Money blog: Billions knocked off Santander’s value

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By Sarah Taaffe-Maguire, business reporter

Under normal circumstances we could be bringing you full detail on how the UK arm of high street bank Santander performed. Parent company Banco Santander has just released its third quarter results, after all. But we’ll be left waiting. 

The eurozone’s third-biggest lender delayed publishing complete UK results after a UK court ruling on car loans. 

The lender said it was assessing the impact of a Court of Appeal ruling which found some motor finance commissions banks paid to car dealerships were unlawful. 

Its share price fell more than 4% – knocking roughly €3.17bn (£2.63bn) off the company value – after the announcement before recovering some of the loss as the trading day wore on. 

The head of an organisation representing salon owners was close to tears while speaking to Sky News about the impact tomorrow’s budget could have on the industry.

Toby Dicker, founder of the Salon Employers Association, said he supported people being paid more through an increase in the minimum wage, but claimed salons are hit “five times harder” by increases in labour costs due to the way they are set up.

Proposed changes being announced tomorrow, including a rise in employer national insurance contributions, will cost his own business “£55,000 at an absolute minimum”, he told Sky News’ Business Live. 

“What that means is it’s no longer affordable to keep on apprentices. Apprentices in our industry have dropped by 83% in the last 10 years,” he said.

Mr Dicker said the industry had not been listened to by the government for years, and that tomorrow would be “the final nail in the coffin”.

“They’re talking about halving the numbers of apprentices in the next few days, that’s where we are,” he said.

“Sit down with me for two hours, Rachel Reeves and your team, and listen to what we have to say, because hairdressing has always been treated with disrespect and we’ve had enough. We’re very emotional. We’ve had enough. Just please listen to us,” he said, as he became tearful.

Mr Dicker said workers in the industry may end up losing their homes, apprenticeships and “their opportunity to grow”.

“I’m frustrated for the employers in our industry – they’re done, they’re done. I can’t explain it any other way. Apprentices are over, employment’s over because you haven’t listened,” he said.

Staff at Ford are to walk out in a row over pay and conditions.

More than 1,000 Unite members working in administration will strike tomorrow.

The union said Ford has failed to offer its workers a permanent pay increase and was imposing performance-related pay from 2025 for all staff.

A Ford spokesperson said: “Considering the overall competitiveness of our general salary roll employee pay and benefits package, the company’s final offer of a 5% total pay increase for 2023-24 is fair and balanced.

“We will continue to engage with Unite and our valued employees and endeavour to resolve the matter.”

Rachel Reeves risks fuelling shop inflation with her autumn budget unless she introduces measures to reduce the tax burden on retailers, bosses have warned.

New figures from the British Retail Consortium show overall retail prices are now 0.8% lower than a year ago, marking the third consecutive monthly fall.

But Helen Dickinson, its chief executive, said measures to be announced tomorrow by the chancellor as she aims to plug a £22bn hole in public finances could put falling inflation at risk.

She said: “Households will welcome the continued easing of price inflation, but this downward trajectory is vulnerable to ongoing geopolitical tensions, the impact of climate change on food supplies, and costs from planned and trailed government regulation. Retail is already paying more than its fair share of taxes compared to other industries.”

Ms Dickinson called on Ms Reeves to introduce a “retail rates corrector”, a 20% adjustment to business rates bills for all retail properties.

This would “allow retailers to continue to offer the best possible prices to customers while also opening shops, protecting jobs and unlocking investment”, she said.

Rachel Reeves will tomorrow become the first Labour chancellor since 2010 to deliver a budget.

She will set out the government’s plans to “fix the foundations” and meet Sir Keir Starmer’s ambition of bringing growth back to the economy.

The government has warned that there will not be vast amounts of sunshine in this budget, with tax rises expected in order to boost investment.

But ministers insist that this will put Britain’s economy on stable footing for the long term.

Our lead politics presenter Sophy Ridge will anchor coverage throughout the day from 10am until 5pm, joined by our political and economics experts to assess the detail and what it means for you.

And we’ll have live coverage in the Politics Hub, as well as looking at what the budget means for you here in Money blog, so do join us tomorrow for the first budget of this new Labour government.

Watch The Budget from 10am on Wednesday on Sky channel 501, Virgin channel 602, Freeview channel 233, on the Sky News website and app or on YouTube.

By Sarah Taaffe-Maguire, business reporter

Talking about the cost of government borrowing is tricky and is about to get trickier. 

The interest rate the state has to pay on a key way of raising money, through issuing government bonds to investors, has mostly been rising in the past six weeks. 

Bonds are issued for a set period of time, from three months to 50 years, and work like a kind of loan. Markets determine the interest rate, so how much investors are charging can tell us about how they’re receiving policy announcements and economic data. 

Higher interest rates on borrowing make having debt pricier and can deter a state from funding investment in public services.

There are lots of things that determine the interest rate, known as the yield, on UK government bonds, called gilts. Exactly what is moving the yield is a matter of debate. 

Since last week, when reports of Chancellor Rachel Reeves imminently breaking her spending rules emerged, there was a spike in the benchmark 10-year gilt yield, a spike which has been surpassed for the second time this morning. 

That could be because of fears over Ms Reeves’s extra borrowing, which could be worth billions. The yield is now the highest since before Labour came into power on 4 July at 4.282%.

Or it could be that the UK is affected by the same forces as the US, which, similarly, has seen its 10-year bond yield rise steeply this month and hit 4.3%. 

The polls are tied for the US presidential election, meaning the possible introduction of inflationary policies by Donald Trump. 

The 10-year UK bond yield tracks the US 10-year as there’s an assumption the Bank of England will track the US central bank, the Federal Reserve, in cutting rates. 

It’s going to be even harder to clearly work how the UK bond yields respond to the budget tomorrow as the US election looms closer. 

Crucially, at the exact same time Ms Reeves will stand up in the Commons, the US – the world’s biggest economy – will announce economic growth figures. 

Meanwhile, a slight lessening of Iran-Israel tensions has kept the oil price below $72 a barrel for the second day in a row. 

High rewards for shareholders at Europe’s largest bank HSBC brought its share price to a six-year high. It’s the biggest riser on the FTSE 100 index of most valuable companies on the London Stock Exchange. Overall the index is up 0.36% but the bigger and more UK-focussed FTSE 250 is down 0.39%. 

Sterling has fallen just off the recent highs against the euro and the dollar, though currencies tend to be strengthened by higher bond yields. A pound can buy €1.1997 and $1.2982.

Rachel Reeves could announce an above-inflation rise to the minimum wage when she delivers her first budget tomorrow, reports suggest.

It’s believed the chancellor will raise the minimum amount by up to 6% for more than a million low-paid workers next year.

The changes would follow the new government’s instruction to the Low Pay Commission, which recommends minimum wage rates, to include the cost of living in how it works out the rate.

A 6% rise would up the wage for people aged 21 and older to around £12.12 an hour – in line with the commission’s forecast last year.

Ms Reeves is also expected to announce a larger increase for younger workers aged 18 to 20 in a bid to bring their rate closer to the adult wage.

The minimum wage rose by more than 9% a year in 2023 and 2024 as high inflation hammered the country, in an effort to meet the previous government’s target of raising rates to two-thirds of median earnings.

A Treasury spokesperson told the Guardian they would not comment on speculation outside the budget.

Earlier this year we reported on how differences in the minimum wage affect those aged 18 to 20:

By Saywah Mahmood, data journalist

Lowri Williams is struggling to cover her basic expenses. Earning a low income with very little support, she says she feels like she’s “living hand-to-mouth” and barely getting by.

She’s one of a large group of people in low-income households who are caught in a precarious position, earning too little to comfortably support themselves, but too much to qualify for significant financial help.

For people like Lowri, working more or earning a higher income could mean losing vital support like Universal Credit, leaving them no better off and in some cases even worse off.

Higher tax bills for the lowest paid

Lowri’s salary is not high enough to pay tax. But there’s a wider group of low-income earners who are facing a heavy tax burden.

Sky News analysis has found that in the last three years, working people in the bottom 25% of earners have effectively had a 60% tax hike.

This is due to the freeze on personal allowances, introduced in 2021 and scheduled to end in 2028. For each year the freeze is enacted, earners effectively see their tax rates rise in real terms as a higher proportion of their income becomes taxable.