Pearson’s progress boosts FTSE 100
Trader in LondonImage copyrightGetty Images

Education publisher Pearson continued to rise on Wednesday as investors took heart from its latest trading statement.

By the end of the day its shares had risen 3%, on top of Tuesday’s 7% gain.

The firm has issued a string of profit warnings, but now says full-year operating profit is set to come at the top half of its predicted range.

Overall, the benchmark FTSE 100 index ended up 26.7 points or 0.36% higher at 7,542.87.

Sainsbury’s was among the fallers on the FTSE 100, following its announcement late on Tuesday that it was cutting 2,000 jobs.

The supermarket chain’s share price shed 1% in reaction to the news.

It plans to make 1,400 payroll and HR clerks redundant and other changes could see another 600 posts removed.

Shares in Madame Tussauds owner Merlin Entertainments fell another 2%, having sunk 16% on Tuesday after it said summer trading had been poor due to bad weather and terror attacks.

The company, which also runs Legoland theme parks, said it now expected full-year like-for-like revenues to be unchanged from last year.

On the currency markets, sterling continued its fall against the dollar, which began on Tuesday after the Bank of England’s new deputy governor indicated he was not in favour of raising rates.

Speaking to MPs on the Treasury Committee, Dave Ramsden said he did not believe a rate rise would be needed “in the coming months” because wage growth showed few signs of picking up.

By the end of Wednesday the pound regained some ground to trade flat against the dollar at $1.31910. Against the euro, however, it was down 0.2% at €1.11890.

Theresa May to scrap universal credit helpline charges

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Media caption‘It’s a lot of weeks to wait’

People will be able to call the government’s universal credit helpline without being charged, within weeks.

Prime Minister Theresa May said she had listened to criticism of the charges, which can be up to 55p a minute, and decided it was “right” to drop them.

But she again rejected calls by Labour leader Jeremy Corbyn to “pause” the roll-out of the controversial benefit amid fears it is causing hardship.

MPs will vote shortly on Labour’s call for a rethink after a five-hour debate.

The Conservatives have ordered their MPs to abstain, meaning Labour is likely to win the vote. However, the outcome will not be binding on the government.

Universal credit, which rolls six working-age benefits into a single payment, is designed to make the system simpler and ensure no-one faces a situation where they would be better off claiming benefits than working.

But it has faced a backlash from a dozen Conservative MPs, who fear payment delays risk pushing families into destitution.

Mrs May met a group of concerned MPs in Downing Street ahead of the Commons debate, amid speculation they could vote with Labour.

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Media captionThe PM appears to give a surprising initial answer when asked to pause the national rollout of universal credit.

At Prime Minister’s Questions, Mr Corbyn said he was glad the PM had “bowed to Labour pressure” by scrapping the hotline charges.

But he added: “The fundamental problems of universal credit remain – the six week wait, rising indebtedness, rent arrears and evictions.

“Will the prime minister now pause universal credit and fix the problems before pressing ahead with the roll-out?”

Mrs May prompted cheers from Labour MPs as she began her reply with “yes”, before urging them to “listen to the whole sentence I was going to make”.

She said universal credit was “a simpler system”, that “encourages people to get into the workplace – it is a system that is working because more people are getting into work”.

The universal credit hotline will become free to use “over the next month”, the government has said, and that would be followed by all DWP helplines by the end of the year.

The government says it makes no money from the 0345 number. It is charged at local rate and is included as a free call in many landline and mobile phone packages but can cost some mobile phone users as much as 55p a minute.

Universal Credit has been introduced in stages to different groups of claimants over the past four years, with about 610,000 people now receiving it.

Almost a quarter of all claimants have had to wait more than six weeks to receive their first payment in full because of errors and problems evidencing claims.

But the government recently approved a major extension of the programme to a further 45 job centres across the country, with another 50 to be added each month.

How does it work?

Image copyrightGetty Images

There is no limit to the number of hours you can work per week if you get universal credit, but your payment reduces gradually as you earn more.

Under the old system many faced a “cliff edge”, where people on a low income would lose all their benefits at once as soon as they started working more than 16 hours. In the new system, benefit payments are reduced at a consistent rate as income and earnings increase.

A six-week wait is built into the system.

Because universal credit is based on how much money you have each month, it is paid in arrears – people claiming the benefit receive money for the last month worked, not for the month ahead.

That means everyone has to wait at least four weeks, and the rest of the time is because of the way the scheme is administered.

Labour’s Frank Field told MPs a food bank in his Birkenhead constituency needed to order five tonnes of extra food to deal with hardship caused by the roll-out of universal credit over Christmas.

He asked Work and Pensions Secretary David Gauke if his constituents should ignore the food bank’s warnings, or give it extra donations as a result of the minister’s “inability to deliver a scheme that works”.

Mr Gauke had earlier accused Labour of attempting to wreck the new benefit rather than taking a constructive approach to reforming it.

Conservative backbencher Peter Aldous called on ministers to be “pragmatic and not dogmatic” in their approach and not stick rigidly to a set timetable.

But he added: “If something is not done, the housing crisis will be made even worse, as private landlords refuse to accept universal credit claimants as tenants.”

The SNP’s Mhairi Black said the offer of advance payments made matters worse for some claimants because they had to be paid back.

She accused the government of acting like a “pious loan shark – except that instead of coming through your front door they are coming after your mental health, your physical well-being, your stability, your sense of security.”

The Department for Work and Pensions says its latest data, from last month, indicates 81% of new claimants were paid in full and on time at the end of their first assessment while 89% received some payment.

Cases of non-payment, it said, were due to claimants either not signing paperwork, not passing identity checks or facing “verification issues” such as providing details of their earnings, housing costs and childcare costs.

BBC Newsnight’s political editor Nick Watt said he understood ministers were giving “serious thought” to cutting the initial waiting period for payments from six to four weeks around the time of next month’s Budget.

Lloyds Bank shareholders ‘mugged’, claim lawyers
Lloyds Bank branchImage copyrightReuters

Shareholders in Lloyds Banking Group were “mugged” by the bank and its former directors when they were persuaded to back the takeover of Halifax Bank of Scotland (HBOS).

That’s according to lawyers for shareholders, who are suing the bank and five former directors.

They claim the bank failed to tell shareholders the bank was effectively bust before the transaction completed.

The defendants strongly contest the claimants’ case.

They include former chairman Sir Victor Blank and former chief executive Eric Daniels.

“We are saying that shareholders were mugged in this acquisition and should never have been kept in the dark. Disclosure was not made by the Lloyds board,” Richard Hill QC, for the shareholders, told the High Court.

Mr Hill said the defendants had accepted that while asking shareholders to support the purchase in the autumn of 2008, Lloyds directors failed to disclose the following facts:

  • HBOS had received a covert loan from the Bank of England – known as “Emergency Liquidity Assistance” – totalling £25.65bn
  • After announcing the intended acquisition, Lloyds had secretly loaned HBOS a further £10bn
  • HBOS had also received covert financial support from the US Federal Reserve, then totalling $14.5bn (£11bn)

Shareholders were told in September and October 2008 there had been no significant change in HBOS’s financial position when it had suffered a run on wholesale deposits, was surviving on emergency lending from Lloyds and the Bank of England and had gone from being a functioning bank to a failed one, Mr Hill said.

“The directors knew it; and they told shareholders the opposite,” Mr Hill submitted.

“Mr Daniels was informed by government on 17 September 2008 that if he didn’t announce a deal by the next day, then HBOS would have to be nationalised.”

‘Robust capital’

Yet when they announced the deal the next day, the directors made a series of assurances to investors. Sir Victor Blank called it “a good deal for customers and shareholders”.

Analysts were told had “robust capital” and “very strong liquidity” – even after it was in receipt of $14.5bn of covert financial support from the Federal Reserve, Mr Hill said.

The claimants say the glowing description given to shareholders was in contrast to what was told confidentially to the Office of Fair Trading (OFT), which might have blocked the deal due to competition concerns.

A confidential OFT document disclosed in court said: “HBOS strongly believes that if the merger with LTSB were not to take place, it would no longer be credible for HBOS to continue as an independent bank without at least some form of assistance from the tripartite authorities.”

‘Absolutely involved’

Defence documents submitted to the court refer to support for the acquisition from the regulator at the time, the Financial Services Authority (FSA).

Mr Daniels was informed by Lloyds then chief risk officer Carol Sergeant on 1 October 2008 that the £10 billion loan to HBOS “would not be supportable in the normal course of business” but was part of a systemic rescue package and explaining that the FSA should “explicitly endorse the position”.

On the 2 October, Lloyds obtained confirmation of FSA support from FSA chief executive Hector Sants.

Then director of wholesale banking Truett Tate told Ms Sergeant by email: “Hector wanted it noted, explicitly and word for word, that ‘he was absolutely involved, in every aspect of the transactions, and supported it to the detail’. He added that they were very keen to have the deal go through and indeed felt that ‘everyone’ was increasing committed past the point of no return.”

The case continues.

Debt collector Cabot in Haste to seal float

Sky News has learnt that Andy Haste, the former RSA Insurance chief executive, is to be unveiled as the new chairman of Cabot Credit Management.

City sources said on Wednesday that Mr Haste, who is also chairman of Wonga, will be named in an announcement expected to be made by Cabot about its intention to float on Friday morning.

The appointment of a heavyweight chairman has allowed Cabot’s owners to press ahead with their plan to list the company.

Insiders said that Cabot’s owners, the New York-listed speciality finance firm Encore Capital Group and private equity group JC Flowers, would seek to sell part of their stakes in the flotation.

The company is also expected to seek in the region of £150m in new capital from institutional investors, banking sources said.

Cabot’s plan to go public comes against a backdrop of growing warnings about the indebtedness of British consumers, and reflects burgeoning opportunities for the business to grow its customer base.

Earlier this week, the head of the City watchdog, warned that many young people were being forced to borrow money to fund essential everyday expenditure.

Goldman Sachs, Jefferies and Morgan Stanley are leading the listing of the debt collector, which owns brands such as Cabot Financial and Wescot.

Earlier this year, Cabot bought Orbit, which is focused on collecting outstanding debts from water companies’ customers.

The intention to float will come weeks after it emerged that Peter Crook, the former boss of doorstep lender Provident Financial, had stepped down as a director of Cabot because of the crisis at his former employer.

If successfully completed, an initial public offering of Cabot would make the company the latest UK-based debt collection group to go public, following the listing of Arrow Global in 2013.

Cabot’s shareholders have been buoyed by the performance of Arrow’s shares, which have risen by more than 55% over the last 12 months.

Sky News first reported Cabot’s float plan earlier this year.

Analysts have said that valuing Cabot precisely is challenging based on information filed at Companies House, although public disclosures show that earnings before interest, tax, depreciation and amortisation in the nine months ending September 2016 rose 24% to £180m.

In the debt portfolios it manages, the company estimates £2.1bn of remaining collections over the next decade.

Cabot has built its UK business by acquiring assets from banks which have been seeking to meet increasingly onerous regulatory capital targets.

The company also operates in markets such as Ireland and Spain.

It says it has invested close to £2bn in buying portfolios with a face value of more than £20bn, and manages roughly £1bn on behalf of clients.

Cabot’s listing will be among the largest in London this year, and will follow a flurry of float announcements in recent weeks by companies such as Bakkavor, TMF and Contour Global.

Recent discussions with potential buyers of Cabot, including the buyout firm Apax Partners, are understood to have been abandoned.

Last year, Cabot was the first credit management service provider to secure full authorisation from the City regulator following a change in the supervisory regime.

Its other competitors include Lowell GFKL Group, which is backed by the private equity firm Permira and the Ontario Teachers’ Pension Plan.

Lowell is said to be in talks about the acquisition of a portfolio of assets in Scandinavia.

Cabot declined to comment on Wednesday.

Wagamama owner wins race for go-kart champion

Sky News understands that Duke Street Capital, a private equity firm, has secured a deal to acquire Teamsport, which operates more than 20 sites across the UK.

The deal, which could be announced as soon as Thursday, will be significant for Duke Street as it will be the first struck by a new fund which has the backing of Goldman Sachs, the Wall Street investment bank.

Sources said that Duke Street, which is sitting on a potentially lucrative return from the eventual sale of Wagamama, is expected to pay in excess of £40m for Teamsport.

The go-karting business has been part-owned by Connection Capital, another investment firm, since 2013, when it changed hands in a £9m management buyout led by Neil Taylor, the co-founder of high street retailer Game Group.

Duke Street is one of the UK’s best-known private equity investors, having backed companies including The Original Factory Shop, Payzone and Voyage Care, a care provider for people with learning disabilities.

The firm has generated favourable returns for investors over the last decade.

The investment in Teamsport comes as a number of auction processes for consumer-facing businesses, including the retailers Dreams and Aurum Holdings, encounter difficulties amid uncertainty about the economic outlook.

Sources said Duke Street was confident about the prospects for Teamsport under its ownership.

GCA Altium, the investment bank, has been advising Teamsport on the deal.

Duke Street and GCA Altium declined to comment.

Unemployment drops by 52,000 but pay squeeze continues
Man working in Ford factoryImage copyrightGetty Images

UK unemployment fell by 52,000 in the three months to August to 1.4 million, leaving the jobless rate unchanged at 4.3% from the previous quarter.

However, pay still failed to keep pace with inflation, with the real value of earnings down 0.3% over the past year.

Total earnings, excluding bonuses, rose by 2.1% from June to August, said the Office for National Statistics.

The news will increase expectations that the Bank of England will raise interest rates on 2 November.

However, Kathleen Brooks of traders City Index said the Bank faced a tricky decision next month.

“The prospect of raising interest rates when real wages are in negative territory will make this potential hike a tricky one for the Bank to justify,” she said.

The unemployment rate is still at the joint lowest level since 1975, although the claimant count increased by 1,700 to 804,100 last month.

The UK’s key inflation rate rose to 3% in September.

There were 32.1 million people in work in the UK in the June to August period, 94,000 more than between March and May and 317,000 more than in the same period in 2016.

The employment rate was 75.1%, up from 74.5% a year earlier, while the total number of unemployed people was 215,000 fewer than at the same time last year.

Employment Minister Damian Hinds said: “Our economy is helping to create full-time, permanent jobs which are giving people across the UK the chance of securing a reliable income.

“We’ve boosted the income for people on the lowest pay by increasing the national living wage and delivered the fastest pay rise for the lowest earners in 20 years.”

The female unemployment rate is at a joint record low of 4.2%, while job vacancies have gone up by 3,000 to a 783,000.

The number of people classed as economically inactive, including those looking after a sick relative, on long-term sick leave, early retirement or who are not looking for a job, fell by 17,000 to 8.8 million.

Commenting on those figures, senior ONS statistician Matt Hughes said: “Many labour market measures continue to strengthen. Employment growth in the latest three-month period was driven mainly by women, with a corresponding drop in inactivity. Vacancies remain robust, at a near-record level.”

Analysis: Andy Verity, economics correspondent

Image copyrightReuters

Unemployment drops! A record low rate! Earnings shrinking against inflation!

Once upon a time, these were all big headlines. But we’ve become so used to them now, they barely cause a ripple – and that has its own implications for interest rates.

The latest numbers reinforce what the new deputy governor of the Bank of England, Dave Ramsden, said on Tuesday: there’s little sign of wages picking up in response to higher inflation.

Nevertheless, the City remains convinced the official rate will have to rise from its record low of 0.25%.

The pattern of trading in interest-rate derivatives – investments that effectively bet on when interest rates will rise or fall – suggests there is an 82% chance that rates will go up to 0.5%.

If so, it would be the first rate rise in more than 10 years.

We won’t have to wait long to find out who’s right.

Margaret Greenwood, shadow employment minister, expressed her fears at the continuing fall in the real value of wages.

She said: “With a record number of working people living in poverty, the news that real wages have fallen yet again is deeply concerning.

“While the overall increase in employment is welcome, it’s also clear from today’s figures that too many people are struggling to find employment because of their age, ethnicity, disability, or where they live.”

TUC general secretary Frances O’Grady commented: “Britain desperately needs a pay rise. Working people are earning less today (in real terms) than a decade ago.

“The chancellor must help struggling families when he gives his Budget next month. This means ditching the artificial pay restrictions on nurses, midwives and other public sector workers. And investing in jobs that people can live on.”

Find out if your wages are keeping up with inflation

Enter your details below. Source: Office for National Statistics.

BAE Systems and Cammell Laird to bid for Type 31 frigate contract
Type 31e frigateImage copyrightPolaris Media
Image caption Cammell Laid has previously built some of the most iconic Royal Navy warships

Defence giant BAE Systems is to make a joint bid with the UK’s largest shipbuilder Cammell Laird to construct five low-cost warships.

It follows the announcement in September of a new national shipbuilding strategy intended to benefit UK shipyards.

The Ministry of Defence plans to boost a depleted Royal Navy fleet with five Type 31e frigates, costing £250m each.

BAE recently revealed plans to cut almost 2,000 mainly air sector jobs.

The defence firm is facing an order gap for the Eurofighter Typhoon and wants to slow production in its air sector.

The navy currently uses Type 23 frigates, which would be slowly phased out.

The contract for the new Type 31e General Purpose frigates is expected to be awarded in spring 2019, with construction beginning in the autumn.

A successful bid would see Merseyside-based Cammell Laird act as prime contractor.

Image copyrightGavin Trafford
Image caption Cammell Laird are proposing an innovative design based on BAE System’s naval ships

The MoD’s shipbuilding strategy was formed in response to Sir John Parker’s independent report into British naval shipbuilding.

The report made recommendations to transform the UK maritime industry and boost the prosperity of regions, shipyards and maritime supply chains across the country.

Cammell Laird has previously worked alongside BAE Systems in constructing 1200-tonne flight deck blocks for the Queen Elizabeth Class aircraft carriers, and blocks for the complex nuclear powered Astute submarines.

Chief Executive Officer John Syvret said: “The company is proposing an innovative frigate design known as Leander, based on existing and proven BAE systems naval ship designs.

“This design meets the T31e requirements with a high level of adaptability to attract the widest range of international customers.”

Image copyrightBAE Systems/ PA
Image caption HMS Queen Elizabeth was built in blocks across six cities

John Hudson, managing director of BAE Systems Maritime, said: “We are pleased to be working with Cammell Laird with whom we have a strong and effective relationship, having worked with them on the Carrier and Astute programmes.

“We believe our expertise in warship design and engineering capability, combat management systems and export campaigns, together with Cammell Laird, means we are in an excellent position to contribute to the success of the Type 31e programme”

Cammell Laird is one of the most famous names in British industry with roots tracing back to the early 19th Century.

Located in Birkenhead on the River Mersey, it has a long history in constructing some of the most iconic Royal Navy warships, including HMS Achilles and HMS Ajax.

The Merseyside shipbuilder is currently building the £150m new arctic survey vessel, RSS Sir David Attenborough.

Dragons’ Den-backed fake tan misled users, watchdog rules
Kate Cotton and Louise Ferguson appearing on Dragons' Den in 2013
Image caption Kate Cotton (right) and Louise Ferguson (left) pitching to the Dragons in 2013

A self-tanning product launched with the help of investment from the Dragons’ Den panel has been found to mislead customers.

The Advertising Standards Authority (ASA) found claims by Skinny Tan that its product could “tone” or give “less visible cellulite” could not be proven.

Claims that the product was 100% natural were also found to be misleading.

The ASA says the company’s adverts must not appear again in their current form.

Skinny Tan launched in the UK in 2013, after company founders Louise Ferguson and Kate Cotton appeared on Dragons’ Den, winning £60,000 of financial backing from panellists Piers Linney and Kelly Hoppen.

Image caption Dragons Kelly Hoppen (second left) and Piers Linney (second right) invested in the brand

The Essex-born entrepreneurs had all five Dragons vying to invest in their business, which claimed it was the first self-tanner made of natural ingredients and could reduce the appearance of cellulite.

However beauty rivals PZ Cussons complained to the ASA about adverts appearing on Skinny Tan’s website and their Facebook page.

The Dragons’ Den-backed company had made a number of claims, including that it was the number one self-tanning product in the UK and could “tone” women.

Despite saying the natural guarana in the product would “help make cellulite look visibly smoother and less obvious”. the product was not found to have any physiological effects which would achieve this.

Skinny Tan, which was bought by beauty giant InnovaDerma in 2015, defended its cellulite-reduction claims, saying it was “commonly believed that tanning could make you look thinner”.

Image copyrightPA

The company said its claims were only in regard to the “cosmetic effect of the tan” and not any physiological effects of the product.

In addition, Skinny Tan was found to give the misleading impression that it did not contain any of the agent DHA – the main colouring agent in tanning lotions which has a distinctive smell.

Skinny Tan claimed without the chemical DHA, their product smelt better than other self-tanning products.

But it was found that Skinny Tan contains naturally occurring DHA, with the advertising watchdog saying it had seen no evidence that their lotion smelt better than other products containing DHA.

The claims to be all-natural and the UK’s number one self-tanning brand were also found to be misleading by the ASA.

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Householders warned about ‘blocked drain fraud’
man clearing drainImage copyrightGetty Images

Householders with blocked drains are being warned to think twice before employing claims management companies (CMCs) to process a claim.

The insurance company Direct Line says that more than half the claims being made by such firms are “invalid, inflated or fraudulent”.

Many people have cover for blocked drains as part of their home insurance.

However, sometimes a CMC will offer to handle the claim for them, charging a significant sum.

Direct Line says some people end up paying thousands of pounds to such companies when they could contact their insurance company for free.

The firm says there has been a sharp rise in the number of claims being made for blocked drains.

In the first quarter of 2017, it estimates the number increased by 22% compared to 2016, with no apparent or logical explanation.

Hefty cost

It’s thought that in some cases, unscrupulous drainage firms are selling details of their clients to CMCs.

Those CMCs then approach the householder and ask them to sign a bit of paper, typically promising to give the management company 10% of the eventual insurance payout.

Direct Line says that in some cases, people can also be confused about whether they are dealing with a drain repair company or a CMC.

“It is important that vulnerable customers who have an issue with their property are not taken advantage of by companies that are looking to profit from their misfortune,” said Katie Lomas, director of Direct Line Home Insurance.

“Fraudulent and inflated claims drive up the cost of policies for all consumers. Anyone that thinks they may need to make a claim on their insurance policy should contact their provider directly.”

As part of its research, Direct Line examined more than 2,000 drainage claims made in the last year. It found that 54% of them had been inflated or were invalid, costing UK insurance companies £2m.

RB shake-up sees Durex split from Brasso

That is the conclusion from the news that consumer goods giant RB, formerly known as Reckitt Benckiser, is reorganising itself into two divisions.

One division, RB Health, takes in heathcare brands including Neurofen, Strepsils, Gaviscon, Clearasil and Dettol, as well as ‘lifestyle’ brands such as Durex, Scholl and Veet.

The second, RB Hygiene Home, will own household products brands such as Air Wick, Finish, Calgon, Mr Sheen, Vanish, Brasso and Cillit Bang.

This is a big shake-up for the UK’s 13th-largest company, which was formed by the 1999 merger between British firm Reckitt & Colman with the Dutch company Benckiser.

With a stock market value of just under £50bn, RB is a vast business that, during the last decade or so, has made a number of shrewd acquisitions of assets that it successfully identified as having good growth prospects – then managed them more aggressively than their existing owners.

These included the old Boots Healthcare business in 2005, which brought in Strepsils and Neurofen; the 2008 acquisition of Adams Healthcare, which brought in Mucinex and the 2010 takeover of SSL, which added Scholl and Durex.

The biggest roll of the dice came when, earlier this year, RB announced it was splashing out $16.7bn for the US baby milk maker Mead Johnson.

Some businesses have been offloaded along the way, including the famous Colman’s mustard brand, but most notably Indivior, a provider of opioids to people seeking to lose their heroin addiction, which was floated off in 2014.

Following the Mead Johnson deal, RB also announced plans to sell its remaining food brands, including the French’s mustard business.

Announcing the move, RB said: “The two business units will together form one RB – a single company devoted to delivering on our mission of creating healthier lives and happier homes.”

Yet this separation of the two businesses will inevitably lead to speculation RB plans to float off its Hygiene Home arm which, accounting for 40% of sales, is the smaller of the two divisions. Adding fuel to this is that Rakesh Kapoor, RB’s chief executive, will be personally heading RB Health.

There is a logic to the reorganisation. Along with other consumer goods giants like Unilever and Procter and Gamble, RB is wrestling both with changing consumer habits and tastes, including disruption from internet start-ups that sell direct to the consumer and competition from supermarket own brands. All at a time when the rising price of commodities like palm oil, a key ingredient, are rising.

A more formal break-up would undoubtedly be welcomed. Investors have started to fret that sales growth has stalled at RB – concerns accentuated today when RB admitted that, during the three months to the end of September, sales were down 1% on the same period on a like-for-like basis.

Analysts had been expecting growth during the quarter. Adding to those worries have been a string of setbacks, including a cyberattack in June this year and an earlier scandal in South Korea involving the sale of a humidifier disinfectant linked to the deaths of more than 100 people.

This has got some shareholders worrying that, given RB’s well-known efficiency, whether it has been ‘running too hot’ or, at the very least, whether it can carry on growing profits further in a climate in which sales growth is flagging and in which it has few obvious cost cuts left to make.

Adding to that unease was the sudden departure, last month, of four of the 10 members of RB’s executive committee.

Demerging Hygiene Home would also fit with what is thought to be Mr Kapoor’s long-held ambition of turning RB into a pure consumer healthcare giant.

Mead Johnson was an obvious step in bulking up in that area and there are other assets likely to be up for sale in the near future, most notably the consumer healthcare divisions of Pfizer, which includes the Advil, Centrum and Chapstick brands.

Merck, another pharma giant, is also thought to be mulling the sale of its consumer healthcare arm, which makes Seven Seas vitamins and Sangobion, the iron supplement. Mr Kapoor insisted today it was too soon to say if RB will bid for either, but is known to be keen. He said integrating either would not be a concern.

But RB will not have the field to itself. Nestle has also expressed an interest in bulking up in consumer healthcare, reasoning that, like RB, it is probably better-placed to distribute and sell such products than the big drug companies, which in most – but not all – cases are seeking to focus on their science and on their more profitable pharmaceutical products.

It promises to be an interesting 18 months or so in the sector.