Closing post
Time to wrap up…
John Healey should “stay the course” and continue repairing the UK’s public finances, the International Monetary Fund’s top economist has said, after the fund lifted its growth forecast for Britain.
Little more than a fortnight before Healey’s first budget, Silvana Tenreyro, the IMF’s economic counsellor, said the UK “stands out” among G7 countries in having a plan to narrow its deficit.
“The UK has already started a consolidation process,” she said. “The message for the UK is simply, stay the course.”
The owner of Phase Eight, Hobbs and Whistles has said its websites and IT systems have been hit by a cyber-attack that may have compromised customers’ personal data.
The South-African listed TFG London said it identified the “cybersecurity incident” at the three UK-based retail chains on Sunday. Its two other UK brands, Inside Story and White Stuff, are not affected.
TFG said its stores had stayed open and trading but some of its IT systems “remain unavailable” and it had paused all online orders as a “precautionary measure”.
An “investigation is ongoing, including establishing whether any personal or other sensitive information has been compromised,” the company said.
In other news…
The UK’s cost of living squeeze means fewer people plan to ringfence money for holidays abroad next year, the travel industry has warned.
The new Your First Home programme for first-time buyers could increase the number of houses British builder Bellway produces each year by 10%, its boss has said.
Key events
US stock market joins chip sell-off
The chip sell-off is continuing in the US stock market today – the blue chip S&P 500 share index is practically flat, down by 0.02%. But the tech heavy Nasdaq fell by 0.4% at the opening bell.
Chip designer Nvidia has slipped by 0.9%, while Micron is down by 4.7%. AMD is also down by 2.7%.
Whitbread CEO says UK tax hikes mean new hotels were scrapped
Graeme Wearden
The boss of Premier Inn owner Whitbread has blamed UK tax hikes for forcing the firm to cut back on planned UK hotel investments.
Dominic Paul, chief executive of the hospitality giant, said the industry has been “hammered” by higher taxes and labour costs linked to recent budgets.
And in a bit of pre-Budget pressure, he urged the government to freeze property taxes.
Paul told the Press Association:
“We need this Budget to be a turning point for the industry.
“What we have seen in recent budgets meant that we have had cut potential investments in hotels, which would have created more jobs.”
According to Bloomberg, the Premier Inn-owner is shouldering an additional £100m in tax costs; last year’s budget ended pandemic-era business rates relief and introduced higher property valuations from April 2026.
Your First Home scheme ‘could boost Bellway’s house output by 10%’
Julia Kollewe
The new Your First Home programme for first-time buyers could increase the number of houses British builder Bellway produces each year by 10%, its boss has said.
Faced with a chronic shortage of homes, the government has made housing one of its top priorities and Andy Burnham’s surprise announcement of the YFH scheme a fortnight ago sent housebuilders’ shares soaring by more than 10%.
Jason Honeyman, who has led Bellway since 2017, welcomed the new programme, which will be more targeted than previous help-to-buy initiatives. It features household income caps to exclude those with big salaries, and price caps to ensure people can only buy modest houses.
He said:
Based upon our past experience with help to buy, the new scheme has the potential to boost volumes by around 10%, and with a market recovery, provide a path back to at least 10,000 homes a year and a return on equity of 15%.
Full details of the scheme, including the launch date, are expected be announced by John Healey in his first budget as chancellor on 28 October.
Goldman Sachs earnings beat forecasts; equities traders revenue soars
Goldman Sachs’ earnings for the third quarter have beat forecasts, with net income of $5.3bn for the period – ahead of expectations of $4.2bn and almost 30% higher than a year ago.
The US bank’s equities traders performed particularly well, with their revenue up 72% to $6.4bn compared with the same time last year.
However, earnings from its fixed income, currencies and commodities trading fell 1% to $3.5bn.
Shares in Goldman are up by 3.4% in pre-market trading.
Kalyeena Makortoff
The FCA CEO has admitted that new rules meant to stamp out bullying and sexual harassment won’t be enough to change working culture across the City.
The Treasury Committee pushed Nikhil Rathi for his views on how regulation would influence behaviour of bad actors still operating in the financial services industry.
Labour MP Julie Minns referred to the committee’s 2024 Sexism in the City inquiry, which discovered there was “a very stark gender pay gap, harassment and widespread sexual harassment, bullying, misogyny persisted across the industry. It was a broken system of whistle blowing and widespread misuse of NDAs.”
She asked whether FCA rules and guidance, including a recent decision to expand its it’s so-called non-financial misconduct rules beyond banks, to hedge funds, asset managers and insurers was “ever going to be sufficient to change the working culture in this sector”.
Rathi responded, saying: “No, not on their own.”
He explained some cases would remain matters for the police and other authorities.
Rathi added:
We can’t do it on our own. There’s been other legislation that’s come through and that’s come into force, including for all employers around prevention of, of harassment. And at the end, the tone on this comes from the leadership of organisations.”
Under the expanded financial misconduct rules, companies are expected to report any serious cases of non-financial misconduct to the regulator.
They’re also required to pass on reports of bad behaviour – including racism, sexual harassment, violence and intimidation – to that person’s potential future employer, to help prevent cases of “rolling bad apples”, where rogue bosses move to new firms without consequence.
FCA boss urges small businesses to take out cyber insurance
Kalyeena Makortoff
The Financial Conduct Authority’s CEO has warned every small City business to take out insurance against growing cyber security risks from the booming AI sector.
Speaking to MPs on the Treasury Committee this morning, Nikhil Rathi said he recognised that, out of the roughly 45,000 firms that the regulator supervises, “not all of them are going to be able to invest” in frontier AI technology in the way larger companies can.
The panel of FCA executives referenced the fact that they, and some of the bigger companies they supervise, had been given access to Anthropic’s now infamous frontier AI model, Mythos – which has been credited with being able to rapidly identify gaps in company’s cyber security system – under Project Glasswing.
AI models like Mythos, Rathi explained, posed both an opportunity and a threat.
The FCA chief said:
One message I’d give to every small businesses, you should consider making sure you are insured.”
He added:
Cyber insurance is absolutely fundamental and businesses, large and small, must consider their insurance footprint, just as they would think about employer liability insurance and other forms as an absolutely core requirement.
And the cyber insurance market is actually anchored in the UK and Lloyd’s of London. It’s active, it’s open. “
JPMorgan Chase earnings miss expectations
JPMorgan has reported a rise in its third-quarter profit, but missed expectations after the US bank reported a slowdown in its fixed income trading division.
The biggest bank in the US said its net income landed at $15.4bn for the quarter, below expectations of $16.3bn.
Revenue from its fixed income division dropped 4% compared with the same period last year, the bank said – bringing total trading revenue to $10.3bn for the third quarter.
Chief executive Jamie Dimon said in a statement:
The U.S. economy continued to be fueled by strong business investment and ongoing consumer spending. However, large fiscal deficits, sticky inflation, elevated asset prices, rising interest rates and geopolitical conditions continue to shift under the surface. These forces may be manageable, but we remain prepared for a wide range of outcomes.”
Shares in JPMorgan are down by about 3% in pre-market trading. Goldman Sachs and Citigroup will also be reporting their earnings later this afternoon.
Rogue AI models may ‘self-replicate’ to hijack household devices, Anthropic says
Claude developer Anthropic has warned that rogue “AI worms” will soon be able to hijack household smart devices such as ovens and TVs.
The company said in a blog post on Monday that AI agents could be “months away” from “self-replicating” across “internet-of-things” devices, such as smart ovens and off-brand Android TVs.
It is the latest in a series of warnings by AI researchers and companies, as developments in the field continue at pace.
Anthropic said in a research post that it is “seeing signs of life for AI worms.”
We don’t yet have a full rogue replicator, but agents are becoming increasingly capable of completing the individual steps in the replication chain (and passing on their adaptations to future copies of themselves).
…It’s uncertain exactly what form autonomous AI replication will take. It could be a slow, distributed “digital slime mold,” living on relatively insecure compute. It could also be a powerful cyber model that breaches datacenters at a high pace, or a model that scams people for compute credits.
Smart devices in homes could be the first target for attacks as they are connected to the internet and historically have had minimal security measures in place, Anthropic said.
Hobbs and Whistles owner hit by cyber-attack
The owner of Phase Eight, Hobbs and Whistles has said its websites and IT systems have been hit by a cyber-attack.
The Foschini Group (TFG) told its investors that it had identified a “cybersecurity incident” on 11 October which affected some of its IT systems, specifically its Phase Eight, Hobbs and Whistles brands. It said its Inside Story and White Stuff brands were not affected.
The company, which is listed in South Africa, said in a statement to the stock exchange:
The Group immediately activated its incident response and business continuity plans. TFG London has engaged external cybersecurity specialists to contain the incident. The incident has been reported to the relevant UK authorities.
TFG London’s stores remain open and trading, although several of its IT systems remain unavailable. The Group’s operations in TFG Africa and TFG Australia run on separate systems and are not affected.
The investigation is ongoing, including establishing whether any personal or other sensitive information has been compromised. Should the investigation establish that such information has been compromised, TFG London will notify affected individuals or organisations, as appropriate.
The Board will continue to assess the situation and will communicate any material developments by way of a further SENS announcement if required.
It comes just a week after hackers gained access to the app system at the fashion retailer Asos, sending a push notification to thousands of customers.
UK holiday demand may have peaked amid cost of living squeeze, says travel industry
Gwyn Topham
The UK’s cost of living squeeze means fewer people plan to ringfence money for holiday abroad next year, the travel industry warned on Tuesday.
Despite war, wildfires and EES border checks, the numbers of Britons taking holidays climbed back to pre-pandemic levels this year – but rising costs may mean the numbers have peaked, according to an annual travel industry report.
Numbers taking holidays both at home and abroad continued to rise, although late bookings and shorter city breaks have been an increasing feature of holidays through 2026, according to research from the industry body Abta.
Court date set for legal challenge to FCA’s £9.1bn motor finance compensation scheme
Kalyeena Makortoff
A court date has finally been set for a legal challenge to FCA’s £9.1bn motor finance compensation scheme.
The Upper Tribunal has confirmed it will hold a hearing from 16 to 26 February 2027, which means consumers will continue waiting for compensation.
The scheme is being challenged by lenders – Volkswagen Financial Services, Mercedes Benz Financial Services, and Crédit Agricole Auto Finance – as well as a consumer group, Consumer Voice.
The lenders and Consumer Voice are coming at this from different angles (lenders arguing it is unfairly punitive, and Consumer Voice arguing that it short changes victims), adding to the complexity of the legal challenge.
The FCA continues to insist that its scheme is “the quickest, fairest and most efficient way to compensate consumers” and has pledged to “defend it robustly.”
However, the FCA is also warning lenders to prepare for the possibility that this could all fall apart, leaving them to handle individual claims through the court system, which could prove to be far more expensive and draw out the process even further:
Firms should plan for the possibility that, if the scheme or parts of it are quashed, there may be no motor finance compensation scheme and no complaint handling pause. In that scenario, lenders would need to be operationally and financially ready to resolve complaints through the usual complaint-handling process and within the usual statutory timescales.
We expect lenders to plan rigorously for this scenario, make the necessary financial provisions and engage with their auditors.”
AI ranked as biggest global risk by insurers – ahead of climate change
Artificial intelligence is now ranked as the biggest global risk by insurance experts, according to the insurer AXA.
Climate change is still considered the biggest risk by the general public, with AI & big data ranked second, up from seventh last year.
But among insurance experts, AXA found that AI is considered the top risk, bumping climate change to second place.
AXA chief executive Thomas Buberl said that “living in a world of ‘polycrises’ has become the new normal”.
For the first time, experts worldwide rank risks related to artificial intelligence and big data as their top concern, ahead of climate change. This does not mean that climate is less worrying – it remains the number one risk for the general population, with unprecedented levels of perceived vulnerability – but it shows that AI is now seen as a structural risk, on a par with major environmental and geopolitical threats.
Among both experts and the general public, 34% of AXA’s survey respondents said they identified AI as the top risk because of issues related to human rights, bias and the misuse of data. AI’s impact on employment was also a frequently cited reason, as well as the “black box effect” – the inability to understand or explain decisions made by AI systems.
AXA’s findings echo a warning today from the IMF that the threat of an AI sell-off in stock markets is affecting the world’s financial stability.
Athanasios Vamvakidis, the deputy director of the IMF’s monetary and capital department, said:
The exposure of the rest of the world to US assets, particularly AI, is the highest it has ever been. So this is supporting the global economy through wealth effects today; but if we get a market correction it could have broad implications.”
An AI crash was one of three “salient risks” to stability identified by the IMF, alongside rising government borrowing costs and the threat of a big cyber-attack.
It called this trio of factors “plausible near-term catalysts for a sharp tightening of financial conditions and market turmoil”.
