FTSE 100 winning streak ends as WPP shares hit lowest level since 1998; ECB holds rates at 2% - business live

2.30pm GMT Faced with a multibillion-pound shortfall in the public finances, if Rachel Reeves does, as reported, raise the basic rate of income tax in next month’s budget, she will be the first chancellor to do so since Labour’s Denis Healey, 50 years ago. Healey announced his radical budget in April 1975, in which he raised the basic rate by two percentage points to 35%, and other rates by the same amount. In the Guardian’s budget coverage the next day, political correspondent, Ian Aitken, told readers that “like a stern Edwardian head waiter at the end of a wild West End orgy, Mr Healey yesterday presented Britain with the bill for a year of reckless wage indulgence”.The backdrop to his budget was an ‘economic crisis’, as some experts called it, with inflation galloping at nearly 20%, unemployment rising, and the pound falling. The UK was, like other world economies, also suffering the consequences of a massive rise in oil prices.Healey, quoted by The Guardian, defended his budget, saying, with reference to industrial relations and spiralling wage demands: The tragedy is that a lot of the bitter medicine would not have been needed if so many people had not tried to get more than their share of what the country can afford.” The new leader of the Conservative Party, Margaret Thatcher, called it a “genuine socialist budget”, consisting of “equal shares of misery for all”. 1.51pm GMT WPP shares are now at their lowest point since 1998, down by just under 17% today. The share price fall came after the advertising group slashed its sales guidance and its new chief executive, Cindy Rose, said its recent performance had been “unacceptable”. Related: WPP jobs at risk as ad group’s new boss condemns ‘unacceptable’ performance Shares in WPP are down by about 63% in the year so far, and have lost just over 50% in the past five years. The FTSE 100 group, which is now worth £3.3bn, was valued at £25bn eight years ago. Related: What’s gone wrong at WPP? The crown slips at world’s biggest advertising group 1.36pm GMT The ECB’s decision to leave its ket interest rates unchanged at 2% suggests that policymakers feel that the eurozone economy is in decent shape. Mark Wall, chief European economist at Deutsche Bank, says: Where’s the smoking gun for a rate cut? Despite the US tariffs, despite all the various sources of uncertainty, the European economy continues to eke out some growth. Economic ‘resilience’ is keeping the ECB doves in check, and the policy pause on the rails.” However, Irene Lauro, eurozone economist at Schroders notes that if inflation gets too low, the ECB could follow the Federal Reserve’s suit. The US central bank cut its benchmark interest rate by a quarter point to a range of 3.75% to 4% yesterday. She said: We remain confident that growth will strengthen into next year, supporting the ECB’s decision to keep interest rates on hold into 2026. However, if inflation comes in lower beyond current projections, the ECB could follow the Fed’s risk-management approach and deliver a precautionary rate cut. For now, the outlook for the eurozone has shifted positively – a welcome change after months of stagnation.” 1.24pm GMT European Central Bank keeps interest rates on hold The European Central Bank kept interest rates on hold on Thursday for the third meeting in a row despite concerns that a modest economic recovery across the eurozone will fuel inflation. The ECB kept its key deposit rate at 2% despite annual price growth rising to 2.2% across the 20-member euro bloc in September, up from 2% in August and 1.7% a year earlier. In the 27-member EU, annual inflation was 2.6% in September, up from 2.4% in August, according to Eurostat. The eurozone economy expanded by 0.2% in the third quarter from the previous three months, according to preliminary data from the European Commission published on Thursday. Related: ECB keeps interest rates on hold despite eurozone inflation fears 12.59pm GMT BYD profits drop 33% amid overseas push Elsewhere in the auto world, the Chinese electric car manufacturer BYD has reported a 33% drop in its third quarter profits. Net profit dropped 33% year-on-year to 7.8bn yuan ($1.1bn), its second quarterly decline in a row and the biggest fall in more than four years. Total revenue fell by about 3% to about 195bn yuan. It comes as the world’s biggest electric car company faces increasingly tight competition in its home market from rivals such as Leapmotor and the state-owned SAIC Motor Corp. In September, BYD’s market share in China dropped from 18% last year to 14%, according to reports. The company has lowered its sales target this year by 16% to 4.6 million vehicles, Reuters reported, although it still expects its EV and plug-in hybrid exports to double from 2024, boosted by growth in Europe. Updated at 2.23pm GMT 12.24pm GMT Volkswagen says US tariffs will cost it £4.4bn a year The German carmaker Volkswagen has said Donald Trump’s trade tariffs will cost it up to €5bn (£4.4bn) a year in revenue. The group, which owns car brands including Porsche and Audi, said this morning that it made a €1.3bn loss in its third quarter, compared with a €2.8bn profit in the same period last year. Volkswagen said the losses were due to a shift in strategy for Porsche’s electric cars, as well as the impact of US tariffs. The company, which is headquartered in Wolfsburg and employs about 650,000 people worldwide, raised the prospect of job cuts as it said it seeks to cut back on costs. Chief financial officer Arno Antlitz said: Increased trading tariffs and the resulting negative volume effects burden us by up to 5 billion EUR on a full-year basis. Those effects will continue to persist – and that is why we must rigorously implement the performance programs in place, push forward efficiency measures and develop new approaches. Our focus will be – among others - on the targeted use of our scale and exploiting synergies within the Group even more effectively.” Last year the group laid out plans to cut back its German workforce by 35,000 roles, which it said would lead to about €4bn in cost savings per year in the medium term. Updated at 2.23pm GMT 12.04pm GMT We’re at the midday point, and WPP is still the standout on the FTSE 100, with the shares now down by about 14.5%. There are fears that jobs at WPP could be at risk under new boss Cindy Rose’s strategic review to address “unacceptable” performance at the advertising company. The FTSE 100 business lost its top spot as the world’s biggest advertising agency by revenue to its French rival Publicis last year. My colleague Kalyeena Makortoff has the full story here: Related: WPP jobs at risk as ad group’s new boss condemns ‘unacceptable’ performance 11.20am GMT Eurozone economy grows faster than expected The Eurozone economy grew by 0.2% in the third quarter, slightly ahead of expectations of 0.1% , as France recorded its strongest growth in more than two years. France reported a 0.5% rise in output, driven by trade and domestic demand. Germany and Italy both narrowly avoided recessions in the third quarter, but overall the figures paint a picture of decent resilience against the uncertainty of US trade tariffs. The economic data comes just a few hours before the European Central Bank sets interest rates this afternoon. The ECB is widely expected to leave interest rates unchanged for the third time in a row. 10.54am GMT Topshop heads to John Lewis early in time for Christmas shopping Topshop is to dance into John Lewis more then two months earlier thanexpected with pop-ups in four stores for six weeks from 3 November,with the London site including regular DJ sessions. The fashion brand, which is currently only available online or in the Liberty department store in central London, will go into John Lewis’s outlets inBristol, Leeds, and Liverpool and London’s Oxford Street. In Oxford Street, Topshop will host weekly DJ Sessions every Thursdayevening from 13 November in which the brand promised a guest eachweek would be “bringing live music and energy to shoppersin-store”. The ranges will include party outfits and basics including denim. Topshop, which is owned by online retailer Asos, said last month that it wouldopen 32 outlets in John Lewis from February – its sole UK high street partner. Michelle Wilson, the managing director of Topshop, said: We’ve seen an incredible response to Topshop’s return, and we know our customers are excited to shop the brand in person again. By taking our Winter and Party collections beyond London, the Topshop pop-ups bring our signature energy and style to locations across the UK, just in time for the festive season.” 10.21am GMT OpenAI preparing for a $1tn IPO, reports suggest OpenAI is preparing for an initial public offering that could value the company behind ChatGPT at up to $1 trillion, according to a report by Reuters. The AI company is considering filing for an IPO as soon as the second half of 2026, Reuters has reported, citing three unnamed people familiar with the matter. The news comes after OpenAI completed a new restructuring deal with Microsoft this week, giving the software company a stake of about 27%. Related: OpenAI completes conversion to for-profit business after lengthy legal saga Earlier this year OpenAI’s chief financial officer Sarah Friar said the restructuring better positioned the company for a potential IPO, while chief executive Sam Altman has previously said an IPO is the most likely path for the company given how much money it needs to train and build AI systems. A spokesperson for OpenAI told Reuters: An IPO is not our focus, so we could not possibly have set a date. We are building a durable business and advancing our mission so everyone benefits from AGI.” 9.49am GMT Ofgem considers plan to cancel £500m in energy debt The energy regulator Ofgem is considering a plan that would cancel up to £500m in energy debt owed to suppliers. The regulator said it is considering plans that would mean people on means-tested benefits with energy debt of more than £100, built up between April 2022 and March 2024, will be eligible for help. These people would need to make some contribution towards paying off the debt or their ongoing energy use. If they are unable to do so, they would need to work with a debt charity to help manage their money. It comes as the regulator grapples with an energy debt crisis, with unpaid energy bills and fees climbing to a record £4.4bn as of the end of June. This year the Office for National Statistics found that a record proportion of British households were unable to pay their energy bills by direct debt because there was not enough money in their bank accounts. Related: ‘It’s unsustainable’: homes in Great Britain brace for winter with soaring energy debts The regulator’s proposal is part of a final consultation and is not yet a firm decision. However, a spokesman said that on average households could receive debt relief of around £1,200 per account (gas/electric), or around £2,400 per dual fuel customer. 8.47am GMT Puma plans 900 job cuts Over in Germany, Puma has told investors this morning that it plans to cut more than 900 jobs in a turnaround plan under the new boss Arthur Hoeld. The sportswear brand said it will cut 900 roles by the end of next year as part of a plan to get back to growth by 2027. Puma said it had to address the “the fact that it has become too commercial, which is reflected in muted brand heat, low distribution quality, and a product offering that is not cutting through in the market.” Puma, which is listed in Germany and employed more than 22,000 people at the end of 2024, has lost almost three-quarters of its market value over the past five years, as it has struggled to attract shoppers in an increasingly competitive sportswear market. The company has already announced about 500 job cuts this year, on top of the 900 further cuts announced today. Hoeld, who joined Puma this spring, said: At the end of July, we stated that 2025 would be a year of reset. Since then, we have taken important steps to clean up Puma’s distribution, improve our cash management and reset our operational expenses. By expanding our cost efficiency programme, we are moving quickly to address challenges and make the business more efficient and resilient. I strongly believe the Puma brand has incredible potential with more than 77 years of history, one of the best product archives in the industry and huge credibility in many major sports. We have identified the areas in which we need to take decisive action and outlined our strategic priorities to become one global sports brand with globally resonating product ranges and inspiring storytelling across markets. With these strategic priorities, we have the clear ambition to establish Puma as a Top 3 sports brand globally, returning to above industry growth and generating healthy profits in the medium term.” Updated at 2.24pm GMT 8.29am GMT European stock markets open lower European stocks are opening broadly lower this morning: London’s blue chip FTSE 100 index has fallen by 0.4%. The ad group WPP is the worst performer across the index, with its shares down 8.6%, after it cut its sales guidance for the year. Haleon, the consumer healthcare group that owns brands such as Sensodyne and Centrum, is the best performer, up 3.3%, after it beat expectations for its third quarter revenue growth. Standard Chartered is a close second, up 3%, after it raised its profit guidance for the year, partly thanks to a boost in its wealth management businsess. The Stoxx Europe 600 index is down 0.2%. The French Cac 40 is down 0.4%, while in Spain the Ibex 35 is down 0.5% and in Italy the FTSE MIB is down 0.2%. The German Dax is one of the only risers on the continent, up by 0.2%. Derren Nathan, head of equity research at Hargreaves Lansdown, notes that oil prices are still muted: Yesterday’s rally in oil prices proved to be short-lived. Brent Crude prices have dropped marginally to around $64.5 per barrel. The absence of a mention of a trade agreement on energy products after the summit between China and the US is playing on traders’ minds. Meanwhile, a tightening of sanctions by the US on Russian oil exports hasn’t alleviated concerns of a supply glut. US stock futures are trading broadly flat after a mixed performance on Wall Street yesterday. While the tech-led Nasdaq broke yet another record, the wider indices were down after a much-anticipated quarter point cut by the Fed. However, Jerome Powell’s comment around a further reduction in December being far from a foregone conclusion saw some caution creep back into the market.” Updated at 8.33am GMT 8.10am GMT Virgin Trains moves closer to Channel Tunnel service Richard Branson’s train company is a step closer to challenging Eurostar’s monopoly on transporting passengers across the Channel after the UK rail regulator approved Virgin Train’s application to use a key depot in east London. The Office of Rail and Road (ORR) approved Virgin’s application to use the Temple Mills depot in Leyton – which is used for maintaining and storing trains. It said the move would unlock £700m of investment in new services and create 400 jobs. Access to Temple Mills is a critical step in helping Virgin Trains challenge the monopoly held by Eurostar, which has been the only passenger service allowed to access the Channel tunnel since it opened in 1994. Temple Mills is the only train depot that can be accessed from High Speed 1, the line that runs between London and the tunnel. Related: Virgin Trains on track to challenge Eurostar cross-Channel monopoly with access to key depot It will give Virgin trains access to the light maintenance facilities it needs to run international services to the European mainland. While Virgin still needs to secure additional regulatory approvals covering issues such as track access and safety, it brings Branson one step closer to launching his plan to run services competing with Eurostar in 2030. Branson said: The ORR’s decision is the right one for consumers – it’s time to end this 30-year monopoly and bring some Virgin magic to the cross-Channel route. Virgin is no stranger to delivering award-winning rail services, and just as we have successfully challenged incumbents in air, cruise and rail, we’re ready to do it again. We’re going to shake up the cross-Channel route for good and give consumers the choice they deserve.” The ORR’s decision comes only months after it rejected a separate application to return Virgin trains to the UK’s west coast mainline, amid concerns over delays and cancelled journeys. Virgin Group has not operated trains in the UK since its contract for the west coast mainline expired in December 2019. Updated at 11.06am GMT 7.58am GMT New WPP boss says performance is "unacceptable" Elsewhere this morning, the new boss of WPP has called its performance “unacceptable”, as the advertising giant cut its guidance for sales growth this year. Cindy Rose, a former Microsoft executive who was appointed to lead the FTSE 100 group this summer, said: My ambition is for WPP to lead our industry in terms of innovation, client delivery and organic growth. However, I acknowledge that our recent performance is unacceptable and we are taking action to address this.” Rose added that WPP has now started its strategic review, with the new boss promising it will “significantly” improve execution and “dramatically” simplify internal organisation. It comes as WPP warned that revenue in its third quarter dropped 8.4% compared withthe same period last year to £3.3bn. The ad group also cut its forecast sales for the year, now expecting a decline of 5.5% to 6%, worse than its previous suggestion of a drop of 3% to 5%. Related: What’s gone wrong at WPP? The crown slips at world’s biggest advertising group Updated at 8.03am GMT 7.42am GMT Introduction: Oil price slips after Trump-Xi trade deal Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Oil prices have fallen slightly as investors digest the new trade deal between US President Donald Trump and Chinese President Xi Jinping. The two world leaders met in South Korea this morning, with Trump agreeing to reduce tariffs on China from 57% to 47% in a one-year deal, in exchange for Beijing resuming purchases of US soybeans, the continuation of rare earth exports and a crackdown on the trade of fentanyl. Brent crude futures dropped by 0.31% to $64.72 a barrel this morning, while US West Texas Intermediate crude futures dropped by 0.33% to $60.28. The drops suggest that some investors are sceptical that the new agreement marks an end to the trade war. But President Trump has said his discussions with Xi were “fantastic”, and emphasised their “great relationship”. Related: Trump-Xi meeting: US president says rare earths deal and tariff reduction agreed in crunch trade talks Elsewhere, the energy company Shell has just reported its third quarter earnings, with an adjusted net income of $5.43bn, ahead of what analysts in the City had been expecting. The oil company said that its performance had been driven by a record level of production in Brazil and 20-year highs in the Gulf of Mexico – which Donald Trump has renamed the Gulf of America. Chief executive officer Wael Sawan, who has spent the past two years trying to close the valuation gap between Shell and its American rivals, said: Shell delivered another strong set of results, with clear progress across our portfolio and excellent performance in our Marketing business and deepwater assets in the Gulf of America and Brazil. Despite continued volatility, our strong delivery this quarter enables us to commence another $3.5 billion of buybacks for the next three months.” The Agenda 10am GMT: Eurozone GDP 1.15pm GMT: European Central Bank rate decision 9pm GMT: Apple and Amazon quarterly earnings