BUSINESS LIVE: Dollar soars as Trump declares victory; Hospitality worth hikes; M&S smashes forecasts

Hetal Mehta, head of economic research at St. James’s Place:

‘Given the focus of Trump’s campaign messaging on tariffs, as well as his use of the use of tariffs in international negotiations in his past term, we expect these to be a key feature of his second term.

‘This could have a short-term inflationary impact, especially on sectors such as traditional energy, financials and defence, as companies seek to pass on costs through price increases.

‘Looking ahead slightly further, Fed Chair Jerome Powell’s current term in office ends in 2026. As Chair, Powell’s policies are key to keeping inflation under control. With Trump potentially preferring an alternative Fed Chair, policy uncertainty could increase further.’

The crisis engulfing the car finance market could spread to other parts of the insurance sector, experts warned.

The Court of Appeal ruled last month that commissions paid between banks and brokers on car deals may be unlawful because they were not clearly flagged to the customer.

The decision plunged the car finance sector into turmoil.

Homebuilder Persimmon has flagged concerns around signs of build costs emerging in price negotiations for 2025.

British builders have recently seen an improvement in sales, but concerns that the Bank of England may delay interest rate cuts due to rising inflation, spurred by the UK’s ambitious new budget plans, are dampening hopes for an immediate recovery.

Financial markets are poised for the BoE’s rate decision due on Thursday, and a second rate cut in four months would offer a major boost for the housing sector.

Persimmon, which also told shareholders that sales rates since the start of the third quarter were well ahead of last year, said: ‘We are working closely with our supply chain to manage our costs, which will also be impacted by new building regulations and the employer national insurance increases announced in the recent (UK) budget.’

Aarin Chiekrie, equity analyst, Hargreaves Lansdown:

‘With Bonfire Night’s embers still cooling, Marks & Sparks lit up the market with a firework show of its own, delivering a dazzling set of first-half results. Its hot streak of better-than-expected results continued in the first half, driven by a strong uplift in food sales.

‘High quality and value propositions have both been sharpened, helping the group record volume growth for four years in a row. In Clothing & Home, performance was strong, with continued growth reflecting improved customer perceptions of value, quality, and style. That’s by no means an easy feat and is a key reason for M&S being able to sell more than 80% of clothes at full price, far higher than many of its rivals.

‘Credit where it’s due, M&S has done a great job breathing new life into the business over the past couple of years. Operational and strategic improvements mean the business is healthier than it has been in some time.

‘Debt levels are moving in the right direction, and there’s plenty of cash being generated to help fund the group’s store rotation plan, which focuses on opening new locations in high-growth areas. There’s even cash left over to support recently reinstated dividend payments, which means M&S could once again appeal to income-focused investors.’

Marks & Spencer profits soared 17.2 per cent in the first half, with the retailer continuing to beat expectations thanks to market share gains.

Chief executive Stuart Machin’s mission to reinvigorate the chain gained further momentum, amid a focus on improving its food and clothing lines, online operations and store estate.

The FTSE 100-listed group made a profit before tax and adjusting items of £407.8million in the six months to 28 September, ahead of analyst forecasts and head of the £348.1million profit at the same point a year ago.

Wetherspoon’s chair Tim Martin has warned over price rises after the autumn Budget, as he said the pub chain’s tax bill will jump by two thirds next year.

Martib said he believes ‘all hospitality businesses’ are planning to pass on higher costs through price hikes.

He said: ‘Cost inflation, which had jumped to elevated levels in 2022, slowly abated in the following two years, but has now jumped substantially again following the Budget.

‘All hospitality businesses, we believe, plan to increase prices, as a result.

‘Wetherspoon will, as always, make every attempt to stay as competitive as possible.’

Expectations of Donald Trump’s imminent US election victory have driven the dollar higher in early trading, with Treasury yields soaring as the so-called Trump trade returns.