Inflation surges to highest in more than a decade

The latest UK inflation data make unpleasant reading this morning. The consumer prices index rose by 5.1 per cent in the year to November, its highest level in more than a decade and much more than economists had expected.

Consumer prices rose at an annual rate of 4.2 per cent in October, data from the Office for National Statistics show, and economists had been braced for a rise to 4.8 per cent last month.

ONS chief economist Grant Fitzner said a “wide range of price rises contributed to another steep rise in inflation”. Fuel prices were one of the factors pushing up the index, but rising clothing costs and prices for food, second-hand cars and higher tobacco duty also contributed.

Meanwhile factory gate and raw material prices have risen to their highest level in twelve years.

Our economics editor Chris Giles has more.

Tell me what you think. Email us at citybulletin@ft.com and click here for today’s top headlines in a short-form audio digest.

Briefly

Cineworld has lost the latest stage of a court fight after backing out of a $2.3bn deal to buy Cineplex, Canada’s largest cinema group. The Ontario Superior Court of Justice awarded Cineplex damages of C$1.23bn (around £720m) and C$5.5m for lost transaction costs. Cineworld has said it will appeal.

Currys, the retailer formerly known as Dixons Carphone, pointed to a “softer market” in the run-up to Christmas, but said full-year profits were on track to meet a forecast set a month ago. Currys said there had been “some impact” on product availability from supply chain problems but that it had taken market share and maintained margins.

Energy regulator Ofgem has launched a consultation on reforming the energy price cap, which has limited consumer costs during the recent price spike but pushed many suppliers over the brink. The proposals include revising the cap quarterly rather than every six months to pass through wholesale price increases to customers more quickly, or putting consumers protected by the cap on to a six-month fixed tariff that would prevent them from switching at will unless they paid exit fees.

International Airlines Group, the group behind British Airways and Iberia, is in advanced talks to abandon its acquisition of Air Europa. The deal, originally struck in November 2019, had run into competition concerns.

Also out today are updates from retail landlord Hammerson, supplier Bunzl and leisure group Hollywood Bowl.

Beyond the Square Mile

It’s the most wonderful time of the year if you’re an investment banker at Goldman Sachs or JPMorgan Chase. The two banks are preparing to pay out bumper bonuses following a record year for dealmaking on Wall Street, our banking and M&A correspondents report. At Goldman, the bonus pool could be 40-50 per cent larger than last year, while at JPMorgan it could be 40 per cent bigger. The two banks have taken more investment banking fees than any others.

The US is to blacklist eight more Chinese companies for their alleged involvement in the surveillance of the Uyghur Muslim minority, our correspondents report from Washington and Hong Kong. The US Treasury will put DJI, the world’s largest commercial drone manufacturer, on the investment blacklist on Thursday along with the seven other groups, barring US investors from taking stakes in the companies.

And French fashion house Chanel named a Unilever veteran as its new global chief executive to take over from co-owner Alain Wertheimer, who has filled the role since the previous CEO left the label over “differences of opinion about strategic direction” in 2016. Leena Nair was global head of HR for Unilever and spent almost 30 years at the consumer goods group, but has little experience of the luxury fashion sector.

Also out today are updates from Inditex, which reported record sales and profits, and drugmaker Sanofi, which pushed back the expected approval date for its Covid-19 vaccine after it was asked to extend a late-stage clinical trial. Our breaking news team bring you more on both stories here.

Essential comment before you go

The FT unveils its person of the year today and it’s Elon Musk. Our veteran tech correspondent and US west coast editor Richard Waters interviews the man behind the tweets, so that’s well worth checking out here.