Thames Water begs to be spared fines and costs, warning bidders will walk away

Thames Water is asking to be spared billions of pounds of costs and fines over the next five years and heap more on to bills so it can attract new investors, the Guardian can reveal.The struggling water company is racing to find a buyer over the next eight weeks and is trying to persuade the regulator Ofwat to grant it significant leniency on penalties and extra costs, to attract bidders. That would mean customer bills rising by far more than the 35% it has been allowed.Thames and a clutch of hedge funds lending it £3bn of high-interest debt have said new investors will walk away unless Ofwat grants huge allowances on costs. The company has claimed that otherwise their investment would be “pissed away” on fines and costs by the end of the decade, leaving it in the same parlous financial position, sources said

UK economy shrinks in January; stocks and euro jump on German debt deal – as it happened

Germany’s incoming chancellor Friedrich Merz said he had secured the crucial backing of the Green party for a massive increase in state borrowing and reform of debt rules, clearing the way for the outgoing parliament to approve it next week.Merz’s conservatives and the Social Democrats, who are in negotiations to form a government after the national election last month, have proposed a €500bn fund for infrastructure and sweeping changes to borrowing rules to bolster defence and revive growth in Europe’s largest economy.With the support of the Greens, they now have the two-thirds majority necessary to pass constitutional amendments, with a vote scheduled for Tuesday. Merz had justified the need to push the package through the outgoing parliament after recent shifts in US policy under president Donald Trump, warning that a hostile Russia and an unreliable US could leave Europe exposed.Merz said at a press conference:It is a clear message to our partners

Asda to invest in price cuts to battle drop in sales and market share

Asda is to invest “a pretty significant war chest” in cutting prices and putting more staff on the shop floor as the supermarket chain battles a decline in sales and market share.Allan Leighton, the chair of the privately owned group that runs more 580 supermarkets, almost 500 convenience stores and 769 petrol forecourts, said there would be a “material reduction in our profit” for the year ahead as the group aimed to invest in order to regain its crown as the UK’s lowest-price traditional supermarket.“This is an investment warning, not a profit warning,” said Leighton, who returned to Asda in November after a two-decade gap to attempt a second turnaround of the chain where he was previously chief executive. “It is not because we are doing badly but investment for the mid and long term and that’s going to cost.“The only way we have got to rebuild profit is through sales growth

UK economy shrinks unexpectedly in blow to Rachel Reeves

The UK economy contracted by 0.1% in January, dealing a blow to Rachel Reeves before the spring statement later this month.In a surprise to City economists, who had expected 0.1% growth in January, the Office for National Statistics data showed the services sector failed to offset a decline in the industrial sector and maintain growth from the previous month.Manufacturing output fell by 1

Shrinking economy offers unhelpful backdrop for Rachel Reeves’s growth push

For a government that has made growth its overriding mission, the 0.1% decline in GDP in January signalled by the Office for National Statistics will be depressing news.As Rachel Reeves prepares to announce her spring statement on 26 March, the economy appears to be going in the wrong direction – underlining the fact that the Office for Budget Responsibility is likely to have presented her with notably weaker forecasts than in October.The monthly data is more volatile than the closely watched quarterly growth rates and can often be revised, but it appears the UK was stagnating even before Donald Trump began tearing up the global trading system.As Suren Thiru of the Institute of Chartered Accountants in England and Wales put it: “The UK’s economic performance may have been similarly downbeat in February, with any boost from consumer spending amid strong wage growth and lower interest rates weakened by the brake on business activity from this torrent of global uncertainty

S&P 500 falls more than 10% below recent high as markets rattled by Trump

The S&P 500, a key US stock market index, closed in correction territory on Thursday as the volatility of Donald Trump’s trade wars rattled investors.The index closed more than 10% down from its 19 February peak as Wall Street approaches the end of a second week of pressure.The technology-focused Nasdaq Composite also closed in correction last Thursday, while the Dow is over 9% down from its peak in December.On Thursday, after Canadian and EU leaders hit back on American tariffs on steel and aluminum imports, the US president threatened a new 200% tariff on European alcohol, in response to a 50% EU tariff on American bourbon imports.“This will be great for the Wine and Champagne businesses in the US,” Trump wrote on Truth Social