Newsflash: the German economy is sinking deeper into contraction, dragged down by its manufacturing sector.

Thw latest HCOB ‘flash’ PMI survey compiled by S&P Global, just released, shows that business activity across Germany is falling at the quickest rate for seven months in September.

German businesses reported increased caution among customers, deterring them from making investments; concerns towards the health of the economy were reported to be a factor.

Total inflows of new business fell at the quickest rate for nearly a year in September, and firms cut jobs for the fourth month running.

This pulled Germany’s flash composite PMI output index down for the fourth month in a row, to 47.2, down from August’s 48.4. That’s the lowest reading since February – anything below 50 shows a contraction.

Manufacturing shrank at the fastest pace in a year, while the modest growth in the services sector was the weakest in six months.

Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, fears that a technical recession (two quarters of negative growth in a row) in Germany is now “baked in”.

De la Rubia says:

“The downturn in the manufacturing sector has deepened again, evaporating any hope for an early recovery. Output plunged at the fastest rate in a year, with new orders collapsing. In a sign of resignation, companies have shed staff at a rate not seen since the COVID-19 pandemic in 2020. This comes as several major automotive suppliers have announced significant job reductions. These troubling figures are likely to intensify the ongoing debate in Germany about the risk of deindustrialization and what the government should do about it.

Optimism is something of the past. Manufacturers are downright depressed about their future activity, with expectations for the coming year plummeting. In a striking shift, moderate optimism in August has quickly turned into the steepest pessimism in a year by September. This rapid downturn in sentiment is most likely linked to the wave of negative headlines surrounding Volkswagen, which has cast a shadow over the broader industry.

Hamburg Commercial Bank predicts Germany’s economy will shrink by 0.2% in the July-September quarter. That would put the country into recession, as GDP fell by 0.1% in April-June.

Newsflash: Rightmove has said it will “carefully consider” the new, inproved, takeover offer from REA Group, and respond “in due course”.

In a statement to the City, Rightmove confirms it has received a third proposal from REA, which it dubs “unsolicited, non-binding and highly conditional”.

Rightmove says its. board will “carefully consider the Increased Proposal, together with its financial advisers.”

Rightmove shareholders should take no action in respect of the Increased Proposal, it says.

Andrew Fisher, chair of Rightmove, reiterates that REA’s first two bids were both rejected for being “uncertain, highly opportunistic and unattractive”.

Fisher says:

“Rightmove is an exceptional company with a very clear strategy, a consistent track record of delivery and a strong management team. The Board is confident in the Company’s short and long term prospects, and sees a long runway for continued shareholder value creation.

“Based on the implied value and structure of REA’s first and second indicative non-binding proposals, we considered these proposals to be uncertain, highly opportunistic and unattractive. Accordingly, the Board unanimously rejected them.

“The Board will continue to act on behalf of our shareholders and respond to the most recent proposal in due course.”

Rightmove also points out that the 2% drop in REA’s shares today has pulled down the value of its cash and share offer, from 770p to 761p [making the offer worth around £6bn].

Rightmove has jumped to the top of the risers on the FTSE 100 share index at the start of trading, after Rea Group upped its takeover offer again.

Rightmove are up 3.8% at 700p.

That’s still some way shy of Rea’s new offer, which values Rightmove at 770p per share.

Spending on health and beauty products is booming despite cost-of-living pressures, a new survey shows.

The latest Barclays Consumer Spend data shows health and beauty has been the highest-performing category in retail since August 2023.

Last month, consumer spending on health and beauty rose 7.3% year-on-year, while overall retail spending was up 0.1%.

Nearly half of consumers see such spending as “essential” – a category which typically includes priority purchases such as groceries and childcare, Barclays says.

Karen Johnson, head of retail at Barclays, says:

“It’s encouraging to see that overall beauty spending has been in growth year-on-year, with August showing the highest level of growth in the past 18 months. Our data shows that social media has proven to play a key role in influencing online purchases, a further demonstration of the rising commercial importance of these platforms.

“The health and beauty sector exemplifies continuous growth, likely driven by social media, particularly among younger generations. The key to a resilient retail model is examining these trends to better understand future purchasing behaviours.”

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

When bidding for property, it’s important not to take no for an answer. Australia’s REA Group is taking this advice seriously, and has just launched its third offer to buy UK housing portal Rightmove.

After being rebuffed twice this month, REA has upped its offer again. It is now proposing to pay around £6.1bn for the UK’s biggest online property portal.

REA’s offer is worth 770p per Rightmove share – structured as 341p in cash and 0.0422 new REA shares

In a statement to the Australia stock market this morning, Owen Wilson, CEO of REA, insisted the deal made sense, saying:

“We believe that the combination of our world-leading expertise and technology with the attractive Rightmove business will create an enhanced experience for agents, buyers and sellers of property.

We live in a world of intensifying competition and this proposed transaction would bring together two highly complementary digital property businesses for investment and growth.

Wilson added that REA is “genuinely disappointed at the lack of engagement by Rightmove’s Board”.

REA, which is majority owned by Rupert Murdoch’s News Corp, made its first approach to Rightmove on 5 September, when it proposed paying 705p per share, or £5.6bn. That was rebuffed, with Rightmove’s board saying it “fundamentally” undervalued the company.

Then on Friday night, news broke that REA had increased its offer by £300m.

Rightmove weren’t commenting officially on that offer yesterday, but Bloomberg reported that “people familiar with the matter’” said it had been rejected.

Now, Rightmove’s board must ponder this third offer.

The company’s shares closed at 674p on Friday night (before news of the second offer broke), which values Rightmove at £5.32bn.

Also coming up today

Surveys of purchasing managers across the UK, Eurozone and the US will show how major economies are faring this month.

And in Liverpool, chancellor Rachel Reeves is expected to promise “a Budget to rebuild Britain” in her speech to the Labour Party conference today.

The agenda

• 9am BST: Purchasing managers index (flash reading) for the eurozone in September

• 9.30am BST: Purchasing managers index (flash reading) for the UK in September

• 11am BST: CBI industrial trends report on UK factories

• 2.45pm BST: Purchasing managers index (flash reading) for the US in September