Red Sea attacks could lead to price rises, say UK retail bosses; FTSE 100 index turns 40 – business live

Show key events only Please turn on JavaScript to use this feature Live feed Key events 22m ago Introduction: Red Sea attacks could lead to price rises, say UK retail bosses; FTSE 100 index turns 40 22m ago 02.51 EST Introduction: Red Sea attacks could lead to price rises, say UK retail bosses; FTSE 100 index turns 40 Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

UK retail bosses have warned that the Houthi rebel attacks on commercial vessels in the Red Sea are delaying shipments, which will affect product availability and could push up prices in the UK. Maersk and other large shipping firms have diverted vessels away; they are now taking a much longer rote around Africa’s Cape of Good Hope and up the west side of Africa.

The British Retail Consortium warned this could have knock on effects on product availability and prices. Chief executive Helen Dickinson said this was “as a result of higher transportation and shipping insurance costs”. She added: Over the coming months, some goods will take longer to be shipped.

Leeds based Boxer Gifts designs games and seasonal presents, which are made in China and then shipped to Europe via the Red Sea, one of the world’s busiest shipping lanes. Thomas O’Brien , boss of the family run business, told the BBC that some of its costs had gone up by 250% over the last fortnight.

We just about got used to shipments arriving on time after Covid, but at the moment with the Red Sea, that’s adding another 10 to 14 days to shipments. You end up with a two or three week delay. We’ve got Valentine’s Day products that are likely to be delayed and miss Valentine’s Day. The same effect is going to be felt on Mother’s Day meaning a huge chunk of our selling time for these games is missed.

Oil prices are steady this morning , with Brent crude trading at $75.88 a barrel while US light crude is at $70.3 a barrel. Marine Stewardship Council (MSC) and Maersk have halted sailings through the Red Sea until further notice, while France’s CMA CGM is increasing shipments between Europe and the Mediterranean.

On a more positive note, the FTSE 100 turns 40 today. It started the year with a 0.15% drop yesterday. Our financial editor Nils Pratley has looked at its ups and downs over the last four decades. Footsie turns 40: FTSE 100’s rise, rise and stagnation over four decades Read more On the first trading day of the new year, many stock markets fell back yesterday after notching up gains in recent weeks.

Traders have reassessed the outlook for interest rate cuts : markets had been pricing in as much as 160 basis points of cuts in the US for 2024, twice as much as the Federal Reserve projects, but are now pricing in less than 150bps. Expectations of a Fed rate cut by March have fallen back to an 85% probability and similarly at the European Central Bank the chance of a cut by March is now seen at 59%, down from 71% last Thursday, as analysts at Deutsche Bank noted.

The minutes of the Fed’s last meeting, out later today, should shed more light on the central bank’s thinking. On Wall Street, the S&P 500 closed down 0.6% yesterday, while the Nasdaq saw a larger, 1.6% decline. Stocks in Asia declined overnight, with Japan’s Nikkei slipping 0.2% while Hong Kong’s Hang Seng fell 0.9%, the Australian market dropped 1.4% and the South Korean market shed 2.3%.

In 2023, global financial markets confounded gloomy expectations when stocks rallied and bonds reversed heavy losses made early in the year. Many major share indices posted double digit gains as falling inflation raised hopes of interest rate cuts next year, while recession fears faded at least for the US.

Britain’s FTSE 100 lagged though, and gained less than 4% last year. The Agenda 8.55am GMT: Germany unemployment for December (forecast: 5.9%) 3pm GMT: US ISM Manufacturing PMI for December (forecast: 47.1) 7pm GMT: US Federal Reserve Open Market Committee minutes of last meeting Updated at 03.06 EST Explore more on these topics Business Business live Currencies Stock markets Commodities Shipping industry Reuse this content.