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  • Business and finance update 21st October 2024

Business and finance update 21st October 2024

Inflation surprise

Good morning. Today we're talking about UK inflation, Uber’s big acquisition target and a new listing in London.

Big Stories

Inflation surprise

UK inflation unexpectedly dipped to a three-and-a-half-year low of 1.7% in September, falling below the Bank of England's 2% target. This welcome news for consumers is largely due to lower petrol prices and airfares. Significantly, "stubborn" services inflation also cooled, dropping from 5.6% to 4.9%. This eases pressure on the Bank of England, which was hesitant to cut interest rates due to persistent services price rises. Traders are now pricing in more interest rate cuts by year-end. A cut next month seems almost certain, with a potential second cut in December gaining traction. However, the picture isn't entirely rosy. Food price increases picked up pace for the first time in over a year, and housing costs climbed at their fastest rate since 1992. This could temper the excitement for lower interest rates among homeowners and those seeking mortgages. Overall, this inflation surprise paves the way for a more relaxed monetary policy by the Bank of England, potentially offering some relief to consumers but also presenting challenges for specific sectors.

Uber targets travel giant

Uber is reportedly considering the acquisition of online travel giant Expedia. This potential deal, valued at over $20bn, would be Uber's largest to date and a significant step towards its "super app" ambitions. Fuelled by a surging stock price and recent profitability, Uber seeks to emulate Chinese platforms like WeChat, offering a vast array of services beyond just ride-hailing. Food delivery, freight, and even yacht rentals are already on Uber's menu. Adding Expedia, with its portfolio of travel booking platforms (Vrbo, Hotels.com, Orbitz), would significantly expand its reach and offerings. For Uber CEO Dara Khosrowshahi, a reunion with Expedia might be tempting. He led the company from 2005 to 2017 before joining Uber. Early talks are underway, with details still emerging. This potential acquisition could propel Uber into new markets and solidify its position as a comprehensive super app.

London listing boost

Applied Nutrition, a leading sports supplements company, has announced its plans to float on the London Stock Exchange later this month. A price range of 136 pence to 160 pence per share has been set, valuing it at up to £400m. The company has secured the support of prominent investors, including JD Sports and Mohsin Issa, the co-owner of Asda who will support with a cornerstone investment of £25m. Applied Nutrition's IPO is a significant milestone for the sports nutrition industry and highlights the growing popularity of health and fitness products. The listing is seen as a positive development for the City of London, which has seen a decline in listings in recent years. Applied Nutrition's decision to list in London is a boost to the market and demonstrates confidence in the UK economy. Next up could be fast fashion giant Shein in what would be a huge boost for London, having been valued at $66bn in its last funding round.

Elsewhere...

Changing times: Boohoo’s CEO is stepping down as the online fashion retailer launches a strategic review of its brands, which include Debenhams and PrettyLittleThing, that could result in a breakup of the company.

Takeover talk: Shares in ingredients group Tate & Lyle soared after rumours emerged of a bid for the company from an American private equity group.

New powers: Amazon is joining Google and Microsoft in the pivot towards nuclear energy, aiming to meet rising power demands from its data centres while hitting climate targets.

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$1 million

How much tech billionaire Elon Musk has said he will give away a day to a registered voter in the key swing state of Pennsylvania until the US presidential election in November.

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