LIVE BUSINESS: Inflation slows to 1.7%; Whitbread sees £300m profit rise; Just Eat affected by the crisis in the US

Business is booming at Boots as their boss completes a series of store closures before leaving.

The pharmaceutical giant said sales in the three months to the end of August were 6.2 percent higher than the same period a year earlier, as premium beauty and skincare products disappeared from shelves. shelves.

LVMH has suffered its first quarterly sales decline since the pandemic following a slowdown in demand for high-end fashion.

The French group, whose brands include Givenchy, Celine and Louis Vuitton – where actress Zendaya is a global ambassador – posted a 3 per cent drop in sales in the three months to September.

It was the first drop since sales fell in early 2020 when Covid-19 hit.

Zoe Gillespie, investment manager at RBC Brewin Dolphin:

“At first glance, Whitbread’s results are mixed, but the long-term story for the company is one of growth, even if there are some short-term challenges in the form of weaker demand in the UK and a slowdown in the German economy. economy.

‘Premier Inn is a well-established and highly cash-generating brand in the UK and continues to make great progress in Germany, with the latter approaching profitability in the not-too-distant future.

‘Management’s confidence is reflected in its expectations around profitability, investment and buybacks, with £2 billion expected to be delivered in these areas by 2030.

“While the shares have yet to truly recover to their pre-pandemic levels, and are down for a year now, the company’s five-year plan provides a good foundation on which Whitbread can build its recovery.”

Just Eat Takeaway has seen gains in key markets in Northern Europe, the UK and Ireland, largely offset by recent sharp declines in its growth markets of North America, Southern Europe and Australia.

The food delivery company posted a 4 percent drop in gross transaction value during the third quarter to €6.34 billion, below the analyst consensus of €6.5 billion.

Australia and southern Europe saw GTV fall by 11 percent during the period, while North America fell 12 percent.

Chief Jitse Groen said: ‘We have made good progress on our key strategic pillars, which we believe will drive growth.

‘Northern Europe, the UK and Ireland continued their positive momentum and these segments now account for around 60% of the Group’s total orders. In line with our diversification strategy, several new partnerships were launched in adjacent areas such as supermarkets, pharmacies and wellness in many of our markets.

‘In addition, operational and cost efficiencies have allowed us to increase investments while maintaining our prospects. “We are on track to deliver our full-year forecasts.”

Premier Inn owner Whitbread has set a target of making at least £300m more profits and more than £2bn returns to shareholders over the next five years.

It comes after the hotel group suffered a drop in first-half profits, with adjusted pre-tax profits falling 13 per cent year-on-year to £340m in the six months to August 29.

Whitbread chief executive Dominic Paul said: “We are making excellent progress with our plans and over the next five years we are set to deliver a step-change in our performance that will fund significant returns for shareholders.”

‘To demonstrate our confidence, today we have announced the details of our Five Year Plan which sets out the scale of our ambition for FY30.

“Having laid the foundation for future growth, we are making good progress and remain confident in the outlook, as reflected by our higher interim dividend and increased share buybacks.”

Total public debt worldwide will surpass $100 trillion (£77 trillion) for the first time by the end of this year, according to a grim forecast from the International Monetary Fund (IMF).

As Rachel Reeves struggles to make her budget numbers add up, the global watchdog said governments must act now to prevent debt from spiraling further out of control or risk having to take even more painful measures in the future.

Its projections see global debt reaching 93 percent of gross domestic product (GDP) by the end of this year and 100 percent by 2030.

Thomas Pugh, economist at RSM UK:

‘The fall in inflation to 1.7% leaves it 0.4 points below the MPC’s latest forecast. Although the slowdown was due to the drop in air fares (from 11.9% to -5.0%) and fuel (from -3.4% to -10.4%), service inflation returned to fall to 4.9%, its lowest reading since May 2022, and core inflation fell to 3.2%. .

‘It is certain that inflation will recover later this year as favorable base effects disappear from the annual comparison, some of the more erratic factors that reduced inflation in September disappear and energy prices rise.

“But this morning’s data is clear evidence that disinflation continues to advance apace in the economy, and should reassure the Bank of England that it can cut interest rates more aggressively without stoking further inflation.” inflation”.

‘Finally, the fall in inflation will come too late to help the Chancellor in the budget, as September’s inflation rate is a factor used to set next year’s benefit payments. But a much larger-than-expected budget, combined with higher borrowing, could keep the MPC cautious, despite the more positive outlook on inflation.

Hetal Mehta, head of economic research at St. James’s Place:

‘The fall in inflation in the UK is very broad based and, for the Bank of England, the core and services inflation figures in particular will be good news.

‘They should consolidate expectations of a cut in November and perhaps the division of votes will reduce.

“As for back-to-back cuts, I think more evidence of a continued decline in inflation is needed before we see this and suspect the Bank of England will also want more time to digest the Budget announcements.”

Consumer price inflation fell faster than expected in September, falling from 2.2 per cent to 1.7 per cent, data from the Office for National Statistics showed.

Last month’s inflation reading was below market expectations of 1.9 percent and strengthens the case for further Bank of England interest rate cuts in November.