UK job adverts at record in Christmas buildup; inflation knocks US consumer sentiment to 10-year low – as it happened

Last modified: 06: 03 PM GMT+0

Closing summary

Time to wrap up...

Britain’s ongoing labour squeeze is continuing in the run up to Christmas, as firms continue to struggle to fill vacancies. The number of active job postings at UK firms hit 2.68 million in the first week of November, a record high, with another 221,000 ads were added during the week.

Roles being advertised for driving instructors, prison officers, fork-lift truck drivers, secondary school teachers, care workers and goods packers all saw big increases, while vacancies for painters, roofers and carpenters fell as builders were hit by supply shortages.

In the US, consumer confidence has slumped to its lowest level in a decade, as rising inflation hit confidence.

But workers are also quitting their jobs at a record pace, at a time when firms are competing for staff.

Today we learned the least confident consumer in a decade is quitting his or her job at the highest rate on record.

— Tom Hearden (@followtheh) November 12, 2021

Pressure is mounting over Bain Capital’s proposed £530m takeover of LV=. Campaigners are concerned that the deal for the pensions and life insurance mutual will mean worse payouts for customers and poorer customer service. MPs fear another private equity asset-stripping.

And this evening, we’ve reported that the Conservative party’s new treasurer could make millions of pounds from the controversial takeover of the pensions and insurance mutual LV= by an American private equity firm.

AstraZeneca has started signing commercial contracts to supply its Covid-19 vaccine next year as the pandemic moves to an “endemic phase” – in a major shift away from the drugmaker’s not-for-profit pricing.

Britain’s blue-chip FTSE 100 index fell around 0.5%, dragged down by AstraZeneca which missed earnings forecasts, hospitality firms, and a stronger pound today.

European markets closed at fresh record highs, despite new lockdowns measures being announced in Austria and the Netherlands.

Eurozone industrial output fell again, down 0.2% in September.

With supply chain problems still intense, the EU’s competition chief has warned that Europe and the US must avoid being dragged into a ‘subsidy race’ in the struggle to get hold of computer chips

Johnson & Johnson has become the latest major company to announce it will split. It will spin off its consumer products division into a new company as it focuses on pharmaceuticals and medical devices.

Elon Musk has continued to cut his stake in Tesla, selling almost $700m of shares yesterday.

Delivery workers sort parcels at a makeshift logistics station in Beijing.
Delivery workers sort parcels at a makeshift logistics station in Beijing. Photograph: Tingshu Wang/Reuters

Logistics workers are processing mountains of parcels after Chinese e-commerce titan Alibaba has enjoyed record sales during its Singles Day shopping extravaganza.

The energy regulator has threatened to strip five suppliers of their licences after they failed to hand over more than £500,000 collected from customers’ bills to help pay for a renewable energy support scheme.

Women who work mostly from home have been warned they risk hurting their careers and getting caught in a “she-cession” as more men return to office working post-pandemic .

And Bake Off’s coming back again, after Channel 4 struck a new deal to keep the hit show for three more years.

Goodnight, and have a lovely weekend. GW

Tory treasurer could net millions from controversial LV= takeover

The Conservative party’s new treasurer could make millions of pounds from the controversial takeover of the pensions and insurance mutual LV= by an American private equity firm.

The proposed buyout has enraged some Conservative MPs – and could put them at odds with Malik Karim, an investment banker, who was named Tory treasurer in September, responsible for building the party’s election war chest.

Conservatives see the takeover as another sale of a cherished British mutual institution, and it has drawn the wrath of former Conservative deputy prime minister Michael Heseltine.

Karim is the founder and chief executive of City investment bank Fenchurch Advisory Partners, LV=’s longstanding financial adviser. Fenchurch is believed to have made millions of pounds of fees by advising the member-owned firm on its gradual dismemberment in recent years.

Karim, a Tory donor who earns the lion’s share of Fenchurch’s profits, stands to make one last payday by advising LV= on its £530m sale to Bain Capital – the US private equity giant that was co-founded by Republican Mitt Romney.

But the deal has provoked outrage because it will end LV=’s status as a member-owned firm after 178 years, hand a paltry payout of about £100 to each of its 1.2m members, and has led to fears over asset stripping.

It has whipped up a political storm among MPs, by placing another British institution into US private equity hands. Karim’s involvement is likely to further anger Tory MPs, who are reeling after a string of revelations about standards in public life.

LV= refused to say what it will pay Fenchurch. Advisers on other insurance buyouts have made millions of pounds in fees.

Here’s the full story:

Updated

Oxfam has accused AstraZeneca of breaking its promises over its Covid-19 vaccine, after deciding to start making a profit on it.

Anna Marriott, Oxfam’s Health Policy Manager and spokesperson for the People’s Vaccine Alliance, said:

“AstraZeneca is breaking its repeated and celebrated public promises of a non-profit vaccine for all countries for the duration of this pandemic and to never to make a profit in any low- and middle-income country from this publicly funded vaccine. It is turning its back on these commitments at a time when the pandemic still rages and 98 per cent of people in the poorest countries are not yet fully vaccinated.

“While AstraZeneca has said the vaccine will remain non-profit for developing nations, we understand that 75 middle-income countries including Indonesia, The Philippines, South Africa and Zimbabwe are excluded from their commitment. AstraZeneca must immediately and unequivocally confirm that it will not profit from any sales of the vaccine for any low or middle-income country whether via bilateral deals or COVAX.

Oxfam has accused AstraZeneca of breaking its promises https://t.co/MkXOvyNjxC

— Alex Maitland (@alex_maitland1) November 12, 2021

Earlier today, AstraZeneca CEO Pascal Soriot explained that the virus is becoming endemic, saying:

“We are moving to an endemic phase and next year is the target for these commercial contracts.”

Soriot also insisted that it was offering affordable and tiered pricing, depending on countries’ ability to pay. He said the vaccine, developed with Oxford University, would not become “a huge profit earner”.

Here’s the full story:

Luxury gains lead European shares to record highs again

European shares closed their sixth straight week of gains at a new high on Friday, as strong results from Cartier owner Richemont rounded off a robust earnings season, reports Reuters:

The pan-European STOXX 600 index rose 0.3% to a new peak of 486.75 points, and added 0.7% for the week. It has finished at record highs in four of the five sessions this week.

Richemont surged 10.9% and was the best-performing European stock for the day, after it beat six-month profit estimates and said it was seeking investors for its loss-making Yoox business.

The luxury sector also got a boost from France’s LVMH, which gained 2.5% on news that Louis Vuitton was planning to open its first duty-free store in China.

FTSE 100 dragged down by AstraZeneca, as lockdown worries also weigh

In the City, the FTSE 100 has ended the day down 36 points or 0.5% at 7348 points.

After hitting a 20-month high yesterday, the blue-chip index couldn’t repeat the feat. AstraZeneca pulled it down, closing 6.8% lower after missing earnings expectations this morning.

Travel and hospitality shares also had a weak day, after Austria announced a lockdown for unvaccinated people in two of Europe’s worst-hit coronavirus regions, and the Netherlands announced a partial lockdown will begin tomorrow.

Airline group IAG fell 2.8%, hotel operator Whitbread lost 2.3% and catering group Compass lost 2.1%.

On the smaller FTSE 250, cruise operator Carnival fell 3.9% and package holiday group TUI lost 3.3%.

France’s CAC had a stronger day, though, hitting an all-time high, while Germany’s DAX was flat.

#fechamento
▪️ 12/11/21 13:55
Fechamento Europa
🇩🇪DAX 16.104,15 +0,13%▲
🇬🇧FTSE 100 7.346,97 -0,50%🔻
🇫🇷CAC 40 7.091,40 +0,45%▲
🇪🇺EuroStoxx50 4.370,75 +0,29%▲https://t.co/YXDwDD1JUa

— Alex Princival (@alex_princival) November 12, 2021

The University of Michigan confidence survey also showed a stark difference on party lines between Americans.

While the headline index of Consumer Sentiment fell to a ten-year low of 66.8 this month, it was a relatively upbeat 87.0 for Democrats, and an extremely gloomy 37.2 for Republicans (details here)

The University of Michigan Consumer Sentiment survey is broken.....partisan politics is skewing results dramatically #UMich #sentiment $SPX pic.twitter.com/vpqyfvEYWW

— Diego Colman (@DColmanFX) November 12, 2021

Surveys of Consumers chief economist, Richard Curtin, says:

Consumer sentiment fell in early November to its lowest level in a decade due to an escalating inflation rate and the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation.

One-in-four consumers cited inflationary reductions in their living standards in November, with lower income and older consumers voicing the greatest impact. Nominal income gains were widely reported but when asked about inflation-adjusted gains, half of all families anticipated reduced real incomes next year. Rising prices for homes, vehicles, and durables were reported more frequently than any other time in more than half a century.

The reactions of consumers to surging inflation should be no surprise, as it has been reported during the past several months. The description that inflation would be “transient” has the undertone that consumers could “grin and bear it” as economic policies counted on a quick and automatic self-correction to supply and labor shortages. Instead, the pandemic caused economic dislocation unlike any prior recession, and has been intertwined with partisan interpretations of economic developments.

That partisan split makes it harder to assess exactly what’s going on in the economy.

Curtin explains:

Partisans aligned with the President’s party have adopted very positive moods, and those in the opposing camp very negative moods. As a result, partisan supporters of one or the other presidents either mentioned or ignored rising home and stock values, inflation and income growth rates, or mentioned or ignored employment or unemployment rates, and so forth.

The unexpectedly large drop in the University of Michigan consumer confidence index in early November reflects the impact of broadening inflation fears, says Michael Pearce, senior US economist at Capital Economics.

It suggests any rebound in real consumption over the coming quarters will be relatively muted, he warns:

The plunge in the consumer confidence index to 66.8 in November, from 71.7, took it to levels last seen in the immediate aftermath of the 2008 financial crisis.

The drop reflected declines in both the current conditions index to 73.2, from 77.7, and the expectations index to 62.8, from 67.9. We don’t have the full breakdown, but the U. Mich index is partly based on a question asking about buying conditions for durable goods, which the press release said were at their worst levels in more than half a century, reflecting widespread shortages and sharp price increases.

Consumers’ expectations for inflation over the next five years were stable at 2.9%, but expectations for inflation over the coming year ticked higher to 4.9%, from 4.8%.

The Index of Consumer Sentiment declined from 71.7 in October to 66.8 in November, the lowest level since November 2011, according to preliminary data from the University of Michigan and Thomson Reuters. Inflation was a primary concern. pic.twitter.com/whGobpTjvr

— Chad Moutray (@chadmoutray) November 12, 2021

US consumer sentiment plunges to 10-year low on inflation worries

U.S. consumer sentiment has plunged to the lowest level in a decade this month, as surging inflation cut into households’ living standards.

The University of Michigan’s Consumer Sentiment Index has tumbled to 66.8 in its preliminary November reading from October’s final reading of 71.7. That was the lowest level since November 2011, and weaker than expected

It shows that the jump in prices this year, which has driven US inflation to a 31-year high of 6.2%, is worrying consumers.

🇺🇸US consumer confidence from the University of Michigan drops to 10-year low. The measure from Conference board remains high

The reason? University of Michigan asks Americans whether it is "a good or bad time to buy major household items". It's not due to rising prices. pic.twitter.com/GR8e0qUHDW

— Danske Bank Research (@Danske_Research) November 12, 2021

Marketwatch explains:

Americans’ sentiment worsened due to escalating inflation and the growing belief that no effective policies have yet been developed to reduce the damage from it, said Richard Curtin, the survey’s chief economist.

Rising prices for homes, vehicles and durables were reported more frequently than any other time in more than half a century, he said.

Consumer confidence hints at Americans’ willingness to spend on goods and services, which is a major driver of the U.S. economy. However, although confidence has remained at subdued levels in the last few months, U.S. consumers haven’t shown signs of a severe retreat in spending.

Here’s some reaction:

Michigan Consumer Sentiment: November Prelim Falls https://t.co/KPRzDTWlHw pic.twitter.com/tJlHBBOy7U

— Jill Mislinski (@JillMislinski) November 12, 2021

Worries on Main Street: Consumer Sentiment Index fell to a 10yr low in early Nov "due to an escalating inflation rate" & "growing belief among consumers" that an effective policy response is near, advises U. of Michigan's chief economist for surveys: https://t.co/EMkHElzYUC pic.twitter.com/gasn3VBxon

— James Picerno (@jpicerno) November 12, 2021

🇺🇸U Michigan Consumer Sentiment Index fell 4.9ppts to 66.8 in Nov: decade low ⚠️

🔥Higher inflation perceived to erode income (today & over the next year) & purchasing power, especially amongst older consumers

🟡Present conditions 73.2 (-4.5pt)
🟡Expectations 62.8 (-5.1pt) pic.twitter.com/oFUNTiYYWl

— Gregory Daco (@GregDaco) November 12, 2021

US workers quit jobs at record pace

Workers in the US quit their jobs at a record pace in September.

Around 4.4m people voluntarily left their jobs during the month, the Labor Department reports, lifting the quits rate to 3.0% -- which are record levels since the survey began.

There were 10.4m job openings during the month, close to the record highs seen this summer, as firms continue to struggle to hire workers (as we’ve seen in the UK today too)

The report says:

The number of quits increased in September to a series high of 4.4 million (+164,000).

The quits rate also increased to a series high 3.0 percent. Quits increased in several industries with the largest increases in arts, entertainment, and recreation (+56,000); other services (+47,000); and state and local government education (+30,000). Quits decreased in wholesale trade (-30,000). The number of quits increased in the West region.

Nick Bunker, economist at jobs site indeed.com, has more rapid analysis:

September 2021 #JOLTS Report:

📉 Job openings down slightly from a revised August level, 10.4 million

📈 Quits rate: New all-time high! Total quits rate up to 3%, 3.4% in the private sector

— Nick Bunker (@nick_bunker) November 12, 2021

Big jump in quits rate for arts, entertainment, and recreation which went from 3.2% in August to 5.7% in September.

— Nick Bunker (@nick_bunker) November 12, 2021

About half of the decline in job openings in September were due to a drop in leisure and hospitality openings.

Looks like the effect of the delta variant surge was still being felt

— Nick Bunker (@nick_bunker) November 12, 2021

Job openings declined in September, but unemployment dropped more, so the ratio of unemployed workers to openings declined. pic.twitter.com/APDGiN8kBw

— Nick Bunker (@nick_bunker) November 12, 2021

Leisure and hospitality continues to be the sector clearly leading the way on quitting, at 6.4% in Sept pic.twitter.com/NRrus55oX7

— Nick Bunker (@nick_bunker) November 12, 2021

Updated

Inflation expectations have picked up in Germany, which may concern central bankers....

The #inflationexpectations of individuals in Germany for the next 12 months have increased again in October and have reached an average of 4.2%. This is the first time since the launch of the survey that inflation expectations in Germany have exceeded 4%. https://t.co/DE6T936yOw pic.twitter.com/bzqXShhclH

— Deutsche Bundesbank (@bundesbank) November 12, 2021

On Wednesday, Germany’s inflation rate jumped to 4.5%, the highest in almost 30 years.

With energy prices soaring, and supply chain problems driving up costs, people may now be anticipating that prices will keep rising, despite hopes that it’s a transitory problem.

Wall Street has opened higher, lifted by Johnson & Johnson and some tech stock gains.

The S&P 500 is up 6.7 points, or 0.15%, at 4,656 points, while the Nasdaq Composite has risen 0.3%.

U.S. stocks open higher https://t.co/wiDd4d8AYH pic.twitter.com/ASE3In8lJQ

— Bloomberg Markets (@markets) November 12, 2021

Shares in Johnson & Johnson have moved higher, after it announced its split, reports Victoria Scholar of interactive investor:

Shares in J&J trading up by 3% in the pre-market session

The company announced plans to split into two by spinning off its consumer business to focus on pharma and medical devices instead

The break up is expected to happen in 18-24 months via a stock offering pic.twitter.com/qCt6yci8wc

— Victoria Scholar (@VictoriaS_ii) November 12, 2021

Johnson & Johnson to split

Johnson & Johnson plans to split into two companies, separating its consumer health division that sells Band-Aids and Baby Powder from its pharmaceuticals and medical devices business.

It’s the biggest shake-up in the company’s 135-year history, just days after another US titan, General Electric, announced it would split in three.

Johnson & Johnson plans to separate its consumer health business into a new publicly traded company, and will focus on pharmaceuticals and medical devices.

J&J says the new consumer health company would be “a global leader with iconic brands and products that touch over one billion lives every day”, such as Neutrogena, AVEENO, Tylenol, Listerine, JOHNSON’s, and BAND-AID.

Alex Gorsky, J&J’s chief executive, said:

Following a comprehensive review, the Board and management team believe that the planned separation of the Consumer Health business is the best way to accelerate our efforts to serve patients, consumers, and healthcare professionals, create opportunities for our talented global team, drive profitable growth, and – most importantly – improve healthcare outcomes for people around the world.”

Gorsky adds that splitting the businesses makes sense -- rather than keeping two diversified entities within one corporation.

We believe that the new Johnson & Johnson and the New Consumer Health Company would each be able to more effectively allocate resources to deliver for patients and consumers, drive growth and unlock significant value.

Johnson & Johnson to Split Into Two Companies pic.twitter.com/UvAJslC8nd

— Lorcan Roche Kelly (@LorcanRK) November 12, 2021

J&J’s consumer arm has faced tens of thousands of claims that its baby powder and other talc-containing products caused mesothelioma and ovarian cancer.

It put thousands of those claims into a newly created subsidiary this autumn, which it then placed into bankruptcy in a controversial legal strategy known as the Texas Two Step.

A still from the first trailer for the new series of The Great British Bake Off

TV news: Channel 4 has struck a new deal to keep The Great British Bake Off, the broadcaster’s biggest hit, for three more years.

The show, which brings in audiences of up to 9 million, is crucial to Channel 4’s offering to advertisers and forms the backbone of its commercial strategy.

While the value of the new deal with the Bake Off maker, Love Productions, has not been disclosed, Channel 4 paid £75m for its first three-year deal when it poached the show from the BBC in 2016.

“We are thrilled that Channel 4 will continue to serve up Bake Off’s unique combination of warmth, humour and soggy bottoms for years to come,” said Ian Katz, Channel 4’s chief content officer.

“Bake Off is all about optimism, celebrating eccentricity and bringing the nation together, precisely what a publicly owned Channel 4 is here to do.”

Here’s our news story on fears that women who work mostly from home risk hurting their careers and getting caught in a “she-cession”:

Tesla's Musk sells almost $700m more shares

Elon Musk has sold more of his stake in Tesla.

New SEC filings (here and here) show that the Tesca CEO’s trust sold 639,737 shares on Thursday.

That’s on top of the 4.5m share sales, worth $5bn, reported on Wednesday which lowered his stake by around 3%.

These latest shares were sold in a series of transactions at between $1,056 and $1,104, which I think has raised roughly $687m (based on the reported transaction sizes and prices).

Musk's trust sold 639,737 shares in Tesla on Nov 11.#Tesla $TSLA pic.twitter.com/Mfv82kJEc8

— CN Wire (@Sino_Market) November 12, 2021

This follows Musk’s poll last weekend, in which Twitter users voted that he should sell 10% of his Tesla stake.

This latest sale leaves Musk’s trust owning nearly 167.5m shares in the company, the filing says.

That suggests the 639,737 shares sale cuts his stake by under 0.5%, meaning Musk would need to sell more shares to hit the 10% target

Tesla’s shares have fallen around 13% so far this week, from $1,221 last Friday night to $1,063 by Thursday’s close.

Alibaba sees record sales for Singles Day shopping extravaganza in China

Workers sorting packages at a logistics company in Hengyang in China’s central Hunan province on November 12, 2021, a day after “Singles Day”.
Workers sorting packages at a logistics company in Hengyang in China’s central Hunan province today. Photograph: AFP/Getty Images

The Chinese e-commerce titan Alibaba enjoyed record sales during its Singles Day shopping extravaganza, giving a much-needed boost to the firm after a torrid year in which it became the symbol of a government crackdown that hammered the country’s tech sector.

The firm said 540.3bn yuan (£63bn) was spent as China’s army of consumers went on a splurge despite a more low-key sales campaign after pressure from the government to tone down the aggressive promotions and rampant consumerism.

Combined sales with its industry rival JD.com came in at 889bn yuan, which was also a record and up about a fifth from last year.

An employee for Chinese e-commerce giant JD.com stands next to packages for delivery on Singles’ Day.
An employee for Chinese e-commerce giant JD.com stands next to packages for delivery on Singles’ Day. Photograph: Roman Pilipey/EPA

Alibaba and JD.com reported strong sales of items such as electric appliances, electronics, pet supplies, and cosmetics and other personal-care goods.

JD.com shares rose more than 4% in Hong Kong on Friday, although Alibaba was down more than 1%.

Singles Day – so-called for the 11.11 date – began more than a decade ago and for years was a one-day, 24-hour event on 11 November.

However, industry players expanded it recently into an extended promotion from 1-11 November, with many retailers and platforms offering discounts and pre-sales even earlier... More here:

This surge of orders has meant delivery workers have been sorting through masses of packages....

Workers sorting packages at a logistics company in Hengyang in China’s central Hunan province today.
Workers sorting packages at a logistics company in Hengyang in China’s central Hunan province today. Photograph: AFP/Getty Images
Delivery workers sort parcels at a makeshift logistics station in Beijing yesterday.
Delivery workers sort parcels at a makeshift logistics station in Beijing yesterday. Photograph: Tingshu Wang/Reuters

Updated

Industry output across the eurozone has fallen for the second month running, despite a jump in production of consumer goods.

Industrial production across the euro area dipped by 0.2% in September, as the jump in output earlier this year faded.

Eurozone.

Second successive monthly decline in industrial production.

-0.2% in September, -1.7% in August. Still 1.3% below pre-pandemic levels.

— Daniel Lacalle (@dlacalle_IA) November 12, 2021

#Europa

Eurozone Industrial Production SA (M/M) Sep: -0.2% (est -0.5%, prevR -1.7%)
- Eurozone Industrial Production WDA (Y/Y) Sep: 5.2% (est 4.1%, prevR 4.9%) pic.twitter.com/4VO43goQhf

— Datoeconomia (@datoeconomia) November 12, 2021

Production of capital goods, such as heavy duty machinery, fell by 0.7%, which may show that businesses are more cautious. Intermediate goods (used to make final products) dropped by 0.2%.

But factories producing goods for consumers were busier - durable consumer goods output rose by 0.5% and non-durable consumer goods by 1.0%.

Euro area #IndustrialProduction -0.2% in September over August 2021, +5.2 over September 2020 https://t.co/aZ6sQYxq4Y pic.twitter.com/KoVIIsKNIG

— EU_Eurostat (@EU_Eurostat) November 12, 2021

Factories are also having to cope with the surge in rising costs, and passing them onto customers - as Victoria Scholar of Interactive Investor flags:

German wholesale prices rise 15.2% yoy in Oct
Rising from 13.2% in the previous month
Highest since 1974 during the oil crisis
Driven by petrol products, scrap and residual materials

— Victoria Scholar (@VictoriaS_ii) November 12, 2021

Updated

Oil prices are under pressure this morning, with Brent crude falling by around one dollar to $81.94 per barrel, and US crude down 1.5% at $80.40.

Oil weakened earlier this week after the surge in US inflation raised the prospect of higher interest rates, which would dent growth and demand for energy.

With high gasoline prices a growing problem, traders are also wary in case US authorities release some oil reserves to drive down prices.

Marios Hadjikyriacos, senior investment analyst at XM, says:

There’s growing speculation that the White House could release the ‘kraken’ soon, or in other words the Strategic Petroleum Reserves, to cool oil prices and by extension inflation. Making a deal with Iran is another alternative.

Vestager warns against subsidy race in global chip shortage

The EU’s competition chief has warned that Europe and the US must avoid being dragged into a ‘subsidy race’ in the struggle to get hold of computer chips.

In a speech to Belgium’s Katholieke Universiteit Leuven this morning, EU Competition Commissioner Margrethe Vestager warned that the serious shortage of semiconductors is threatening to destroy company profits and undermine their recovery.

Vestager said there were several causes of the shortage (according to a copy of her speech on the Commission’s website):

From the increase in demand coming from home-stay during the pandemic; to the geopolitical tensions leading to hoarding of supplies, notably in China; to the business decisions of some companies to cancel supply contracts, only to find themselves at the back of the queue when demand picked up.

And she cautions against a subsidy race, saying it would leave everyone worse off.

In the current circumstances, it becomes tempting for companies to try to play out governments against each other, scanning the landscape to see who would be willing to pay more. This risks letting taxpayers – whether European or American – pick up the bill, and get little from it.

Today, EU Executive Vice-President Margrethe @Vestager came to #kuleuven to discuss transatlantic relations in the post-pandemic world. Discover the highlights of her speech ⬇️ https://t.co/N62E9JKAm8

— KU Leuven (@KU_Leuven) November 12, 2021

Those chip shortages have hit car production around the world, with UK output hitting its lowest since the 1950s in July. Even Apple, with its huge financial muscle, has warned that supply chain shortages are hitting its output.

New homes being built by Redrow on the Ebbsfleet Valley development in Kent.

The strong UK housing market means homebuilder Redrow expects to hit pre-pandemic results this year, despite the jump in raw material costs.

Redrow told shareholders this morning that its order book is at record levels.

Prices are up too; the average selling price of private reservations in the last 19 weeks has risen 14% year-on year, as demand for larger properties in the shift to remote working remains strong.

Redrow also flagged that costs have risen this year due to ‘well-publicised’ supply chain problems.

Richard Akers, chairman, will tell Redrow’s AGM today that:

Despite the well publicised material shortages and supply interruptions facing the industry we are working successfully with our longstanding supply partners to ensure build output remains at normal levels.

We estimate that overall build cost inflation will be c5% for the current financial year.

And looking ahead, Akers adds:

As a result of our strategy to grow the business outside London, with a strong focus on our industry leading product and placemaking, we expect to deliver results in the 2022 financial year approaching those achieved in 2019.

Housebuilder @Redrow has told investors it expects to deliver figures close to pre-pandemic levels this year, as it benefited from pent-up demand after the Covid-19 lockdowns https://t.co/7N5Dp3apUZ

— Property Week (@PropertyWeek) November 12, 2021

Updated

AstraZeneca to move Covid-19 vaccine to “modest profitability"

A syringe containing AstraZeneca vaccine, for people receiving a booster jab at the auditorium of The Mall Ngamwongwan, Nonthaburi Province in Thailand last week.
A syringe containing AstraZeneca vaccine, for people receiving a booster jab at the auditorium of The Mall Ngamwongwan, Nonthaburi Province in Thailand last week. Photograph: Atiwat Silpamethanont/NurPhoto/REX/Shutterstock

AstraZeneca has sold more than $2.2bn (£1.64bn) of its Covid-19 vaccine in the first nine months of this year, as the drugmaker said it is set to move to “modest profitability” as new orders are received.

Britain’s biggest drugmaker has so far promised to provide the jab, which it developed with Oxford University, on a not-for-profit basis through the pandemic.

“The company is now expecting to progressively transition the vaccine to modest profitability,” it said in its third-quarter results this morning.

“Covid‑19 vaccine sales in the fourth quarter are expected to be a blend of the original pandemic agreements and new orders, with the large majority coming from pandemic agreements.”

Earlier this week the Anglo-Swedish drugmaker confirmed it will create a vaccines unit as it plans for the future of its coronavirus shot beyond the pandemic. The company said the reorganisation would bring together people who had previously been based in different parts of the business, and will be dedicated to the Covid-19 vaccine and tweaked versions to deal with new variants of Sars-CoV-2.

AstraZeneca said it intends to start including the revenue and profit of sales of the pandemic vaccine in its future financial guidance and in results on Friday there would be a “limited profit contribution” in the final three months of the year.

The company said the contribution would offset costs relating to its long-acting antibody combination AZD7442, and has not changed its earnings guidance for investors.

AstraZeneca’s third-quarter revenue rose by 50% to $9.8bn, boosted by the addition of Alexion, the US drugmaker for rare disease acquired earlier this year, and were up 32% excluding the vaccine.

But adjusted earnings per share came in at $1.08, below average analyst estimate of $1.24.

Updated

In London, the FTSE 100 has dipped from last night’s 20-month high, down around 0.3% at 7360 points.

Pharmaceuticals group AstraZeneca are the top faller, down 2.6%, despite laying out a plan to progressively transition its Covid-19 vaccine to “modest profitability” as new orders are received (more on that in a moment).

#AstraZeneca falls on mixed results.

💉Q3 revenue jumped 50% to $9.866B ahead of forecasts.

📊Core EPS rose 14% to $1.08 missing expectations & guidance was left unchanged.#AZN 🔽 2.6% #Tradingdotcom #MarketUpdate

RW:74.54% of retail clients lose money

— Trading.com UK (@tradingdotcomuk) November 12, 2021

Luxury fashion maker Burberry are the top riser, up 3%, recovering some of yesterday’s fall after it reported a slowdown in sales growth.

Richard Hunter, head of markets at interactive investor, says markets have moved into a holding pattern, as investors weigh up the conflicting signals from higher inflation and strong company earnings.

The US inflation shock from earlier in the week subsided somewhat, although slightly disappointing earnings from Disney dampened the mood.

Even so, the third quarter reporting season has, on the whole, been a roaring success which has confounded the bears. It appears that the effects of supply chain bottlenecks, rising raw material prices and a tightening labour market have done little to derail the recovery of companies on the ground, although those concerns are likely to persist over the coming months.

Indeed, inflation remains the major concern after the surprisingly high number earlier in the week, and this in turn has put further pressure on the Federal Reserve to reconsider its stance on the need for interest rate hikes. Currently, two hikes are being priced into markets for next year, with the worst scenario being that the Fed alters its outlook and raises rates faster and further than is currently anticipated.

EUROPEAN MARKET UPDATE:

FTSE: -0.23%

CAC: +0.22%

DAX: +0.10%

— CA Arun Mantri 🇮🇳 (@ArunMantriCA) November 12, 2021

European stock markets have hit a fresh record high in early trading.

Luxury goods maker Richemont has surged 7.8% after beating profit estimates in the first half of the fiscal year. It is also seeking investors for its loss-making Yoox business, in a move widely expected to appease shareholders [Reuters has more details here].

France’s CAC index has hit a new record high of 7,097.46 points. It’s now rallied by 27% this year, in a rapid recovery from its pandemic losses.

Working from home may hurt women's careers - BoE's Mann

Despite the UK’s tight labour market, there are concerns that women who work mostly from home risk seeing their careers suffer.

Bank of England policymaker Catherine Mann warned that with significant numbers of workers returning to the office, those who stay away risk their careers suffering -- as a ‘two track’ workplace develops.

While online communication is much better than before the pandemic, it still can’t replace the spontaneous office conversations which can lead to recognition and advancement in many workplaces, argued Mann, a member of the BoE’s Monetary Policy Committee.

Yesterday she told an event for women in finance hosted by the newspaper Financial News that:

“Virtual platforms are way better than they than they were even five years ago. But the extemporaneous, spontaneity - those are hard to replicate in a virtual setting.

And with difficulties accessing childcare and Covid-related disruption to schooling continuing, Mann fears that this means many women will continue to work from home, while men returned to the office:

“There is the potential for two tracks. There’s the people who are on the virtual track and people who are on a physical track. And I do worry that we will see those two tracks develop, and we will pretty much know who’s going to be on which track, unfortunately.”

Working from home may hurt women's careers, says Bank of England's Mann https://t.co/wY5c6NLgbW pic.twitter.com/3JSEIDXQn5

— Reuters UK (@ReutersUK) November 11, 2021

There was a notable drop in construction vacancies last week -- from carpenters and joiners to plasters, painters and roofers.

UK weekly job advert changes
The weekly change in UK active job openings Photograph: Recruitment & Employment Confederation

The REC’s Neil Carberry says this is because shortages of key materials are hitting building sites, telling Today:

The area which is maybe a bit slower at the moment is actually construction.

We think that’s about some of the supply chain challenges which construction has had on materials just slowing down what’s happening on sites.

The latest Construction PMI, released last week, showed that a “severe shortages of staff and materials” was hitting the sector.

Carberry also plays down reports that Britain faces a Great Resignation, as workers quit in favour of a better job elsewhere.

People are less worried about moving employers than earlier in the year, when there was more uncertainty, he explains, but...

I don’t think it’s about people walking out on employers they’re dissatisfied with.

It’s just that nobody moved jobs for about a year and we’re getting all that activity at once as people try to move their career on, and get that pay rise they want.

Updated

Recruiters are seeing “really significant delays to getting jobs filled at the moment”, Neil Carberry, CEO of the Recruitment & Employment Confederation, warns.

REC members say it’s taking at least a month longer to fill vacancies than normal, due to the tight labour market, Carberry told Radio 4’s Today programme.

The 221,000 new job adverts posted last week shows there’s high demand for workers, he explained. And with a record 2.7m job openings, some vacancies are taking longer to fill.

Are people being lured way to higher pay and bonuses?

Carberry says this does happen over time. The increase in care home vacancies may be partly due to care workers being tempted to other sectors as the economy opens up.

There’s also been “a big bounceback” in hospitality vacancies this year, as lockdown restrictions have lifted. We’re now in the key hiring season, with November and December particularly busy for the sector.

Updated

Introduction: No let-up in UK labour squeeze

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Britain’s ongoing labour squeeze is continuing in the run up to Christmas, as firms continue to struggle to fill vacancies.

The number of active job postings at UK firms hit 2.68 million in the first week of November, a record high, according to the Recruitment and Employment Confederation (REC) this morning.

Growth in job adverts shows “no signs of slowing down in the build up to Christmas”, REC says, despite concerns about increases in the cost of living and the persistent presence of COVID-19.

Another 221,000 ads were added during the week - the fourth highest weekly figure since the start of 2020. It highlights that the worker shortages that have hampered the UK’s recovery have not eased, as growth slows over the summer.

UK job adverts
UK job adverts week-by-week Photograph: REC

Driving instructors saw the biggest jump in adverts, up over 32% week-on-week, followed by prison officers (+13.0%), and fork-lift truck drivers (+9.1%).

Adverts for secondary school teachers rose 9.1% with fitness instructors (+7.7%) and care workers and home carers (+7.1%), also in demand.

Hospitality firms are also struggling to hire, with ads for bar staff (+3.2%), chefs (+3.1%) and waiters and waitresses (+2.7%) up again.

These vacancies could give workers the upper hand in pay negotiations -- at a time when the cost of living squeeze is hitting families.

But there were “notable fall in adverts for construction sector roles”, where shortages of raw materials have been hitting the sector. Ads for painters and decorators fell 17.8%, along with roofers (-13.4%), and bricklayers (-11.3%).

Neil Carberry, chief executive of the REC, says:

“The latest job advert numbers show recruitment activity staying strong in the run-up to Christmas. The general positive trend varies by region and sector, however. London has been affected more than other areas by the rise of hybrid working, and its jobs market continues to grow at a slower pace than the rest of the UK.

And while roles in logistics and care are in high demand, the construction sector saw a drop-off last week as supply issues constrained the industry’s ability to work to capacity.

UK’s top hiring hotspot last week was Telford and Wrekin (+19.4%) followed by South Teesside (+13.9%).

But the East of England lagged - with three of the bottom ten local areas for growth: Breckland and South Norfolk (-3.6%), North and West Norfolk (-2.4%), and Bedford (-2.2%).

Labour squeeze shows no signs of loosening before Christmas https://t.co/6CbcR5VMOH pic.twitter.com/VdcEqIqfNZ

— City A.M. (@CityAM) November 12, 2021

European stock markets are set for a flat open.

Yesterday, the FTSE 100 closed at a 20-month high, after strong results from AutoTrader, with mining giants lifted by relief that property developer China Evergrande averted a default.

European Opening Calls:#FTSE 7388 +0.05%#DAX 16104 +0.13%#CAC 7064 +0.06%#AEX 816 +0.00%#MIB 27689 +0.20%#IBEX 9098 +0.07%#OMX 2349 +0.12%#STOXX 4361 +0.07%#IGOpeningCall

— IGSquawk (@IGSquawk) November 12, 2021

The US dollar is on track for its best week in almost five months, after America’s inflation rate hit a three-decade high this week, raising pressure for the Federal Reserve to raise interest rates. Gold could post its best week in six months.

The agenda

  • 10am GMT: Eurozone industrial production for September
  • 3pm GMT: University of Michigan consumer sentiment index
  • 3pm GMT: JOLTS survey of US job openings

Contributors

Graeme Wearden

The GuardianTramp

Related Content

Article image
US and eurozone consumer confidence hit one-year highs; German inflation jumps – as it happened
Rolling coverage of the latest economic and financial news

Graeme Wearden

30, Mar, 2021 @4:25 PM

Article image
US inflation slows as prices pressures ease; UK payrolls hit record – as it happened
Rolling coverage of the latest economic and financial news

Graeme Wearden

14, Sep, 2021 @4:01 PM

Article image
Christmas shopping starts early in UK; Austria’s lockdown knocks travel stocks and oil – as it happened
Retail sales across Great Britain picked up last month, and consumer confidence has risen despite inflation

Graeme Wearden

19, Nov, 2021 @5:23 PM

Article image
UK mortgage approvals hit 13-year high; German inflation falls below zero - as it happened
New mortgage approvals surged to 84,700 last month, as German harmonised inflation drops to -0.4%

Graeme Wearden

29, Sep, 2020 @3:15 PM

Article image
IMF warns supply disruptions and inflation threaten recovery; UK vacancies and payrolls at record– as it happened
Rolling coverage of the latest economic and financial news

Graeme Wearden

12, Oct, 2021 @6:04 PM

Article image
UK house price inflation at seven-year high; supply chain problems mount – as it happened
Rolling coverage of the latest economic and financial news

Graeme Wearden

07, Jun, 2021 @4:47 PM

Article image
Bank of England warns of increased risk-taking and reliance on cloud computing– business live
Rolling coverage of the latest economic and financial news

Graeme Wearden

13, Jul, 2021 @5:16 PM

Article image
Inflation ‘may mean UK interest rates rise next year’; China’s exports jump; bitcoin slides – as it happened
Rolling coverage of the latest economic and financial news

Graeme Wearden

07, Sep, 2021 @4:10 PM

Article image
Stock market correction of 5%-10% ‘likely before year end’; US inflation expectations rise – as it happened
Rolling coverage of the latest economic and financial news

Graeme Wearden

13, Sep, 2021 @4:35 PM

Article image
OECD inflation hits 25-year high, as Fed’s Powell vows to stop it becoming ‘entrenched’ – as it happened
Federal Reserve chair Jerome Powell is appearing for a confirmation hearing at the Senate, as prices across the OECD jump at the fastest pace since 1996

Graeme Wearden

11, Jan, 2022 @6:06 PM