BP racks up £7bn profits; UK house prices fell in October – business live

From 1h ago 07. 17 GMT Introduction: BP racks up £7bn profits Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets. Oil giant BP has racked up another quarter of surging profits, thanks to the jump in energy prices caused by the Ukraine war.

BP beat City expectations by racking up underlying profits of $8. 15bn, or £7bn, in the July-September quarter, helped by strong natural gas trading. That’s more than double the $3.

32bn it made in the same quarter a year ago (based on BP’s preferred ‘underlying replacement cost’ earnings measure). BP will continue to push cash to shareholders, by announcing a fresh $2. 5bn share buyback, on top of a dividend worth 6p per share.

Bernard Looney, BP’s chief executive officer, says the company is continuing to “perform while transforming”: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} We remain focused on helping to solve the energy trilemma – secure, affordable and lower carbon energy.

We are providing the oil and gas the world needs today – while at the same time – investing to accelerate the energy transition. 2022 has been an extremely profitable year for BP. Three months ago it tripled its quarterly profits to $8.

5bn for April-June, leading to accusations of ‘unfettered profiteering’ . Such large profits will reignite calls for larger windfall taxes on the bumper profits earned by oil and gas companies. Last week Alok Sharma , the outgoing president of the Cop26 UN climate summit, told The Guardian that the existing windfall tax should be changed to raise billions more and to stop companies using loopholes to invest in further fossil fuel extraction.

As Sharma pointed out: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “These are excessive profits, and they have to be treated in the appropriate way when it comes to taxation,” Windfall tax must change in face of ‘excessive’ oil profits, Alok Sharma says Read more We’ll have more reaction to BP’s profits through the day.

Also coming up today UK house prices fell 0. 9% in October as the housing market cooled, new figures from the Nationwide Building Society show (more on that shortly). European stock markets are set to open higher, extending their recent rally.

Investors are hoping that some central banks might soon slow the pace of interest rate rises, as the global economy weakens. European Opening Calls: #FTSE 7150 +0. 78% #DAX 13368 +0.

86% #CAC 6314 +0. 76% #AEX 676 +0. 86% #MIB 22848 +0.

86% #IBEX 8008 +0. 65% #OMX 1978 +0. 49% #SMI 10901 +0.

68% #STOXX 3646 +0. 80% #IGOpeningCall — IGSquawk (@IGSquawk) November 1, 2022 Overnight, Australia’s Reserve Bank has lifted its cash rate by 25 basis points to 2. 85%, the highest since 2013, while America’s Federal Reserve will start its two-day meeting to set monetary policy.

Australian borrowers hit again as RBA raises interest rates by 25 basis points to 2. 85% Read more The agenda 7am BST: Nationwide house price index for October 9am BST: Eurozone manufacturing PMI report for October 9. 30am BST: UK manufacturing PMI report for October 2pm BST: US manufacturing PMI report for October 2pm BST: JOLTS survey of US job openings Updated at 07.

29 GMT Key events 16m ago Calls for ‘polluter tax’ on oil firms 29m ago UK house prices fall: what the experts say 48m ago UK house prices fell after ‘mini-budget’ turmoil 1h ago BP has spent $8. 5bn on share buybacks this year 1h ago BP to pay $800m in windfall tax this year 1h ago Introduction: BP racks up £7bn profits Filters BETA Key events ( 6 ) BP ( 5 ) UK ( 4 ) Nationwide Building Society ( 3 ) 16m ago 08. 21 GMT Calls for ‘polluter tax’ on oil firms Profits at the world’s biggest oil companies have soared to around £150bn so far this year as Russia’s war on Ukraine pushed up energy prices, analysts estimate.

Profits at world’s seven biggest oil firms soar to almost £150bn this year Read more Global Justice Now , which campaigns for a more equal world, is calling for these major polluters to pay the cost of the climate damage caused by fossil fuels. They say: . css-knbk2a{height:1em;width:1.

5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} The Big 5 oil companies alone have announced over ~$170 billion in profits in 2022 . To put this into perspective, that is more than the $116 billion a year that loss and damage are estimated to cost the global south, to date. It doesn’t take much to connect the dots to see what’s happening here.

When fossil fuel companies are announcing record profits just days before COP27, its high-time leaders joined those dots once and for all too and make polluters pay up for loss and damage. It’s clear they can afford to, and a polluter tax could help reduce household energy bills closer to home as well. People here and the global south have one thing in common when it comes to companies like BP, they’re ripping us off and think they can keep getting away with it at the expense of people and the planet.

It’s high time we showed them the game is up. ” Updated at 08. 25 GMT 29m ago 08.

08 GMT UK house prices fall: what the experts say The sharp drop in house prices last month is probably a ‘sign of things to come’, says Martin Beck , chief economic advisor to the EY ITEM Club . . css-knbk2a{height:1em;width:1.

5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “Given the recent challenges for the housing market from financial market turmoil, an associated rise in mortgage rates, and concerns that the Bank of England may opt for a particularly significant rise in interest rates in November, a 0. 9% month-on-month fall in Nationwide’s measure of house prices in October did not come as a surprise. “October’s fall could likely be a sign of things to come.

Although mortgage rates have retreated from the highs seen just after the mini-budget, they’re still elevated compared to early-mid September. For example, the current standard variable rate on a Nationwide mortgage is 5. 24%, compared to 3.

74% pre-mini-budget. Cost of living pressures remain challenging, and face being exacerbated by tax rises and public spending restraint in November’s Autumn Statement, and consumer confidence is notably depressed. House prices fall by £5,500 in October Was this a one-off mini-budget reaction or the start of a longer downward house price slide? #houseprices #property https://t.

co/ALgYKNfNRL via @twindighomes — Anthony Codling (@anthonycodling) November 1, 2022 Jonathan Hopper, CEO of Garrington Property Finders , says buyers can play ‘hardball’ by refusing to pay asking prices: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “The chaotic aftermath of the mini-Budget sent tremors through the property market that left both buyers and sellers shaken.

“The worst of it is, we’re likely to feel the aftershocks for months to come. “A fundamental recalibration of what’s affordable is underway. Fewer mortgages are available, with interest rates having gone up in an express lift, rather than the gradual escalator we’d been expecting.

Tomer Aboody, director of property lender MT Finance, says political uncertainty and interest rate fluctuations have left buyers and sellers unsure whether to proceed. . css-knbk2a{height:1em;width:1.

5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} ‘Rising cost of living and higher interest rates translate into less money in people’s pockets and therefore a different approach, until these higher costs become the norm. ’ 48m ago 07. 49 GMT UK house prices fell after ‘mini-budget’ turmoil The turmoil following the UK’s mini-budget drove down house prices last month, Nationwide reports.

Prices fell by 0. 9% during October, the first such fall recorded by Nationwide since July 2021 and the largest since June 2020. The average price dropped to £268,282, from £272,259 in September.

Robert Gardner , Nationwide’s chief economist, blamed the surge in market interest rates after Kwasi Kwarteng’s announcement in September. Kwarteng’s plan for huge unfunded tax cuts drove up the cost of mortgages, with many deals vanishing , as the money markets anticipated a very sharp hike in UK interest rates. Gardner says: .

css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “October saw a sharp slowdown in annual house price growth, to 7. 2% from 9.

5% in September. Prices fell by 0. 9% month-on-month, after taking account of seasonal effects, the first such fall since July 2021 and the largest since June 2020.

“The market has undoubtedly been impacted by the turmoil following the mini-Budget, which led to a sharp rise in market interest rates. Higher borrowing costs have added to stretched housing affordability at a time when household finances are already under pressure from high inflation. For example, the increase in mortgage rates meant that a prospective first-time buyer (FTB) earning the average wage and looking to buy a typical FTB home with a 20% deposit would see their monthly mortgage payment rise from c.

34% of take-home pay to c. 45%, based on an average mortgage rate of 5. 5%.

This is similar to the ratio prevailing before the financial crisis. High interest rates mixed with a disastrous mini-budget, results in house prices falling 0. 9% in Oct & AVG house price growth to slow to 7.

2% down from 9. 5% in Sep. This makes the UK AVG house now worth £268,282.

@AskNationwide pic. twitter. com/uLUJ73gmrz — Emma Fildes (@emmafildes) November 1, 2022 On an annual basis, house prices were 7.

2% higher in October than a year ago, down from 9. 5% in September. Gardner also warns that the market looks set to slow in the coming quarters.

. css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} Inflation will remain high for some time yet and Bank Rate is likely to rise further as the Bank of England seeks to ensure demand in the economy slows to relieve domestic price pressures.

The Bank will set interest rates on Thursday, and could lift borrowing costs by another half of a percent (from 2. 25% to 2. 75%), or even by 75 basis points (to 3%).

Updated at 07. 54 GMT 1h ago 07. 40 GMT BP has spent $8.

5bn on share buybacks this year The $2. 5bn buyback announced this morning means that BP will have spent $8. 5bn so far this year buying its own shares back.

That’s around 60% of its surplus cash flow – money which could have gone into, say, extra investment in renewables. George Dibb of the Head of Centre for Economic Justice at the IPPR, says such buybacks should be taxed: . css-knbk2a{height:1em;width:1.

5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “Companies like BP are making huge profits and channelling these straight back to already-wealthy shareholders through share buyback schemes. Instead of reducing costs for consumers or investing in renewable energy, these fossil fuel giants are prioritising transfers to shareholders. BP has announced a new buyback programme today of $2.

5bn, totalling $8. 5bn this year alone. “There is an alternative.

The US have recently levied a tax on share buybacks and the UK should follow suit. A 25 per cent windfall tax on the share buybacks of BP and Shell would raise up to £4. 8 billion per year for the treasury.

Taxes which could be spent on supporting households across the UK. ” BP has just announced a huge quarterly profits of $8. 2bn, almost triple same period last yr $2.

5bn is going straight back out to shareholders via buybacks In the first 6mon of this year BP spent 10x as much buying its own shares as on renewables Tax share buybacks now! https://t. co/QCplFpIGWg — George Dibb (@GeorgeDibb) November 1, 2022 BP has spent THREE TIMES as much on share buybacks ($2. 5bn) as it did in Windfall Tax ($800m) in the past quarter https://t.

co/oIl0hF1TNA — George Dibb (@GeorgeDibb) November 1, 2022 Updated at 08. 12 GMT 1h ago 07. 32 GMT BP’s $8.

2bn profits in the last quarter were driven by “exceptional gas marketing and trading result and higher gas realizations”, it says. Gas prices shot up in August and early September, as Russia squeezed gas supplies to Europe by cutting capacity on its Nord Stream 1 pipeline, and then closing it. 1h ago 07.

28 GMT BP to pay $800m in windfall tax this year BP expects to pay around $800m, or £700m, in windfall tax on its North Sea operations this year. That will be part of a tax bill of around $2. 5bn for North Sea earnings, a company spokesman has said.

BP’s profits surged to $8. 2 billion in the third quarter, more than double a year earlier and one of its best results ever Unlike Shell, BP says it will be hit by the UK windfall tax this year: it expects to pay $2. 5bn tax in the North Sea, including $800m for the windfall levy — Emily Gosden (@emilygosden) November 1, 2022 The 25% Energy Profits Levy (EPL) was announced by then-chancellor Rishi Sunak in May, to fund support for struggling households.

But, the tax includes incentives to increase spending in new oil and gas projects – and last week, rival Shell said it hadn’t paid any windfall tax yet, due to spending more on investments in the North Sea. New: BP’s business continues to generate cash at an extraordinary rate – a large chuck of it is coming the U. K.

government’s way. BP confirms it expects to pay £2. 17 billion in tax on its North Sea operations this year.

C£700 million of this will be the Energy Profits Levy. pic. twitter.

com/wXXrS8KDgV — Joel Hills (@ITVJoel) November 1, 2022 There are reports that chancellor Jeremy Hunt could increase the windfall tax rate to 30%, and run it until 2028, to help fix the UK’s fiscal ‘black hole’. 1h ago 07. 17 GMT Introduction: BP racks up £7bn profits Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

Oil giant BP has racked up another quarter of surging profits, thanks to the jump in energy prices caused by the Ukraine war. BP beat City expectations by racking up underlying profits of $8. 15bn, or £7bn, in the July-September quarter, helped by strong natural gas trading.

That’s more than double the $3. 32bn it made in the same quarter a year ago (based on BP’s preferred ‘underlying replacement cost’ earnings measure). BP will continue to push cash to shareholders, by announcing a fresh $2.

5bn share buyback, on top of a dividend worth 6p per share. Bernard Looney, BP’s chief executive officer, says the company is continuing to “perform while transforming”: . css-knbk2a{height:1em;width:1.

5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} We remain focused on helping to solve the energy trilemma – secure, affordable and lower carbon energy. We are providing the oil and gas the world needs today – while at the same time – investing to accelerate the energy transition. 2022 has been an extremely profitable year for BP.

Three months ago it tripled its quarterly profits to $8. 5bn for April-June, leading to accusations of ‘unfettered profiteering’ . Such large profits will reignite calls for larger windfall taxes on the bumper profits earned by oil and gas companies.

Last week Alok Sharma , the outgoing president of the Cop26 UN climate summit, told The Guardian that the existing windfall tax should be changed to raise billions more and to stop companies using loopholes to invest in further fossil fuel extraction. As Sharma pointed out: . css-knbk2a{height:1em;width:1.

5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “These are excessive profits, and they have to be treated in the appropriate way when it comes to taxation,” Windfall tax must change in face of ‘excessive’ oil profits, Alok Sharma says Read more We’ll have more reaction to BP’s profits through the day. Also coming up today UK house prices fell 0. 9% in October as the housing market cooled, new figures from the Nationwide Building Society show (more on that shortly).

European stock markets are set to open higher, extending their recent rally. Investors are hoping that some central banks might soon slow the pace of interest rate rises, as the global economy weakens. European Opening Calls: #FTSE 7150 +0.

78% #DAX 13368 +0. 86% #CAC 6314 +0. 76% #AEX 676 +0.

86% #MIB 22848 +0. 86% #IBEX 8008 +0. 65% #OMX 1978 +0.

49% #SMI 10901 +0. 68% #STOXX 3646 +0. 80% #IGOpeningCall — IGSquawk (@IGSquawk) November 1, 2022 Overnight, Australia’s Reserve Bank has lifted its cash rate by 25 basis points to 2.

85%, the highest since 2013, while America’s Federal Reserve will start its two-day meeting to set monetary policy. Australian borrowers hit again as RBA raises interest rates by 25 basis points to 2. 85% Read more The agenda 7am BST: Nationwide house price index for October 9am BST: Eurozone manufacturing PMI report for October 9.

30am BST: UK manufacturing PMI report for October 2pm BST: US manufacturing PMI report for October 2pm BST: JOLTS survey of US job openings Updated at 07. 29 GMT Topics Business Business live Economics Stock markets BP House prices Oil Reuse this content.