Inflation has fallen to below 2%, to its lowest level in three years. The Consumer Prices Index (CPI) fell to 1.7% in September, according to the Office for National Statistics (ONS). The dip marks the first time CPI has been below the Bank of England’s 2% target since April 2021, and is sharper than economist expected: their consensus estimate was a drop to 1.9%. CPI stood at 2.2% in July and August. Services inflation also fell below 5% for the first time since May 2022. The FTSE 100 has risen on the news, which makes a November interest rate cut all the more likely, but the pound fell sharply, dropping 0.6% against the US dollar to fall below $1.30 for the first time in two months. Chief Secretary to the Treasury Darren Jones said the slower pace of price rises was “welcome news for millions of families”.

Chancellor Rachel Reeves has been told by the International Monetary Fund (IMF) that she must slash Government spending to get debt down, rather than just rely on tax rises, which the body said is “undesirable”. National debt has hit 100% of GDP since the July General Election. Worldwide, the IMF is also warning that global debt is expected to hit $100 trillion (£76 trillion) for the first time this year. It singled out the UK, US, France and Italy as countries where debt is on track to keep rising until the end of the decade.

On Friday, Reeves will summon City bosses to 11 Downing Street for the first post-election meeting of Labour’s British infrastructure “taskforce”, the Guardian reports. The aim of the taskforce is to secure more private investment for national investment projects. Those who will attend the meeting include Lloyds Banking Group’s Charlie Nunn, HSBC UK’s Ian Stuart and Phoenix Group’s Andy Briggs. They will be expected to deliver advice on how best to fund and implement a series of Government infrastructure programmes.

Benefits pay better than work for many, a report from The Institute for Fiscal Studies (IFS) has concluded. The IFS research found Britons with long-term sickness risk being up to £1,200 worse off if they come off incapacity benefits and work part-time, a situation the think-tank said was down to high rates of tax that make it difficult to entice welfare claimants back into the labour market. Report author Eduin Latimer explained that those who returned to work for 16-hours a week face an effective tax rate of more than 100% when considering their loss of benefits. If they work 20 hours per week, they would still be £360 poorer each year than if they did not work at all, because universal credit claimants lose around 55p for every pound of income from working. Claimants who receive additional support for ill health fare even worse, risking the loss of £4,994 if they work more than 15 hours a week. Even those who took a full-time job on the national living wage, earning £20,900 a year, face an effective tax rate of 89%, and make only less than £200 a month extra than if they stayed on benefits and did not work at all. There is, therefore, “a strong incentive to work fewer hours,” Latimer said.

Health Secretary Wes Streeting and Work and Pensions secretary Liz Kendall have been talking about their ideas to get people of sickness benefits and into work - or working harder. Writing in The Telegraph, Streeting announced a near-£300m trial with the world’s largest pharmaceutical firm, Lilly, to “support real-world trials” that involved giving overweight workers and obese unemployed people weight loss jabs to study their effect on worklessness and days taken off sick. “Widening waistbands" are placing a "significant burden on our health service," he wrote, and claimed the intervention could be "monumental in our approach to tackling obesity". Prime Minister Sir Keir Starmer also backed the trial, suggesting the plans are "very important" for the economy, but they were slammed by doctors, including NHS junior Doctor Bhasha Mukherjee, the former Miss England, who said the drugs were "absolutely not the answer" to tackling obesity and that she had concerns about introducing potentially serious side effects into an already complex health situation. Kendall, meanwhile, has floated the idea of job coaches visiting seriously ill patients on mental health wards to try to get them back to work. Trials of employment advisers giving CV and interview advice in hospitals produced "dramatic results", she told the BBC, arguing a wider roll out would form part of her drive to cut Britain’s disability and incapacity benefits bill. Disability rights campaigners have expressed concerns about these proposals.

Michael Mainelli, The Lord Mayor of the City of London has told Reuters he thinks that Brexit cost London's financial sector some 40,000 jobs. Dublin had gained most, attracting 10,000 positions, while cities such as Milan, Paris and Amsterdam had also benefited from jobs migrating from London after Britain voted to leave the EU in 2016. "Brexit was a disaster," Mainelli said, adding: "The City voted 70-30 to remain. We did not want it". However, others disagree: a study by EY, for example, calculated only 7,000 jobs had left London for an EU nation by 2022.

The Financial Conduct Authority (FCA) is reviewing the premium insurance market – which allows customers to pay for motor and home insurance in instalments – amid fears they may not be receiving fair or competitive deals. More than 20m people in the pay for insurance in this way, the FCA says, with the average yearly interest rate on the amount of money borrowed ranging between 20% to 30%. "People rely on premium finance to spread their insurance costs by paying in smaller monthly payments. We want to ensure that competition works well and make it easier for consumers to find the best deals," Graeme Reynolds, director of competition at the FCA, said in a statement to Reuters. The FCA expects to publish an interim report following the market study and proposed next steps during the second half of 2025.

Supermarket sales have risen as consumers start to shop for Christmas, industry data from market researcher NIQ suggests. Its figures show UK supermarket sales rose 4.7% in the four weeks to 5th October, a 0.7% rise from 4% on the four months prior. "Many households are now budgeting for Christmas and slowly stocking their cupboards to help spread the cost," Mike Watkins, NIQ’s UK head of retailer and business insight, said

Some 20 UK and EU energy firms are urging their governments to overhaul the post-Brexit trading set up in a bid to construct a North Sea “green power hub” and unlock investment, The Telegraph reports. The businesses have written an open letter to European and British energy ministers, urging them to prioritise a more efficient EU-UK electricity trade. “We are concerned that the EU and the UK will not achieve their objectives of fully developing the potential of the North Seas as long as electricity is traded using sub-optimal market mechanisms,” they wrote. Signatories to the letter included the UK’s National Grid, Renewable UK and Energy UK, as well as the EU’s Wind Europe and Energy Traders Europe. All agreed that establishing “more efficient electricity arrangements between the European Internal Energy Market… and the GB market” is “of particular urgency to unlock investment”. They also advocated: “Reestablishing a system of price coupling between the IEM and GB markets” as “the only market mechanism able to realise the untapped potential of the North Seas”.

BMW CEO Oliver Zipse has warned that EU bans on the sale of combustion engine cars by 2035 will trigger a “massive shrinking” of the continent’s vast automotive industry, as it would put carmakers here at a huge disadvantage compared to their Chinese rivals. The EU has ruled that there must be a ban of the sale of petrol and diesel cars by the end of 2035, a stepped run down to that goal which means the average amount of carbon dioxide emitted by new cars must fall by 15% in 2025, 55% in 2030, and 100% in 2035, the Telegraph says. Carmakers who breach the rules could be hit with multimillion-euro fines. Speaking at the Paris Automotive Show, Zipse said the EU’s goals were “no longer realistic” because demand for electric vehicles (EV) across Europe has stalled, and because domestic carmakers lag behind their Chinese peers on cost and battery technology. France is also pushing for “flexibility” on European Union regulations ahead of their introduction next year. Here iin the UK, numerous carmakers have railed at what they say is the unachievable target of meeting net zero goals set by the Government that include a ban on petrol and diesel car sales by 2030.

Ofwat is to appoint LEK Consulting as an independent monitor of Thames Water, Sky News said yesterday. Thames, which serves 15m customers in London and the southeast is attempting to reconfigure a £12bn debt pile, and must come up with a rescue plan to avoid Government intervention through the Special Administration Regime (SAR), a procedure used during the collapse of Bulb Energy in 2021. Thames has already lost two investment-grade credit ratings in breach of its operating licence conditions. LEK Consulting's role is likely to provide Ofwat with insight into what steps Thames Water is taking to address its financial and operational shortcomings, Sky said. Neither Ofwat nor Thames Water have commented on the reports.

It is the turn of Bellway, one of Britain’s largest housebuilders, to blame uncertainty around the Budget for denting sales today.  Bellway CEO Jason Honeyman says: “Through the autumn trading period, we’ve got customers that are nervous about the October Budget. That’s dampened our sales rates through September and early October.”  “If you pick up a newspaper, everyone’s reading a different story of what tax is going up next week. We need clarity and certainty. We’re very keen to get on the other side of the Budget and hope that it’s not as bad as what’s played out,” he said, adding that Bellway was giving the Government “the benefit of the doubt” until the Budget was over. Honeyman did, however, praise the Government’s approach to planning, but remarked: “If the Government could be as clear on business and taxes as it is on planning, it would be a lot easier for us all.”

BBC News is cutting a further 155 jobs, a memo to staff from CEO Deborah Turness has revealed. Turness said in the email that the cuts would deliver a saving of £24m, or 4% of its current budget. The BBC has set a target of cutting -cutting strategy aimed at slashing 500 roles from across the broadcaster by March 2026, to save £500m from its annual budget.  Earlier this year, BBC Director General Tim Davie also warned a further £200m of savings would need to be found amid uncertainty over the future of the licence fee funding model.

Fenwick, the department store which closed its iconic shop on London’s Bond Street in February, has reported its seventh year of losses. The family-owned group, which now has eight department stores nationwide, said sales fell 3% to £299m in the year to January, however it almost halved losses to £38m.

John Lewis is restarting personal loans for its customers, striking a deal with digital bank Zopa to do so. The collaboration means customers will be able to apply for online and get loans of between £1,000 and £35,000 from the department stores finance arm, John Lewis Money, in less than two hours. An earlier tie-up with HSBC was abandoned in 2022.

Sky news says that a trio of buyout firms - said to be Cinven, EQT and New Mountain Capital - have been shortlisted to buy a stake in the UK operations of Grant Thornton, a deal that could value one of Britain’s biggest accountancy firms at more than £1.5bn.

The Confederation of British Industry (CBI) has told City AM that it will have financial backing for its annual flagship summit next month, the first to be held since the business lobbying group all but collapsed last year in the wake of a sexual misconduct scandal. A spokesman for the group said it had secured more sponsors for its conference next month than the two currently announced, - The University of Exeter and confectionery firm, Pladis – and that others “will be publicised in due course”.  Meanwhile, Sky News reports that the CBI is in talks to sub-let part of its vast London HQ to help cut costs in the wake of the scandal, which led to hundreds of businesses renouncing their membership. At its peak, the CBI hired almost 300 people, but has cut at least 100 jobs over the past year. It also has offices overseas.  

In the US, Walgreens Boots Alliance is shutting 1,200 stores over the next three years. “Pharmacy chains are facing multiple challenges as consumers avoid high-priced grocery items and pressures mount on payments they receive from drug middlemen for filling prescriptions,” The Guardian says. Walgreens’ stock is trading near 30-year lows and is down 65% this year, making it the worst performer on the S&P 500 index. The chemist chain had over 8,000 stores in the US as of 31st August last year.

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