What to Watch: US offers quick trade deal, Card Factory stockpiling, and retailers call for rates reform

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
John Bolton, US national security adviser. Photo: Peter Nicholls/Reuters

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

US offers quick trade deal

Donald Trump’s national security advisory has said that a trade deal with the UK after Brexit can be done “very quickly.”

The UK will be “first in line” for a trade deal with the US, John Bolton said on Monday after a meeting with Prime Minister Boris Johnson.

Bolton said during his visit to London: “A prior American president said that if the United Kingdom left the European Union, it would go to the back of the queue on trade deals.

“To be clear, in the Trump administration Britain’s constantly at the front of the trade queue, or line as we say.”

UK unemployment rises

The unemployment rate has crept up in the UK, official figures reveal as fears grow it could be the “beginning of the end” for Britain’s record jobs boom.

The number of people looking for work increased by 0.1% to 3.9% between April and June, according to Office for National Statistics (ONS) data published on Tuesday. Economists had predicted it would hold steady.

But the employment rate was also higher, returning to 76.1%, the joint-highest figure since records began in 1971.

Britain has seen a period of jobs growth that has taken many economists by surprise amid poor productivity growth and Brexit uncertainty, with employment at levels not seen since the 1970s.

Card Factory stockpiling

Card Factory (CARD.L) is stockpiling ahead of the 31 October Brexit deadline as it puts in place contingency plans for a possible no-deal withdrawal.

The greeting card retailer said on Tuesday it had incurred extra costs due to the stockpiling. It came as Card Factory reported half-year like-for-like sales up 1.5%.

The group said sales in its stores, excluding online, rose 1.2%. The half-year result marked a slowdown from the first quarter, when like-for-like sales rose 2.3%.

The chain said it remained “broadly” on track for the full year.

Retailers call for rates reform

50 top retailers have written to chancellor Sajid Javid calling for reform of business rates, which they say are dragging down the already struggling retail sector.

Firms including Marks & Spencer (MKS.L), Asda, and Boots said the system was outdated and was harming investment and communities.

Business rates are a tax charged on the buildings businesses occupy. Critics say the tax gives online retailers, who typically occupy less space, an unfair advantage.

TUI counts cost of 737 Max

Tour operator Tui (TUI.L) expects the grounding of Boeing’s (BA) 737 Max airplanes to cost it €300m (£278m) this year, the company said on Tuesday.

Tui, which used to operate under the name Thomson in the UK, said issues with the 737 Max cost it €144m (£134m) in the third quarter alone.

Boeing’s 737 Max jets were grounded around the world in March after the new planes were linked to two deadly crashes. The grounding is still ongoing and Boeing has blamed a fault in the software for the crashes.

Nestle warns on Brexit

Nestlé (NESR.DE) is warning that a no-deal Brexit means “major challenges” for the British food and drink industry, as fears grow of disruption to supplies of everyday goods.

Speaking exclusively to Yahoo Finance UK, a spokesman for the global food and drink giant said there was “real concern” at the company and across the sector over the consequences of Britain leaving without a deal.

Nestlé is the world’s biggest packaged food maker, and is behind major household brands including Kit Kat, Nescafe and Purina Petcare.

KPMG chief ousted

One of consultancy firm KPMG’s most senior partners has been dismissed after an internal investigation into his conduct.

Tim Howarth, head of UK financial services consulting, was dismissed over the weekend, according to the Financial Times which first reported his dismissal.

KPMG confirmed in a statement that Howarth had been dismissed after an internal investigation into “conduct issues.” No details were given but the FT reported that the probe related to WhatsApp messages.

Yahoo Finance UK understands the WhatsApp messages were sent internally to other KPMG staff and were not the sole component of the investigation. The contents of the messages and the type of misconduct investigated is not clear.

European markets drift lower

European markets were lower on Tuesday as geopolitical concerns continue.

Connor Campbell, a financial analyst at SpreadEx, said markets were being dragged down by the “worrying situation between China and Hong Kong, and Argentina’s peso woes, alongside more familiar tastes like Brexit, the trade war and global growth concerns.”

Britain’s FTSE 100 (^FTSE) was down by 0.3%, France’s CAC 40 (^FCHI) was down by 0.1%, Germany’s DAX (^GDAXI) was up by 0.3%, and the Euronext 100 (^N100) was down by 0.3%.

Asian markets mostly fell overnight. Japan’s Nikkei (^N225) closed up by 1.1%, the Hong Kong Hang Send Index (^HSI) was down by 2.1%, and China’s Shanghai Composite (000001.SS) was down by 0.6%.

What to expect in the US

US stocks future are pointing to a quiet open, with S&P500 futures (ES=F), Dow Jones futures (YM=F), and Nasdaq futures (NQ=F) were all flat.