Company insolvencies in England and Wales higher than during financial crisis; Gold price hits record high – business live

11.55am BST

More companies went bust in past year than during financial crisis

More companies in England and Wales went bust in the last year than at the height of the financial crisis, the latest insolvency figures show.

There were 25,551 insolvencies in the 12 months from August 2023 to July 2024, new data from the Insolvency Service released this morning shows.

That’s more than in the year from August 2008 to July 2009, when 25,186 insolvencies were recorded ( see data here ). That period covered the collapse of Lehman Brothers in September 2008 , which was followed by the ‘Great Recession’ of 2009 .

Rebecca Dacre , partner at Forvis Mazars , the international audit, tax and advisory firm, says:

“The latest insolvency figures are a strong reminder that many businesses are still a long way off from recovery.”

“Despite initial signs of improvement in the economy, some sectors are still experiencing severe difficulty as interest rates remain high. Falling consumer spending during the cost of living crisis has also made it incredibly difficult for some businesses to survive. The retail and hospitality sectors have borne much of the brunt.”

As covered at 9.51am , company insolvencies fell by 7% month-on-month in July, to 2,191, or 2150 on a seasonally-adjusted basis.

The worst month for insolvencies in the last year was November 2023, when 2,467 were recorded.

But during the financial crisis, company failures peaked in October 2008 at 2,732.

David Hudson, restructuring advisory partner a t FRP, says high interest rates, weak demand and rising costs have all pushed up insolvency levels in recent months.

Hudson adds:

We expect insolvency levels to remain elevated for some time yet.

While economic conditions are improving, there are many businesses that have had their resilience ground down since the onset of the pandemic and that are now carrying large amounts of debt, which they’ll struggle to maintain even with falling rates and strengthening consumer confidence.

11.35am BST

One billion pounds has been wiped off the value of telecoms company BT this morning, after Sky struck a broadband deal with one of its biggest rivals.

Sky has decided to roll out its Full Fibre Broadband on internet provider CityFibre ’s network.

CityFibre can currently reach 3.8 million customers, and is aiming to more than double that to 8 million premises “over the coming years”.

The partnership looks to be a blow to BT, which currently hosts Sky’s broadband customers on its high-speed Openreach network.

Greg Mesch, CEO at CityFibre says:

“This partnership with Sky is a huge vote of confidence in our business and has cemented CityFibre’s position as the UK’s third digital infrastructure platform.

With demand for digital connectivity continuing to grow, CityFibre’s network can provide the quality and reliability that people need and the infrastructure competition the UK deserves.”

Shares in BT have dropped by 6.8% this morning, down 9.9p to 135.6p, to the bottom of the FTSE 100 leaderboard.

That knocks its market capitalisation down to £13.47bn, down from £14.44bn last night.

AJ Bell’s head of financial analysis Danni Hewson says BT’s shares came under pressure on fears of an enhanced competitive threat for its Openreach broadband operation.

But, she adds:

CityFibre’s modest scale and focus on rural areas suggest it shouldn’t be a huge issue.”

10.59am BST

Gold now over $2,525/oz

Gold is continuing to rally, and has now hit a new alltime high of $2,525.24 per ounce.

Gold traders are refocusing on the prospect of lower U.S. interest rates, attracting Western safe-haven seekers back to the market, as shown by inflows into physically backed products, said Carsten Menke, an analyst at Julius Baer ( via Reuters ).

10.23am BST

Eurozone inflation confirmed at 2.6% in July

We have confirmation that inflation ticked up across the eurozone last month.

The euro area annual inflation rate was 2.6% in July 2024, up from 2.5% in June, statistics body Eurostat reports. That’s in line with the preliminary estimate, at the end of last month.

Eurostat says:

The lowest annual rates were registered in Finland (0.5%), Latvia (0.8%) and Denmark (1.0%). The highest annual rates were recorded in Romania (5.8%), Belgium (5.4%) and Hungary (4.1%).

Compared with June 2024, annual inflation fell in nine Member States, remained stable in four and rose in fourteen.

Core inflation, which strips out energy, food, alcohol & tobacco, was 2.9% for the third month running.

Updated at 10.23am BST

10.06am BST

More than 10,000 people fell into insolvency last month.

Official data shows that 10,524 individuals entered insolvency in England & Wales in July, which is 24% more than in July 2023. It’s slightly lower than in June, when there were 10,548 individual insolvencies.

9.51am BST

Company insolvencies fall in England and Wales

Just in: there’s been a welcome fall in the number of companies collapsing in England and Wales.

The Insolvency Service reports that there were 2,191 registered company insolvencies in England and Wales in July 2024. That’s a 7% fall compared with June.

However, it’s 16% higher than a year ago, as there were 1,890 insolvencies in July 2023.

The Insolvency Service says:

The number of company insolvencies remained much higher than those seen both during the COVID-19 pandemic and between 2014 and 2019.

Company insolvencies in July 2024 consisted of 320 compulsory liquidations, the highest monthly number since before the COVID-19 pandemic.

There were also 1,691 creditors’ voluntary liquidations (CVLs), 155 administrations and 25 company voluntary arrangements (CVAs).

Chris Tate , partner at accountancy firm Azets , says poor cashflow management is often the biggest killer for strugging companies, explaining:

“Despite recent encouraging signs, a great many businesses are still being pushed into insolvency while the challenges faced by many others are often proving to be almost insurmountable.

“The August interest rate reduction from 5.25% to 5%, being the first in over four years, was welcomed by business but will not be enough to significantly aid those businesses who are highly leveraged.

“The traditional summer slowdown, added to ongoing economic challenges – extra costs, supply chain issues, pay increases, cautious customer spending – may be a decisive factor for many companies.

9.41am BST

Pound hits one-month high

Sterling is also having a strong morning, gaining ground against the weakening US dollar.

The pound has hit its highest level again the US dollar in almost five weeks. It has hit $1.3012, which would be a one-year high if it closed there.

The pound has benefitted from optimism about the UK economy, which has been the fastest-growing G7 economy so far this year.

Related: UK economy continues recovery from recession with GDP growth of 0.6%

9.07am BST

Gold now over $2,520

The spot price of gold is continuing to climb – and just hit $2,520.67 per ounce….

Update: Hang on, make that $2,521.36…. the rally continues….

Updated at 9.12am BST

9.04am BST

Why gold has hit an alltime high

Interest rate cut hopes, the weaker US dollar, geopolitical instability, demand from some central banks, and the pursuit of safe assets have combined to push gold to its record high today.

So explains Ernesto Di Giacomo , senior market analyst at brokerage XS.com :

One of the main drivers behind this historic surge has been the expectation of a more dovish monetary policy from the U.S. Federal Reserve. With the possibility of further interest rate cuts and increased quantitative easing, financial markets have responded predictably, driving up the price of safe-haven assets like gold. The prospect of a weakened dollar has made gold more attractive to both domestic and international investors.

Additionally, instability in geopolitically sensitive regions, such as Ukraine and the Middle East, has significantly contributed to this rise. Ongoing tensions in these areas have created an environment of uncertainty, leading investors to seek refuge in gold, considered a safe asset in times of crisis. Geopolitical instability has acted as a catalyst, further boosting the demand for this precious metal.

Another critical factor has been the decline in bond yields and the dollar’s depreciation. With falling bond yields, investors have sought alternatives that offer greater security and returns. In this context, gold has emerged as a standout option, attracting a growing number of investors. Moreover, a weaker dollar has made gold more accessible to buyers outside the United States, further driving its demand in international markets.

So far this year, gold has experienced a more than 20% increase, a notable growth driven by central bank purchases and strong demand in China. Central banks, seeking to diversify their reserves, have increased their gold acquisitions, while Chinese demand for jewelry and investment remains robust. This behavior has significantly contributed to the sustained increase in gold prices in global markets.

Updated at 9.55am BST

8.56am BST

Gold hits record high, meaning gold bars worth over a million dollars

Newsflash: the gold price has hit a new alltime high.

Spot gold has risen over its previous record high, set last Friday, to trade at $2,513.79 per ounce this morning.

This extends its recent gains, as gold has been lifted by expectations of cuts to US interest rates starting in September.

Falling interest rates support the gold price, as they make alternative assets such as bonds and cash reserves – which pay interest – less attractive.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, says:

The recent demand boom can be put down to growing expectations that the US Fed is set to cut interest rates in the coming months. Add in central bank buying, demand for portfolio hedges, and global uncertainty; it’s been a recipe for strong demand over the year.

Gold has now risen almost 22% so far this year. And it may have further to rise, with investment bank UBS forecasting prices could reach $2,600 an ounce by the end of 2024.

At current levels, a standard bar of gold is worth one million dollars.

Bloomberg explains :

With gold bars typically weighing about 400 ounces, that would make each one worth more than $1 million.

Updated at 8.58am BST

8.42am BST

Sweden's Riksbank cuts interest rates

Newsflash: Interest rates have been cut in Sweden.

The Riksbank has lowered its policy rate by a quarter of one percent, to 3.5%.

It has also hinted it could make three more rate cuts this year – more than previously expected – saying:

Inflation is in the process of stabilising at the target and economic activity is weak.

The Executive Board has decided to cut the policy rate by 0.25 percentage points to 3.5 per cent. If the inflation outlook remains the same, the policy rate can be cut two or three more times this year, which is somewhat faster than the Executive Board assessed in June.

8.29am BST

The UK government is to hold talks with unions this week over pay rises for rail workers and seafarers, as it tries to end industrial unrest and stimulate growth.

The Rail, Maritime and Transport union (RMT) will meet with officials at the Department for Transport on Tuesday to discuss a pay rise for its members at train-operating companies.

The union will be seeking a deal for this year, without any changes to terms and conditions, PA Media reports .

The RMT will also meet Network Rail on Thursday to discuss pay, and will also hold talks later this week with the Ministry of Defence to try to resolve a pay dispute at the Royal Fleet Auxiliary (RFA).

RMT general secretary Mick Lynch said that all offers would be dealt with by the union after talks are completed.

He said:

“We really need to move on from the belligerent and hostile attitude of the last government and reset industrial relations to allow rail workers and RFA seafarers to get on with the job.”

The meetings follow a suggested deal aimed at ending the long-running train drivers’ pay dispute.

Members of the Aslef union are being recommended to vote in favour of a three-year increase worth over 14%.

Related: Aslef train drivers reach deal that could end rail strikes after two years of chaos

8.08am BST

Key event

European stock markets have opened mostly higher, with the pan-European Stoxx 600 index gaining 0.3% in early trading.

Germany’s DAX and France’s CAC are both 0.3% higher.

But in London, the FTSE 100 has dipped by 14 points or 0.15%. Shell and BP are among the fallers, tracking the decline in the oil price .

Updated at 8.19am BST

8.05am BST

Over in Italy, as fresh search is underway for six people – including tech entrepeneur Mike Lynch – after the Bayesian yacht capsized off Sicily before dawn on Monday.

Lynch’s 18-year-old daughter Hannah, Morgan Stanley International chairman Jonathan Bloomer, and Clifford Chance lawyer Chris Morvillo are also among those missing .

Related: Sicily yacht sinking: search for missing tech tycoon Mike Lynch and Bayesian passengers resumes – live

Related: Who is Mike Lynch, the UK tech boss missing in superyacht sinking?

7.55am BST

China's July oil imports from Russia fall 7.4%

Speaking of oil….China’s crude imports from top supplier Russia have fallen.

Official data shows that China imported 7.4% less oil in July than a year ago.

Russian oil arrivals, including via pipelines and shipments, totalled 7.46m metric tons last month, or 1.76m barrels per day (bpd), according to data from the General Administration of Customs.

That’s lower than the 1.9 million bpd recorded in July 2023, as well as June’s 2.05 million bpd.

That suggests weaker demand for energy in China, as its economy remains subdued – as export growth slows and factory activity weakens.

This will also make a dent in Moscow’s revenues; Russia has redirected its oil exports from Europe to China, and India, after Western countries imposed sanctions following its invasion of Ukraine.

7.48am BST

Oil drops on hopes of easing Middle East tensions

Oil is not joining the rally, though.

Brent crude, the international benchmark, has dropped 0.5% this morning to a near-two-week low of $77.29 per barrel.

That adds to its $2/barrel fall on Monday, on hopes of success in the Middle Eastern peace talks.

US secretary of state Antony Blinken is visiting the region, again; yesterday he met with Israel’s prime minister Benjamin Netanyahu for three hours. Netanyahu’s office says the meeting was “positive and conducted in a good spirit”.

Kyle Rodda, senior financial market analyst at Capital.com, says:

Reports that the US have cajoled Israeli Prime Minister Benjamin Netanyahu into a ceasefire agreement raised hopes of a de-escalation in the Israel-Gaza war.

The markets remain on the lookout for potential reprisals from Iran on Israel for the assassination of Ismail Haniyeh, which could reinflame tensions. Regarding a potential ceasefire, the onus shifts to Hamas and whether it accepts the arrangement.

7.48am BST

Introduction: Markets lifted by soft-landing hopes

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Global stocks continue to push higher, on hopes that policymakers are executing a ‘soft landing’ in their battle against inflation.

After gains on Wall Street last night, shares across Asia have hit a one-month high today – as investors continue to move on from the volatility that gripped markets last week.

MSCI’s index of Asia-Pacific shares outside Japan hit a one-month high, before dipping back slightly, while Japan’s Nikkei has surged by 1.8%, or 674 points, up to 38,062 points.

The rally is being driven by expectations that the US Federal Reserve will start to cut its key policy rate next month, and that America will dodge a recession.

Jerome Powell , the head of the US Federal Reserve, could cement those hopes – or shake them – when he speaks at a major economic symposium in the Rocky Mountains resort of Jackson Hole on Friday.

Ipek Ozkardeskaya , senior analyst at Swissquote Bank , says:

The week kicked off on a positive note on expectation that when Federal Reserve (Fed) Chair Jerome Powell speaks at the Jackson Hole meeting on Friday, he will deliver a strong hint that the rate cuts will begin soon in the US.

How soon? Probably in September? By how much? Probably a reasonable 25bp? Would the markets be upset with the idea of a 25bp cut instead of a 50bp? Probably not, because a 50bp cut would require a severe economic slowdown, a crisis or a panic mode, which is not good for risk appetite.

Therefore, the best of both worlds would be the hint of a 25bp cut that would keep the market mood in the sweet soft-landing spot. And this is what investors hope to hear.

Related: High stakes at Jackson Hole symposium as Powell surveys US’s rocky prospects

European markets are set for a mixed open, with Germany’s DAX being called higher but the FTSE 100 expected to fall a little.

The agenda

• 8.30am BST: Sweden’s Riksbank interest rate decision

• 9.30am BST: UK insolvency statistics for July

• 10am BST: Eurozone inflation report for July (final reading)

• 1.30pm BST: Canadian inflation report for July

Updated at 9.00am BST