Putin ships record gas supplies to China to prop up war economy

Thanks for joining us today. My colleague Chris Price will be back in the morning but in the meantime here are a few of the latest business stories from The Telegraph:

• Disney wins support from hedge funds as it battles to stave off Nelson Peltz
• Eurostar reprimanded over cheap seats promotion
• Gold demand hits record high amid global turbulence, says Royal Mint

Wizz Air has cancelled all flights to Tel Aviv until March as the war in Gaza continues and the airline struggles with grounded planes.

The move comes after German rival Lufthansa announced it would resume flying to Israel during January.

The Hungarian low-cost airline had previously cancelled flights until the end of January as a result of the conflict. The move, however, is believed to have had no material effect on the airline as it has been able to reallocate planes to other routes, where it is short.

Last year, WizzAir was forced to ground 45 Airbus A320neo jets after issues with the engines used. In July, engine manufacturer Pratt & Whitney issued a product recall on the engines after discovering that the metal used was susceptible to cracks.

WizzAir was contacted for comment.

Britain’s construction sector is set to outperform the eurozone as its residential markets are expected to face a tougher 2024 according to analysts. Riya Makwana reports:

Building in the UK is expected to be “flattish” this year, as the market shows signs of positivity, meanwhile Germany and France in particular are expected to see “further volume contraction from weak residential markets”, said Investec.

Aynsley Lammin, analyst at Investec said: “Germany is weaker in terms of housing. It had a good run for a long time. But growing interest rates and its economy more widely - specifically high energy costs - has made it weaker than France and Britain.”

Germany reported its steepest house price drop last year with prices falling by more than 10pc in the third quarter of the year. This marks its largest decline since it began keeping records in 2000.

The Ukraine war pushed up the cost of energy hugely in the country, due to its reliance on Russian gas, this combined with high interest rates and the cost of living crisis depressed its housing market.

While construction in the UK is forecasted to be stronger than that of Europe, Investec expects volumes across most types of buildings including residential and commercial to be weak.

House prices in the UK only fell by between 1pc and 2pc last year. Buyer and seller activity however fell steeply. Nationwide expects house prices to remain flat this year or to decline by 0.2pc at most.

Mr Lammin said that confidence in the UK’s housing market is returning as peak mortgage rates have been surpassed. He said: “We are expecting interest rates to be cut this year. Sales rates should start improving in the first half of the year, boosting confidence in the second half.”
 

The FTSE 100 closes down 0.51pc. The biggest risers were British Gas owner Centrica, up 3.15pc, followed by drug company GSK, up 2.74pc. The biggest fallers were mining company Anglo American, down 5.04pc, followed by pest control and cleaning services group Rentokill Initial, down 4.95pc.

Meanwhile, the mid-cap FTSE 250 was down 0.95pc. Defence company Babcock was the biggest riser, up 4.95pc, followed by drug company PureTech Health, up 3.68pc. The biggest faller was investment manager Ashmore, down 7.47pc, followed by cruise business Carnival, down 6.79pc.

Global industrial fishing is bigger than previously thought, with “numerous” dark fishing vessels at work inside marine protected areas, new research has found.

In a major study, Global Fishing Watch has compared GPS data of fishing vessals with satellite imagery to discover that considerable amounts of fishing in waters that previously were believed to have little activity.

The research found that 75pc of the world’s industrial fishing vessels are hidden from public view. It found that publicly available data “wrongly suggests that Asia and Europe have similar amounts of fishing ... for every 10 fishing vessels we found on the water, seven were in Asia while only one was in Europe.”

Global Fishing Watch said while not all boats are legally required to broadcast their position, so-called dark fleets pose challenges for managing overfishing.

Depressed British share prices have led to more foreign buyers acquiring London-listed companies, according to a top City broker, which warned that the stock market will become irrelevant unless urgent action is taken.

Our reporter Michael Bow has the details:

Depressed UK share prices have led to more foreign buyers acquiring London-listed companies, according to a top City broker.

Peel Hunt said there was a surge in overseas acquirers taking advantage of cheap British stocks last year, which sparked a rise in takeover premiums.

The proportion of buyers from overseas rose to 55pc in 2023, breaking the long-run trend of a 50/50 split between UK and non-UK buyers.

Buyers also paid an average premium of 50pc last year, well above the average 30pc-40pc seen over the past decade.

This figure was dragged higher by the 170pc premium Mars paid for Hotel Chocolat, which was the largest premium paid in 2023. 

Charles Hall, Peel Hunt’s head of research, said higher premiums were a bad sign because they show that companies are undervalued, leading to businesses seeking greater valuations elsewhere.

Read the full story here.

The dollar rose to a two-week high in trading today among a range of currencies including the euro amid stock market losses, as investors express more scepticism over American interest rate cuts. The exchange rate between dollar and sterling remained more-or-less flat today, after sterling dropped yesterday.

Karl Schamotta, chief market strategist, at Corpay in Toronto, told Reuters:

Markets are suffering a brutal hangover to kick off the year, with [US] Treasuries unwinding some of December’s euphoric moves and the dollar steamrolling its rate-sensitive rivals.

To some extent, this is positioning-driven mean reversion: investors drank a little too much liquidity last month, and the consequences are now arriving.

The strength of the US economy, despite current interest rate levels, could reduce the scope for interest rate cuts. Mr Schamotta added:

If the U.S. economy continues to outperform against expectations, [Treasury] yields should push higher, equity valuations could fall, and the greenback should climb.

Major stock market indexes are down today, as investors take a more cautious path compared with the end of 2023.

The FTSE 100 is down 0.63pc, FTSE 250 down 1.1pc, while the S&P 500 is down 0.75pc. On the continent, the French CAC 40 is down 1.9pc and Germany’s DAX is down 1.62pc.

This evening, the US Federal Reserve will issue minutes of December’s interest rate meeting, which brokers expect will give investors more clarity.

Russ Mould, investment director of AJ Bell, said: “Messaging from the [US] central bank seemed a touch confused at the end of 2023 as it initially implied rate cuts in 2024 before such talk was dampened” but he said that the “minutes may provide some clarity”.

The UK Government has announced this afternoon that it is guaranteeing the financing of around $700m (£554m) for the construction of  of the Six Flags Qiddiya City theme park.

The multi-billion pound theme park will be part of a new entertainment and tourism district in Saudi Arabia called Qidddiya, located around 40m from the nation’s capital.

UK Export Finance has signed a deal with the Qiddiya Investment Company, which is backed by Saudi’s sovereign wealth fund, to provide an Islamic Murabaha financing facility (where a repayment mark-up is agreed instead of interest).

Oliver Christian, HM Trade Commissioner for the Middle East and Pakistan, said:

UK-Saudi Arabia bilateral trade stood at over £17bn last year, and our trading relationship goes from strength to strength. This is clearly demonstrated by today’s announcement that UK Export Finance has secured another strategic win by supporting this record-breaking Islamic financing deal – its largest ever Murabaha.

This transaction will help UK exporters access even more of the valuable trading opportunities being created by Saudi investment in infrastructure and socio-economic transformation.

Manufacturing activity in the United States remained weak in December, shrinking for a 14th consecutive month according to survey data.

The Institute for Supply Management’s (ISM) manufacturing index was 47.4pc in the final month of 2023, up from November’s 46.7 percent figure.

The figure, though slightly higher than the consensus estimate, was still firmly under the 50-point mark separating growth from contraction.

ISM survey chief Timothy Fiore said:

The U.S. manufacturing sector continued to contract, but at a slightly slower rate in December.

None of the six biggest manufacturing industries registered growth in December.

With that I will say goodbye for the day and hand you over to Alex Singleton, who will keep you updated with market movements.

Russian energy giant Gazprom has announced a new daily record for the amount of gas supplied to China via its Power of Siberia pipeline.

In a statement released on its Telegram channel Gazprom said: 

At the beginning of January, Gazprom raised daily gas supplies to China via the Power of Siberia gas pipeline to a fundamentally new level, stipulated by the agreement for 2024.

Moreover, already on January 2, this new level was exceeded, and Gazprom updated the historical record for daily pipeline gas exports to Chinese consumers.

Russia is also in long-running talks about building a new Power of Siberia-2 pipeline to carry another 50 bcm of natural gas a year from its northern Yamal region to China via Mongolia.

The proposed pipeline would carry almost as much as the now idle Nord Stream 1 pipeline under the Baltic Sea that was damaged by explosions in 2022.

The US economy added fewer new job vacancies than expected in November in a further sign that the Federal Reserve could be on its way to cutting interest rates.

Businesses had 8.79m positions open in November, according to the Job Openings and Labor Turnover Survey released by the US Labor Department.

That was below the 8.82m vacancies forecast by analysts.

The main US stock indexes opened lower as investors locked in profits after a strong 2023 and awaited economic data and the Federal Reserve’s December meeting minutes for hints on the path of interest rates this year.

The Dow Jones Industrial Average fell 85.81 points, or 0.2pc, at the open to 37,629.23. 

The S&P 500 opened lower by 17.76 points, or 0.4pc, at 4,725.07, while the Nasdaq Composite dropped 124.47 points, or 0.8pc, to 14,641.47 at the opening bell.

The audit watchdog has launched an investigation into an official behind key decisions at Thurrock Council, the local authority that declared effective bankruptcy last year after ploughing hundreds of millions of pounds into risky solar farm schemes.

Our special correspondent Matt Oliver has the details:

The Financial Reporting Council (FRC) said the unnamed individual was being investigated over their “compliance with governance, reporting, regulations and professional standards” in the five years to March 2022.

It comes after the Conservative-run authority was brought to its knees after investing £655m of public cash – borrowed from other councils – in 53 solar farms, via schemes set up by financier Liam Kavanagh.

Mr Kavanagh, who denies wrongdoing, used the money to buy luxury goods, including a private jet, a yacht and a country estate.

It comes at a time when creaking local authority finances are in the national spotlight.

Disney has reached a confidentiality agreement with an activist investor as it garners support for the company’s board nominees in its continuing proxy battle with Nelson Peltz.

The entertainment giant said that the agreement with ValueAct Capital Management will allow it to provide information to ValueAct and consult with it on strategic matters, including through meetings with its board and management.

Disney chief executive Bob Iger said: “ValueAct Capital has a track record of collaboration and cooperation with the companies it invests in, and its co-CEO Mason Morfit has been very constructive in the conversations we’ve had over the past year. We welcome their input as long-term shareholders.”

Last month Nelson Peltz’s investment management firm Trian Fund Management said that it was planning to nominate the activist investor and a former chief financial officer of Disney for seats on the media and entertainment company’s board as part of a proxy battle for control of the entertainment giant that has lasted for a year.

Along with Peltz, Trian is planning to nominate James Rasulo, who served as Disney’s finance chief from 2010 to 2015. 

Prior to serving as CFO, Rasulo was chairman of Walt Disney Parks and Resorts Worldwide from 2005 to 2009 and was president of Walt Disney Parks and Resorts from 2002 to 2005.

Trian, which owns $3bn of common stock in Disney, is looking to nominate Peltz and Rasulo to the Disney board at the company’s 2024 annual shareholders meeting, which is expected to be held in the spring.

Eurostar has been reprimanded by the advertising watchdog after promoting a £39 fare that applied to only a “very small percentage” of available seats.

The email of July 15 included the subject line, “Soak up every second of summer,” and went on to read: “Treat yourself to a European getaway ... from just £39 each way.”

However, a complainant, who was only able to find one ticket from London to Paris at the advertised price, challenged whether the ad was misleading.

The Advertising Standards Authority (ASA) said that data provided by Eurostar showed that the £39 fares “had made up a very small percentage of available tickets for travel between London and Paris, and Paris and London” and that the advert was therefore misleading.

A Eurostar spokesman said: 

We value customer feedback, including complaints, and take great care in the way that we word our advertising and the number of tickets that we offer at the promotional price during particular time periods.

We understand and take on board the ASA’s ruling which is related to seat availability in part of the promotional period, and we are committed to ensuring that this scenario does not occur again.

HSBC has become the first major high street lender to offer a mortgage deal with a rate below 4pc, giving hope to millions of homeowners renegotiating loans this year.

Our money reporter Ruby Hinchliffe has the latest:

From Thursday homeowners looking to remortgage will have access to rates as low as 3.94pc, depending on the size of their loans.

The lender has also slashed its two-year fixed deals to 4.49pc – dipping below the 4.50pc threshold for the first time since June, according to brokerage L&C Mortgages.

Meanwhile, those customers looking to fix their costs for ten years can also access rates as low as 3.99pc.

David Hollingworth, of L&C Mortgages, said while borrowers coming to the end of their current fixed rates this year will still be looking at a rise in payments – these new, lower rates will take “some of the sting” away.

Read which other lenders are cutting rates.

The European Union has imposed sanctions on the world’s biggest diamond mining company and its chief executive as part of what it called its “unwavering commitment” to Ukraine in the war against Russia.

The move targeted Alrosa, which accounts for about 90pc of Russia’s diamond production, and its boss Pavel Marinychev. 

Brussels said the company “constitutes an important part of an economic sector that is providing substantial revenue” to Moscow.

It means Alrosa’s assets in Europe will be frozen and EU citizens and companies will be barred from making funds available to the company. 

Mr Marinychev, who was appointed chief executive last May for three years, also faces a travel ban in Europe.

Bitcoin has plunged as much as 9pc today as investors take profits after a rush to buy the world’s largest digital token amid speculation that regulators will approve wider trading measures.

The cryptocurrency had broken above $45,000 (£35,300) on Tuesday for the first time since April 2022 but this afternoon plunged below $41,000 (£32,400).

Speculators had raced to buy bitcoin amid speculation that the US Securities and Exchange Commission would approve exchange traded funds, or ETFs, tied to the digital currency’s spot price.

The pound held steady after the previous day’s steep losses as investors waited for US economic data that could shift markets.

Sterling was last flat against the dollar at $1.26, after falling 0.9pc the previous day in its biggest one-day drop since mid-October.

It was slightly higher against the euro, with the single currency down 0.2pc at 86p.

Investors returned from the holiday period with doubts in their minds about the euphoria of November and December, when falling global inflation and softer words from central banks fuelled hopes that interest rates will drop sharply this year.

The dollar jumped on Tuesday to around a two-week high and the pound and euro slumped, in a reversal of the trend seen over the last two months.

Data on job openings and the manufacturing sector in the US, as well as the minutes from the Federal Reserve’s December meeting, could bring a sleepy session to life later in the day.

An Austrian property tycoon whose empire includes Selfridges faces losing his luxury alpine residence after authorities claimed it as security against unpaid taxes.

Our special correspondent Matt Oliver has the details:

Rene Benko is the founder of Signa Group, the sprawling business with assets that also include the Chrysler Building in New York.

But Signa was declared insolvent in November, sparking a complex process to untangle a vast network of shell companies that Benko used to control assets.

He reportedly still lives in the wall-ringed luxury villa in Igls, near Innsbruck, with the rest of his family after building it on the site of a former hotel.

But read how tax officials have now placed a claim against the property, or “lien”, worth about €12m (£9.5m).

The Italian government is reportedly considering a €930m (£804m) plan to encourage people to turn in their petrol or diesel cars and buy electric vehicles instead.

The package, under discussion by the industry ministry, would include financial incentives worth as much as €13,750 (£11,892) to allow people with an annual income lower than €30,000 (£25,900) to scrap models which are more than 20 years old, in favour of new electric cars, according to a draft document seen by Bloomberg.

The aim, according to the document, would be to “change Italy’s vehicle fleet, which is one the oldest in Europe”.

The plan would also “support low-income families and the purchase of cars made in the country”.

The plan will be presented at a meeting with representatives of the car sector on February 1, according to an industry ministry spokesman.

New-car registrations in Italy increased 19pc in 2023 to around 1.6m, according to transportation ministry data. However, Italy’s EV market share is lower than in other major European economies.

Wages offered to Chinese workers in major cities dropped by the most on record at the end of last year as the world’s second largest economy struggles to recover from the pandemic.

Average salaries offered to new people accepting new jobs fell 1.3pc across 38 cities in the fourth quarter of 2023, according to data from online recruitment platform Zhaopin. 

The slump to 10,420 yuan (£1,162) was the worst drop since at least 2016 and the third straight quarter of decline, the longest run since data on yearly changes were first available in 2016.

In Beijing, the wages decreased 2.7pc compared to a year ago while in Guangzhou they fell 4.5pc.

It comes a day after China stocks kicked off the year with their worst day since 2019 after a slowdown in manufacturing and home sales.

Christopher Wong, a currency strategist at OCBC, said the data showed “how fragile the China recovery story is”.

Redmond Wong, Greater China market strategist at Saxo Markets, added: “The sluggishness in economic recovery and policy uncertainty is keeping investors cautious.” 

US stock markets slipped in premarket trading as Treasury yields extended gains ahead of the release of the latest minutes from the Federal Reserve’s most recent meeting.

Wall Street kicked off 2024 on a downbeat note, halting a blistering rally in stock markets last year, as Apple and other technology names came under pressure from higher yields.

Shares of rate-sensitive megacap stocks including Nvidia , Apple and Tesla fell marginally in premarket trading on Wednesday, as the 10-year Treasury yield climbed for a fourth session to 3.97pc.

The declines came on the heels of a strong year for US stocks. The benchmark S&P 500 came within a striking distance of its all-time closing high last week as investors priced in aggressive rate cuts in 2024 following signs of cooling inflation.

The minutes of Fed’s December meeting, where policymakers opened the door to potential rate cuts this year, is scheduled for release at 7pm UK time.

In premarket trading, the Dow Jones Industrial Average and S&P 500 fell 0.2pc, while the Nasdaq 100 was down 0.4pc.

Taxpayers now own less than 37pc of NatWest after the Government sold a £197m stake in the bailed-out bank. 

The latest sale brings the Treasury’s stake in the bank down to 36.94pc - down from around 84pc at its peak.

NatWest’s share price has fallen more than 19pc over the last year as it was rocked by the Nigel Farage debanking scandal and the departure of its chief executive Dame Alison Rose.

Ladbrokes owner Entain has appointed an activist investor to its board who has previously called for the group to sell off some or all of its stake in a major US joint venture.

The business said that Ricky Sandler would sit on its capital allocation committee as well as its people and governance committee.

The company will also work with his outfit, Eminence Capital, to find another director who can sit on Entain’s board.

The move, which has sent its shares 1.6pc higher today, will give some hope for those wanting Entain to change its practices. 

In a letter to the board in June, Mr Sandler criticised the decision of the betting giant to sell new shares in order to raise money for takeovers.

In the last year, Entain shares are down around a quarter, and chief executive Jette Nygaard-Andersen announced last month that she would leave the business.

The slump in nuclear power comes as a separate study showed Britain’s electricity production from fossil fuels sank to its lowest level in almost 70 years in 2023.

Coal, gas and oil generated 104 terawatt hours of electricity, a total last seen in 1957, according to analysis from specialist website Carbon Brief, which added that it was 22pc lower than 2022.

Electricity from fossil fuels has now fallen by two thirds since hitting a peak in 2008, caused by both a renewables boom and weaker electricity demand, it added.

Fossil fuels accounted for around one third of total UK electricity supplies last year, attaining the lowest ever share.

Low-carbon energy sources comprised 56pc, with renewables on 43pc and nuclear on 13pc.

Britain aims to be net zero by 2050 and the Government aims to derive 95pc of the UK’s electricity from low-carbon sources by 2030, with plans to fully decarbonise the sector by 2035.

The number of unemployed people in Germany rose by much less than expected in December, labour office figures showed.

The Federal Employment Agency said the number of people out of work increased by 5,000 in seasonally adjusted terms to 2.703 million. Analysts had expected the total to rise by 20,000.

Andrea Nahles, chairwoman of the agency, said: “The labour market is still holding up well in terms of the extent of the burdens and uncertainties.” 

The seasonally adjusted jobless rate grew slightly in December to 5.9pc.

The number of unemployed people in Germany increased by 191,000 to 2.6m in 2023 compared to the previous year, which was one of the lowest since German reunification.

In 2023, there were on average 761,000 job openings, 84,000 fewer than a year ago, the agency said.

The output from Britain’s nuclear power plants slumped to its lowest level in more than four decades last year, putting the Government’s quest for net zero onto shakier ground.

Power output shrank to about 37 terawatt-hours following the closure of two stations, according to data from the Government and EDF.

It meant nuclear energy produced less than 40 terawatt-hours of power for the first time since the early 1980s.

It comes as Britain’s fleet of five nuclear plants is scheduled to shrink to just three by the end of 2026.

The Government is expected to soon set out its roadmap to reaching net zero by 2050, including plans to build as much as 24 gigawatts of new nuclear capacity by that time.

To reach the goal, developers would need to add 16 gigawatts in the next decade at a cost of more than £150bn, according to Aurora Energy Research. 

EDF’s Hinkley Point C is the first project to be constructed in more than three decades, with its two reactors due to begin producing power in 2027 and 2028.

Oil has fallen back after a rise in prices was triggered by Iran’s dispatch of a warship to the Red Sea.

Global benchmark Brent was down 0.6pc below $76 a barrel after dropping 1.5pc on Tuesday, with West Texas Intermediate falling 0.7pc below $70. 

Prices had initially risen at the start of the year as Iran emboldened Houthi militants that have disrupted shipping in the Red Sea over Israel’s war with Hamas in Gaza.

However, prices have dropped after traders reduced bets on the scale of interest-rate cuts from central banks worldwide, leading to one of the worst-ever concerted slumps in stocks and bonds in a first session of the year on Tuesday.

London faces a “relentless” exodus of companies from its stock markets unless “urgent action” is taken to address low valuations, analysts have warned.

There was a “dearth” of new company listings in Britain last year, according to investment bank Peel Hunt.

This was caused by low valuations, which have instead made London “an attractive hunting ground for acquirors,” with 40 takeovers worth at least £100m taking place last year, with a total value of £21bn.

The mergers and acquisitions had an average premium of 50pc, reflecting “the depressed valuations of so many UK smaller companies,” according to Peel Hunt head of research Charles Hall.

He said:

The  key takeaway  is that  the  pace of de-equitisation is relentless and will likely continue unless action is taken and impacts quickly. 

This is driven by the low UK valuations, which makes it an attractive hunting ground for acquirors and is a key factor behind the dearth of IPO activity.

Wholesale gas prices have risen ahead of a cold snap that is poised to send freezing temperatures across Britain.

Europe’s benchmark contract rose as much as 3.4pc to more than €31 per megawatt hour while the UK equivalent gained 3.5pc to nearly 79p per therm.

It comes as sub zero temperatures are about to sweep across Europe, with forecasts indicating they will linger until the middle of January.

However, price rises are being kept in check by high storage levels, which ING Group predicted will remain about 50pc full by the end of the winter.

The FTSE 100 has edged up as investors await the release of minutes of the Federal Reserve’s December meeting to gauge the path ahead for global interest rates.

The blue-chip FTSE 100 index rose 0.2pc, while the midcap FTSE 250 index was down 0.1pc.

Personal care, drug and grocery stores sector was the top gainer, rising 1.2pc to a near eight-week high, while precious metal miners slid as much as 1.5pc.

It comes as business leaders have turned more pessimistic about the outlook for the economy and are holding back on investment decisions, according to the Institute of Directors’ (IoD) confidence index.

Entain topped the FTSE 100, with a 2.6pc jump, after the sports betting company appointed Eminence Capital founder Ricky Sandler as a non-executive director on its board of directors.

GSK gained 2.1pc after Jefferies raised its rating on the stock to “buy” from “hold”, along with hiking its price target.

All eyes will be on the Fed’s December meeting minutes, due at 7pm UK time, which will give more clues to investors on how soon the US central bank can start cutting interest rates.

Food price inflation fell at a record pace in the UK in December - and for the month that leads up to Christmas, few countries offered a more stark a contrast to that story than Turkey.

Turkey’s annual inflation rate approached 65pc last month, reaching a new high for 2023 and putting the country on course to meet an expected peak of 70 to 75pc in May.

The government’s decision to raise the official minimum wage by nearly 50pc risks faster price increases.

However, President Recep Tayyip Erdogan’s new team of market-friendly economists expecting inflation to start falling from near record highs within four months.

The rate reached a decades-long high of 85pc in October 2022 and then fell off before resuming a steady climb.

Turkey’s official annual inflation rate ticked up to 64.77pc in December, from 61.98pc in November.

But the month-on-month pace of increases of 2.93pc was the smallest of the past six months.

Turn the clock back 40 years and you land in a City of London where you could still spot a trader sporting a bowler hat, while Paul McCartney’s Pipes of Peace was number one and Everton were only a few months away from winning the FA Cup. This is when the FTSE 100 was born.

As the UK’s benchmark stock market turns 40, senior money reporter Lauren Almeida looks at the stocks which have performed best:

Britain’s biggest, most famous stock market index – also known as the “Footsie” – came into being on this day four decades ago.

The index has since been home to some of the most successful businesses in history, from oil giants such as BP and Shell to AstraZeneca, the drug-maker behind one of the first Covid vaccines.

The FTSE 100 has had its ups and downs over the past 40 years; most notably it has failed to keep up with international rivals. 

But entry into this exclusive club is still a mark of success for British businesses, while falling out is an embarrassment. It is one of the most recognisable financial brands in the world.

Read the FTSE 100’s biggest winners.

Ryanair shares opened 2.6pc lower after it revealed that its flights were suddenly removed from travel agency websites in December.

The low-cost carrier said it expects to take a 1pc to 2pc hit on passenger numbers in December and January as a result of the action by major platforms such as Booking.com, Kiwi and Kayak.

The airline said it would respond to the sudden removal by Ryanair by “lowering fares where necessary”.

The FTSE 100 got off to a strong start in London after the latest industry data showed that food price inflation fell at its fastest pace on record.

The UK’s blue-chip index rose 0.2pc to 7,733.31, although the domestically-focused FTSE 250 was down 0.2pc to 19,483.26.

Supermarket inflation has seen its fastest monthly drop on record as the average household spent an all-time high of £477 on groceries over December, figures show.

Grocery prices are now 6.7pc higher than a year ago, the lowest level since April 2022 and a plunge from November’s inflation of 9.1pc, analysts Kantar reported.

The sharp decline in food price inflation is a further signal that the Bank of England may not need to keep interest rates at their 16-year highs for an extended period to slow down price rises in the economy.

It came as supermarkets experienced their busiest Christmas since 2019, with Britons making 488m trips to the supermarkets over the four weeks to December 24 - 12 million more than the year before - and sending a record £13.7bn through the tills.

The average household spent £28 more on groceries across the month than in December 2022, with total take-home sales up 7pc in value and the number of items bought up 2pc.

December 22 was the most popular shopping day, when just over 25m trips were made and consumers spent £803 million in physical stores - 85pc more than the average Friday in 2023.

Europe’s fastest growing airline Wizz Air revealed it carried just under 5m passengers in December, an increase of 18.8pc on the previous year.

The Hungarian low-cost carrier said it filled 82.1pc of its seats during the month.

Over the course of 2023 it carried 60.3m passengers, an increase of 32.1pc on the previous year.

Ryanair has warned shareholders that passenger numbers and returns will take a short term hit after its flights were suddenly removed from travel agent websites.

The low-cost airline said larger platforms such as Booking.com, Kiwi and Kayak had removed its flights without warning in what it called a “welcome” step.

The Irish carrier said the change would not “materially affect” its full year traffic or profit guidance but said it would reduce short term passenger numbers by 1pc or 2pc in December and January.

Ryanair has been in a battle with what it calls “pirate” travel agency websites for some time, accusing many platforms of overcharging, providing fake contact information, or “other pricing/refund scams”.

It was granted an injunction by the Irish High Court last year that stopped Flightbox from unlawfully scraping Ryanair.com content for online platforms.

Ryanair revealed it carried 12.5m passengers in December, an increase of 9pc on the previous year.

It cancelled a further 900 flights in December as the Israel-Hamas conflict rages on.

Thanks for joining me. British executives have urged the Bank of England to cut interest rates as soon as possible to boost the economy as “depressed” confidence sank to a four-year low.

The Institute of Directors’ (IoD) latest economic confidence index, which measures bosses’ optimism about the UK economy over the year ahead, sank to its lowest level since August in December.

The reading of minus 28, down from minus 21 in November, was close to the 2023 low point of minus 30 recorded in June.

It showed bosses ended 2023 in a “relatively depressed place,” according to IoD director of policy Roger Barker.

He said: “In the coming months, the Bank of England will be considering its next step in term of interest rates. 

“Based on the evidence of this survey, an early cut in interest rates would be justified in terms of helping to kick-start business confidence.”

Money markets are betting that the first interest rate cut by the Bank of England will happen by May.

5 things to start your day 

1) Marks & Spencer crowned ‘Christmas winner’ by investors | Retailer’s shares hit five-year high as turnaround efforts pay off

2) Part-time work hits the City as flood of deals slows to a trickle | Overstaffed firms seek to cut costs amid slowing revenue growth and declining profits

3) ‘Lazy’ broadband engineers blamed for exposing hospitals and banks to cyber attacks | Rush to roll out full-fibre sparks fears that security measures are being overlooked

4) Britain faces fresh inflation headache as Maersk suspends shipments | Disruption risks driving oil prices and shipping costs higher in wake of Houthi attacks

5) Jeremy Warner: The Eurozone isn’t about to collapse – it’s worse than that | A once acute, life-threatening illness has given way to a chronic, long-term condition

What happened overnight 

Asian shares dropped after Wall Street and the City of London started 2024 with a slump.

Hong Kong’s Hang Seng lost 1pc to 16,618.50, influenced by a 2pc drop in technology shares, while the Shanghai Composite index gained 0.1pc to 2,966.13.

Prices of Chinese gaming companies rose, with Tencent Holdings and Netease both adding over 1pc following local reports that a senior official responsible for overseeing China’s gaming industry had been dismissed after the release of draft regulations last month spurred a meltdown in gaming stocks just days before Christmas.

Australia’s S&P/ASX 200 slipped 1.4pc to 7,523.20. South Korea’s benchmark slumped 2.3pc to 2,607.31 after hovering around a 19-month high Tuesday amid the short-selling ban.

Bangkok’s SET lost less than 0.1pc and India’s Sensex was down 0.4pc.

Japanese markets remained closed for the New Year holiday.

The S&P 500 index of American shares fell 0.6pc yesterday to 4,742.83. Meanwhile, the Dow Jones Industrial Average of 30 leading US companies rose 0.1pc to 37,715.04 and the Nasdaq Composite index, heavily weighted towards technology shares, fell 1.6pc to 14,765.94.

The dollar rose against major currencies as the yield on 10-year Treasury bonds rose rose 7.3 basis points to 3.933pc - an indication that the markets were a little less confident yesterday of interest rate cuts in 2024.