Vodafone to cut 11,000 jobs, Imperial Brands maintains guidance

Stocks to watch

Telecoms giant Vodafone said it was cutting 11,000 jobs and expected to post flat earnings next year after reporting a decline in annual profits in a performance described as “not good enough” by its chief executive. Adjusted core earnings fell 1.3% to €14.7bn due to higher energy costs, and commercial underperformance in Germany. CEO Margherita Della Valle said: “Our performance has not been good enough. To consistently deliver, Vodafone must change.”

Imperial Brands said it remained on track in its half-year report on Tuesday, as it reported accelerating returns. The FTSE 100 firm said despite higher next-generation product investment affecting profitability, it saw a strong contribution from Logista following recent mergers and acquisitions. It said it was confident in meeting its full-year guidance, and was progressing towards its five-year strategy of improving returns.

Newspaper round-up

One in four teachers and one in eight nurses will be higher-rate taxpayers by 2027 as a result of the government’s record freeze on income tax allowances and thresholds, according to a leading thinktank. The Institute for Fiscal Studies said better-paid public sector workers will be among the almost 8 million people – one in five of all taxpayers – who will pay income tax at 40% or above as result of the Treasury’s attempt to reduce the UK’s budget deficit. – Guardian

The energy watchdog for Great Britain will label the decade-long wait to connect low-carbon projects to the electricity grid as “unacceptable”, amid tensions over a “blame game” for a mounting backlog of green power projects. Jonathan Brearley, the chief executive of Ofgem, has written to energy bosses to warn that the current system, whereby energy projects queue for their connection, could be replaced by new methods to match power generation with demand. – Guardian

John Lewis has turned to the advertising agency that helped Margaret Thatcher into Downing Street as the department store seeks to reinvigorate its flagging business. The John Lewis Partnership, which also owns Waitrose, has hired Saatchi & Saatchi to work on all its upcoming adverts including its much anticipated Christmas advert. – Telegraph

The European Commission has given the green light to Microsoft’s merger with Activision Blizzard, putting it at odds with the British competition watchdog which blocked the tie-up last month. The European regulator approved the $68.7 billion deal, subject to promises from Microsoft over the next ten years to ensure that Activision’s games, which include the blockbuster Call of Duty franchise, are freely available across cloud streaming providers. – The Times

British businesses have been urged to supply more “data and information” on how the Treasury’s decision to scrap VAT-free shopping for overseas visitors is hurting the economy, as renewed pressure builds for the policy to be reinstated. The government is facing fresh calls from companies, including the luxury trade body Walpole and Heathrow airport, to restore tax-free shopping for overseas tourists. They warn that London is losing tourism business to cities such as Milan and Paris. – The Times

US close

Wall Street ended the day on a positive note on Monday, with investors holding out hope for a resolution to the ongoing federal debt ceiling discussions.

The Dow Jones Industrial Average closed 0.14% higher at 33,348.60, while the S&P 500 ended the session up 0.3% at 4,136.28, and the tech-heavy Nasdaq Composite gained 0.66% to finish at 12,365.21.

Monday’s gains reflected investor optimism despite contrasting messages from Washington regarding the debt ceiling discussions.

President Joe Biden expressed optimism about the talks on Sunday, but House Speaker Kevin McCarthy said on Monday that the White House and congressional Republicans were still "far apart".

In currency markets, the dollar was last 0.03% stronger on sterling at 79.84p, while it held steady against the euro, remaining at 91.96 euro cents.