Time to wrap things up.

A key measure of US inflation has risen for the first time since March, underlining its bumpy ride down to lower levels.

The consumer price index (CPI), which measures price growth across a basket of goods, ticked up to an annual pace of 2.6% in October – from 2.4% in September, which had been the slowest rate in more than three years.

Stripping out volatile food and energy costs, the closely watched “core” inflation index held firm at 3.3%. The reading was in line with economists’ expectations.

Though inflation has fallen dramatically since peaking at a four-decade high in summer 2022, many Americans are still under pressure after years of price increases.

Frustration over the cost of living appeared to play a major role in the election, with exit polls indicating that the majority of Republican voters were frustrated with the US economy and their financial situation.

On the campaign trail, Donald Trump proffered tax cuts and tariffs as solutions, but questions have been raised about what such policies will actually mean for inflation.

The president-elect has pledged to enact tariffs of at least 10% on all US imports, a policy that many economists say would probably lead to inflation going up as much as 5.1%, according to the Budget Lab at Yale.

The Federal Reserve cut interest rates for the first time in four years in September, a key turning point in its battle to bring down inflation. It lowered rates again last week, to their lowest level since February 2023.

At a press conference, the Fed chair, Jerome Powell, said the central bank “has gained confidence that we’re on a sustainable path down to 2%”, its target for inflation, but added: “The job’s not done.”

The Fed has been trying to carry out its “dual mandate”, managing price increases without triggering higher rates of unemployment.

The Post Office plans to close more than 100 branches and says about 2,000 jobs are at risk in a move that has been condemned by unions as “tone deaf and immoral” after the Horizon IT scandal.

Our other main stories:

Thank you for reading. We’ll be back tomorrow. Take care – JK

US inflation is bang in line with forecasts: the headline annual rate has picked up slightly to 2.6% in October from 2.4% in September.

The core rate – which strips out volatile items like food and energy – held at 3.3% last month, still a bit high for the Federal Reserve’s liking.

The data, released by the Bureau of Labor Statistics, will be closely watched by the Fed, which has cut interest rates by 0.75 percentage points over two meetings to a target range of 4.5% to 4.75%.

Market analyst Jesse Cohen said:

UK farming minister Daniel Zeichner has been speaking at the Agricultural Industries Confederation conference. He has been addressing farmers’ concerns about inheritance tax and the re-election of Donald Trump, who is said to want a free trade deal with the UK that would inevitably include cheap agricultural products – food and drink – which could undercut UK farmers.

Zeichner said of a Trump trade deal:

At the moment, we don’t know what’s going to happen, but our view, and I think it’s it is sensible view to take, is that we will always pursue the national interest of this country,

He added that he was pleased the government recently agreed a deal to export beetroot to the US.

He told the room there would be no changes to the threshold at which farms will be subject to inheritance tax. Treasury estimations suggest only 28% of farms will be hit by a tax bill when the owner dies, but Defra’s figures suggest it could be as high as 66%.

Zeichner said that government was convening with experts to see “why the numbers are so different” and “what this will look like going ahead” but added there will be no change to the budget.

He said:

We are not going to see any change to the budget. So what has disappointed me is that people have jumped to a series of extrapolations as to what will happen, rather than looking at the actual figures, what’s actually been happening. I’m afraid there’s a huge discrepancy in the figures from the actual claims on estates which the Treasury has administered increased in recent years, and some of the figures that others are using, and our officials are working on that, because there must be reasons why there are those discrepancies.

Zeichner added that there is “no magic money tree,” and reiterated that there will be no changes to the inheritance tax threshold despite the anger from farmers.

Thousands of people plan to descend on Westminster next week in a protest against the changes which they say will cause family farms to be sold off to pay inheritance tax bills.

Amazon Prime star Jeremy Clarkson is due to speak at the event as are some political figures yet to be confirmed.

On the EU, Zeichner said the UK will not be realigning with the EU’s standards to reduce trade friction:

This government has said that we want to renegotiate or improve our relationship with our near neighbours, the European Union. But quite a lot of the regulatory systems we have inherited are now beginning to diverge and just not through choice, but just because time is passing. And I very much appreciate the fact that for exporters, that poses potential challenges. Now, without going over the debate from the past, we are where we are, but I am charged by Keir Starmer with working with others to try and negotiate an improved veterinary agreement, and we will be trying to achieve that.

We must also respect the choice of British people made the referendum. It wasn’t my choice but that choice was made, and there are advantages, as we’ve seen, in terms of the fact that we’ve been able to move much more quickly on precision breeding.

The chief executive of the UK defence company Babcock has said that he expects countries around the world to maintain or increase military spending after the election of Donald Trump as US president.

David Lockwood said that he expected “all countries at least sustaining and maybe increasing” defence budgets, partly in response to pressure from Trump on the US’s Nato allies.

When President Trump was around first time, if you ignored the rhetoric for his domestic audience, his message to Nato members was ‘I expect you to spend’ [what was committed].

Nato members are committed by treaty to spend the equivalent of 2% of GDP on military budgets. Some of the allies have not hit that target for several decades, but the combination of pressure from the US and Russia’s full-scale invasion of Ukraine has prompted many countries to reassess their plans.

“An unstable world is unfortunately good for defence budgets,” said Lockwood, speaking as Babcock announced an increase in operating profits for the six months to the end of September.

Babcock, a member of the FTSE 250 index, has recovered from a period of turmoil to earn a steady stream of profits. It runs large parts of the UK’s defence operations, including training programmes and maintenance of the UK’s nuclear submarine fleet.

He said that the submarine infrastructure “definitely didn’t get the money it deserved” during the period of relative geopolitical calm around the turn of the century. “There is definitely a need for the recapitalisation” of Devonport, where Babcock maintains the nuclear fleet, Lockwood said.

He added that the upgrade work at Devonport has been tricky while also doing work on the fleet, but insisted that previous regulatory concerns had now been addressed. He said:

The Office for Nuclear Regulation would describe themselves as content with how we’re running Devonport.

Opus Energy has agreed to pay more than £7m in refunds, redress and goodwill payments after the regulator Ofgem found that the company overcharged almost 88,000 business customers over two decades.

The company, which has been supplying businesses with renewable energy since 2002, had two faults in its billing system, meaning customers were temporarily on the wrong tariff, or their billing periods were incorrectly duplicated. The faults were spotted during an audit, after which Opus reported itself to the regulator.

These two faults led to 87,825 customers being overcharged between 2003 and 2023. While 93% of accounts were overcharged by less than £50, one customer, who has since been refunded, overpaid £102,000.

Opus has since resolved the technical faults and will pay £5.5m in refunds to affected customers. An additional £1.56m will be paid in goodwill and redress payments. The supplier has committed not to claw back money from customers who were undercharged as a result of the system faults.

It has identified all affected accounts and has processed refunds automatically for current customers. Former customers will be contacted to receive refunds where the amount is £2.50 or more. Any unclaimed refunds and refunds below £2.50 will be paid to the Energy Redress Fund. Accounts still supplied by Opus Energy have already been refunded.

Opus was bought by Drax, which owns the UK’s biggest renewable power plant, in 2017.

Jacqui Gehrmann, deputy director of retail compliance at Ofgem, said:

All energy consumers should be able to trust their supplier to provide accurate bills and charge them only what they owe.

While things can go wrong, we expect suppliers to identify issues quickly. So, it’s concerning that these billing issues weren’t spotted sooner.

Many businesses have struggled with the high cost of energy in recent years. Any instance of a customer overpaying, no matter how small, is unacceptable.

We’ve worked closely with Opus Energy in recent months to ensure the issues are rectified, and that customers affected are refunded and compensated swiftly.

Bank of England policy maker Catherine Mann has warned of upward pressures on inflation in the UK.

The American economist, who voted against last week’s interest rate cut, said

There are some possibilities about downward pressure on inflation coming from export prices coming out of China, for example. But against that ... one piece of news that is downward bias, the rest of it is upward bias, and likely to be more volatile going forward over the medium term.

High US tariffs on imports from China by president-elect Donald Trump might lead to more Chinese goods heading to Europe at discounted prices, analysts have said.

Mann said energy prices were more likely to rise than fall and highlighted “pretty sticky” services price inflation in Britain. She was speaking on the Female Central Bankers panel organised by BNP Paribas’ Global Markets.

She was the only member of the Bank’s nine-strong monetary policy committee who voted against cutting borrowing costs last Thursday, when Bank Rate was lowered to 4.75% from 5%.

The central bank said after last week’s announcement that Mann wanted to wait to see the impact of the Labour' government’s first budget and increase in the national minimum wage, which she thought could boost overall wage growth and businesses’ pricing power.

In lighter news, here’s a round-up of this year’s top Christmas toys.

A “fart blaster” with a repertoire of 15 sounds that blasts “fog fart rings” and a waddling mother duck are among the toys destined to appear on Christmas lists as experts predict a “record-breaking” year for sales.

At £30, the Despicable Me 4 spin-off toy promises to be a talking point on Christmas Day. It comes with two scents: banana and “fart”. Mercifully, on a day when the nation eats Brussels sprouts, the latter smells more like burnt popcorn.

With the cost of living crisis in the background of yet another year’s celebrations, the Toy Retailers Association’s annual DreamToys list of the 20 “hottest toys” includes 14 under £50. Compiled by an independent panel it provides a crib sheet for shoppers seeking both value for money and play value.

Whereas previous lists included sets costing well over £100, this year’s priciest is FurReal’s interactive pet monkey, Peanut, at £80. Paul Reader, the chair of the selection committee, said it was “very conscious” of the level of disposable income people had.

Parents are spending a little bit more on toys but not looking for one iconic item.

At the COP29 climate summit, the mood is gloomy.

There is “no sign” of the transition away from burning fossil fuels that was pledged by the world’s nations a year ago, with 2024 on track to set another new record for global carbon emissions.

The new data, released at the UN’s Cop29 climate conference in Azerbaijan, indicates that the planet-heating emissions from coal, oil and gas will rise by 0.8% in 2024. In stark contrast, emissions have to fall by 43% by 2030 for the world to have any chance of keeping to the 1.5C temperature target and limiting “increasingly dramatic” climate impacts on people around the globe.

The world’s nations agreed at Cop28 in Dubai in 2023 to “transition away” from fossil fuels, a decision hailed as a landmark given that none of the previous 27 summits had called for restrictions on the primary cause of global heating. On Monday, the Cop28 president, Sultan Al Jaber, told the summit in Baku:

History will judge us by our actions, not by our words.

The Post Office plans to close 115 branches and says about 2,000 jobs are at risk as part of a plan that will see post office operator pay increase by £250m over the next five years.

The Post Office confirmed today that it is seeking to offload 115 branches that it centrally owns, known as crown post offices, but said it expects to maintain the total network at 11,500 branches across the UK.

The plans come against the backdrop of the public inquiry into the Horizon IT scandal, described as one of the worst miscarriages of justice in UK history.

The move puts approximately 1,000 jobs at risk although the Post Office expects that all the branches will be refranchised to new owners over the next five years.

About 2,000 branches are operated by partners such as Tesco, WHSmith and Morrisons and about 9,000 are operated by independent subpostmasters that have a contract with the Post Office.

The Post Office is also “streamlining” its central operations with speculation that this will lead to about 1,000 further job cuts.

The plans also include increasing post office branch owner remuneration by £250m annually by 2030, with up to £120m in additional remuneration by the end of the first year of the five-year plan, a 30% increase in revenue share.

“The Post Office has a 360-year history of public service and today we want to secure that service for the future by learning from past mistakes and moving forward for the benefit of all postmasters,” said Nigel Railton, the chair of the Post Office. “We can, and will, restore pride in working for a business with a legacy of service, rather than one of scandal.”

Britain’s financial watchdog is pressing the Supreme Court to speed up a decision to permit lenders to appeal a crucial judgment that may pave the way for a multi-billion pound consumer compensation scheme linked to car finance commissions.

The Financial Conduct Authority (FCA) said it would also consult on extending the time firms have to respond to complaints from borrowers, after the Court of Appeal in October ruled it was unlawful for car dealers to receive a commission from banks providing motor finance without obtaining the customer’s informed consent.

It is the latest twist in a slow-burning probe into banks’ sales practices in past years that analysts estimate could cost the industry up to £16bn, in what could become Britain’s costliest consumer banking scandal since the payment protection insurance (PPI) scandal.

Since the October judgment, the FCA said it has undertaken extensive industry engagement and found that firms are likely to receive a high volume of complaints.

A complaint extension would allow them to prevent “disorderly, inconsistent and inefficient outcomes” for consumers making complaints, motor finance firms and the market, the watchdog said.

The FCA is investigating whether there was widespread misconduct related to discretionary commission arrangements, or DCAs, before they were banned in 2021.

It wants to uncover whether consumers have lost out and what compensation they should get. It urged firms today to consider whether they should make financial provisions for resolving complaints.

As part of its review, the FCA already granted motor finance firms and consumers more time to handle or make complaints where a DCA was involved.

The FTSE index of UK banks rose by 0.77% this morning, outperforming the broader FTSE 100 index which is up by 0.3%. Lloyds Banking Group shares rose by 1.7%.

The growing scrutiny has weighed heavily on some lenders’ share prices this year, with Close Brothers, which is heavily involved in car finance, slumping by 75%. It is down by 0.6% today.

Analysts at Jefferies said yesterday that redress could cost Lloyds £2.5bn if the bank is required to repay all commissions from 2007-2020. Lloyds has already set aside £450m.

Grocery sales growth slowed across the UK last month as shoppers save their cash ahead of Christmas, and wait for Black Friday promotions, according to industry figures.

Market researchers NIQ said UK supermarket sales rose by 4% in the four weeks to 2 November, down from the 4.7% growth in September.

Mike Watkins, NIQ’s UK head of retailer and business insight, said:

Shoppers so far have been cautious and it’s evident that they are saving on grocery essentials to be able to afford treats and indulgences.

He said the UK has “a polarised consumer” – with half of households still feeling pressure on their finances.

Sales volumes of clothes and other general merchandise fell by 5.5%.

Yesterday, retail analysts Kantar said October was the biggest grocery sales month so far this year, with sales increasing by 2.3% year-on-year to £11.6bn.

The takeaway delivery firm Just Eat Takeaway is selling Grubhub to delivery-focused restaurant chain Wonder in a deal valued at $650m (£510m) – just four years after buying the US-app in a multi-billion dollar tie-up following the the first Covid lockdowns.

Netherlands-based Just Eat, which is Europe’s largest meal delivery firm, had been looking to offload its US unit since as early as 2022, as the pandemic boost faded and it grappled with tough competition.

Wonder is a New York City-based chain of fast casual restaurants, led by former Walmart executive and serial entrepreneur Marc Lore.

The deal is expected to close in the first quarter of 2025, provided it receives the usual regulatory approvals, and Just Eat said it would retain no material liabilities associated with Grubhub.

Just Eat bought Grubhub in a $7.3bn deal agreed in June 2020, which was aimed at creating the world’s largest food delivery service outside China. The tie-up was aimed at giving Just Eat access to the lucrative food delivery market in the US, with the combined business able to serve customers in 25 countries.

At the time, Uber was reportedly also holding talks with Grubhub, as the food delivery sector boomed during the pandemic.

However, Just Eat executives came under pressure from investors after the boost from pandemic-era food deliveries began to fade as economies reopened following pandemic lockdowns, and its shares began to slide. Just Eat shares are trading some 90% lower than at their peak, reached in October 2020.

Another utility, the power generator and network operator SSE, has reported a 26% increase in first-half profits, lifted by a strong performance of its electricity networks and renewables businesses.

Its chief executive of more than 11 years, Alistair Phillips-Davies, will stand down next year, and will remain in post until a successor is appointed.

He said:

We are encouraged by the increasing attractiveness of our main markets and our alignment with the new UK government’s mission to achieve clean power by 2030.

The Perth-based company posted an adjusted pre-tax profit of £714.5m for the six months to 30 September, and stuck to its annual profit forecast.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said:

SSE’s powering along nicely and should continue thanks to the foundations built by group CEO Alistair Philips-Davies. But after 11 years in the power seat, he’s announced his intention to step down once a successor is found.

Turning to business performance, and climate-focused investors will be pleased to hear that renewable energy output rose 45% in the first half. The uplift was helped by increased capacity, higher prices and an easy comparative period as last year’s performance was held back by unfavourable weather conditions.

Efforts to plant itself at the heart of the clean energy transition have continued at pace, with £1.3bn of investment in the first half. Turbo-charging focus on renewables is a bold and admirable move, but the shift comes with a hefty dose of risk – they’re not always reliable. To some degree, they’re always at the mercy of Mother Nature. That’s why more flexible gas-fired plants are still part of the energy mix and can help plug the shortfall in energy output when the wind doesn’t blow in SSE’s favour. These assets were loss-making in the first half, but as consumers fire up the heating over winter months, profits are set to warm up over the second half.

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

Thames Water has obtained support from three-quarters of its creditors for an emergency funding deal, which would give it a £3bn lifeline.

Britain’s biggest water company said today that creditors holding more than 75% of its Class A debt – the least risky class of bonds in its debt pile – agreed to the deal.

The 75% threshold is the minimum needed for the plan to be approved by a UK court. Thames Water is aiming for a court date on 17 December.

The debt-laden utility hailed this as an “important milestone” and is hoping more bondholders will take part.

Under the plan, Thames Water would initially get £1.5bn of funding with an annual interest rate of 9.75%, which the company says will keep it going until next October.

Asian shares are down again, amid a strong dollar and concerns over the incoming Trump administration’s trade policies. Today, traders await key inflation data from the United States, which could be key to the Federal Reserve’s next interest rate decision.

Japan’s Nikkei is down by 1.6% while Hong Kong’s Hang Seng index has slipped by 0.1% and South Korea’s Kospi slid by 2.6%.

Over the past week, we’ve seen ‘Trump trades’ – traders betting on big government spending, lower taxes and higher tariffs once Donald Trump takes office. The dollar has jumped and Treasury yields rocketed since last week’s election.

Markets are now seeing a 62% chance of an interest rate cut at the Fed’s next meeting in December, down from 77% a week ago and 84% a month ago, according to CME Group.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, explained:

US yields pushed higher and the dollar rally gained further momentum yesterday, as investors continued to surf on the idea that Donald Trump’s pro-growth policies and tariffs would boost inflation in the US and limit the Federal Reserve’s capacity to ease the monetary policy as much as previously anticipated. The US 2-year yield, for example, which best captures the rate expectations, is up by 85bp since the September dip, we could see a similar jump in the US 10-year yield.

The CPI [consumer price index] data has regained importance since Donald Trump was re-elected president of the US. Jobs data remains crucial for the Fed’s policy path, as the last thing the Fed wants is to panic and lose control of the situation, but the Fed’s victory over inflation looks more vulnerable today than it did a month ago. And that’s supportive of the US dollar.

Of course, October figures won’t tell much about the Trump effect on consumer prices. We must wait a few months before we start seeing the impact of Trump on numbers. But the higher the numbers, the lower the December cut expectations. And I sense that today’s numbers may not sooth the doves’ nerves: the US headline inflation is expected to have climbed from 2.4% to 2.6%, while core inflation is seen steady near 3.3% - still significantly above the Fed’s 2% policy target.

The Agenda

• Noon GMT: US MBA mortgage applications for last week

• 1.30pm GMT: US inflation for October (forecast: 2.6%, previous: 2.4%)