Business news live: National security probe ordered into £4bn takeover of defence firm Cobham

Follow live business updates

(Reuters)

The government has ordered an investigation into a £4bn takeover of British defence giant Cobham by a US private equity firm on the grounds of national security.

Business Secretary Andrea Leadsom said the government wanted to "support private sector innovation whilst safeguarding the public interest" but had ordered the intervention after "careful consideration".

The competition watchdog will now scrutinise the national security implications of the deal between Cobham and Advent International and report the results before 29 October.

Please allow a moment for the live blog below to load...

Key Points

• Falling inflation 'helpful for consumers' but economists warn of rises to come
• Pound falls after inflation comes in lower than expected
• Housing market slumps to slowest since 2012, official figures show
• Inflation drops to 1.7 per cent in August - it's lowest since December 2016 
• Record numbers seek debt help
• Government orders national security probe into Cobham takeover by US private equity firm

[18 September 2019 09:56 · ben.chapman]

Slowest housing market since 2012

[18 September 2019 10:01 · ben.chapman]

House prices fell in four of nine English regions: The South East, London, the East and North East.

Falling prices had largely been confined to London and the South East but the issue is now more widespread.

Wales was the strongest region with 4.2 per cent annual growth in July.

[18 September 2019 10:07 · ben.chapman]

Pound falls after inflation data

The pound is down 0.42 per cent against the dollar on the back of lower-than-expected-inflation.

Sterling is at $1.245 and has dropped 0.27 per cent against the euro to €1.104.

[18 September 2019 10:37 · ben.chapman]

Poorer areas hit hardest by disappearance of free-to-use cash machines

Free-to-use cash machines are vanishing more quickly in deprived areas than in affluent ones, according to consumer campaigners who are pressing Chancellor Sajid Javid to implement a cash guarantee.

Which? said its analysis shows nearly one in 10 (9 per cent) free cashpoints across the country had closed or switched to fee-paying during a 17-month period after changes to how the network is funded were set out.

The consumer group used data from ATM network Link to make the findings.

Reductions to the fees card issuers pay to ATM operators have sparked fears that "cash deserts" could be created, with bank branches also closing.

Press Association

[18 September 2019 10:38 · ben.chapman]

'Helpful news for consumers'

Consumer price rises slowed down from an annual rate of 2.1 per cent in July to 1.7 per cent in August.

That's good for UK households, says Howard Archer of the EY Item Club.

August’s moderation in inflation to 1.7 per cent adds to the improvement in consumer purchasing power coming from annual earnings growth rising to an 11-year high of 4 per cent in the three months to July.

Improved consumer purchasing power is particularly welcome news for an economy currently struggling markedly amid major Brexit, domestic political and global economic uncertainties – consumers have been the most resilient sector of the economy and their purchasing power will be critical to whether this resilience can continue.

[18 September 2019 10:40 · ben.chapman]

UK inflation slows in temporary respite for consumers

"Inflation in Britain fell to 1.7 per cent last month - the slowest pace of price growth since December 2016 - after a surprisingly high rate of 2.1 per cent in July," writes The Independent's business and economics editor, Olesya Dmitracova.

"Economists had expected inflation to slow to 1.9 per cent in August. 

"According to the Office for National Statistics, the largest pressure on inflation came from a drop in the prices of clothing and shoes and much slower inflation in recreational and cultural goods and services, which include toys and computer games, as well as in sea fares."

Here's the full story:

UK inflation slows in temporary respite for consumers

[18 September 2019 10:52 · ben.chapman]

So what is more expensive, and what is cheaper?

Recreation and culture saw the biggest fall in price over the year to August. Within that grouping, games, toys and hobbies fell 5 per cent between July and August 2019.

Air fares rose by more in 2019 than in 2018 but sea fares rose by less.

A number of essential costs have also risen in price, including the cost of owning a home, energy bills, and council tax.

Clothes and shoes rose in price by 1.8 per cent.

[18 September 2019 11:19 · ben.chapman]

How will lower inflation impact the Bank of England's interest rate decision?

Inflation is now well within the Bank of England's target of 2 per cent which could make the BoE more likely to cut rates when its Monetary Policy Committee meets tomorrow.

But many analysts think  that is unlikely

James Smith, an economist at ING, points out that wages are rising at 4 per cent a year for the first time since 2008.

"This is the main reason why the Bank of England will likely retain its notional tightening bias at tomorrow's meeting and also suggests it's too early to pencil in rate cuts in the UK," he said. 

"Equally though, the ongoing uncertainty surrounding Brexit, and mounting concerns over global growth, suggests the prospect of any further policy tightening is also still quite a long way off."

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, echoes that feeling, saying that the likelihood of a rate cut this year remains "slim".

"The 1.7% print actually exceeded the Committee’s August Inflation Report forecast of 1.6%," he points out.

"In addition, half of the sharp fall in the headline rate was driven by further volatility in the price of computer games. A renewed fall in clothing inflation to -0.9%, from 0.4% in July, accounted for a further one-quarter of the decline in the headline rate."

Core goods inflation likely will rise over the next nine months in response to the recent rise in import prices and the depreciation of sterling, Tombs says.

[18 September 2019 11:30 · ben.chapman]

Cash-starved Air India putting crews on low-fat diet

NEW DELHI (AP) Cash-starved Air India is putting its crew on a diet, changing their inflight menu to special low-fat meals.

Dhananjay Kumar, the state-run airline's spokesman, said Wednesday that the objective is to provide healthy and cost-effective meals to crews on domestic and international flights.

Kumar declined comment on media reports that the cost per meal, mostly vegetarian, will come down to one-third of existing 500-800 rupees (up to $11) per meal.

The new menu was introduced Monday on flights originating from New Delhi and Mumbai and will be extended to other routes soon.

Associated Press

[18 September 2019 12:09 · ben.chapman]

The chancellor is, unsurprisingly, upbeat about the the latest inflation figures.

Sajid Javid, said: “Low inflation and high wage growth means people's hard-earned cash is going further, helping them to provide for their families. 

"We're helping with the cost of living by cutting taxes for more than 30 million people and ensuring that almost a million of our dedicated public sector workers - including our soldiers, teachers and doctors - get above-inflation pay increases."