Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Quiz profit warning
Shares in fast fashion firm Quiz (QUIZ.L) crashed after the company warned fewer people visited its shops this summer as trading remained “challenging”.
The stock dropped as much as 13% after it said revenues so far this year were “broadly” flat on last year, after stripping out sales lost from unprofitable businesses that have ended.
Peter Cowgill, chairman of Quiz, said: “The challenging trading conditions reported at the time of the group’s announcement on 11 June 2019 have persisted over the summer months.
“Consistent with the widely reported conditions on the UK high street, the business has experienced a reduction in store footfall during the period compared to the previous year when the group experienced particularly strong demand.”
Amazon’s tax bill rises
Amazon (AMZN) has faced criticism over its UK tax bill yet again, despite an increase in the amount going to the exchequer.
Amazon paid £220m in all forms of UK tax last year, the online sales giant said on Wednesday. However, this is just a small percentage of the £10.9bn in revenues the company generated in Britain last year.
Amazon’s corporation tax bill has also been criticised. The company paid £14m in corporation tax last year, which represents a rise of almost £10m.
However, Richard Murphy, professor of practice in international political economy at City University of London, told the Guardian this was “the square root of diddly-squat”.
A spokesperson for Amazon told the paper: “We help fund public services and infrastructure throughout the country. We do this through the taxes that are collected by the Exchequer as a consequence of our activities in the UK.”
Halfords warns on summer sales
Halfords (HFD.L) shares slipped in early trading after the bikes and car parts retailer warned of a summer sales slowdown.
Like-for-like group revenues slumped by 3.2% for the 20-week period to 16 August. Halfords blamed sliding motoring sales during the period.
Graham Stapleton, chief executive of Halfords, said: “Despite sales growth in group services, online and business-to-business, we have seen our overall sales impacted by cooler, wetter weather and weaker consumer confidence year-on-year.
“The market has been challenging but we are pleased to have seen increased market share in our core categories.”
Stapleton warned that “economic and political uncertainty will continue to impact big-ticket discretionary spend” for the remainder of 2019.
The pound jumped against the US dollar (GBPUSD=X) in early trading on Wednesday, after Members of Parliament (MPs) moved to seize control of parliament to block a no-deal Brexit.
The pound rose by over 0.26% to reach over $1.21 on Wednesday morning, having hit a 34-year low (if you don’t count the ‘Flash Crash’ of 2016) on Tuesday.
On Tuesday evening, Johnson then launched the bid for an early general election — which would mark the third election and potentially a fourth prime minister for Britain in four years if he loses.
This came after he suffered a brutal defeat at the hands of MPs trying to block a no-deal Brexit.
MPs voted to take control of the House of Commons agenda, meaning they can now look to prevent the PM from taking the UK out of the EU without a deal in place.
Spending round caps busy day
Chancellor Sajid Javid is expected to deliver his first major spending address in parliament today, amid a busy calendar for economic events.
The Chancellor is expected to deliver the spending round announcement in parliament after PMQs today around lunchtime. Billions in spending commitments for things like hospital upgrades, school funding, extra policing, and funding for nurses have already been announced.
Elsewhere, the latest PMI figures for the service sector are due at 9.30am from IHS Markit. They are expected to show the dominant economic sector close to stagnation and follow worrying readings from the construction and manufacturing sector earlier this week.
Finally, senior Bank of England officials, including governor Mark Carney, will be quizzed by MPs on the Treasury Select Committee later today. Carney and his colleagues will answer questions on the latest inflation report at 2.15pm today.
Royal Bank of Scotland (RBS.L) is set to take a bigger-than-expected hit from late PPI claims, the lender warned on Wednesday.
RBS said it expects a further hit of between £600 million and £900 million for payment protection insurance (PPI) mis-selling, after a last-minute rush ahead of the August claims deadline.
It comes on top of the £5.3 billion in provisions already set aside by the bank. The part-nationalised lender said the charge will be reflected in its third-quarter results.
A top European cryptocurrency business backed by Google and Sir Richard Branson is raising $50m (£41m) to invest in startups.
London-based Blockchain is currently in talks with investors about raising the venture capital fund, according to two sources. Blockchain wants to use the money to invest in both equity and crypto coins in the sector.
Sam Harrison, who joined Blockchain from Naspers Ventures in July 2018, is heading up the effort, the sources said.
Harrison’s LinkedIn appears to confirm this, saying he “co-founded Blockchain.com Ventures – $50m Venture Capital Fund.” It states the fund has already invested in crypto startups like Origin Protocol, Coindirect, Sliver.tv, Nodle.
Blockchain declined to comment.
Elliptic, a London-based firm that detects and investigates cryptocurrency-related crimes, said on Wednesday that it had raised $23m (£18.9m) in new investment to fund its ongoing Asian expansion.
The company, which was co-founded in 2013 by Oxford and Imperial College London PhD scientists, counts as customers over 100 cryptocurrency businesses and financial institutions across the world.
The round of funding was led by SBI Group, a major Japanese financial services group based in Tokyo. Tomoyuki Nii, an SBI Group executive, will join the board of Elliptic.
European markets surge
European markets were rallying strongly on Wednesday thanks to signs of hope from Hong Kong.
“Asia markets surged this morning after the South China Morning Post reported that Hong Kong CEO Carrie Lam said that she would be withdrawing the contentious extradition bill,” Michael Hewson, chief market analyst at CMC Markets, said.
“Hong Kong markets, as well as global financial markets have taken this extremely well with the Hang Seng surging by over 4% and its biggest one day gain this year.
“This optimism has rippled over into a positive open here in Europe this morning, with strong gains across the board from financials as well as luxury stocks, with Asia focussed HSBC, Standard Chartered, Prudential and Burberry amongst the biggest risers.”
What to expect in the US
Companies reporting later today include: