BUSINESS LIVE: Inflation slows to 1.7%; Whitbread expects profit to rise by £300m; Just Eat affected by the crisis in the USA

Business is booming at Boots as its boss closes a number of stores ahead of his departure.

The pharmaceutical giant said sales in the three months to the end of August were 6.2 percent higher than in the same period a year earlier as premium beauty and skincare products flew off shelves.

LVMH reported its first quarterly sales decline since the pandemic after demand for high-end fashion slowed.

The French group, which owns brands including Givechy, Celine and Louis Vuitton – and whose global ambassador is actress Zendaya – reported a 3 percent decline in sales in the three months to September.

This was the first decline since sales plunged in early 2020 when Covid-19 hit.

Zoe Gillespie, Investment Manager at RBC Brewin Dolphin:

“At first glance, Whitbread's performance is mixed, but the company's long-term story is one of growth – even if there are some short-term challenges in the form of weaker demand in the UK and a slowdown in the German economy.

“Premier Inn is an established and strong cash flow generating brand in the UK, which continues to make strong progress in Germany and will reach profitability in the near future.

“The board's confidence is reflected in its expectations around profitability, investment and buyouts, with £2 billion expected to be committed to these areas by 2030.

“While shares have yet to return to pre-pandemic levels and have fallen to year-ago levels, the company's five-year plan provides a good foundation on which Whitbread can build its recovery.”

Just Eat Takeaway is seeing growth in its key markets of Northern Europe, the UK and Ireland, largely offset by recent sharp declines in its growth markets of North America, Southern Europe and Australia.

The meal delivery company reported a 4 percent drop in gross transaction value in the third quarter to 6.34 billion euros, below analysts' consensus of 6.5 billion euros.

Australia and Southern Europe saw GTV decline by 11 percent over the period, while North America saw a decline of 12 percent.

CEO Jitse Groen said: “We have achieved significant progress on our key strategic pillars, which we believe will drive growth.

“Northern Europe and Great Britain and Ireland have maintained good dynamics and these segments now account for approximately 60% of the Group's total orders. Consistent with our diversification strategy in many of our markets, we have established several new partnerships in adjacent locations such as grocery, pharmacy and wellness.

“Furthermore, cost and operational efficiencies allowed us to increase investments while maintaining our forecasts. We are on track to deliver our guidance for the full year.”

Premier Inn owner Whitbread has set a target of at least £300 million more profit and more than £2 billion in shareholder returns over the next five years.

The ruling came after the hotel group reported a decline in first-half profits, with adjusted pre-tax profit falling 13 per cent year-on-year to £340 million in the six months to August 29.

Whitbread chief executive Dominic Paul said: “We are making excellent progress on our plans and over the next five years we intend to make a step change in our performance, which will deliver significant returns for shareholders.

“As a sign of our confidence, we today announced the details of our five-year plan, which sets out the scale of our ambition through FY30.

“Having laid the foundations for future growth, we are executing at pace and remain confident in our prospects, as reflected in our increased interim dividend and continued share repurchases.”

Total global public debt will exceed $100 trillion (£77 trillion) for the first time by the end of this year, according to a stark forecast from the International Monetary Fund (IMF).

As Rachel Reeves struggles to keep her budget adding up, the global watchdog said governments must act now to prevent the debt spiral from spiraling further out of control or risk having to take even more painful action in the future.

Its forecasts predict global debt will reach 93 percent of gross domestic product (GDP) by the end of this year and 100 percent by 2030.

Thomas Pugh, economist at RSM UK:

“The drop in inflation to 1.7% leaves it as much as 0.4 percentage points below the last MPC forecast. While lower airfare prices (11.9% to -5.0%) and fuel prices (-3.4% to -10.4%) contributed to the slowdown, services inflation fell back to 4.9%. the lowest reading since May 2022, and core inflation fell to 3.2%.

“It is true that inflation will rebound later this year as favorable base effects disappear from the annual comparison and some of the more erratic factors that caused inflation to fall in September subside and energy prices rise.

“However, this morning's data provide clear evidence that disinflation continues to move at a rapid pace in the economy and should reassure the Bank of England that it can move to cut interest rates more aggressively without increasing inflation.

“Ultimately, the fall in inflation will come too late to help the Chancellor on budget matters, as the September inflation rate is one of the factors taken into account when determining next year's benefit payments. However, a much larger than expected budget combined with higher debt may make the Monetary Policy Council cautious, despite a more positive outlook for inflation.

Hetal Mehta, head of economic research at St. James's Place:

“The fall in inflation in the UK is very broad-based and the data on core and services inflation in particular will be good news for the BoE.

“They should consolidate expectations for a reduction in November, and perhaps the division of votes will narrow.

“In terms of further cuts, I think more evidence of continued decline in inflation is needed before we see that, and I suspect the BoE will also want more time to digest budget announcements.”

Consumer price inflation fell faster than expected in September, from 2.2 percent to 1.7 percent, according to data from the Office for National Statistics.

Last month's inflation reading was below market expectations at 1.9 percent, strengthening the case for further Bank of England rate cuts in November.