Finance, in brief

The US central bank held its main interest rate at 3.75% to 4% on Wednesday. [1]

The bank, the Federal Reserve, sets what it costs to borrow in US dollars. [3]

In September it voted 12-0 to raise rates, its first rise since 2023. [15]

Fewer votes means fewer set dates when the cost of borrowing can change. [2]

The rate sets what people pay on mortgages and credit cards, and earn on some savings. [3]

Warsh said high rates are cooling the AI boom as investors push back on tech borrowers. [4]

The next test is PCE, a US price figure due Thursday, then December's meeting. [13]

The US central bank held its rate at 3.75% to 4% while prices rise 3.7% a year, and two of its own voters said it should have raised. [1][3]

Its chair, Kevin Warsh, gave no hint about December, so the decision now rests on the next price figures and on the meeting after the 3 November election. [6][13]

A hold with no hint sounds calm, so the 78% chance traders already put on a December rise is easy to miss. [6]

Holding the rate at 3.75% to 4% keeps up what some savings accounts pay. [3]

The rate stays where it is, and traders expect it to rise in December. [3][6]

Whether the US Fed raises its rate in December.

Warsh refused to give any guidance, and the 78% chance is a price traders pay, not a promise. [6][9]

Whether US prices start to slow before that meeting.

The PCE price figure due Thursday is the next reading, and the September figure of 3.7% was higher than August's. [13][3]

The Bank of Canada raised its main interest rate a quarter point, to 2.5%, on Wednesday. [16]

It was the bank's first rise since July 2023. [17]

Canada's prices rose 3.2% in a year to September, above its 1% to 3% band. [18]

The bank now expects 3.1% inflation in 2027, up from the 2% it forecast in July. [16]

It also raised this year's growth forecast to 1.0%, from 0.7% in July. [16]

A higher rate will likely push up Canadian loan and mortgage costs, Reuters reported. [16]

Governor Tiff Macklem said of any further rise, "we will proceed carefully." [16]

The Bank of Canada's rise to 2.5% is likely to push up loan and mortgage costs. [16]

Canada's central bank raised its growth forecast for this year to 1.0%, from 0.7% in July.

On Wednesday Britain's ten-year borrowing rate dipped to 5.321% as the Budget held no big surprises. [20]

By Thursday morning it had slipped to 5.308%. [19]

City economists called John Healey's first Budget as chancellor a "no harm" budget. [19]

The official forecaster, the OBR, cut 2027 growth to 1% from 1.5%. [21]

It sees prices rising 3.1% this year and 3.4% in 2027. [23]

Prices only get back to the 2% goal in 2028, a year later than March's forecast. [21]

The room left under the borrowing rules shrank to £15bn, from £23.6bn in March. [21]

Higher interest on its debt costs the UK government an extra £14bn this year. [19]

Markets still expect the Bank of England to raise rates next month. [22]

Christine Lagarde will step down as head of the European Central Bank on 7 February. [24]

Her term was due to end in October 2027, nearly nine months later. [25]

The ECB sets interest rates for the 21 countries that use the euro. [25]

European Union leaders will choose her successor, and the search starts at once. [24]

Klaas Knot of the Netherlands and Spain's Pablo Hernandez de Cos are seen as favourites. [19]

A Berenberg economist says this way the choice is made before France's 2027 election. [19]

The ECB announces its own rate decision at 13:15 GMT on Thursday. [26]

Who will run the European Central Bank after 7 February.

EU leaders have only just started the search, and the two favourites are one economist's view, not a shortlist. [24][19]

What the European Central Bank decides on Thursday.

Its decision comes at 13:15 GMT, after this edition was written. [26]

Shares in Alphabet, Google's owner, were 10% lower before New York trading opened on Thursday. [28]

A close over 9.77% lower would be its worst day after results since listing in 2004. [28]

Its sales rose 25% to $127.6bn in the three months to September. [29]

Its operating profit, from running its businesses, rose 30% to $40.6bn. [29]

But its final profit fell 25% to $26.2bn. [27]

An $8.7bn loss on its stake in SpaceX pulled that profit down. [27]

Its spending was $9.07bn more than the cash its businesses brought in; analysts expected $2.70bn. [28]

Alphabet still plans to spend $195bn to $205bn this year, mostly on data centres and chips. [27]

Why a fall in another company's shares can cut a company's own profit

A company buys a stake in another company

Each quarter it counts that stake at its latest value

When the other company's shares fall, the drop goes into its profit as a loss

No cash leaves, and its own business is unchanged

So reported profit can fall while its own business earns more

Alphabet's own businesses earned 30% more than a year ago. Its profit still fell 25%, because SpaceX shares it owns lost value.

Both bars are Alphabet's latest quarter. The gap between them is mostly the fall in value of its SpaceX stake.

An $8.7bn loss on its SpaceX stake took its final profit to $26.2bn, while profit from running its businesses rose to $40.6bn.

A €6.4bn cut in the value of its stake in Porsche turned the quarter into a €4.2bn loss.

Its own adjusted figure left out a loss of about $200m on its stake in OpenAI.

Losses on short-term investments helped cut its reported profit to $290m, while its profit without one-off items was $3.74 a share.

A paper loss can turn back into a gain if the shares recover. If the company later sells the stake for less, the loss becomes real cash.

When SpaceX's shares fell, the loss showed up for SpaceX's own investors, in Alphabet's profit, and for every pension fund that owns Alphabet shares.

The shares were 10% lower before New York opened, after spending outran cash by $9.07bn. [28]

How large Alphabet's SpaceX loss was.

The Guardian puts its loss on its stakes at $8.7bn and ties it to SpaceX; Business Insider puts the SpaceX loss alone at $8.2bn. We used the Guardian's figure. [27][30]

Microsoft's shares were nearly 4% higher before Thursday's open, after results beat forecasts. [28]

Its sales rose 19% to $92.3bn in the three months to September. [32]

Its profit was $36.6bn, above the $35.1bn analysts expected. [33]

Azure, its business renting out computing power, grew 48%. [31]

It spent $45.2bn on buildings and equipment, less than the $50.67bn analysts expected. [31]

The cash left after spending fell 27% to $18.63bn but stayed above zero. [28]

Its adjusted profit left out a loss of about $200m on its stake in OpenAI. [31]

Finance chief Amy Hood said "we still have demand that exceeds supply." [31]

One analyst said Microsoft builds "in a measured way", so it holds fewer surprises. [28]

Its own adjusted figure left out a loss of about $200m on its stake in OpenAI.

Samsung Electronics made a record 107.44 trillion won of operating profit in its latest quarter. [34]

No big tech firm had topped 100 trillion won, about $74.52bn, in a quarter before. [35]

Its chip business, lifted by AI demand for memory, made nearly all of that profit. [34]

Yet its shares closed 4.13% lower in Seoul on Thursday. [34]

It has paid or planned 35 trillion won of the 90 to 110 trillion it promised. [35]

The detailed plan for paying shareholders comes only in January, which disappointed investors. [34]

Its rival SK Hynix set out a $75bn plan for shareholders a day earlier. [35]

Samsung's fall pulled South Korea's main share index, the Kospi, down 2.1%. [14]

Shell, Europe's biggest oil and gas company, made $10.8bn in its latest quarter. [37]

That is nearly double the $5.43bn it made a year earlier. [37]

Its refineries earned a record $42 a barrel, against the old record of $28.04 in 2022. [36]

Damage to refineries in the Middle East and Russia left the world short of fuel. [37]

Shell will buy back $5bn of its own shares over three months, up from $3bn. [37]

Its shares rose about 3% to a record high in London. [36]

Shell is now the biggest company on London's FTSE 100 index. [37]

Greenpeace, a campaign group, said oil bosses "cash in on our misery". [37]

Damaged refineries pushed Shell's refining margin to a record $42 a barrel, and Shell is passing $5bn back through a share buyback. [36][37]

Lloyds, a big UK bank, said its profit before tax rose 99% to £2.33bn. [40]

Most of the jump came because last year's £800m car-loan charge did not repeat. [40]

Its income rose 9% to £5.07bn. [40]

On Wednesday the chancellor doubled the extra tax on bank profits from 3% to 6%. [39]

He said it lasts 15 months, to pay for help with energy bills. [39]

Finance chief William Chalmers said he sees no obvious link between energy prices and bank taxes. [39]

Spain's 2022 bank tax was meant to last two years and was extended three more. [39]

The extra tax on bank profits doubles from 3% to 6% for 15 months, to pay for help with energy bills. [39]

Whether Britain's higher bank tax really ends after 15 months.

Britain's Treasury says it will write the limit into law, but Spain extended a bank tax meant to last two years by three more. [39]

Volkswagen, Germany's biggest carmaker, lost €4.2bn before tax from July to September. [19]

It was its biggest loss since the end of 2015. [19]

A €6.4bn cut in the value of its stake in Porsche drove the loss. [19]

Its sales fell 11% to 5.9m cars in nine months, mostly because of China. [19]

It is cutting up to 100,000 jobs, many of them in Germany. [19]

Its finance chief said earnings are "too low to continue investing strongly in our future." [19]

Its shares fell 1.6% as nine-month operating profit fell 98.7%. [38]

A €6.4bn cut in the value of its stake in Porsche turned the quarter into a €4.2bn loss.

The company is cutting up to 100,000 jobs as sales in China fall. [19]

Lenders to Thames Water vote on Thursday on an emergency loan of £2.4bn. [41]

The company supplies 16 million customers in London and the Thames Valley. [41]

It owes about £20bn, and its owners walked away in 2024. [41]

The lenders, including BlackRock and Elliott, lent it £3bn last year at 9.75% interest. [41]

The new loan would take the total to £5.4bn and keep it running to autumn 2027. [41]

A campaign group says the interest could add £40 to each home's bill if passed on. [41]

The lenders say the cost will not be added to bills. [41]

Prime Minister Andy Burnham is weighing whether to bring it under state control. [41]

Their £3bn loan pays 9.75% interest, and a new £2.4bn loan would keep the company running to autumn 2027. [41]

Whether Thames Water's new loan ends up on household bills.

A campaign group says the interest could add £40 a home; the lenders say it will not be added. [41]

Weil, Gotshal & Manges, a Wall Street law firm over 90 years old, plans to close. [42]

Its managers asked the partners, the lawyers who own it, to vote to wind it down. [42]

It has about 1,200 lawyers and reportedly earned more than $2bn in 2025. [42]

Nearly two dozen partners have left since mid-September, many to rival firms. [43]

Merger talks with another firm, Willkie Farr & Gallagher, broke down days ago. [42]

Weil worked on famous bankruptcies, including Lehman Brothers, General Motors and Enron. [42]

Semafor says rival firms now lure star lawyers with pay guaranteed for two or three years. [43]

Weil's head of mergers took a team of partners to Cravath, and six private-equity partners went to Simpson Thacher. [43]

Whether Weil closes for good.

Its partners vote in the coming days, and the Wall Street Journal says it could shrink instead of closing. [42][43]

Brent, the main world oil price, fell 0.7% to $114.50 a barrel early Thursday. [44]

Prices had risen on Wednesday after Yemen's Houthis said they hit Saudi Arabia's largest refinery. [45]

US Vice President JD Vance wrote to Iran's security chief to restart peace talks, reports say. [44]

An Iranian official called a new Qatari draft deal "unacceptable ideas". [44]

Traders also fear US strikes on Iran after the US vote on 3 November. [44]

Even after the fall, oil stayed above $100 a barrel. [14]

Oil fell 0.7% to $114.50 a barrel on Thursday, after reports that the US vice president wrote to Iran's security chief to restart peace talks.

Shanghai's STAR50 index of tech companies fell 4.2% by midday Thursday. [46]

The wider Shanghai Composite fell 0.9%. [46]

Hong Kong's tech shares fell 2%, while its main index edged up 0.1%. [46]

Taiwan's main index fell 1.1%, while Japan's Nikkei rose 1.0%. [14]

Selling of AI-linked shares outweighed the US Fed's decision to hold, Reuters reported. [46]

Investors in Asia also weighed company results on top of the US Fed. [14]

India's Sensex share index rose more than 600 points to above 73,860 on Thursday. [47]

Traders credited the US Fed's hold; Adani Ports led with a rise of over 4%. [47]

Kotak Mahindra Bank rose 4.3%, its highest close since April 2025. [49]

But the rupee slipped 0.15% to 95.3675 to the dollar, a two-week low. [48]

Traders said firms bought dollars to repay foreign debts, and India's central bank stepped in. [48]

Foreign funds have pulled record sums out of Indian shares, Jefferies, an investment bank, says. [50]

Jefferies says a cut in India's tax on long-held share gains could bring them back. [50]

UK lenders approved 53,443 mortgages to buy homes in September, Bank of England figures show. [19]

That is the lowest since December 2023, and 19.4% fewer than a year before. [19]

Economists had expected about 54,000. [19]

It was the third monthly fall in a row. [19]

Card and other consumer lending grew 9.8% in a year, the fastest since April 2018. [19]

Anthony Codling, an analyst at RBC, said demand for homes remains "stubbornly subdued". [19]

Whitbread, owner of Premier Inn hotels, expects £45m to £60m less property tax by 2029. [19]