BUSINESS LIVE: Dollar rises as Trump declares victory; Hospitality price increases; M&S smashes forecasts

Hetal Mehta, Head of Economic Research at St. James’s Place:

“Given the focus of Trump’s campaign messages on tariffs, as well as his use of the use of tariffs in international negotiations during his previous term in office, we expect these to be a key element in his second term.”

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

“Looking a little further ahead, Fed Chairman Jerome Powell’s current term ends in 2026. As chairman, Powell’s policies are key to keeping inflation under control. With Trump potentially preferring an alternative Fed Chair, political uncertainty may 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 could be illegal because they were not clearly marked to the customer.

The decision threw the car finance industry into turmoil.

Homebuilder Persimmon has flagged concerns over signs of construction costs emerging in price negotiations for 2025.

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

Financial markets are gearing up for the BoE’s interest rate decision due on Thursday, and a second rate cut in four months will give the housing sector a big boost.

Persimmon, which also told shareholders that sales rates since the start of the third quarter were well above last year, said: ‘We are working closely with our supply chain to manage our costs, which will also be affected by new building regulations and increases in Employers’ National Insurance Schemes announced in the latest (UK) Budget.’

Aarin Chiekrie, equity analyst, Hargreaves Lansdown:

‘With Bonfire Nights glow still cooling, Marks & Sparks lit up the market with its own firework show, 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 increase in food sales.

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

“Credit where it’s due, M&S has done a fantastic job of reviving the business over the past few years. Operational and strategic improvements mean the business is healthier than it’s been for some time.

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

Marks & Spencer’s profits rose 17.2 per cent in the first half as the retailer continued to beat expectations thanks to increased market share.

CEO Stuart Machin’s mission to revive the chain gained further momentum amid a focus on improving its food and clothing lines, online operations and retail properties.

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

Wetherspoons chairman Tim Martin has warned of price rises after the Autumn Budget, saying the pub chain’s tax bill will jump by two-thirds next year.

Martib said he believes “all hospitality companies” plan to pass on higher costs through price increases.

He said: ‘Cost inflation, which had risen to elevated levels in 2022, eased slowly in the following two years but has now risen significantly again after the Budget.

‘All hospitality companies, we believe, are planning to raise prices as a result.

‘Wetherspoon will, as always, do everything possible to remain as competitive as possible.’

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