Consultancy says companies quoted on London stock market issued 65 in three months to end of September

The number of profit warnings from UK-listed companies has risen to the highest level in two years, as the war in the Middle East triggers a surge in costs for businesses before the budget.

With less than a fortnight before John Healey’s tax and spending statement to the Commons, the consultants EY-Parthenon said companies quoted on the London stock market had issued 65 warnings in the three months to the end of September.

Rolling coverage of the latest economic and financial news

• John Healey poised to raise taxes on banks in budget

Elsewhere in the markets today, South Korea’s Kospi share index has recorded its biggest weekly loss since October 2008, down 14.5% this week.

Although the Kospi did rise today (+2%), it was still a bad week for technology stocks – as investors worried about the borrowing, spending commitments and future profitability of AI companies.

The reality is that while companies embraced AI aggressively as it first emerged, now they are figuring out how to use it effectively while keeping AI costs under control. A slowing, more careful, path towards corporate adoption has been missed by the market which remained wildly frothy about valuations.

“A UK bank tax risk is now a base case. If it is confirmed on 28 October, it’ll be the size and timing that will be key.

If Healey does go ahead, shares of Lloyds and NatWest, which are almost entirely exposed to the UK, would likely be impacted most, and you are seeing this already in the share price reaction today. Barclays is partly exposed. HSBC is least exposed in the mix.”

John Healey has spoken to UK journalists at the IMF annual meeting in Bangkok, and said banks are a part of the “jewel” in the UK’s economic crown

Today’s better-than-forecast UK growth report is good news for chancellor John Healey as he hobnobs with other finance ministers at the IMF meeting in Bangkok.

But it may encourage the Bank of England to raise interest rates as soon as its next meeting in November….

“While August’s unexpected uptick all but confirms that the OBR will raise its growth forecast for this year from 1.1% to 1.4%, the Chancellor still faces a major Budget headache, as elevated borrowing costs eat into fiscal headroom and increase pressure for tax rises.

“These unexpectedly upbeat figures will further embolden hawkish sentiment among policymakers by reinforcing the view that the economy is strong enough to withstand a rate rise, making a November hike look highly likely.”

“The latest GDP figures are encouraging, with the economy growing by 0.7% in the three months to August, its strongest growth rate since May. On its current trajectory, the UK is likely to record growth comfortably above 1% this year, which would probably be enough to make it the second-fastest-growing economy in the G7.

“The UK’s growth performance has been a bright spot amid a less impressive run of economic news following events in the Middle East. Business investment has been an important driver, particularly spending on ICT hardware, likely linked to the build-out of AI infrastructure. The UK still lags the US in both the scale of that investment and the boost it provides to growth, but it is making progress and remains ahead of many of its European peers.

Rolling coverage of the latest economic and financial news, including the IMF meeting in Thailand and the IEA’s new oil market report

• Full story: US inflation rose to 3.7% in September

• Global financial system is failing developing countries, says Ed Miliband

UK government borrowing costs are dropping this morning, which will please John Healey and the IMF alike!

The yield, or interest rate, on UK 10-year bonds is down 3.5 basis points to 5.4%, while thirty-year bond yields are 3bps lower at 5.89%.

Chancellor John Healey is expected to pay for all new giveaways in this month’s Budget — including a cost-of-living package — with higher taxes or spending cuts rather than more borrowing.

People briefed on UK Budget preparations told the FT that the October 28 fiscal package would be “scorecard positive” in 2029-30, the final year of the parliament, meaning that all extra discretionary spending was fully funded.

China’s exports, imports, and trade surplus all comfortably beat expectations in September as the trade boom continued. Key trade ties look set to remain stable through year-end, which should keep this year’s key growth engine humming.

Boaz Weinstein’s hedge fund is waging an aggressive campaign against the FTSE 250’s Baillie Gifford US Growth Trust

• Business live – latest updates

Here we go again: another episode in the Saba saga, the story of a New York hedge fund causing havoc in the UK investment trust sector by taking big stakes in funds and then demanding change, often in only vague terms.

The best that can be said about Saba Capital (and it’s not much) is that its belligerent boss, Boaz Weinstein, has disturbed the complacency that used to infect corners of the UK investment trust world, meaning companies that invest in other companies. It is now harder for a board to do nothing if the share price sits at a wide discount to the value of the underlying assets for long periods.

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded to Robert Hall and Neil Woodford for developing the “microeconomic foundations of macroeconomic stabilisation”

There’s some movement in the Nobel economics prize betting, with around 45 minutes to go until the announcement.

Sidney Winter, the professor emeritus of management at the Wharton School, and Lawrence Katz, the Elisabeth Allison Professor of Economics at Harvard University, have both appeared high on Polymarket’s odds at times this morning (although the market is very volatile).