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Tesco lifts profit forecast after strong Christmas, and M&S beats expectations
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Tesco lifts profit forecast after strong Christmas, and M&S beats expectations
Rolling coverage of the latest economic and financial news
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Interest rates  
Bank of England may cut rate sooner after surprise inflation forecast
Bank of England may cut rate sooner after surprise inflation forecast
Retail  
Tesco and Marks & Spencer emerge as Christmas winners
Fujitsu  
Government urged to review £2bn in contracts
Renewable energy  
Global capacity grew at record pace in 2023
World economy  
AI-driven misinformation ‘biggest short-term threat’
Pennon  
Owner of firm fined for sewage dumping buys Sutton and East Surrey Water
HS2  
True cost of London-Birmingham line more like £66bn, boss admits
Freeports  
Gove refuses to set deadline for investigation into Tees ‘corruption’
Solar power  
Installation of rooftop panels in UK hits 12-year high in 2023
Energy  
UK government sets out plans for ‘biggest nuclear power expansion in 70 years’
BrewDog  
Brewer faces staff backlash after dropping real living wage pledge
‘I do feel bad’  
Englishman who posed as HyperVerse CEO says sorry to investors
Post Office Horizon scandal  
Hundreds of post office operators to have convictions quashed
‘Wrecked my life’  
Horizon victims tell of suffering caused
‘What we’ve been calling for’  
Post office operators welcome acquittal plan
Today's agenda
Tesco and Marks & Spencer have emerged as Christmas winners this morning.Tesco, the UK’s largest supermarket chain, has raised its forecast for profits this financial year, after ringing up record sales in the weeks leading up to Christmas.

Tesco’s like-for-like sales in the six-week Christmas period across the UK and the Republic of Ireland were 6.4% higher than a year earlier. That followed growth of 7.3% in the previous 13 weeks, to 25 November. The group now expects to post operating profits of £2.75bn this financial year, above its previous guidance range of £2.6bn to £2.7bn.

Tesco also reports it cut prices cut on nearly 2,700 products, with savings of about 10%, another sign that inflation pressures are easing.

By upgrading its profit forecast, Tesco has gone one better than rival Sainsbury which could only maintain its outlook yesterday. Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, says: “Tesco has managed what Sainsburys couldn’t quite muster, which is a profit upgrade for the full year."

Marks & Spencer has also posted solid like-for-like sales growth, up by 8.1% across the UK in the last 13 weeks of the year. That’s better than expected. M&S’s food sales increased by. 10.5%, with strong growth in meat, poultry, produce, grocery and in-store bakery products.

The recent turnaround in the clothing department continued too, with Clothing & Home sales increased by 4.8%. M&S says its market share increased, led by the strong performance of womenswear.

Richard Lim, CEO at Retail Economics, says: “These are fantastic results delivered in a challenging market. Shoppers have fallen back in love with M&S, buying into the re-energised proposition that’s centred around a leading omnichannel service. It’s been a mightily impressive turnaround and there’s lots of momentum in the business heading into 2024."

Also coming up today
Hopes are building that the Bank of England could cut interest rates sooner than thought, after several economists predicted inflation could fall to its 2% target as soon as April. Investors are watching for the latest US inflation figures, due this afternoon, which will influence how soon the Federal Reserve can start cutting borrowing costs.

The agenda
• 9.30am GMT: Latest ONS business insights survey
• 1.30pm GMT: US inflation report for December

We’ll be tracking all the main events throughout the day ...
Nils Pratley on finance
Now claw back Vennells’s bonuses from the Post Office. The rules allow it
Now claw back Vennells’s bonuses from the Post Office. The rules allow it
 

John Crace

Guardian columnist

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Well, 2023 didn’t exactly go to plan, did it? Here in the UK, prime minister Rishi Sunak had promised us a government of stability and competence after the rollercoaster ride of Boris Johnson and Liz Truss. Remember Liz? These days she seems like a long forgotten comedy act. Instead, Sunak took us even further through the looking-glass into the Conservative psychodrama.

Overseas, the picture has been no better. In the US, Donald Trump is now many people’s favourite to become president again. In Ukraine, the war has dragged on with no end in sight. Then there is the war in the Middle East and not forgetting the climate crisis …

But a new year brings new hope. We have to believe in change. That something better is possible. The Guardian will continue to cover events from all over the world and our reporting now feels especially important. But running a news gathering organisation doesn’t come cheap. So this year, I am asking you – if you can afford it – to give money. By supporting the Guardian from just £2 per month, we will be able to continue our mission to pursue the truth in all corners of the world.

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Happy new year!

 
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