Trump trade drives dollar rally and gold hits record high; Lloyds beats profit expectations – business live

The UK government is “closely monitoring” Thames Water and ready to take action if necessary, according to the environment secretary, as Britain’s biggest water company is battling for its survival, blighted by sewage scandals, fines and huge debts.

Steve Reed told LBC Radio:

We’re closely monitoring the situation with Thames… the company remains viable, but if we have to take action, we are prepared to do that.

The news came after it emerged that water companies in England could be banned from making a profit under plans for a complete overhaul of the system.

The idea is one of the options being considered by a new commission set up by the Department for Environment, Food and Rural Affairs (Defra) amid public fury over the way firms have prioritised profit over the environment.

Sources at the department said they would consider forcing the sale of water companies in England to firms that would run them as not-for-profits. Unlike under nationalisation, the company would not be run by the government but by a private company, run for public benefit.

The nonprofit model, which is widely used in other European countries, allows staff to be paid substantial salaries and bonuses but any profits on top of that are returned to the company.

Deutsche Bank, Germany’s biggest bank, has reported higher profits for the third quarter, after taking a smaller-than-expected financial hit from shareholder lawsuits over its Postbank division. The bank said it would resume share buybacks.

Deutsche paused plans for more share buybacks in July, after booking a €1.3bn litigation charge linked to its botched acquisition of the lender Postbank more than a decade ago. The group has since settled with 80 plaintiffs, about 60% of the lawsuits, and cut provisions by €440m. However, provisions for credit losses doubled from a year earlier.

The investor lawsuits going through the courts in recent years claim that the bank underpaid for Postbank. This has weighed on Deutsche’s share price.

Deutsche reported a profit before tax of €2.3bn between July and September, up 31% from a year earlier, boosted by the litigation provision release. Excluding this, profits rose by 6% to €1.8bn.

Its investment bank beat expectations, with revenues up 11% from a year earlier, mirroring gains at US rivals like JPMorgan and Goldman Sachs.

Deutsche’s chief executive Christian Sewing said:

In these three months, we made important progress in putting legacy litigation matters behind us, while also producing a record third-quarter profit in our operating business.

However, revenues at the retail division, which includes Postbank, were flat, while the corporate bank posted a 3% decline in revenue, worse than expected.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The dollar has rallied, boosted by strong economic data and investors betting that Donald Trump can clinch next month’s presidential election, while gold prices hit a new all-time high amid rising geopolitical tensions in the Middle East.

The dollar is up again today, as markets shortened the odds of a second Trump administration. Strong US jobs figures earlier this month drove investors to scale back their expectations for Federal Reserve rate cuts, also lifting the currency. The dollar index – which measures the US currency against six other major currencies – rose to 104.17, the highest since early August.

Gold prices have hit a fresh record as the conflict in the Middle East along with uncertainty around US interest rates and the US election fuelled demand for safe-haven assets.

Spot gold climbed to $2,752 an ounce, while silver prices also rose, by 3% to $34.78 an ounce.

Over here, Lloyds Banking Group, Britain’s biggest mortgage lender, predicted higher house prices as it reported third-quarter profits ahead of expectations. Chief executive Charlie Nunn credited income growth, cost discipline and strong asset quality.

It made a statutory pre-tax profit of £1.8bn between July and September, down from £1.9bn a year ago, but above City forecasts of £1.6bn.

The bank has raised its forecast for UK house prices to rise by 3.1% this year, compared with an earlier prediction of 1.9%.

The Agenda

• Noon BST: US MBA Mortgage applications

• 2.45pm BST: Bank of Canada interest rate decision

• 3pm BST: European Central Bank president Christine Lagarde speech

• 3pm BST: Eurozone Consumer confidence flash estimate for October

• 3pm BST: US Home sales for September