The rate of US inflation barely moved in November, the last piece of major economic news before the Federal Reserve weighs whether to cut interest rates for the third time this year at its meeting next week.

Prices rose 2.7% in November compared with a year before, according to consumer price index (CPI) data released by the Bureau of Labor Statistics (BLS) on Wednesday measuring the prices of select goods and services. The core inflation rate, which removes the volatile food and energy industries from the data, held steady last month, at 3.3%.

The annual rate of inflation still remains above the Fed’s targeted goal of 2%, but many economists and investors are betting that the Fed will cut rates on 18 December. Expectations place a potential cut at a quarter-point, which would bring rates down to 4.25% from 4.5%.

Inflation peaked at 9.1% in June 2022, a 40-year high, and has gradually come down over the last two years. The lowest inflation has been since then was 2.4%, in September, though it ticked up to 2.6% in October.

The Supreme Court has granted permission for two car lenders to appeal a landmark ruling on motor finance commission payments that has left firms fearing a potential £30bn compensation bill.

The decision gives Close Brothers and MotoNovo owner FirstRand a chance to overturn a decision by the court of appeal, which in October said that paying “secret” commission car dealers - without disclosing the sum and terms of that commission to borrowers - was unlawful.

The court of appeal decision went beyond existing City regulation and an ongoing Financial Conduct Authority investigation into harms caused by now-banned discretionary commission arrangements (DCAs). It also opened the door to a fresh flood of claims that ratings agency Moody’s says could now cost lenders up to £30bn.

News that the supreme court had accepted the case bolstered motor lenders’ shares. Close Brothers jumped as much as 8% while Lloyds Banking Group rose by 4%, and Barclays climbed by 1.6%.

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US inflation has risen slightly, in line with economists’ expectations, and are unlikely to alter expectations of an interest rate cut next week.

The consumer prices index rose at an annual rate of 2.7% last month, up from 2.6% in October. On a monthly basis, headline CPI rose by 0.3% in November, versus 0.2% in October.

The core rate of inflation, which excludes foods and energy, stayed at 3.3%, also as expected. On a monthly basis, core CPI rose 0.3% in November, the same gain as in October.

Inflation still remains above the Fed’s targeted goal of 2%, but many economists and investors are betting that the Fed will cut rates next Wednesday by a quarter-point, which would bring them down to 4.25% from 4.5%.

HSBC is reportedly pushing through $3bn (£2.4bn) of cost savings as part of its biggest restructuring in a decade under new chief executive Georges Elhedery.

Europe’s biggest lender aims to complete its shake-up by next June, Bloomberg News reports. Under the overhaul announced in October, the London-based lender will reorganise into four new divisions and split its operations into eastern and western markets.

The shake-up will include job cuts among senior bankers – which means, according to Bloomberg, that just over 40% of HSBC’s top 175 managers will be axed. This would cut the bank’s expense bill, which is expected to come in around $32.6bn, by around 10%.

HSBC is expected to set out the financial impact of its restructuring plans, including a related one-time charge, alongside its full-year results in February.

Elhedery, who replaced Noel Quinn as chief executive in September, has quickly made his mark with sweeping changes aimed at tightening the bank’s sprawling operations and reining in costs.

Interest rate cuts by central banks have started to squeeze profit margins at big lenders after a period of record-breaking profits last year.

The Supreme Court has granted permission for Close Brothers and FirstRand to appeal a landmark court of appeal ruling from October that has left UK lenders fearing a £30bn compensation bill.

It means there is a chance to overturn the ruling, which had determined that paying a “secret” commission to car dealers who had arranged loans - without disclosing the sum and terms of that commission to borrowers - was unlawful.

It comes days after the FCA wrote to the supreme court, asking it to decide quickly whether it will give permission to appeal.

Close Brothers shares jumped 8% on the news. Shares in Lloyds, the biggest car lender on the high street, rose more than 4%.

The October ruling had opened the door to a fresh flood of claims, as it went beyond ongoing investigation by the FCA into a specific type of commission payment, known as discretionary commission arrangements (DCAs), which was banned by the regulator in 2021.

The Financing and Leasing Association lobby group – which represents car lenders ranging from big banks such as Lloyds and Barclays to the finance arms of carmakers including Ford and Volkswagen – welcomed the news.

Its director of motor finance Adrian Dally said:

Permission to appeal is very good news indeed. The expedited process will give the motor finance sector the certainty it needs.

The hearing is expected to take place in spring or summer 2025, with a decision potentially due on late autumn 2025.

A spokesman for FirstRand’s Aldermore, which runs the car finance firm MotoNovo, declined to comment.

Close Brothers said it “will not be commenting further on an ongoing appeals process, and any further announcements will be made as and when appropriate”.

An investment group which has stakes in fast food chains Subway and Burger King’s European businesses as well as Japanese-inspired Danish chain Sticks’n’ Sushi is in talks to take control of bakery chain Gail’s.

McWin Capital is already a shareholder in the up-market bakery chain alongside private equity group Bain Capital and former Pizza Express and Patisserie Valerie owner Luke Johnson.

Gail’s appointed bankers from Goldman Sachs to sell the business for a reported £500m last month and the group has said it plans to open at least about 35 bakeries around the country next year.

Sales for Gail’s parent company Grain Topco, which operates wholesale businesses The Bread Factory and Bertinet Bakery alongside more than 130 Gail’s outlets, increased by 27% to nearly £232m in the year to February, according to the latest accounts of its parent company Grain Topco. However, the group made a £7.4m pretax loss, after a near £13m loss the year before, as costs rose.

Several UK roofing and construction services companies “illegally colluded to rig bids” to win contracts for repairing schools, in particular roofing, the competition watchdog said, as it launched an investigation.

The Competition and Markets Authority (CMA) said it has reason to suspect that several companies, including building contractors and technical advisors, worked together to rig bids to secure contracts funded through the government’s condition improvement Fund (CIF). The CMA is particularly concerned about roofing contracts.

The regulator, led by chief executive Sarah Cardell, did not name any of the companies under investigation. It has carried out surprise inspections at several business premises to gather evidence, including physical and digital documents. It is working closely with the Department for Eduction (DfE).

CIF money is awarded every year by the DfE and can involve significant sums of money. During the latest round, it made available almost £450m in funding. Funds are awarded to schools with buildings in poor condition, to address health and safety issues, as well as building compliance.

Juliette Enser, the watchdog’s executive director of competition enforcement, said:

This fund is incredibly important and ensures that essential building improvements can be made to schools throughout England, meaning students are learning in safe and suitable environments.

While no assumptions should be made that competition law has been broken at this early stage, we will be investigating this issue thoroughly. We will now be making enquiries and assessing the evidence to see whether or not bid rigging has taken place – and what further action may be needed.

If the CMA decides that the companies have broken competition law, after assessing the evidence gathered, it will issue what is known as a statement of objections to set out its concerns, and businesses have an opportunity to respond. At this stage, no assumptions should be made that the law has been broken, the watchdog said.

Public procurement represents around a third of public spending and evidence from around the world suggests it is highly vulnerable to anti-competitive behaviour.

Last year, the CMA issued fines totalling almost £60m to firms involved in rigging both public and private sector bids.

The latest investigation comes ahead of the new debarment regime, which is set to come into force in February. This means that any businesses which break competition law could also be banned from bidding on public contracts in the future – in addition to potential financial penalties and director disqualification.

A business that has been involved in anti-competitive conduct may be granted immunity from penalties, or a significant reduction in penalty, in return for reporting cartel activity and assisting the regulator with its investigation. Individuals involved in cartel activity may also be granted immunity from criminal prosecution if they help the CMA. It may pay a financial reward of up to £250,000 in return for information which helps it to identify and take action against illegal cartels.

Here is our full story on Tui:

Cash-strapped consumers are still prioritising spending on holidays but are choosing more affordable destinations including Egypt, Bulgaria and Tunisia for their annual break, according to Europe’s biggest package trip operator.

Tui said new customers with smaller budgets who are not able to find a package holiday in more traditional locations such as Spain are looking elsewhere.

Inflationary pressures have eased, the travel company said, and the average selling price of its holidays have levelled out, although the cost of a trip remains at a “significantly higher level” compared with 2019.

Prices are now “at a level where we think it will remain”, said Sebastian Ebel, the group’s chief executive.

In financial markets, the pound has risen against the euro, hitting its highest level in two and a half years.

Sterling is supported by a relatively hawkish Bank of England, as well as political uncertainty in France and Germany, although it dipped against a generally stronger dollar.

The euro dropped as low as 83.35p, its lowest since 22 March, and is now trading at 82.49p.

Jane Foley, head of currency strategy at Rabobank, said:

A little question seems to have popped up over the last few weeks, perhaps amongst the mainstream press, asking whether or not euro sterling could finally go back down to where it was before the referendum in 2016.

That would be on the back of this perception that the ECB is more growth-oriented – or lack of growth-oriented – and we’ve got these political issues, clearly in France and in Germany.

We can sit here and quite easily list out what is wrong with the UK economy and what is wrong with the UK budget ... but at least there is a budget. And given the consensus view that the Bank of England will need to be perhaps more cautious than the ECB, sterling is finding a little bit of support.

The Bank of England is expected to leave interest rates on hold next week and be cautious next year. Markets are pricing in three quarter-point rate cuts by the end of next year. In contrast, the European Central Bank is forecast to lower rates by a quarter point tomorrow, and analysts expect the ECB to cut at every meeting at least for the first half of 2025, and possibly beyond.

The ECB is faced with weak economic growth in the eurozone, as well as political turmoil in the two biggest European countries, Germany and France.

Germany’s governing coalition collapsed last month and a snap election is expected on 23 February. In France, the collapse of prime minister Michel Barnier’s government last week left the country’s budget for next year in limbo, with ministers scrambling to prepare stop gap legislation to roll over 2024 spending limits until a new budget bill can be drafted next year.

However, the pound has dipped against the dollar, and was last down 0.34% at $1.2724. The dollar strengthened against major currencies, as traders feared US inflation data due at 1.30pm GMT could come in hotter than expected and disrupt bets on a Federal Reserve rate cut this month.

The UK government is concerned that Christmas train services could be disrupted because of staff shortages, the rail minister said this morning.

Peter Hendy has told MPs that Department for Transport (DfT) officials will continue to look at the issue throughout the festive period.

Many train drivers and other crew members do not have Sunday working included in their contracts, and numerous rail operators often relying on them volunteering to work extra paid shifts to run timetabled services on that day.

This regularly causes the cancellation of hundreds of trains across Britain, such as on Father’s Day or the day of a major England football match.

Giving evidence to the Commons’ transport select committee, Lord Hendy said the government is worried about “staffing of Christmas services”.

That we are concerned about with several train operators, exacerbated by the fact that inevitably the closures close parts of the railway and put more pressure on others.”

I’ve been through this a lot with Alex [Alex Hynes, director general for the DfT’s rail services group] recently and will continue to be into, right up to and over Christmas.

Hynes said:

Generally as a system, we’re over-reliant on overtime working for train crew.
That’s a risk, which may be worse at Christmas time than other times.

This comes on top of the threat of other Christmas disruption, as train managers at Avanti West Coast are to strike in a dispute over rest day working. Members of the Rail, Maritime and Transport union plan to walk out on 22, 23 and 29 December.

A £300m bid to buy a London skyscraper nicknamed the “Can of Ham” has collapsed, in a blow to the City.

The US private equity giant Blackstone could not agree on a price for the building at 70 St Mary Axe – nicknamed Can of Ham for its curved shape – with the current owner Nuveen, a real estate investment group owned by US pension fund TIAA (Teachers Insurance and Annuity Association of America).

Nuveen was reportedly not willing to go below its £322m price tag. The failed deal, first reported by Green Street News, is a sign of the struggling London’s office property market since the Covid-19 pandemic.

Office values have fallen, and deals above £100m are rare, following a move to hybrid working – which means banks, law firms and other companies are downsizing their offices.

Nuveen had tried to sell the building in 2022 for about £400m.

MSCI analyst Tom Leahy said:

There is a gap in price expectations between buyers and sellers . . . suggesting there is further to go before market liquidity returns.

Train managers at Avanti West Coast are to strike in a dispute over rest day working.

Members of the Rail, Maritime and Transport union plan to walk out on 22, 23 and 29 December.

Union members voted overwhelmingly against the company’s proposals.

The RMT general secretary, Mick Lynch, said yesterday:

Avanti West Coast’s proposals have been decisively rejected by our train managers, sending a clear message to management that the current arrangements are unacceptable.

Train managers are being treated unfairly compared to senior managers, who receive significant payments for covering these roles.

In the UK, the average cost of renting a newly let home is now £3,240 higher than at the end of the pandemic lockdowns, after three years of rental increases outstripping rises in earnings, new research shows.

Rents have risen by 27% since 2021, the online property website Zoopla found, compared with a 19% increase in earnings, taking the annual cost of renting a property to £15,240, up from £12,000 in 2021.

Rental costs began to soar as Covid lockdowns were lifted in 2021, which resulted in average private rents hitting record highs.

The increase in housing costs was blamed largely on demand for rental properties greatly outstripping supply, which led to intense competition among tenants.

Joe Biden’s government is reportedly considering new, harsher sanctions against Russia’s lucrative oil trade, just weeks before Donald Trump returns to the White House.

Details of the new measures are still being worked out, but Biden’s team is looking at restrictions that might target some Russian oil exports, Bloomberg News reports, citing unnamed sources.

That step was something Biden had long resisted over fears it could trigger a spike in energy costs, especially in the run-up to last month’s presidential election. But with prices for oil slipping amid a global glut and fears growing that Trump may seek to force Ukraine into a quick deal with Russia to end its nearly three-year-old war, the Biden administration is now open to more aggressive action, the people said…

The US already bans imports of Russian oil but new restrictions on the exports of one of the world’s largest producers — which could involve singling out foreign buyers of its crude — would upend more than two years of policy set after Russia’s full-scale invasion of Ukraine began in February 2022.

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

Europe’s largest tour operator Tui has hailed a “very good year” and said both winter and summer bookings are up, as it raised its prices and sold more package holidays.

The Anglo-German firm said 20.3 million people travelled with Tui in 2024, compared with 19 million the year before, and revenues climbed by 12% to €23.2bn. Underlying profits rose by a third to €1.3bn from €977m. Profit is expected to rise by between 7% and 10% next year.

Winter bookings have risen by 4% year on year with 62% of holidays sold. Tui raised its prices by 5% and sold more package holidays and dynamically packaged trips, where travellers can book individual components with dynamic pricing.

People have been booking more packaged holidays as they try to control costs amid inflationary pressures, but are still keen to get away. Airlines have been hit more by rising costs and weaker business bookings, but Tui’s holiday business has thrived.

Summer bookings are 7% ahead of last year and Tui has sold 17% of those holidays, similar to this time last year, with prices up by 3%.

Tui said demand remained robust throughout the year despite strong competition, but there was a decline in customers going on long-haul trips in the Netherlands and Belgium.

Sebastian Ebel, the chief executive, said:

We will continue to focus on package holidays and our good cooperation with travel agencies.

It’s US inflation day, and financial markets are on tenterhooks.

We are expecting the annual rate of the consumer prices index to tick up to 2.7% from 2.6%, while the core measure, which strips out volatile items like food and energy, is forecast to have stayed at 3.3%.

The Agenda

• 1.30pm GMT: US inflation for November (forecast: 2.7%; previous: 2.6%)

• 2.45pm GMT: Bank of Canada interest rate decision