Key events
UK minister says Ineos did right thing; Exxon at fault over its plant closure
Severin Carrell
Douglas Alexander, the UK government’s Scottish secretary, has said the £120m deal to save Ineos’s ethylene plant at Grangemouth was possible because Ineos had previously invested around £100m upgrading the facility, our Scotland editor Severin Carrell reports.
Speaking on BBC Radio Scotland this morning, he contrasted that with the decision by ExxonMobil to close its ethylene plant at Mossmorran in Fife early next year, with the loss of around 430 jobs.
ExxonMobil’s chairman Paul Greenwood has defended the closure, claiming that the UK’s windfall taxes on North Sea oil and gas operators, and higher emissions taxes, meant Mossmorran had no future. “My international competitors do not have those costs,” he said last week.
The Ineos deal, which will be managed by NatWest on behalf of the UK government, will be formally announced by the chancellor Rachel Reeves, the UK business secretary Peter Kyle and Alexander later this morning.
Alexander told BBC Radio Scotland ExxonMobil’s past decision-making at Mossmorran was in “stark contrast” to the dialogue the government had enjoyed with Ineos.
When we sat down with Jim Ratcliffe it was pretty clear what was needed in order to be able to deliver a future for the chemical facility in Grangemouth. There had been significant Ineos investment in the plant.
In contrast, the Mossmorran facility is now 40 years old, it was built to have a 20 year lifecycle. Alas, there hasn’t been the scale of investment that many of us would wished to see in Mossmorran over recent years.
The management were not able to give us a pathway to profitability.
Gillian Martin, the Scottish government’s cabinet secretary for climate action and energy, welcomed the UK government’s move.
The Scottish government has been calling upon UK government for months now to intervene to protect jobs at Grangemouth and Mossmorran at a scale seen in other parts of the UK. This news will give a much-needed boost to Grangemouth community and the workers at Ineos O&P.
The Scottish government announced £8.5m investment last week at the Grangemouth industrial cluster including in MiAlgae and Celtic Renewables which will create up to 460 jobs, demonstrating that a long term industrial future at the site is achievable. We will continue to do all we can, within our limited powers, to achieve that.
Sharon Graham, the general secretary of the union Unite, which represents hundreds of oil and chemicals industry workers, also welcomed the decision, but said it “must not be a one-off”.
Many promises have been made in the past. This needs to be the start of a new direction of travel. We cannot forget that Grangemouth is also the site where this government has allowed Scotland’s only refinery to close, rather than produce much needed sustainable aviation fuel.
There has to be a joined-up strategy for a workers’ transition, backed by investment. British industry must be backed in a much better way, or jobs and skills will continue to go.
German business confidence unexpectedly falls in December
Sentiment among businesses in Germany has worsened again.
The business climate index from the Munich-based Ifo institute fell to 87.6 points in December, from 88 points in November. Analysts polled by Reuters had forecast an increase to 88.2.
Companies are more pessimistic about the first half of 2026. “The year is ending without any sense of optimism,” the institute said.
Germany has struggled to regain momentum this year, with only modest growth forecast following two years of economic contraction.
Klaus Wohlrabe, head of surveys at the institute, said:
This year there are no presents for the German economy.
The manufacturing index fell, with almost all sectors affected. The number of new orders declined, and companies are planning to scale back production.
In the service sector, confidence has fallen back into negative territory, across almost all service sectors. The only exception was restaurants, which reported a very strong December.
In trade, the index also worsened, as retailers were unhappy with Christmas sales.
In construction, the business climate remained unchanged at a low level.Companies assessed the current situation as worse, but were less sceptical about the coming months.
Oil prices jump 1.5% as Trump orders Venezuela blockade
Oil prices have risen as much as 1.5%, after Donald Trump ordered “a total and complete” blockade of all sanctioned oil tankers entering and leaving Venezuela.
Brent crude rose by 1.5% to $59.79 a barrel earlier, and is now trading up 1.1% at $59.54 a barrel. US West Texas Intermediate Crude climbed by 1.5% to $56.12 a barrel, and is now 1.2% higher at $55.93 a barrel.
This comes a day after oil prices traded near five-year lows on progress in the Russia-Ukraine peace talks. A deal could mean that western sanctions on Moscow are eased, leading to more oil supply.
A trader told Reuters:
The price is sentiment-driven by the Venezuelan news for today, but overall, export volumes from Venezuela are relatively small in the global supply share. With all eyes on the Russia-Ukraine discussions, the market is still under downside risk.
Trump’s moves have ramped up pressure on Venezuela’s authoritarian leader Nicolás Maduro.
Last week, US forces seized an oil tanker off Venezuela’s coast that was traveling across the Caribbean. The tanker was thought to be loaded with about 2m barrels of Venezuela’s heavy crude, according to the New York Times. The Venezuelan government accused the US of “blatant theft” and described the seizure as “an act of international piracy”, further heightening tensions between the two countries.
The Food and Drink Federation has taken a closer look at food prices in today’s UK inflation data. It says:
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By category, we have seen a mixed performance. The ONS reported on 48 main categories this month, of which 26 saw inflation slowing, with inflation rising for the other 22 categories.
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Prices rose the fastest for beef and veal (27.7%), chocolate (17.3%), whole milk (14.8%) and coffee (14.5%).
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Prices fell for nine categories, with the largest drops for: olive oil (-16.2%), flours (-6.1%), pasta (-4.2%) and sugar (-4.0%).
Karen Betts, the group’s chief executive, said:
It’s good to see food inflation starting to fall, not least as shoppers fill their cupboards for the festive season. Nonetheless, food prices remain higher this Christmas than last and many consumers are having to make tough choices about what they buy this year.
Manufacturers continue to work hard to cut costs and pass any potential savings on to consumers, but themselves continue to face significant cost pressures. To really impact this persistent food inflation, we need government to redouble efforts with food businesses to reduce costs, like energy, and boost growth and productivity to bring down prices in the coming weeks and months across the food and drink supply chain.
Christmas dinner and festive treats up to 70% more expensive, reports Which?
Despite some lower food prices in the official inflation figures, the cost of Christmas dinner and festive treats has gone up, a survey shows.
Shoppers are paying up to 70% more for Christmas chocolate treats compared with last year, while the price of a turkey has jumped by as much as £15, according to the consumer champion Which?.
The group analysed a range of ingredients for a typical Christmas dinner, as well as other typical festive treats including mince pies, sparkling wine and chocolates.
Festive chocolate had the steepest mark-up this year. Among the biggest risers was a Lindt Lindor milk chocolate truffles treat box at Asda up 72% to £1.98 compared with £1.15 last year. At Morrisons, Lindt Milk Chocolate Teddy Christmas tree decorations increased from £3.50 in 2024 to £6 in 2025, up 71%.
There were a few annual declines in food prices:
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Olive oil -16.2%
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Flours and other cereals -6.1%
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Pasta products and couscous -4.2%
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Sugar -4%
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Frozen seafood -2.4%
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Rice -1.7%
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Jams, marmalades and honey -1%
Most other food prices continued to rise at an annual rate but at a slower pace.
Anna Leach, chief economist at the Institute of Directors, said:
Inflation has fallen back decisively in today’s data, and by more than expected, bringing the rate to its lowest since March. Food price inflation has eased sharply to its lowest rate since April, despite typically rising at this time of year, while services inflation – a key indicator of domestic price pressure – has also edged down. Together, these figures increase the likelihood of a welcome interest rate cut tomorrow.
Recent indicators point to a notable weakening in both the economy and the labour market, with unemployment reaching its highest level since 2015. Today’s inflation outturn has also come in below the Bank of England’s expectations, driven in part by unexpectedly soft food prices. The Bank will also assess the impact of the recent budget on the outlook for inflation. And despite being trailed as actively disinflationary, the budget’s effects are more mixed due to the increase in spending and borrowing over the next two years. But on balance, the case for a rate cut has been made.
The chancellor, Rachel Reeves, made tackling the cost of living a major target of last month’s autumn budget, alongside £26bn of tax increases to help repair the public finances and fund the end of the two-child benefit cap.
“Getting bills down is my top priority,” she said after the inflation figures. “I know families across Britain who are worried about bills will welcome this fall in inflation.”
Pound tumbles, UK bond yields fall after inflation drop
The pound has fallen against the dollar, as an interest rate cut tomorrow looks more likely.
Sterling has fallen by 0.67% to $1.3343, its lowest level in a week, and is set for its biggest one-day drop since early November. Yields on UK government bonds fell sharply across maturities.
Markets now see a 98.8% chance of a rate reduction at the end of the Bank of England’s meeting at noon tomorrow, from 4% to 3.75%. Before the data, the probability of a rate cut was 90%.
Investors are now betting on 66 basis points of cuts by next December, up from 58bps before the inflation figures.
The TUC is calling for a “sequences of rate cuts” in coming months to ease pressure on households and businesses.
TUC general secretary Paul Nowak said the Bank of England has been “too cautious” this year.
Inflation may be falling, but many working people are still struggling to afford the basics.
The government acted to protect living standards and push back against inflation in last month’s Budget, but more must be done.
The economy is fragile and high interest rates are draining confidence from households and firms. It’s vital that we now boost demand.
The Bank of England has been too cautious this year, and inflation is already lower than they expected only last month. So an interest rate cut this week must be the start of a sequence of reductions over the months ahead. It’s long overdue and it’s the shot in the arm that the economy needs.
Lower rates will give firms the confidence to invest and help get more households spending.
Here’s our full story:
‘Interest rate cut certain’ following inflation drop
An interest rate cut tomorrow is certain following the notable drop in inflation in November, economists say.
Suren Thiru, economics director of the Institute of Chartered Accountants in England and Wales, said:
While the financial squeeze on households and businesses remains severe, these figures offer reassurance that the UK is moving towards a more modest inflation environment, helped by lower food prices.
Softening services and core inflation offer hope that underlying price pressures are becoming less sticky. The growing downward pressure from a loosening labour market and wilting economy should help keep it on a downward path.
UK inflation’s journey back to target should accelerate appreciably in 2026 with lower food and fuel costs alongside the energy bill changes announced in the Budget likely to pull it back to 2% by next summer.
These figures, alongside the recent deluge of downbeat data, mean that an interest rate cut tomorrow looks certain. The vote split could be more dovish than many expect as policymakers will have now assessed the budget’s deflationary impact.
Food and non-alcoholic drink prices rose by 4.2% in the 12 months to November, down from 4.9% in October. Prices of cakes, biscuits and breakfast cereals fell but rose a year ago.
There were other, smaller downward effects on inflation from dairy products and sugar, jam and chocolate.
Tobacco prices also pulled inflation down, with prices in the alcohol and tobacco division rising at an annual rate of 4% in November, down from 5.9% in October, marking the lowest rate since December 2022.
Clothing and footwear prices fell by 0.6% in the 12 months to November, compared with a rise of 0.3% in October. This rate matched the change in February, and was last lower in March 2021.
UK inflation slows sharply to 3.2% as food prices ease – business live
Good morning and welcome to our rolling coverage of business, the financial markets and the world economy.
Inflation in the UK slowed more than expected last month because of easing food prices, marking the third month that inflation has fallen.
Inflation, measured by the consumer prices index, fell to an annual rate of 3.2% in November, from 3.6% in December, according to the Office for National Statistics.
The core rate, which strips out volatile food and energy costs, dropped to 3.2% from 3.4%.
Grant Fitzner, the ONS chief economist, said:
Inflation fell notably in November to its lowest annual rate since March. Lower food prices, which traditionally rise at this time of the year, were the main driver of the fall with decreases seen particularly for cakes, biscuits, and breakfast cereals,
Jim Ratcliffe’s chemicals company Ineos has been granted £120m of government funding to help save the UK’s last ethylene plant at Grangemouth, in a deal expected to protect more than 500 jobs.
The investment in the Scottish plant was necessary to preserve a vital part of the country’s chemicals infrastructure, the UK government said. The ethylene produced there was essential for medical-grade plastics production, water treatment and in aerospace and car-building, it added.
The Agenda
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9am GMT: Germany Ifo business climate index
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9.30am GMT: UK House prices
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11am GMT: UK CBI Industrial trends survey
