BUSINESS LIVE: Inflation hits 3%; HSBC to slash costs; BAE Systems profits soar

The average UK home is worth £22,000 less than thought just a month ago, according to the latest figures from the Office for National Statistics – but prices are actually up.

ONS figures published on Wednesday show an average house price of £268,000, compared to the £290,000 figure the data office reported last month.

The Irish government is paying people up to €84,000 – the equivalent ot £69,650 – to buy a property in one of the country’s offshore islands.

(PA) – Buying and selling shares will be settled more quickly in the UK from late 2027 as part of changes to attract more investment and compete with international financial markets.

Chancellor Rachel Reeves met senior City bankers on Wednesday morning to garner support for the plans.

The changes will see the time it takes to settle securities trades reduced from two days to one, coming into force from October 2027.

During the settlement period, cash and financial assets, known as securities, are exchanged between the buyer and seller.

Shortening the transfer time will speed up trading in UK financial markets, such as buying and selling shares, which experts say could reduce risks for investors.

It will also align the UK with other international markets, namely the US, which introduced the quicker settlement period last year after some investors said the two-day window held up trading.

Ms Reeves outlined the plans to bosses from investment banks and asset management firms including JP Morgan, Morgan Stanley, Goldman Sachs and Citi on Wednesday.

“Speeding up the settlement of trades makes our financial markets more efficient and internationally competitive,” the Chancellor said.

The news that Alasdair Haynes is stepping down as chief executive of Aquis Exchange was met with a mixture of surprise, disappointment and understanding.

Health issues forced Alasdair to vacate the chief executive’s responsibilities and slide into the President’s chair, where access to his experience and knowledge will be readily on tap.

His name will always be synonymous with Aquis Exchange, no matter if David Stevens, the new chief executive, takes the company forward to a greater level of achievement, and whatever influence SIX Swiss Exchange, its new owner, brings to the table.

Manchester United has reported an adjusted net loss of £6.2million for its second quarter, hurt by lower revenue as the club played the less lucrative Europa instead of the Champions League competition this season.

‘We recognise the challenges in improving our men’s team’s league position and we are all working hard, collectively, to achieve that,’ CEO Omar Berrada said in a statement on Wednesday.

The club currently sits 15th in the Premier League, only three places away from the relegation zone.

The company’s revenue in the fianly three months of 2024 fell 12 per cent to £198.7million, resulting in an adjusted net loss, compared with a profit of £19.3million a year ago.

Utd, however, forecast an annual adjusted core profit at the top end of the club’s previous range of £145million to £160million, while keeping its full-year revenue forecast unchanged

Monica George Michail, associate economist at the National Institute of Economic and Social Research:

‘While today’s figures show annual CPI inflation rising to 3.0 per cent in January 2025, its highest level in 10 months, this elevated figure is only transitory – due to base effects – and is expected to fall again in the coming months.

‘We think CPI inflation will average 2.5 per cent in 2025, before falling to the Bank’s 2 per cent target from 2026 onwards.

‘We therefore anticipate only one more rate cut in the second half of this year, given inflationary pressures from the government stimulus, persistently strong wage growth, and heightened global uncertainties.’

Mining giant Glencore is considering a transfer of its primary stock market listing out of the UK, potentially dealing yet another major blow to London markets.

Chief executive Gary Nagle told journalists on Wednesday that the company wanted its shares traded on an exchange ‘where we can get the right and optimal valuation’, though he refrained from revealing a preferred market.

Sainsbury’s has joined supermarket rival Tesco in cutting the number of products in its Aldi Price Match scheme.

In another blow to hard-pressed consumers, the move comes as as official data showed food inflation grew by 3.3 per cent in January and industry experts warned of even higher prices in the year ahead.

HSBC has abandoned its target of achieving net-zero carbon emissions across the business by 2030.

The lender told shareholders it now expects a 40 per cent drop in emissions across its operations, business travel and supply chain by 2030, with the more more ambitious net-zero target now pencilled in for 2050.

HSBC highlighted its limited influence on companies over issues including technological advancements, market demand and effective policy influencing the pace of change.

The lender also said its original target was based on an ability to use carbon credits to offset some of its supply chain emissions, which would not align with recent guidance from the Science Based Targets Initiative, which assesses and approves corporate climate targets.

It follows the departure of HSBC’s chief sustainability officer late in 2024 after chief executive Georges Elhedery removed the role from its executive committee in a management reshuffle.

President Donald Trump has ramped up trade war fears after revealing he plans to impose 25 per cent tariffs on imported cars, pharmaceuticals and semiconductor chips.

Trump has long railed against what he calls the unfair treatment of US automotive exports in foreign markets and last Friday vowed to impose levies ‘in the neighborhood of 25 per cent’ on imported vehicles.

BAE Systems’ profits exceeded £3billion last year as countries around the world continued to ramp up military spending amid elevated geopolitical tensions.

Europe’s largest defence contractor revealed its underlying earnings before tax and interest increased by 14 per cent at constant currency levels in 2024.

The FTSE 100 group’s revenue jumped by more than £3billion to £28.3billion on the back of growth across all divisions.

Luke Bartholomew, deputy chief economist at Abrdn:

‘Inflation was always going to jump higher today, but the size of the increase is a bit of disappointment.

‘However, measures of underlying inflation were actually a bit more encouraging, with services inflation coming in slightly weaker than expected.

‘While key Bank of England policymakers recently sounded more concerned about the growth rather than inflation outlook, there is probably not enough in this report to materially move the dial on the near term outlook for policy.

‘Another rate cut in March looks pretty unlikely, with the Bank continuing with its gradual pace of easing for now. But any speeding up of the pace of rate cuts in the second half of the year will depend on inflation pressures heading back towards 2%’

Mark Crouch, market analyst at eToro:

‘BAE Systems expects sales to surpass £30bn this year, as substantial contract wins in 2024 have seen the defense giant’s order book grow to record levels. Demand for military equipment—ranging from submarines and combat vehicles to fighter jets and naval frigates—continues to rise as nations worldwide look to bolster their defense capabilities.

‘BAE shares received a further boost this week following remarks by US Vice President JD Vance at the Munich Security Conference. In a speech that rocked a few boats, Vance seemed to question European countries’ commitment to defense, asserting that they will need to invest more, with the United States seemingly unwilling to bear the lion’s share of Europe’s defense burden moving forward.

‘With the UK and other European nations now in the precarious position of needing to rapidly resupply their military forces, defense contractors like BAE—Europe’s largest defense company—will play a key role in filling that gap. And in countries like the UK, where armed forces are now roughly 20% smaller than they were a decade ago, this gap presents a significant opportunity for defense giants like BAE to step in.’

HSBC is set to shed even more jobs as part of sweeping cost-cutting plans, as the lender undergoes a transformation guided by new boss Georges Elhedery.

Britain’s biggest bank told shareholders on Wednesday it expects to incur around £1.4billion in severance and other up-front costs over the next two years.

HSBC has not detailed how many employees will be affected by its new targets, but said it was expecting to reduce staff expenses by 8 per cent as a result its cost-cutting drive.

Richard Hunter, head of markets at Interactive Investor:

‘Overall, these are comforting numbers which leave HSBC a strong springboard on which to build as the business is…