Time for a recap:

Barclays’ chief executive, Jes Staley, is stepping down after an investigation by the City watchdog over how he described his links to the sex offender and disgraced financier Jeffrey Epstein.

Factory output growth in the UK has hit an eight-month low, as port disruption and logistical delays force some overseas clients to cancel orders.

US factories have also been squeezed by supply chain problems last month, with bosses reporting severe supplier delays, and problems recruiting skilled staff.

Manufacturers on both sides of the Atlantic continued to hike their prices too, as they passed on surging input costs onto customers.

Despite these challenges, stocks on Wall Street hit new record highs today. with the Dow Jones industrial average clearing the 36,000-point mark.

European stock markets also climbed to new records, while the FTSE 100 has hit its highest level since the pandemic crash over 20 months ago.

A meme coin based on dystopian TV show Squid Game which launched just last week has plunged to to virtually zero, in an apparent ‘rug-pull’ scam that will have cost speculators.

UK diesel prices have reached a record high at the pumps, one week after petrol prices hit their highest ever level in a blow to hard-hit households and small businesses.

The move comes as the UK automotive industry privately lobbies against the proposed 2040 introduction of a ban on sales of new diesel trucks, amid a split between manufacturers over when heavy goods vehicles should abandon fossil fuels.

A survey has found that almost a quarter of workers are actively planning to change employers in the next few months, amid a “great resignation” prompted by a high number of vacancies and burnout caused by the pandemic.

The solution could be to offer higher pay, a shorter working week or enhanced benefits to keep unhappy staff onside:

Training is another option -- with the holiday park operator Haven launching a training scheme for 200 chefs in the latest attempt to address a shortage of skilled kitchen staff.

Ryanair will pull its share listing from the London Stock Exchange in the next six months because of Brexit, as the airline made a quarterly profit for the first time since 2019.

And fashion brand French Connection is also departing the stock market, after shareholders backed the £29m takeover led by a Newcastle-based businessman, putting the company back into private hands for the first time since 1983.

In the City, the FTSE 100 index of blue-chip shares has ended the day at a new pandemic closing high.

The Footsie finished 51 points higher at 7,288.6 points, up 0.7% today, having briefly traded over the 7,300 mark.

That’s its highest close since the markets began to crash in late February 2020.

BT Group finished as the top riser, up 4.4% after confirming that it has hit its cost reduction targets early.

Retailer Next (+2.7%), precious metals producer Fresnillo (+2.5%) and educational publisher Pearson (+2.4%) also rallied, with (most) banks also having a solid day.

But cybersecurity firm Darktrace had another rough day, plunging by 15% to finish at 681.5p.

They’re under pressure since an analyst note raising doubts about its valuation and as the expiry looms of a lock-up on insiders selling their stakes.

Housebuilders also fell, with traders anticipating that a rise in UK interest rates might hit demand. Barclays ended the day down 0.7%, as investors came to terms with Jes Staley’s departure.

Michael Hewson of CMC Markets sums up the day:

BT Group shares have popped higher ahead of this week’s H1 numbers after the company said it had delivered on its £1bn of gross annualised cost savings 18 months ahead of its March 2023 deadline.

Ryanair shares are modestly higher after reporting its first quarterly profit since the beginning of the Covid-19 pandemic. Today’s first half numbers still translated into a loss of €48m, due to a poor Q1, but the number of passengers carried saw a rise of 128% compared to a year ago, with the load factor rising to 79%. Revenues came in at €2.15bn, although the business cautioned on a return to profitability due to its focus on capacity over prices which are likely to be kept low over the rest of the year in order to put pressure on its competitors. The airline also said it is considering delisting its shares from the London Stock Exchange.

IAG shares are also higher, after its British Airways operation announced it had agreed a £1bn 5 year committed credit facility with UK Export Finance, on top of a £2bn facility that was agreed at the end of last year, and drawn in March 2021.

Barclays share price has fallen back on the announcement today that CEO Jes Staley has stepped down with immediate effect, to be replaced by Head of Global Markets, C.S Venkatakrishnan. Staley is said to be contesting the preliminary conclusions of an FCA and PRA investigation into his “characterisation to Barclays of his relationship with the late Mr Jeffrey Epstein”.

On the flip side, both Lloyds Banking Group is building on its gains from last week, finally overcoming the 50p level, taking out its previous peaks in June, and hitting its highest levels since February 2020 in the process.

Speculators who bet on a cryptocurrency linked to the Netflix sensation Squid Game have suffered grisly losses.

SQUID was the latest memecoin sensation to grip the crypto world. Launched last week at just one cent, it quickly soared to over $38 by late Sunday night.

Then suddenly today, it surged to $2,861 before immediately plunging almost 100%, to just a quarter of a cent, wiping out those who bought the coin after its value began rising sharply.

SQUID was billed as a “play-to-earn” cryptocurrency’ -- a token which would be used to play an upcoming online game based on the show, in which indebted contestants play children’s games for cash, but are shot dead if they fail.

But concerns about the coin quickly emerged, after users said they were unable to resell their tokens on cryptocurrency exchanges. Now, SQUID has collapsed, heightening suspicions the entire venture was a scam, known as a ‘rug-pull’.

Gizmodo has a good take on this cautionary tale:

The anonymous hucksters behind a Squid Game cryptocurrency have officially pulled the rug on the project, making off with an estimated $2.1 million. Remember on Friday morning when Gizmodo told you it was an obvious scam? It was only obvious because investors could purchase the crypto but couldn’t sell it. But plenty of people didn’t get the warning in time.

The SQUID cryptocurrency peaked at a price of $2,861 before plummeting to $0 around 5:40 a.m. ET., according to the website CoinMarketCap. This kind of theft, commonly called a “rug pull” by crypto investors, happens when the creators of the crypto quickly cash out their coins for real money, draining the liquidity pool from the exchange.

The SQUID crypto coin was launched just last week and included plenty of red flags, including a three-week old website filled with bizarre spelling and grammatical errors. The website, hosted at SquidGame.cash, has disappeared, along with every other social media presence set up by the scammers. You can see an archived version of the website here.

A second survey of US factories, from the Institute of Supply Management, also shows that growth slowed last month.

The ISM’s US manufacturing PMI dipped to 60.8%, down from 61.1% in September.

Although that shows the economy grew for the 17th month in a row, the report also found that supply chain bottlenecks continued to hold back the recovery.

It says:

• New Orders, Production and Employment Growing
• Supplier Deliveries Slowing at Faster Rate; Backlog Growing
• Manufacturing Inventories Growing; Customers’ Inventories Too Low
• Prices Increasing, Exports Growing and Imports Contracting

ISM Manufacturing Business Committee Chairman Timothy Fiore, explains that shortages of materials, components and skilled staff are all hitting the sector:

“Business Survey Committee panelists reported that their companies and suppliers continue to deal with an unprecedented number of hurdles to meet increasing demand.

All segments of the manufacturing economy are impacted by record-long raw materials lead times, continued shortages of critical materials, rising commodities prices and difficulties in transporting products. Global pandemic-related issues — worker absenteeism, short-term shutdowns due to parts shortages, difficulties in filling open positions and overseas supply chain problems — continue to limit manufacturing growth potential.

Growth across the US factory sector has been hit by supply chain problems -- matching the problems in the UK.

American manufacturers have reported that production growth hit the slowest in 15 months in October, as severe supplier delays hit output.

And with input costs surging, US manufacturers raised their prices at the fastest rate on record.

That’s according to data firm IHS Markit’s latest Purchasing Manager’s Index. It has dropped to 58.4 in October, down from 60.7 in September, which is the lowest reading in 10 months (any reading over 50 shows growth).

The report found that shortages of materials and long delays receiving them knocked output growth to its lowest since July 2020, and left firms struggling to satisfy another rise in new orders.

The report says:

Companies continued to highlight strong demand conditions, but some noted that raw material shortages were hampering demand from clients as stocks of inputs had already been built or delivery times were too extensive.

The pace of new order growth was the slowest for ten months. New export sales rose only fractionally as foreign demand was also weighed down by the knock-on effects of uncertain supply. In line with capacity constraints, production growth slowed to the softest since July 2020 in October. Raw material and labour shortages were commonly cited as hampering the upturn.

Business confidence fell to its lowest in a year, as firms worried about supply chain disruption and inflation.

The US stock market has opened at a fresh record high.

The Dow Jones Industrial Average, which contains 30 of the largest US companies, has surged through the 36,000 points mark for the first time, continuing its strong rally.

Fast-food restaurant group McDonald’s are the top Dow riser, up 1.5%, followed by enterprise software firm Salesforce.com (+1.4%), Visa (+1.2%) , Boeing (+1.1%) and Disney (+1%).

The broader S&P 500 index, and the tech-focused Nasdaq, are both also at new highs.

Investors are shrugging off the ongoing supply chain crisis, which slowed US growth over the summer, and the prospect that the Federal Reserve starts to taper its stimulus programme this week.

Fiona Cincotta, Senior Financial Markets Analyst at City Index, says an encouraging earnings season has boosted stocks:

US stocks rose at the open amid optimism surrounding the economic recovery as global earnings continue to impress and European stocks hit record highs. Of the 280 S&P 500 companies that have reported 82% have exceeded expectations.

Strong earnings are supporting the belief that the economy will be OK despite headwinds from rising prices, labour shortages and supply chain issues.

Stocks are looking to power higher even as inflation expectations remain high and the bets are rising that the Fed could move to hike rates sooner.

Comments by US treasury secretary Janet Yellen, who expressed confidence in the economic recovery from the pandemic is also helping sentiment.

UK diesel prices have reached a record high at the pumps, one week after petrol prices hit their highest ever level in a blow to hard-hit households and small businesses.

About 12.5 million diesel car drivers faced an average price across the UK of 147.94p a litre on 31 October, narrowly surpassing the previous high of 147.93p set on 12 April 2012. More here:

The supply chain disruption hitting UK manufacturers could last until the second half of next year, warns Martin Beck, senior economic advisor to the EY ITEM Club:

“After falling for four successive months, the manufacturing PMI edged up from 57.1 in September to 57.8 in October. But digging into the detail, the picture was more mixed. On the plus side, growth in new orders and employment strengthened. But with firms reporting production increasingly disrupted by severe capacity constraints and shortages of inputs, manufacturing output growth slowed to an eight-month low and was barely in expansionary territory.

This is a picture that is mirrored across the world, and anecdotal evidence suggests supply chain challenges won’t be completely resolved until the second half of 2022.

These ongoing shortages and congestion at the ports could encourage some manufacturers to move their supply chains back within the UK, says Dave Atkinson, SME & Mid Corporates head of manufacturing at Lloyds Bank:

“Strong demand is holding up, but it’s not getting any easier for manufacturers to match that with supply. Materials and labour shortages persist and sustained gas price rises have now been thrown into the mix, particularly affecting construction supplies and food production.

“Some manufacturers are safeguarding against global logistics challenges by bringing supply chains back to the UK. Yet it’s also an option more are likely to consider as customers increasingly examine the carbon impact of their supply chains, with shipping parts from all over the world becoming less palatable. Scrutiny of sustainable practices is only likely to grow beyond COP26.”

Fhaheen Khan, senior economist at manufacturers group Make UK, warns that rising energy costs could force some factories to shutdown this winter :

“Shortages in labour, a supply chain crisis and input costs rising at record rates continue to hamper manufacturers who are being stalked by the after-effects of a post-pandemic boom and a new trading environment. Though the latest data is an improvement, the data masks the true nature of the situation which is partly a reflection of higher stock building to prepare for the cold months ahead.

“Manufacturers continue to report supplier lead times, fuel, transport, and energy bills rising that could result in some having to reduce, or even shut down, production to weather the incoming storm. It is only going to get worse with a sharp increase in consumption expected in the weeks leading up to Black Friday and Christmas.

Supply chain problems are turning into a ‘nightmare’ for some UK manufacturers, warns Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply.

Here’s his take on October’s slowdown in factory output growth -- which hit an eight-month low of 51.3, from 52.7 in September (a reading of 50 shows stagnation).

“A slowdown in manufacturing output growth to an eight-month low is a strong indication of how the effects of staff shortages and the delivery of raw materials are continuing to impact the manufacturing sector even though overall productivity was maintained.

This modest expansion was buoyed up by domestic demand as new order levels improved. However, pipelines of export work slipped back as customers in the EU and beyond became tired of waiting for their undelivered goods and resorted to cancellations.

With Brexit adding to the slowdown, the issue here is not one of supply, as goods and materials are being produced, but that logistics challenges have become a nightmare for some companies.

The jump in prices charged by manufacturers will add to the UK’s inflationary pressures, Brock adds:

“Levels of job creation remained strong with another rise for the tenth month in a row to meet this increased demand as the spotlight now shifts to the quality of workforces. If businesses are forced to compromise on skills to get backlogged jobs out of the door, there may be further drags on delivery times and quality as business are spooked into making decisions just to adapt and survive.

“Input price inflation continues to be a headache for manufacturers who are now charging their customers at shockingly high survey record rates. This will fuel inflation growth fears for the rest of us as the central bank’s interest rate decision looms and balance is sought in the UK economy.”

Output at UK factories has slowed as manufacturers continue to suffer from supply chain disruption and staff shortages, which have prompted them to hike prices at a record pace.

Supply difficulties caused a “severe headwind” last month, with new export orders dipping for the second month running, according to the latest survey of purchasing managers at UK factories.

Data firm IHS Markit reports that factory output growth slowed in October, to its slowest rate since February, before lockdown restrictions were eased.

Companies reported that supply chain delays, and shortages of raw materials, staff and certain skills all led to slower output growth.

The PMI survey also found that firms lifted prices at the fastest pace on record, as they passed on higher costs to consumers.

Worryingly, some companies reported that overseas clients “were cancelling or postponed orders due to longer lead times caused by port delays and freight capacity issues”.

That follows delays at Felixstowe port, which handles about 40% of containers coming in and out of the UK, and the shortage of lorry drivers.

The overall manufacturing PMI rose to 57.8 in October, up from 57.1 in September, due to a pick up in new orders, employment, stock purchases...and longer delays for supplies. That shows a rise in overall activity.

Rob Dobson, director at IHS Markit, says the weaker production growth is a concern:

Strained global supply chains are disrupting production schedules, while staff shortages and declining intakes of new export work are also stymieing the upturn. This low growth environment is occurring in tandem with a severe upshot in inflationary pressures, with manufacturers reporting both a near-record increase in input costs and record rise in selling prices.

“There are also positive notes to take from the survey. A slight improvement in new order growth, led by the domestic market, suggests the trend in demand is stabilising following its recent slowdown. Businesses also remain relatively optimistic about the year-ahead outlook, with 62% expecting production to be higher.

This alongside rising backlogs of work – a by-product of material and staff shortages – is driving a recovery in jobs growth. However, these positives could potentially be at risk if supply-chain, Brexit or COVID headwinds rise during the coming months, especially if high inflation leads to higher borrowing costs.

The price of diesel at UK forecourts hit a new record high yesterday.

Motoring body the RAC reports that the average price of diesel across the UK hit 147.94p a litre on Sunday 31 October, just surpassing the previous high of 147.93p set on 12 April 2012.

This comes a week after petrol hit a new record of 142.94p. It has kept rising since, RAC Fuel Watch data shows, and reached 144.35p/litre yesterday.

The price of a litre of diesel has risen by 30p a litre in a year, making a full 55-litre tank £16 more expensive (it now costs £81 on average, up from £65....making electric cars a more attractive option...).

Sales of diesel cars have fallen since the emissions scandal broke, but the RAC says there are still 12.5m diesel car drivers in the UK, while most of the country’s 4.5m vans running on diesel too.

Fuel prices have been pushed up by rising crude oil prices - Brent crude hit a three-year high over $86/barrel last month.

RAC fuel spokesman Simon Williams said that rising cost of biodiesel (which makes up 7% of ‘B7 diesel’) is also a factor:

“While this isn’t unexpected as petrol has already hit a new record price, it’s still another body blow to drivers and businesses across the country who were already struggling to cope with rising prices.

“As well as hitting household budgets this will have a knock-on effect on the price we pay for goods and services as diesel is very much the fuel of business and, as such, will contribute further to inflation.

“While the price of diesel on the forecourt has primarily shot up due the cost of a barrel of oil doubling in the last year from around $40 to more than $80, the price of biodiesel is now two and a half times what it was 12 months ago. This means the biodiesel content in a litre has rocketed from 7p to 16p, while the pure diesel component has doubled from 20p to 40p.

Almost a quarter of workers are actively planning to change employers in the next few months, a report has claimed, as part of a “great resignation” prompted by a high number of vacancies and burnout caused by the pandemic.

A survey of 6,000 workers by the recruitment firm Randstad UK found that 69% of them were feeling confident about moving to a new role in the next few months, with 24% planning a change within three to six months.

The company said it would normally expect up to 11% of workers to move jobs every year.

It has warned that such a move will have considerable cost implications for employers – as much as £25,000 for each worker – and said it has been advising clients to start looking at whether they needed to improve pay and other conditions to help them retain their best staff.

Ryanair has reported its first quarterly profit since before the onset of Covid-19, but said it expected to post an annual loss of up to €200m (£169m) as it would be forced to discount tickets to fill its planes over the winter, Reuters explains.

The Irish airline, which operated more flights this summer than its European rivals, reported on Monday an after-tax loss of €48m for the six months to September. A company poll of analysts had forecast a loss of €43m.

While it did not break out its after-tax profit for the three months ended September – its second quarter – the €273m loss it reported in the first quarter implies a second quarter profit of €225m.

That marks its first quarterly profit since October-December, 2019 – before the pandemic disrupted travel.

Ryanair also said it is considering delisting from the London Stock Exchange due to a fall in trading volumes this year after British shareholders’ voting rights were restricted post-Brexit.

The airline (which has its primary listing on Euronext Dublin), said:

“The Board of Ryanair is now considering the merits of retaining the standard listing on the LSE.”

“The migration away from the LSE is consistent with a general trend for trading in shares of EU corporates post Brexit.”

In the City, the FTSE 100 has touched a new pandemic high this morning.

The blue-chip index gained 0.6% to hit 7281.59 points, just above last week’s 20-month high, lifted by a slightly weaker pound (it’s down 0.2% at $1.366).

BT Group are the top riser (+3.9%), followed by medical devices maker Smith & Nephew (+2%), Lloyds Banking Group (+1.9%) and Royal Mail (+1.7%).

Housebuilders are lagging, though, on concerns that a rise in interest rates could hit demand and slow the economy.

Barclays is still lower (-1.8%), while cyber-security firm Darktrace are now down 9.9%.

On Barclays, Neil Wilson of Markets.com says:

Shares in Barclays fell more than 1% after the announcement, whilst peers rose - Lloyds rallied about 2% and NatWest over 1%. CS Venkatakrishnan, previously head of global markets, will take the reins.

A safe pair of hands but we probably need to see a bit more. Today’s release mentions that “the Board has had succession planning in hand for some time”, which if you had Jes Staley as your CEO would have been a prudent step to take.

In an internal memo to Barclays staff, and seen by the Guardian, Jes Staley said:

“The reasons for my decision are simple.

The FCA and PRA let me know on Friday evening the draft conclusions of their investigation into the characterisation of a professional relationship I developed earlier in my career.

I do not want my personal response to those matters to be a distraction from the fantastic work you do every day to support our customers and clients.”

Commenting on the appointment of his successor, C.S. Venkatakrishnan, Staley said that the two had known each other “for many years”.

Staley said:

There is no better person to lead this organisation forward. He has a deep understanding of the business of banking, and an unshakeable belief in the power of our purpose and values. I know that under his leadership you will achieve ever greater success as Barclays delivers on its potential.”

He thanked staff for their support over the past six years and said they had helped set the bank on the “right course for a successful future”

“Although I will not be with you for the next chapter of Barclays’ story, know that I will be cheering your success from the sidelines, and that I will remain forever humbled by having had the opportunity to lead this great organisation.”

Barclays chief executive Jes Staley is stepping down after an investigation by the City watchdog over his links to the sex offender and disgraced financier Jeffrey Epstein, my colleague Kalyeena Makortoff writes:

The bank said its board reached an agreement over Staley’s resignation after being notified on Friday of the preliminary conclusions in an investigation by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority into how Staley had characterised his relationship with Epstein to Barclays.

The investigation, which began in late 2019, also looked at the information in light of the fact that it was subsequently shared with the FCA, which covers conduct related issues in the City.

Barclays said that the outgoing chief executive plans to challenge the investigation’s findings.

Barclays said in a statement on Monday morning:

“In view of those conclusions, and Mr Staley’s intention to contest them, the board and Mr Staley have agreed that he will step down from his role as group chief executive and as a director of Barclays,”

More here:

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

We start with some breaking news -- Jes Staley, the chief executive of Barclays Bank, is stepping down, following an investigation into his dealings with the sex offender and disgraced financier Jeffrey Epstein.

The move follows an investigation into the way Staley described his relationship with Epstein to Barclays, which began early last year.

In a statement, Barclays says:

Barclays and Mr Jes Staley, Group Chief Executive, were made aware on Friday evening of the preliminary conclusions from the FCA and the PRA of their investigation into Mr Staley’s characterisation to Barclays of his relationship with the late Mr Jeffrey Epstein and the subsequent description of that relationship in Barclays’ response to the FCA.

In view of those conclusions, and Mr Staley’s intention to contest them, the Board and Mr Staley have agreed that he will step down from his role as Group Chief Executive and as a director of Barclays.

It should be noted that the investigation makes no findings that Mr Staley saw, or was aware of, any of Mr Epstein’s alleged crimes, which was the central question underpinning Barclays’ support for Mr Staley following the arrest of Mr Epstein in the summer of 2019.

It emerged back in February 2020 that an inquiry had been launched into Staley’s characterisation of his dealings with Epstein, after emails between the two men were handed to the UK regulators by their counterparts in the US.

Staley, who joined Barclays in 2015, worked with Epstein during his time at JP Morgan. He took over running the JP Morgan private bank in 2000, when Epstein was already a client.

Staley remained in touch with Epstein for seven years after the financier was convicted of soliciting prostitution from a minor in 2008;. He visited Epstein in Florida in 2009 while he was still serving his sentence and out on work release, and sailed his own yacht, the Bequia, to Epstein’s private Caribbean island in 2015.

Staley has said his final contact with the financier was in “middle to late 2015”, shortly before he took over as Barclays’ chief executive in December.

Barclays adds that they are “disappointed” at this outcome:

The Board is disappointed at this outcome. Mr Staley has run the Barclays Group successfully since December 2015 with real commitment and skill. Supported by the senior team which he largely helped build and on whom the Barclays Group will be relying for the future, Mr Staley clarified the Barclays Group’s strategy, transformed its operations and materially improved its results.

The regulatory process still has to run its full course and it is not appropriate for Barclays to comment further on the preliminary conclusions.

Staley is to be replaced by C.S. Venkatakrishnan, known as Venkat, Barclays’ global head of markets, who was made a co-president of Barclays in September 2020.

The bank says:

The Board has had succession planning in hand for some time, including reviewing potential external appointees, and identified Venkat as its preferred candidate for this role over a year ago, as a result of which he moved from the position of Group Chief Risk Officer to Head of Global Markets.

More to follow...

The agenda

• 9.30am BST: UK manufacturing PMI for October
• 1.45pm BST: US manufacturing PMI for October
• 2PM BST: US construction spending for September