Closing post
Time for a recap.
Key events
Rolls-Royce shares drop as Cathay Pacific inspects Airbus A350 fleet amid engine issues
A late PS: Shares in jet engine maker Rolls-Royce have dropped by almost 6% in late trading, after airline Cathay Pacific detected problems with several engine components.
Cathay Pacific has been forced to cancel some flights as it conducts a “precautionary” inspection of its entire Airbus SE A350 fleet.
The Hong Kong-based airline, among the biggest operators of the European planemaker’s marquee jet, said it identified an engine component failure on an A350 aircraft that was forced to return from its flight to Zurich on Monday. A subsequent check of the fleet uncovered “a number of the same engine components that need to be replaced,” Cathay said in a statement.
The company didn’t specify the issue it had found on the engine, which is made by Rolls-Royce Holdings Plc. Representatives for Rolls-Royce didn’t immediately respond to requests for comment, while Airbus referred to the engine maker and the airline for comment.
Closing post
Time for a recap.
Volkswagen’s new cost-cutting push is a blow to chancellor Scholtz, who is already reeling from the success of the far-right Alternative für Deutschland in a state election last weekend.
Kathleen Brooks, research director at XTB, says:
On Monday, Volkswagen, one of Germany’s largest companies, announced that it would cut costs and it may have to close factories in Germany for the first time.
The company is trying to end the pact with unions that would have protected jobs by 2029. This could add to economic pressure, dent confidence, increase unemployment and add to the pressure on Olaf Scholtz’s government. The market reaction has been mild so far, but it could dent sentiment towards German stocks.
Shares in Volkswagen have hit a one-month high today, after it said it was considering unprecedented factory closures.
They’re up 2.2% today at €98.30, the highest since 2 August.
VW brand chief Thomas Schaefer has said in a statement that the company was in a difficult position:
“The situation is extremely tense and cannot be overcome by simple cost-cutting measures.”
Reuters reports that Volkswagen considers one large vehicle plant and one component factory in Germany to be obsolete.
That’s according to the carmaker’s works council, which is vowing “fierce resistance” to the executive board’s plans.
VW considers shutting factories in Germany and cutting jobs
Over in Germany, carmarket Volkswagen is considering making unprecented factory closures in its home market, as it tries to cut costs.
The company says it can no longer rule out plant closures in Germany – something it hasn’t done before in its history.
According to Bloomberg, Volkswagen is also considering trying its pact with unions to avoid any job cuts until 2029.
VW chief executive officer Oliver Blume said in a statement that the market was getting “tougher”.
“The economic environment has become even tougher and new players are pushing into Europe.
“Germany as a business location is falling further behind in terms of competitiveness.”
Daniela Cavallo, chair of the council that represents VW’s workers, has told employees that VW is considering shutting factories in Germany and cutting jobs.
In a note circulated to employees, reported by the Financial Times, Cavallo explained that VW brand chief executive Thomas Schäfer had on Monday “admitted” that planned savings had fallen short.
Cavallo added:
“As a result, the executive board is now questioning German plants, the VW in-house collective wage agreements and the job security programme running until the end of 2029.”
HP to keep pursuing $4bn damages claim after Mike Lynch’s yacht death
Hewlett Packard is planning to pursue its $4bn damages claim against the estate of British tech tycoon Mike Lynch, who died when his superyacht sank last month.
HP said in a statement on Monday:
“It is HPE’s intention to follow the proceedings through to their conclusion,”
HP has claimed that it lost more than $4bn after it acquired software firm Autonomy, accusing co-founder Lynch of an elaborate fraud that inflated its value.
In 2022, HP won a civil fraud case against Lynch, with a high court judge ruling that he duped the US firm into paying £8.2bn for his software firm Autonomy.
But in June, Lynch was cleared of fraud following a lengthy trial in the US.
Over in Norway, electric-car registrations have hit a record high, even as demand slips in other countries.
About 94% of the 11,114 cars sold in August were electric, the Norwegian Road Federation, or OFV, reported on Monday.
OFV director Oyvind Solberg Thorsen said:
“If this trend continues, we will soon achieve the target of having 100% zero-emissions fleet in 2025,”
Norway’s EV boom has been driven by generous tax incentives, as well as perks such as use of bus lanes and parking benefits, Bloomberg reports.
August’s EV sales were led by Tesla Inc.’s Model Y – more than 2,000 Model Ys were sold in August, taking a 19% share of the markets.
Norwegians don’t appear concerned that Elon Musk’s right-wing rhetoric, and endorsement of Donald Trump, might be making the Tesla brand toxic:
Data last week showed that battery-electric vehicles continued to lose market share across Europe, with drivers choosing hybrids instead.
Lloyds isn’t the only bank to experience technical problems today (seemingly due to a glitch with Microsoft’s Azure).
Virgin Money apologised to customers who struggled to view their transactions through online banking.
It posted on X:
“We’re aware that some customers are having issues with our mobile banking app and internet banking service this morning with customers not being able to view their transactions.”
Technical problem with MS Azure now ‘mitigated’
Microsoft reports that a problem affecting its Azure platform today – which may have had a knock-on impact on consumer services – has been “mitigated”.
Lloyds Bank hit by app problems
Lloyds Bank has apologised to customers after online banking issues have left some unable to view their recent transactions.
According to the website DownDetector, more than 650 Lloyds outages were reported on Monday morning.
A spokeswoman for Lloyds said:
“We know some of our customers are having issues viewing their recent transactions and our app may be running slower than usual.
“We’re sorry about this and we’re working to have everything back to normal soon.”
There have also been reports of problems using Microsoft’s Azure portal in the UK. Downdetector says this could be the cause of “the multiple issues reported by UK consumers”.
UK mortgage rates have continued to slip lower.
Data provider Moneyfacts reports:
-
The average 2-year fixed residential mortgage rate today is 5.56%. This is down from 5.57% the previous working day.
-
The average 5-year fixed residential mortgage rate today is 5.20%. This is down from 5.21% the previous working day.