BUSINESS LIVE: Bitcoin hits $100,000; Vodafone-Three gets green light; Frasers takes Budget hit

Interest rates are likely to be cut four time next year, according to the governor of the Bank of England.

Speaking to the Global Boardroom conference with the Financial Times, Andrew Bailey confirmed the Bank of England’s central forecast of four quarter point interest rate cuts next year.

Activity in Britain’s housebuilding sector continued to fall last month, as high borrowing costs and weak consumer confidence weighed on demand.

The closely watched S&P Global/CIPS UK Purchasing Managers’ Index for the construction industry came in at 55.2 last month, up from October’s 54.3.

Shell and Equinor will combine their offshore oil and gas assets in the North Sea for a joint venture with 1,300 employees.

Based in Aberdeen, it will be the North Sea’s largest oil and gas producer and is expected to produce more than 140,000 barrels of oil equivalent per day next year.

Simon Peters, eToro crypto analyst:

‘Even with this milestone reached, we’re still reasonably early in this bull market if past years and cycles are anything to go by. Historically the peak of the bitcoin bull market has formed 12-18 months after the block reward halving.

‘With the most recent halving having occurred in April 2024, this puts a timeline of the end of 2025 or early 2026 for when the peak of the bull market should occur.

‘With that being said, it is not unusual to see 20 to 40% drawdowns in the bitcoin price during bull markets. With the price reaching such a significant milestone as $100,000 and it being holiday season, I wouldn’t be surprised to see a pull back from this level, as investors take some money off the table before the trend continues on.’

Britons have been hoarding cash in bank accounts in 2024, lured by higher interest rates and relative safety in a year characterised by political uncertainty.

But while savers may have enjoyed more generous interest than has been available for much of the last two decades, they have missed out on bumper equity returns and risk tying themselves to falling rates.

Bitcoin has topped $100,000 for the first time as the price of the cryptocurrency continues to soar in the wake of the election of Donald Trump for a second term as US President.

Trump has nominated crypto advocate Paul Atkins to lead the US Securities and Exchange Commission.

The President-elect has said Atkins, the chief executive of Patomak Partners and a former SEC commissioner, was a ‘proven leader for common sense regulations’.

In the years since leaving the SEC, Atkins has made the case to cut back burdensome market regulations.

Richard Hunter, head of markets at Interactive Investor:

‘Hot on the heels of relegation from the FTSE100 being confirmed, Frasers has declared a profit downgrade which has compounded its current woes.

‘Nearer term, the current clouds which are overhanging over the retail sector (which have also resulted in the relegation of peer B&M European Value Retail from the premier index) are weighing on performance.

‘Consumer sentiment is patchy at best, retail sales are under pressure and the general economic backdrop has lessened consumer propensity to spend.

‘Meanwhile, a failed bid for Mulberry and public disagreements with boohoo have been unwelcome distractions, and the group has found itself under increasing pressure as investors seek better value elsewhere in the sector.’

Energy giants Shell and Equinor’s UK businesses will combine their offshore oil and gas assets for a joint venture creating ‘the UK North Sea’s biggest independent producer’.

Equinor’s executive vice president for exploration and production international, Philippe Mathieu, said: ‘Equinor has been a reliable energy partner to the UK for over 40 years, providing oil and gas, developing the offshore wind industry, and advancing decarbonisation.

‘This transaction strengthens Equinor’s near-term cash flow, and by combining Equinor’s and Shell’s long-standing expertise and competitive assets, this new entity will play a crucial role in securing the UK’s energy supply.’

Matt Britzman, senior equity analyst, Hargreaves Lansdown:

‘The FTSE 100 is set to open lower this morning after slipping 0.3% yesterday, breaking a five-day rally as losses in healthcare and mining dragged the index lower. Gains in financials and airlines provided some support, but it wasn’t enough to offset the broader pressure.

‘The rest of Europe is on a similar path this morning, as turmoil in the French government and question marks around German economic weakness look set to weigh on markets in early trading.

‘Vodafone and Three have secured regulatory approval for their merger, combining the UK’s third and fourth-largest mobile operators into a stronger competitor. While the full details are yet to emerge, this is a significant regulatory shift after years of blocked telecom deals.

‘A streamlined three-player market, seen in countries like the Netherlands and Switzerland, could lift profitability and encourage much-needed investment in the UK’s lagging networks. This is a small win for the sector but doesn’t change the tough market dynamics.’

Police are investigating reports of stalking made by executives at fast fashion firm Boohoo.

There have also reportedly been claims of ‘corporate espionage’.

Frasers has lowered the top end of its annual profit guidance, blaming weaker consumer confidence leading up to and following the Autumn Budget.

The group said it was now forecasting adjusted pre-tax profit for its 2024/25 year of £550million to £600million, versus previous guidance of £575million to £625million.

It made £299.1million on the same basis in its first half, down 1.5 per cent on last year.

Boss Michael Murray said:

‘The first half of this year has been another period of progress for the Group, delivering on our objectives as the Elevation Strategy continues to take the business to the next level.

‘Sports Direct UK delivered further sales growth, and our Property and Financial Services divisions are seeing encouraging progress. We continue to operate with discipline to ensure our business is as resilient as possible – proactively right-sizing recent acquisitions to set them up for profitable long-term growth and driving further automation benefits to exceed our stock reduction targets for the period. 

‘We have also made significant strides in international expansion, developing new partnerships across Australia and Africa, and unlocking opportunities as we move further towards our goal of becoming a leading global sports retailer.’

A gold miner backed by property magnate Nick Candy has bought a rival in a £90million deal. Metals Exploration swooped on Condor Gold with a bid of £67.5million up front in cash and shares.

Condor shareholders will also be entitled to £22.6million in the future if it hits gold production and resource targets.

The tie-up came after the Mail revealed Metals Exploration – 38 per cent-owned by Candy – was prepared to go hostile with its bid.

Pascal St-Jean, CEO at global digital asset investment manager 3iQ:

‘Despite Bitcoin reaching $100,000 being a significant psychological threshold the most important consideration of this event is that although Bitcoin is a Bellwether for the broader digital asset class, the more significant takeaway is that this will increase the likelihood of more institutions and traditional finance investment in the sector.

‘This price appreciation is driven by the perception of an incoming crypto friendly administration resulting from Donald Trump’s election victory, as well as an increase in accessibility to digital assets for investors via the introduction of new Exchange Trade Products and greater regulatory clarity globally.

‘Crypto is also being more widely accepted by governments around the world who are now more accepting of the benefits it delivers, namely financial inclusion.’

Britain’s competition watchdog has finally approved the £15billion merger between Vodafone UK and Hutchison’s Three UK.

It clears the way for the creation of the country’s biggest mobile operator and reduces the number of networks to three from four.

The Competition and Markets Authority had previously said the deal could push up prices for customers, but it later accepted that commitments on network investment and shorter term protections for both retail and wholesale customers were enough to resolve its concerns.

The CMA said: ‘We believe the merger is likely to boost competition in the UK mobile sector and should be allowed to proceed – but only if Vodafone and Three agree to implement our proposed measures.’

Bitcoin has rallied above a landmark $100,000 as investors increasingly bet a Donald Trump White House will cement the cryptocurrency’s place in financial markets.

The total value of the cryptocurrency market has almost doubled over the year so far to hit a record just shy of $3.8trillion, according to data provider CoinGecko. By comparison, Apple alone is worth about $3.7trillion.