Key events
Microsoft’s Activision Blizzard deal set to be cleared
Mark Sweney
Microsoft’s $69bn (£54bn) deal to buy Activision Blizzard, the maker of games including Call of Duty and World of Warcraft, looks set to be cleared after the UK competition regulator said a revised deal addresses its concerns.
The Competition and Markets Authority (CMA) moved to block the biggest tech deal in history in April, citing concerns that Microsoft would dominate the nascent cloud gaming market.
While the move angered Microsoft – the company called it the darkest day in its four decades operating in the UK – a revised proposal was submitted that included selling cloud gaming rights outside Europe to the French rival Ubisoft.
On Friday, the CMA said that the sale of the rights “substantially addresses previous concerns and opens the door to the deal being cleared”.
Call of Duty: Modern Warfare III Photograph: ActivisionUK mortgage rates dip – MoneyfactsMortgage rates in the UK have fallen slightly, according to Moneyfacts.
The average two-year fixed residential mortgage is now 6.56%, down from 6.58% yesterday, while the average five-year fix has edged lower to 6.06% from 6.07%. There are 5,295 residential deals available at the moment, slightly up from yesterday.
The average two-year buy-to-let deal dropped to 6.46% from 6.48%, and the average five-year deal for buy-to-let landlords was unchanged at 6.36%.
Experts expect mortgage rates to fall further in the coming weeks and months amid a “rate war”. There are now some five-year residential deals on offer for less than 5%.
European shares have opened lower, and global stocks are on track for their worst week in a month, as investors are now expecting US interest rates to stay high for some time.
MSCI’s index of global equities dropped 1.7%.
The Bank of Japan kept ultra-low interest rates today. The US Federal Reserve also held rates this week, but expectations of swift rate cuts next year receded.
In London, the FTSE 100 index slipped 21 points, or 0.3%, to 7,658 in early trading. The Dax in Frankfurt and the Ibex in Madrid both fell 0.6% at the open, as did the Euro Stoxx 600 index of Europe’s leading shares.
Helen Dickinson, chief executive of the British Retail Consortium, said the coming months will be vital for retailers in the run-up to Christmas.
Returning consumer confidence helped retail sales regain lost ground after a challenging July. Toiletries, cosmetics, and books performed particularly well as consumers purchased holiday essentials for their late summer getaways. Although white goods and other big-ticket items continued to take a hit as households spent more cautiously.
The next few months are vital for retailers as they gear up for the all-important Christmas trading. While cost-of-living challenges continue to loom large, retailers are working hard ensuring customers get the best possible value. Their capacity to do this is limited by the upcoming rise to business rates, which will see retailers paying hundreds of millions more every year and which the chancellor should scrap in his upcoming autumn statement.
UK consumer confidence rises but remains suppressedConsumer confidence in the UK is continuing to improve as inflation slows, but many households are still struggling to make ends meet, according to a survey.
GfK’s long-running consumer confidence index increased four points in September, but remains in negative territory, at -21.
Expectations for the UK economy over the next 12 months rose six points to -30, 44 points higher than last September. Confidence in personal finances for the coming year edged up by one point to -2, which is 38 points higher than this time last year.
With fewer than 100 shopping days to Christmas, retailers will be relieved to see a four-point boost to the major purchase index, a measure of confidence in big ticket purchases, taking it to -20, which is 18 points higher than a year ago.
Joe Staton, client strategy director at GfK, said:
Against the backdrop of falling inflation figures, growth in wages and high interest rates, UK consumer confidence rose this month to minus 21, the best recorded showing since January 2022.
While this month’s improved headline score is good news, it’s important to note many households are still struggling with the cost-of-living crisis and that economic conditions are tough. The reality is that consumer confidence remains suppressed, and the financial mood of the nation is still negative.
Introduction: UK lenders cut mortgage rates; retail sales in Britain rise, led by foodGood morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
A number of UK lenders including NatWest, TSB, Nationwide building society and Virgin Money have now cut their mortgage rates, with some fixed deals going below 5%.
Several lenders began to reduce deals after UK inflation slowed unexpectedly to 6.7% on Wednesday despite higher petrol prices. There were more cuts to mortgage rates after the Bank of England decided to leave its base rate unchanged at 5.25% yesterday, rather than raising it as markets had expected. The move triggered hopes that the peak in rates may have been reached.
NatWest announced 0.31% reductions across fixed residential and buy-to-let deals. Nationwide reduced selected fixed rates by up to 0.31% from today. The UK’s biggest building society said five- and ten-year fixed rate for first-time buyers and home movers will now start at 4.94%.
TSB will reduce some residential deals by up to 0.25% today, which means deals start from 5.09%. Virgin Money said its five-year fixed rates will start from 4.97%. Yorkshire Building Society also launched a sub-5% mortgage this week, lowering its five-year fixed rate to 4.99%.
Lewis Shaw, mortgage expert at Shaw Financial Services, said:
It’s another sign of the growing rate war.
Chances are we’ll see much more of this in the coming few weeks, and not before time, as consumers are worrying, especially with over half a million people set to move onto new rates before Christmas. This could be the present many have been hoping for.
Retail sales in Great Britain staged a modest recovery in August, rising 0.4% after July’s washout when they fell 1.1%.
Economists had expected a 0.5% increase. Over the three months to August, sales were up 0.3%, according to the Office for National Statistics.
Supermarkets and other food stores were the strongest performers, with sales up 1.2% last month following July’s 2.6% drop when supermarkets reported that the wet weather reduced clothing sales and their food sales also fell back.
It was the wettest July since 2009 and the sixth-wettest July on record since 1836, according to the Met Office. While weather in August improved on July, it was still a mixed and unsettled month, the ONS noted.
Sales at non-food stores (department stores, clothing retailers and others) were up 0.6% last month, following a 1.2% decline in July. However, online sales suffered, falling 1.3% after July’s 1.9% rise when heavy rain and a range of promotions boosted sales. Petrol and diesel sales fell by 1.2% as prices rose sharply.
The Agenda
8am BST: Spain GDP final for second quarter
8.15am BST: France HCOB PMIs flash for September
8.30am BST: Germany HCOB PMIs flash for September
9am BST: Eurozone HCOB PMIs flash for September
9.30am BST: UK S&P Global/CIPS PMIs flash for September
11am BST: :UK CBI Industrial trends for September
2.45pm BST: US S&P Global PMIs flash for September