Lloyds Banking Group to close another 136 branches
Lloyds Banking Group is to close another 136 branches across the UK as customers continue the shift to primarily online banking.
The bank said that it would close 61 Lloyds branches along with 61 Halifax and 14 Bank of Scotland sites, starting in May with completion of the closure plan in March 2026.
A spokesperson for the banking group said:
Over 20 million customers are using our apps for on-demand access to their money and customers have more choice and flexibility than ever for their day-to-day banking
The high-street lender said that staff working in the affected branches would be offered another role at another branch or in a different part of the business.
Earlier this month, Lloyds said it will allow customers to use any of its Halifax, Bank of Scotland and Lloyds branches, roughly a quarter of its branches are closely located to each other.
Lloyds currently has about 932 branches, but previously announced closures will take that figure down to 892 branches by the end of 2025.
That includes 447 Lloyds Bank sites, 341 Halifax-branded branches and 104 Bank of Scotland locations.
The latest announcement of closures will bring the total down to 756 by the end of March next year.
Key events
Tesco is to cut 400 jobs across its supermarkets and head office to “simplify” its business, days after rival Sainsbury’s announced thousands of job losses due to rising labour costs.
The supermarket chain, which earlier this month said it had recorded its “biggest ever Christmas”, said that the cuts were prompted by the hyper-competitive grocery market.
Matthew Barnes, the chief executive of Tesco UK, said that the business needs to find new ways to invest in keeping prices competitive as announced a major efficiency drive.
Changes in the stores include consultation with staff at Tesco bakeries which it is seeking to move away from baking from scratch to more continenta–style deli products.
There will also be staffing cuts at Tesco Mobile phone stores, as well as in head office management positions.
Barnes said:
These are difficult decisions affecting our colleagues, but we believe they are necessary to enable us to invest in what matters most to our customers.
Our priority is to support impacted colleagues, and we will do everything we can to help them find alternative roles within our business.
Today, we have almost 1,000 vacancies available.
Last week, Sainsbury’s said it is to cut 3,000 jobs in the UK through the closure of its hot food counters and cafes and by reducing senior management roles by a fifth.
Lloyds Banking Group to close another 136 branches
Lloyds Banking Group is to close another 136 branches across the UK as customers continue the shift to primarily online banking.
The bank said that it would close 61 Lloyds branches along with 61 Halifax and 14 Bank of Scotland sites, starting in May with completion of the closure plan in March 2026.
A spokesperson for the banking group said:
Over 20 million customers are using our apps for on-demand access to their money and customers have more choice and flexibility than ever for their day-to-day banking
The high-street lender said that staff working in the affected branches would be offered another role at another branch or in a different part of the business.
Earlier this month, Lloyds said it will allow customers to use any of its Halifax, Bank of Scotland and Lloyds branches, roughly a quarter of its branches are closely located to each other.
Lloyds currently has about 932 branches, but previously announced closures will take that figure down to 892 branches by the end of 2025.
That includes 447 Lloyds Bank sites, 341 Halifax-branded branches and 104 Bank of Scotland locations.
The latest announcement of closures will bring the total down to 756 by the end of March next year.
Jaguar has reported a 17% fall in profits to £523m in the final three months of last year, as the automotive giant notched up record revenues for the final quarter.
Jaguar Land Rover, which made global headlines with the unveiling of its much-hyped “fearlessly creative” electric vehicle the Type 00 in December, said that revenues rose 2% year-on-year to £7.5bn – a record for the car maker’s third financial quarter.
Revenue rose 2% year-on-year to £7.5bn in the final three months, a quarterly record. However, year-to-date the manufacturer said that revenues remained flat at £21.2bn.
While quarterly profits fell year-on-year the company said that on a year-to-date basis they were up 7% to £1.6bn, the best profit and margin best performance at this stage of Jaguar’s financial year in a decade.
The company also said that the waiting list for the Range Rover Electric, the first fully electric vehicle from the SUV brand, has now reached 57,000.
The vehicle is due to be launched later this year.
Adrian Mardell, chief executive of JLR, said:
JLR has delivered a robust performance in the third quarter of our financial year,” said Adrian Mardell, chief executive of JLR. “We achieved record third quarter revenue and our best EBIT [profit] margin in a decade. And our electrification plans are progressing.
The company said that while it is “mindful of the challenging economic backdrop” it is on track to hit its profitability and cash flow targets this year.
Sarah Butler
Morrisons halved losses to about £500,000 last year when the supermarket chain boosted sales to £15.3bn by lowering prices, offering loyalty card discounts and keeping shelves stocked.
However, Rami Batiéh, the Bradford-based retailer’s chief executive, did not rule out more job cuts after the group cut 200 roles before Christmas as he said that Morrisons faced “inflationary pressures” from tax changes announced in the October budget.
Sales at Morrisons’ established stores rose 4.1% in the year to the end of October including a 4.9% rise in the final quarter – the group’s best performance in almost four years.
However, Batiéh said sales growth had fallen in the following three months, which included the key Christmas period, when the group’s warehouses were affected by problems at Morrisons’ IT provider Blue Yonder.
Rachel Reeves has announced a £65m investment led by the government’s national wealth fund (NWF) into Connected Kerb, one of the companies racing to roll out more electric car public charge points across the UK.
The NWF will commit £55m in equity investment, plus a further £10m in investment from insurance group Aviva. The NWF, formerly the UK Investment Bank, is designed to step in with investments that will benefit the UK, but private-sector investors have not been forthcoming.
The investment will serve as a useful foil to Reeves’s decision to back Heathrow expansion, which is strongly opposed by environmental groups who argue it will unavoidably increase UK carbon emissions.
The UK charger industry has been struggling to find funding as investors worry about slowing growth in electric car sales.
Chris Pateman-Jones, chief executive of Connected Kerb, said:
This is a game-changing investment that will give individuals and businesses the confidence to make the switch to driving electric, dramatically reducing carbon emissions and air pollution. We are delighted to have such high-profile investors who are deeply aligned with our sustainability and ethical goals.
Reeves also announced £28m for Cornish Metals, a mining company that is hoping to extract metals that are crucial for energy transition technologies.
The Guardian went down one of the old mines that Cornish Metals is trying to restart back in 2022. You can read that here:
Reeves confirms Heathrow third runway backing
Rachel Reeves has confirmed that the Labour government will back a third runway at London’s Heathrow airport.
If that sounds familiar, it is because it has been heavily trailed in the last week. And readers with longer memories might remember a succession of Labour and Conservative governments saying they would back it.
Reeves said:
So I can confirm today that this government supports a third runway at Heathrow and is inviting proposals to be brought forward by the summer.
We will then take forward a full assessment through the airport National Policy Statement. This will ensure that the project is value for money, and our clear expectation is that any associated surface transport costs will be financed through private funding, and it will ensure that a third runway is delivered in line with our legal, environmental and climate objectives.
Back on artificial intelligence, it isn’t only the American big tech companies who appear to have been rattled by the rapid emergence of Chinese competitor DeepSeek.
Chinese tech champion Alibaba announced its latest AI model update on Wednesday, claiming that it can outperform DeepSeek and other competitors like OpenAI’s GPT-4o and Meta’s Llama.
As Reuters explained, the timing is particularly notable for a Chinese company:
The unusual timing of the Qwen 2.5-Max’s release, on the first day of the Lunar New Year when most Chinese people are off work and with their families, points to the pressure Chinese AI startup DeepSeek’s meteoric rise in the past three weeks has placed on not just overseas rivals, but also its domestic competition.
Rachel Reeves makes speech on economic growth plans
UK chancellor Rachel Reeves has started a much-trailed speech on – you guessed it – economic growth.
The Labour government is hoping to persuade investors that it can grow GDP, which would help to ease the fiscal constraints on the government as borrowing costs rise across the world.
She started her speech in Oxford by saying promoting growth is about “making working people better off”.
You can follow the speech in detail on our politics live blog with Andrew Sparrow:
Without economic growth, we cannot improve the living standards of ordinary working people, because growth isn’t simply about lines on a graph. It’s about the pounds in people’s pockets, the vibrancy of our high streets and the thriving businesses that create wealth, jobs and new opportunities for us, for our children and grandchildren.
We will have succeeded in our mission when working people are better off.
One of the key drivers of the strong European tech performance today has been Dutch chip equipment maker ASML.
Its share price is up 11% after it reported €7bn (£5.9bn) in new bookings during the last three months of 2024, far above expectations.
ASML makes the advanced lithography machines that are used to draw transistors onto semiconducting material at the nanometre scale. It is the only company capable of making equipment to manufacture of the world’s most advanced chips, including those with four-nanometre transistors made by Taiwan’s TSMC for Nvidia – the key producer of chips used to train artificial intelligence models.
The strength of ASML’s order book could help to reassure investors that AI-linked companies could still make them money.
Th company said that its 2024 total sales reached €28.3bn, making it a net profit of €7.6bn. It expects sales to grow to between €30bn and €35bn in 2025.
Christophe Fouquet, ASML’s chief executive, said:
The growth in artificial intelligence is the key driver for growth in our industry. It has created a shift in the market dynamics that is not benefiting all of our customers equally, which creates both opportunities and risks as reflected in our 2025 revenue range.
Europe’s Stoxx 600 index has gained 0.4%. That is enough to push it to another record high.
The index has been helped by a rebound in its tech components after the volatility caused by China’s DeepSeek. The Stoxx tech sub-index has gained 4.2% on Wednesday.
FTSE 250 manufacturer Dowlais to leave London listing in £1.2bn US takeover
FTSE 250 car parts maker Dowlais has agreed a £1.2bn takeover by US rival American Axle & Manufacturing (AAM), in the latest example of an American company snapping up a British rival.
Dowlais would leave the London Stock Exchange after the takeover, while chief executive Liam Butterworth would leave after the deal completes.
The companies on Wednesday said they had reached agreement on a cash and shares deal that would allow them to survive the transition from petrol and diesel to electric cars.
Dowlais was formed in 2023 from the car parts business of GKN, the engineering company that traces its heritage back to the start of Britain’s industrial revolution, although GKN had already moved all of its manufacturing abroad. However, the company has struggled since floating on the stock market in April 2023, with its share price having halved from above £1.20 at its debut to less than 50p in November last year.
Dowlais’s share price rose by 8.6% on Wednesday morning as high as 76p, its highest since May 2024.
David Dauch, AAM’s chief executive, will lead the combined company if the deal goes through.
The companies said the combination would create “an increasingly propulsion-agnostic portfolio of products across a broader range of automotive segments supporting internal combustion engine, hybrid and electric powertrains”.
South West Water owner Pennon’s share price hits lowest in 13 years
South West Water owner Pennon Group has fallen to its lowest level in 13 years after saying it would raise £490m to carry out the increased investment required by the regulator.
Pennon’s share price fell by as much as 7.8% on Wednesday morning after it announced the rights issue. It was the biggest faller on the FTSE 250 index of mid-sized companies in early trading, before recovering some of its losses.
Pennon and United Utilities, two of England’s privatised water monopolies, both also said they will increase dividend payments to investors in line with inflation, as they prepare to raise bills.
The companies said they had accepted regulator Ofwat’s final determination of what bills they may charge – removing the possibility of an appeal to try to argue that bills should be higher. The decisions mean the companies will go ahead with bills increases of 23% for South West Water and 32% for United Utilities.
The share price of United Utilities, a member of the FTSE 100 that provides water in north west England, dropped by 0.6%.
Neither Pennon nor United Utilities are under the same financial pressure of struggling counterparts such as Southern Water or particularly Thames Water, which is trying to raise billions of pounds of new debt and then equity. Other water companies are deciding whether to appeal in the hope of charging customers more – a controversial prospect given the widespread outrage over the extent of sewage released into Britain’s rivers and seas.
It’s a mixed opening for Europe’s stock markets. The FTSE 100 has dropped by a single point, but other indices have gained on Wednesday morning.
Here are the opening snaps from Reuters:
-
EUROPE’S STOXX 600 UP 0.1%
-
FRANCE’S CAC 40 DOWN 0.6%; SPAIN’S IBEX UP 0.6%
-
EURO STOXX INDEX FLAT; EURO ZONE BLUE CHIPS DOWN 0.2%
-
GERMANY’S DAX UP 0.4%
WH Smith reports falling UK high street sales as it prepares for sale
Joanna Partridge
WH Smith has reported falling sales in its UK high street stores, just days after its parent company confirmed it is seeking a buyer for its legacy retail business.
Like-for-like sales in the retailer’s UK high street division – where it sells newspapers, books, stationery, cards and gifts – fell by 3% in the 21 weeks to 25 January, compared with a year earlier, although it said this was in line with expectations. It said it exited the Christmas trading period “with a clean stock position” and added it was on track to deliver full year cost savings of £11m.
It came as WH Smith reported 7% higher revenue in its more successful travel arm, and rising revenue in its North American division. The company’s share price rose by 5.7% in early trading on Wednesday morning, making it the second-biggest riser on the FTSE 250 index of mid-sized companies.
WH Smith’s eponymous parent company’s decision to put out a “for sale” sign for its 500 UK high street stores could see the name disappear from British town centres but potentially live on in train stations, airports and hospitals across 32 countries. The intended sale of the high street stores has created uncertainty for 5,000 staff. The move would allow the company to focus on its more successful travel arm which accounted for three-quarters of the group’s revenue in the year to the end of August. The company said it was driving sales at its travel division stores by stocking more travel essentials including new food and health and beauty ranges.
Carl Cowling, WH Smith’s chief executive said:
The group is in a strong position, and while there is some economic uncertainty, we are confident of another year of good growth in 2025.
OpenAI reportedly claims DeepSeek ‘distilled’ data for AI training
Good morning, and welcome to our live, rolling coverage of business, economics and financial markets.
OpenAI has claimed that it has evidence that Chinese competitor DeepSeek used the American company’s AI model to train its rival chatbot, according to Bloomberg News.
The release of DeepSeek’s open source R1 model has roiled global financial markets after the Chinese company appeared to have achieved comparable results to rivals who used far greater money and computing resources.
The claims prompted investors to question the underpinnings of the US stock market boom, which has been predicated on the idea that AI “hyperscalers” will need huge amounts of computing power to train AI models. The share price of chip company Nvidia recorded the biggest one-day decline in value in stock market history on Monday, before recovering some of its losses on Tuesday.
Global share prices steadied on Wednesday. Japan’s Topix index rose by 0.7%, while Australia’s ASX rose by 2.9%. The FTSE 100 was roughly flat at the opening bell.
AI companies and investors have been scrambling to understand the implications of DeepSeek’s rapid rise. OpenAI and its major backer, Microsoft, have been investigating whether DeepSeek obtained data in an unauthorised manner, after observing some individuals exporting large amounts of data from OpenAI’s products, Bloomberg reported.
The Financial Times reported that OpenAI, led by Sam Altman, said it had seen some evidence of “distillation”, which it suspects to be from DeepSeek. That would violate OpenAI’s terms of service.
OpenAI has itself faced heavy criticism for its own approach to others’ intellectual property. The company is facing early hearings in a case led by the New York Times in which media companies claim the company used their data without permission.
Nevertheless, the claims could open up a new front in the technological struggles between the US and China.
Venture capitalist David Sacks was appointed by US president Donald Trump as AI and cryptocurrency “tsar”. He said on Tuesday night that there was evidence of “distillation”, when one AI model asks repeated questions of another to train itself on how to respond.
Sacks told Fox News:
There’s substantial evidence that what DeepSeek did here is they distilled knowledge out of OpenAI models, and I don’t think OpenAI is very happy about this.
I think one of the things you’re going to see over the next few months is our leading AI companies taking steps to try to prevent distillation.
The agenda
-
2:15pm GMT: Bank of England governor Andrew Bailey at Treasury select committee
-
2:45pm GMT: Bank of Canada interest rate decision
