What to watch: William Hill lockdown warning, UK inflation and borrowing rise

Tom Belger
·Finance and policy reporter
·5-min read
File photo dated 4/7/2019 of a branch of William Hill, Ludgate Hill, in central London. The gambling giant has confirmed it has received two separate takeover bids from private equity giant Apollo and casino group Caesars Entertainment. The betting business said it received a written proposal from Apollo on August 27, before receiving further proposals from each party.
William Hill updated investors. Photo: PA

Here are the latest top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.

William Hill revenue slides as it warns on regional lockdown hit

The UK betting giant William Hill saw its revenues slide 9% in the 13 weeks to the end of September, with online growth failing to offset falling sales in its retail estate.

With betting shops forced to shut as part of the lockdown in the Liverpool city region, the company warned new coronavirus lockdown restrictions would hit it hard. Around one in 10 of its branches are in areas classed as ‘very high’ risk.

“With respect to further local lockdowns we estimate that, on average, the closure of 100 shops for four weeks would reduce EBITDA by c.£2m ($2.6m), excluding the benefit from any job support schemes for which the group may be eligible,” it said on Wednesday.

The company said in a trading statement it had seen a resumption in “good growth” in both UK and online international operations, while its UK retail business was trading “broadly on par” with last year like-for-like. Retail net revenue was down 2% year-on-year.

William Hill agreed to a takeover by US casino operator Caesars Entertainment last month, with the new owner expected to sell its operations outside the US.

Metro Bank shares up on lending growth

Shares in Metro Bank rose on Wednesday, as it announced lending had increased during the pandemic and new account openings came close to pre-virus levels.

The total value of loans rose to £15.1bn ($19.7bn) in its third quarter to 30 September, up 2% on the previous quarter. Growth was “driven by continuing capital-efficient government-supported SME/business lending,” the company said in a trading update.

The number of customers deferring mortgages fell from 16% to under 3.5%, while deposit levels were close to flat.

"In a challenging environment, Metro Bank has delivered a good performance with loan growth reflecting our support for government-backed lending schemes,” said CEO Daniel Frumkin.

UK inflation accelerated after the Eat Out to Help Out scheme

UK inflation accelerated in September, as the wind-down of the government’s subsidised meal scheme and a surge in demand for second-hand cars pushed up prices.

The headline rate of inflation on the consumer price index (CPI), which tracks to cost of everyday goods and services, came in at 0.5% in September, 0.1 percentage point lower than predicted by analysts.

It marked a jump on the 0.2% change in prices seen in August, and was also higher than the 0.3% forecast by the Bank of England’s monetary policy committee (MPC). The latest inflation figures were published by the Office for National Statistics on Wednesday.

Analysts said much of the rise reflected prices returning closer to ‘normal’ after the end of the government’s Eat Out to Help Out scheme, which cut dine-in meal prices Monday to Wednesday in August.

Watch: What is a V-shaped economic recovery?

UK government debt at highest level in 60 years

UK government borrowing hit a record high for a sixth month in a row in September, taking public debt to its highest level in 60 years.

Official figures show Britain’s debt pile now stands at almost £2.1tn ($2.7tn), dwarfing the entire economy at 103.5% the size of GDP. It has risen by £259.2bn since April, with borrowing plugging the gap as government spending has soared while tax receipts have plummeted in the wake of the coronavirus crisis.

The data was published by the Office for National Statistics (ONS) early on Wednesday.

Borrowing came in at £36.1bn in September alone, the third highest level since records began in the early 1990s and higher than expected by analysts. Tax receipts were 13.4% lower than a year earlier, while the furlough and self-employed job support schemes cost £5.9bn last month.

WATCH: European markets slide on coronavirus restrictions

European stocks sink despite hopes of US stimulus deal this week

European stocks slid as markets opened on Wednesday, with concerns over new coronavirus curbs offsetting hopes of a US stimulus deal this week.

Several indices in Asia had risen overnight, following Wall Street gains on Tuesday amid rising hopes of a breakthrough in talks over a stimulus package in the US.

Stimulus hopes then helped lift Japan’s Nikkei (^N225) 0.3% and the Hong Kong Hang Seng (^HSI) 1.1% overnight.

The gains failed to lift European markets, however, with stocks opening near-flat but quickly falling. The FTSE 100 (^FTSE) dropped 1.3% as a rising pound hurt export-focused stocks, and new lockdown curbs were announced in Greater Manchester and South Yorkshire.

Germany’s DAX (^GDAXI) lost 1%, and France’s CAC 40 (^FCHI) lost 1.2%. Several European countries are weighing up or imposing further restrictions, which would likely hobble economies further. The Spanish government is considering tighter rules in badly affected areas like Madrid.

What to expect in the US

Wall Street looked set to open close to flat after making gains on Tuesday. S&P 500 futures (ES=F) and Dow Jones futures (YM=F) were off 0.1%, and Nasdaq futures (NQ=F) down 0.2% shortly before 5am eastern time in the US.