app created with pharmacists and doctors. We met him at the Oxford and Cambridge club near St James's Park. 

What's your favourite lunch spot? Luca in Farringdon. They have a beautiful garden and I think the best bread in the world. I have a great relationship with the owner so, on a Thursday at 1pm, I'm normally there having my business meetings.

How do you save time? The OMAD+B diet, which stands for One Meal a Day plus Breakfast. I don't have dinner which saves me time and it makes me more productive and focused, and I sleep better.

Favorite podcast? How I Built This by Guy Raz. I loved the episodes with the founders of Spotify and Ben & Jerry's. 

What are you reading? Zero Sugar, about how to minimise or eliminate sugar. I still love cakes — I've had a slice of cake with every lunch meal since I was 12, but I get fresh, homemade ones. 

On big days, I wear... I always have a combination of green pants, blue jacket and blue or white shirt. My co-founder also likes the same colours, so we look exactly the same.

At the start of my career, I wish someone had told me… That everything takes longer than expected, but I think if you have persistence and determination, you'll get there in the end. 

How do you switch off? I'm from Yorkshire, so I love hiking in the Yorkshire Dales. I like a slow walk along the river or horse-riding, which I got from my dad who used to love horse racing.

Chloe Meley

Pub Quiz

Which British brand unveiled a new supercar over the weekend to celebrate its F1 history? Pricing starts at $2.1 million for the hybrid and only 399 are being made, with all allocated to set customers.

Source: the car brand in question.

[Friday's answer: An estimated one million adults in England have started vaping despite never having been regular smokers.]

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