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Business - Need to Know

Afternoon Edition

Good afternoon. George Osborne pledged in July to take steps to to boost productivity in the UK. Figures from the Office for National Statistics suggest he might need to increase his steps to massive strides.

Britain was far less productive than its G7 peers last year, lagging them on average by the most since records began in 1991, official data showed on Friday, highlighting a persistent problem for Britain's government.

The figures, a first estimate for 2014, showed productivity, measured as output per hour worked, was 20 percentage points below the average in the rest of the G7.

It lagged the United States, Germany and France by a hefty margin and was slightly worse than Italy and Canada. The only country where productivity was lower was Japan, the data showed.

"These figures show UK productivity continues to lag behind other developed economies," ONS chief economist Joe Grice said. "Since the economic downturn, productivity growth has slowed in most developed economies, but by more in the UK than the average."

There’s plenty more on this on the Business Now live blog.

Meanwhile, UK payment processing company WorldPay has announced plans to float on the London market after weeks of speculation and multi-billion pound bids from German and French technology giants.

The company, which is owned by Advent International and Bain Capital, said it wants to raise around £890 million through the listing with a free float of at least 25 per cent, with an over-allotment of up to 15 per cent.

However, if its private equity owners also sell part of their stakes it could be the biggest IPO this year, overtaking Auto Trader.

It also worth noting that RBS was forced to sell it by the European Commission back in 2010 as part of its state-aid bailout. It sold it for £2 billion. The company is now worth around £6 billion.

Ed Curwen has the full story here.

Meanwhile, following the Fed’s decision to do nothing with rates yet again, markets are all lower, due to the downbeat comments on the state of the global economy.

The pan-European FTSEurofirst 300 dropped 1 per cent while the eurozone's blue-chip Euro STOXX 50 fell 1.2 per cent. In London, the FTSE 100 is off 0.89 per cent, in Frankfurt the Dax is 2.27 per cent lower, while the Cac in Paris has shed 2.35 per cent. When US markets open shortly, the Dow Jones is expected to open 130 points lower.

Traders said uncertainty over when the Fed would eventually raise rates was adding further pressure to markets.

You can read the full story here.

David Potts, the chief executive of Morrisons since March, has spent half a million pounds buying shares in the supermarket. Yesterday he bought 314,881 shares at 158.8p, the company announced this morning.

That is on top of the £1 million he spent buying 508,000 shares during the first week.

That is stark contrast to Dave Lewis, the boss of Tesco, who is yet to buy any shares in Britain's largest supermarket.

In fact, earlier this week the Guardian reported that the entire board of Tesco has bought less than £350,000 of shares in the supermarket chain.

Finally, this week’s podcast is out. UK’s public finances, growing eurozone confidence (despite questions over whether it is actually QE driving the recovery), and an M&A bonanza (are mergers actually a good thing?) are the topics this week. Philip Aldrick, our Economics Editor and Deirdre Hipwell, M&A Correspondent discuss and there is even an apology from Richard Fletcher, the Business Editor. You can listen via iTunes and Soundcloud.

Have a great weekend and enjoy the rugby. I most certainly will be.

Rebecca Clancy
Breaking News Editor
The Times
rebecca.clancy@thetimes.co.uk

Shares in London’s FTSE 100 are falling after US Federal Reserve left interest rates unchanged on concerns about the global economy.

London’s benchmark index is down 0.89 per cent, or 55.37 points, to 6,131.62, but a surge in the precious metals miners is helping the blue-chip index outperform the rest of Europe. After the Fed's decision, investors are heading towards safe haven assets such as gold. Rangold Resources, the London-listed goldminer, is up 4.4 per cent to £38.95 a share, while Fresnillo has jumped 5 per cent to 619.5p a share. Gold itself is up $5 to $1,137 an ounce.

But it's a different story for commodities trading and mining giant Glencore, which once again tops the worst performers table on London's benchmark index. Shares are currently down 2.8 per cent. It follows accusations by shareholders that the mining group made a “serious breach” of principle in the way it conducted a $2.5 billion equity placing.

Banks have also been falling across Europe after the decision by the Fed to leave lending rates as they are. Barclays was one of the top fallers on the FTSE 100, falling 2.3 per cent, while the Royal Bank of Scotland is off 2.88 per cent.

In the mid-caps, healthcare services provider UDG Healthcare was up 7.6 per cent after McKesson Corporation agreed to buy its pharmaceutical distribution division.

Passions are running high in Greece as the nation prepares to go back to the polls for the third time this year. Sunday’s elections are widely expected to result in a coalition government

It’s a quiet day in the US with no major earnings and only one data release.

But there's always the question of how markets are going to react to last night's non-event at which the Federal Reserve decided not to raise interest rates for at least another month. Last night markets were extremely volatile following the news as investors tried to make sense of it. This morning, futures are pointing to the Dow opening 130 points lower.

At 10am ET, the Conference Board issues its monthly leading economic index, a gauge of future US economic activity. The index is expected to have gained 0.2 per cent in August after slipping 0.2 per cent in the previous month.

Alexandra Frean
US Business Editor
@freanie

"Compared to Yellen, he looks like a bastion of trustworthiness"
Simon Smith, chief economist at FXPro on Mark Carney, Bank of England governor, following the Fed's decision not to raise US interest rates
Today's FTSE 100 risers and fallers
Up (%)
Fresnillo +5.169%
Randgold Resources +4.371%
British Land +1.862%
J Sainsbury +1.556%
Land Securities +1.547%
* As at noon
Down (%)
Glencore -4.729%
Weir Group -2.882%
Royal Bank of Scotland -2.638%
GKN -2.491%
Ashtead Group -2.343%
* As at noon
The Markets Today
FTSE 100 6,131.62 -0.89%
FTSE 250 16,983.26 -0.35%
Cac 4,545.90 -2.35%
Dax 9.997.74 -2.27%
Brent Crude $49.00 -0.16%
Gold $1,136.70 +1.74%
GBP/USD 1.5639 +0.33%
GBP/EUR 1.3688 +0.44%
10Y Gilt 101.403 +1.06%
* As at noon
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