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Summary

  1. FTSE closes 1% lower
  2. Pearson shares plunge 8%
  3. Heathrow decision to await Cabinet view
  4. UK economy faces prolonged weakness: Item Club

Live Reporting

By Emily Young

All times stated are UK

Get involved

That's all folks!

Back tomorrow - with the latest on the markets and UK inflation figures.

Stranger Things and Narco help Netflix

Just in...

The TV programmes Stranger Things and a second series of Narcos have helped earnings at the online streaming site Netflix.

It says quarterly global streaming revenue exceeded $2bn for the first time (up 36% year over year) in the third quarter.

And it added 0.4 million members in the US verus its forecast of 0.3 million and 3.2 million members internationally vs. our forecast of 2.0 million.

"As discussed, for the balance of 2016, we will continue to operate around break even, and then start generating material global profits in 2017 and beyond, by marching up operating margins steadily for many years," the company added in its statement.

Shares are up 18% in after-hours trading. 

What's behind Hammond mutterings?

Laura Kuenssberg, BBC political editor writes:

The prime minister has "full confidence" in the chancellor.

In days gone by, even the very fact that question was posed was the canary in the coalmine - when journalists knew a minister was in real trouble, proper trouble, it was time to ask that question.

If there was any hesitation, any delay, any raise of the eyebrow from the Number 10 official cursed with taking that day's lobby briefing, it was a sure sign that the unlucky Cabinet member was on their way out.

Read Laura's analysis here

"Tired of fog? Try the frogs!"

Frog campaign
La Defense

Paris has launched a post-Brexit campaign to try and lure City bankers across the water.

La Defense is the financial district of Paris and the billboard seen above has been posted at Heathrow and on the Eurostar.

"As regrettable as Britain's exit from the European Union may be, we have to be pragmatic and promote our own assets," Patrick Devedjian, head of the elected council representing the Hauts-de-Seine district where La Defense is located, said in a statement. 

Inflation to pick up?

Cash till
bbc

And more signs of rising prices are expected to come tomorrow.

Monthly inflation figures for September are due out. Analysts are expecting prices to rise by an annual rate of 0.9%, near a two-year high, up from 0.6% in August.

That's in part due to the weak pound.

Kathleen Brooks from City Index explains how that works:

* The pound falls sharply across a broad range of currencies

* Foreign import prices get more expensive

* Producers and retailers have to accept higher costs, which they eventually pass onto the consumer

Petrol price 'highest in a year'

Petrol pump
Getty Images

The motoring group AA have published figures showing the average price of a litre of petrol has hit £1.15 - the most expensive it's been since August last year.

In March the average price was £1.02.

AA president Edmund King said: "This is a hammer blow not only to family and business finances but a severe shock when people consider that supermarket fuel was available at £1 a litre earlier this year."

Waste of money?

CNBC tweets:

View more on twitter

"The state pension system simply gave away tens or even hundreds of millions of dollars in fees every year for 10 years to hedge fund managers, and received no value in return," the New York State Department of Financial Services said.

Marseille football club bought by US businessman

Marseille football players
Getty Images

Frank McCourt, former owner of the baseball team Los Angeles Dodgers, has bought the French football club Olympic Marseille. 

He has promised fans that he would push the club to the "highest ranks of European football", and that "we have the resources and courage necessary to invest".

Mr McCourt is the latest in a string of US businessmen buying up European football clubs. Manchester United, Arsenal, Liverpool and Roma all have US owners.

RBS and RT

RT website
RT

This is interesting. Earlier today the London-based RT TV channel (formerly Russia Today) said that NatWest had told it that its accounts would be closed by 12 December. There would, apparently, be no discussion.

That line appears to have changed. 

This evening the RBS group (which owns NatWest) says: “These decisions are not taken lightly. We are reviewing the situation and are contacting the customer to discuss this further.The bank accounts remain open and are still operative.”

Well, that's not quite telling someone to sling their hook, is it?

Unfashionable fashion

Shoppers on High Street
Getty Images

Fashion retail in the UK had seen its steepest fall in sales since 2009, according to data from Kantar Worldpanel.

It says that the industry has seen four consecutive months of sales declines in the year to September, with £700m lost from the value of the market from this time last year.

"Fashion retailers are still following the same patterns of over-buying and deep discounting and consumers are increasingly reluctant to pay full price," said Glen Tooke, consumer insight director at Kantar Worldpanel.

"Most recently the decline has been driven by falling frequencies of buying, giving retailers fewer opportunities to encourage shoppers to part with their cash."

Pepsi promise

Pepsi bottles
Getty Images

The drinks company Pepsi has made another promise to cut the volume of sugary drinks it sells.

It has promised that by 2025, at least two-thirds of the 12 ounce beverages it sells will contain 100 or fewer calories.

Governments are clamping down on sugar - with the UK introducing a sugar tax and similar measures introduced in some US cities, Mexico and Hungary, according to Bloomberg news.

The World Health Organization has also suggested that by driving retail prices up by 20%, consumption will drop by a fifth.

Netflix results

After the close of the bell in the US, Netflix reports results.

Shares in the online TV company are trading lower ahead of the numbers, as analysts expect weak subscriber growth.

Market analyst at City Index, Ken Odeluga says: "Netflix’s US subscriber growth hit a giddy peak in the first quarter of this year at well above 4 million net additions.

"It then slumped to a rate that was no more than half that in the next two quarters."

Its costs have risen, he says, and competition has increased.

"The question is whether ‘binge-watching’ will rise fast enough to justify a Netflix valuation that is 311 times its earnings over the last twelve months, and 136 times income forecast for fiscal 2016."

For this quarter, he adds: "At the very least, the group needs to hit guidance that it will add 300,000 US subscribers in its third quarter and 2 million overseas."

Standard Life scrutinises annuity sales

Piggy bank
PA

You may recall that last week the chief City regulator, the Financial Conduct Authority (FCA), said that about 90,000 people should be compensated for being given a bad deal when they bought an annuity, sometime between 2008 and 2015.

Now Standard Life says it is one of the firms which is having to go back through its past annuity sales, to see who might be eligible for a payment.

"At the request of the FCA, Standard Life will conduct a review of all non-advised annuity sales from July 2008 to identify whether our customers received sufficient information about enhanced annuities to make the right decisions about their purchase," the life insurer says.

"It is not yet possible to determine a reliable estimate of the quantum of any redress associated with this process."  

At issue was the failure of insurers to tell customers in poor health that their conditions meant they could receive an "enhanced" annuity with higher payouts, or indeed shop around for one.

With FTSE near record highs why are companies scaling back or pulling IPOs?

Simon Jack

BBC Business Editor

This should be a fantastic time to sell shares. After all the FTSE 100 is hovering near record highs, so why has waste management company Biffa been forced to offer a discount on the shares it is selling?

It is not the only one to scale back its ambitions. Software firm Misys has cut the amount it hopes to raise by £1bn, while several other companies have decided to shelve their plans to list on the stock market - at least for now.

Meanwhile in the US, floats - or IPOs - are going gangbusters, with Snapchat about to sell a slice of the company that would value the whole company at around $25bn.

So what's going on? City sources tell me there are a few concerns about new flotations in general. Companies that have previously been owned by private investors typically owe more money to their banks as they were acquired in the first place with borrowed money.

Second, their track record of making profits is either shorter or less transparent than established public companies.

Third, in the case of Biffa, the company is UK focused and relies on the public sector for a chunk of its revenue - an uncertain income stream going into a period where the public finances are likely to be shaken up by the upcoming Autumn Statement.

Add all that to general disquiet about prospects for the UK economy and it's enough to make investors think twice - or a least want a discount - before buying anything new.

Moving to Frankfurt?

wedding couple sits in a carriage ahead of their wedding in the town hall at the Roemerberg square in Frankfurt, Germany, Friday, Oct. 14, 2016.
AP

The German banking industry has already started making plans to move some offices and staff from London back to Germany, now that Brexit is on the cards.

Hubertus Vaeth, of the marketing body Frankfurt Main Finance, has told Reuters that some banks have told him they will be moving some operations to Frankfurt in the second half of 2017. 

"The precise size is still open. There will be some re-engineering to be done, and there is no pressure to hurry that up," Vaeth said.

"We already see small teams, explorative teams looking into certain aspects. We see options for real estate, and we have very, very clear indications that things will be moved, however, not entire operations," Vaeth added.

FTSE close

That's it! Trading has closed on the London stock market for now.

The FTSE 100 index ended down by nearly 1% at 6,948, with shares in Pearson closing more than 8% lower at 762.5p.

The pound meanwhile is barely changed on the day at $1.21860 and against the euro is trading down by 0.23% at €1.10830.

Bank branch closures hit small businesses

Man uses a bank ATM
PA

Small businesses are having increasing troubles because of the continued closure of bank branches, says the Federation of Small Business (FSB). 

The lobby group says just over 8,000 branches have closed in the past 25 years, with more likely to go.

The FSB points out that many small businesses still use cheques and cash, and need a bank nearby.

The FTSE 100 explained

With the FTSE 100 hitting a record high, our experts explain why it matters to you.

Not sure how the FTSE 100 is complied? And why it's so important?

The team on BBC Radio 5 Live have asked financial experts to explain.

Includes a great fact - there's only one day that the index hasn't been calculated since its launch in 1984.

And that's Friday 16 October 1984 - the day after the great storm across the UK - when not enough traders could get in to work to open trade.

Flexible working isn't just for women

Katie Hope

BBC business reporter

man with baby
Thinkstock

Stories about flexible working requests often focus on women, so it's nice to feature a man for a change, and a senior one to boot. 

Since 2005, Julian Taylor, a partner at law firm Simmons & Simmons, has worked from home every Wednesday morning and takes the afternoon off to enable him to spend more time with his children. Read more here.

His firm offers similar flexibility to almost all its staff. It's something employers' organisation the CBI believes more firms should be offering, suggesting in a report today that it would broaden the type of people who apply for jobs. 

And it believes, and plenty of evidence suggests, that a workforce made up of people from a wider variety of backgrounds, education levels, gender and ethnic backgrounds performs better.

Above the funnel

We've had some responses to our 'above the funnel' question:

Above the funnel?

Splendid nonsense

QE 2
PA

We have received a job advert, via Linkedin, for a writer at a well-known business software company.

Among the attributes are this: "Author powerful B2B content based on local and global insights that will drive brand preference above the funnel and lead to sales conversion."

If you can translate that - especially the bit about the funnel - do drop us a line.

Maybe we have led sheltered lives, but it is the first time we have heard that particular bit of business jargon.

Royal Liver building for sale

The Royal Liver building is up for sale - for the first time since being built 105 years ago.

Once the home of an insurance company, it now houses operations of the bank HSBC and the television firm ITV.

Royal Liver building
PA

US market open

Trader
Getty Images

Trading has just got underway in New York - and there's not a great deal of movement to report to be honest.

The Dow Jones is very little changed, down 0.1% at 18,120.95

The S&P 500 has fared similarly - down by 0.13% to 2130.24

And the Nasdaq is down by 0.18% at 5,205.10

Hasbro profit

Disney Princess
Hasbro

Profit at the US toymaker Hasbro has been lifted by strong demand for its girls toys - including its Disney Princess and Frozen range.

Net income rose to $257.8m for the third quarter, up from $207.6 million.

Shares are up more than 5% in early trading.

Chief executive Brian Goldner said: "2016 has been a strong year, including our third quarter - which marked the greatest revenue and earnings quarter in Hasbro's history. We are well positioned for what we believe will be a good holiday season."  

Market update

So here's where we are on European markets - just ahead of the US open.

London's FTSE 100 is down 0.7% at 6,963.59, with education firm Pearson the biggest faller

Germany's Dax is 0.42% lower at 10,535.43, led down by consumer and industrial group Henkel

France's Cac-40 is 0.3% down at 4,456.84, with hotel group Accor showing the biggest drop

As far as the pound is concerned - it's still below $1.22, slipping by 0.17% against the dollar to $1.21670

Against the euro it's down by 0.5% to €1.10550

Always learning?

Chris Johnston

Business reporter

Pearson website still
Pearson

Investors have lost more faith in Pearson as the morning wears on, with shares in the world's biggest education company now down more than 8%. 

Connor Campbell at Spreadex says traders appear uninterested in news of a potentially pound-boosted set of full-year results for the former Financial Times owner.

"It’s worrying that the company has failed to find a more stable sales base in its education division given that it is now almost solely reliant on that sector after offloading of its major media outlets," he says.

Breakfast binge

Breakfast counter
BBC

First things first...your thoughts may now be turning to dinner...but here's a great piece about the rise of our breakfast spend.

In the eight years since 2008, research group NDP estimates that we have eaten breakfast out an extra 107 million times, while lunch has lost 80 million visits in the same period.

And we shell out more too, spending an average £3.30 on breakfast - an increase of 31% compared with eight years ago. By contrast, our lunch bills have risen by just 6.5% in the same period.

Read the piece in full here 

Full disclosure: Written by, ahem, yours truly.  

Afternoon all

Emily Young

Business reporter

That's it from Ben. I'll be taking over for the rest of the afternoon.

Apple parks car project - report

Apple sign
ge

Fans of Apple products will be disappointed to learn that they won't be able to drive one.

Bloomberg is reporting that Apple has drastically scaled back Project Titan, a scheme to develop an Apple car.

Hundreds of members of the 1,000-strong team have been laid off, according to the report.

Those remaining are going to focus on developing an autonomous driving system, it says.

People missing after chemicals plant blast

Firefighters, BASF plant Ludwigshafen
Reuters

Several people are missing and others are injured after an explosion at the giant BASF plant in Ludwigshafen in Germany.

People living near the site have been told to keep doors and windows closed following the blast which happened at around 11.30 this morning.

The cause of the explosion has yet to be determined.  

Good day for Good Hair Day

GHD website
GHD

The firm that makes GHD, the leading brand of hair straighteners, is being sold for £420m.

The buyer is the US beauty products firm Coty which owns, among other things, the Clairol, Wella and Rimmel brands.

If you didn't know (and I didn't) GHD stands for good hair day.

The current owner of GHD is a private equiry firm called Lion Capital, which bought GHD three years ago for £300m.

In the past Lion Capital has bought and sold Jimmy Choo and Wagamama. It still owns part of Weetabix and all of All Saints. 

Russia Today bank accounts frozen

Russian flag
Reuters

The UK has frozen all bank accounts owned by Russia's state-run broadcaster, Russia Today (RT), its editor-in-chief has claimed.

Margarita Simonyan tweeted: "They've closed our accounts in Britain. All our accounts. 'The decision is not subject to review.' Praise be to freedom of speech!"

RT has previously been sanctioned by Ofcom for biased reporting on the conflicts in Ukraine and Syria.

Pearson continues to weigh on the FTSE 100

FTSE 100 chart
BBC

How has the London stock market done today? The FTSE 100 share index was down 46 points a few moments ago, at 6,968.

That is not much of a move though; a drop of just 0.7% this morning.

The big loser today has been the educational publisher Pearson after its down beat trading statement.

It shares are down 10.5% at 746p.

Mining firms have been the biggest gainers so far, with Glencore up 1.8% and Anglo-American up 1.3%.

'Full confidence'

Philip Hammond
Getty Images

Theresa May has "full confidence" in Chancellor Philip Hammond, Downing Street has said - amid reports some Cabinet colleagues are becoming frustrated as his support for a "soft Brexit".

Mr Hammond was said to have angered pro-Brexit ministers after he called for a delay on migration controls over concerns of the impact on business, according to newspaper reports.

However, Theresa May's official spokeswoman said: "The prime minister has full confidence in the chancellor and the work that he is doing." 

We do wonder if Mrs May is aware of what often happens when a football club expresses its "full confidence" in a manager...

Energy firm sells £621m stake

SSE logo
PA

SSE is selling a stake in its gas distribution business to a Gulf state sovereign wealth fund for £621m.

Scotia Gas Networks (SGN) distributes gas to almost six million properties in Scotland and the south of England.  

The Scottish energy firm agreed to sell 16.7% of SGN to subsidiaries of the Abu Dhabi Investment Authority.

It follows a slump in profit at SSE and a heavy writedown of its power generation and natural gas assets.  

The pound's progress

Graph of the pound v the euro
BBC

How has sterling done today?

Against the euro it is currently down 0.3% at 1.107 euros.

And against the US dollar it is 0.2% lower at $1.216.