Good morning.

We return to the normal results cycle with a strong trading update from Next, which has lifted its expectations for both profit and sales for the full year.

The retailer said full-price sales were up 20pc in the eight weeks to 25 December versus two years ago. This was £70m ahead of its previous guidance for the period.   

As a result, it hiked pre-tax profit forecasts by £22m to £822m and said full price sales will be up 7pc. It also declared a special dividend.

There were some words of caution though, with Next warning growth would be “much weaker” after the first quarter due to strong comparative numbers. It also raised questions over how rising inflation and a possible easing of pent-up demand would impact trading.

5 things to start your day 

1) Petrol accounts for less than half of new car sales last month  Electric car makers risk going too far in race for range

2) Omicron halts high street recovery  Return to working from home deals fresh blow to retailers as firms warn of sales slowdown

3) China’s zero-Covid strategy stretched to breaking point ahead of winter Olympics  Despite mounting concerns over Beijing’s draconian approach to coronavirus, there is little chance it will change tack any time soon

4) Hedge fund king Ken Griffin loses millions on British Airways bet  Billionaire hit by data showing omicron has not dented airline bookings

5) Disgraced Afiniti founder Zia Chishti plots comeback weeks after quitting over harassment claims The entrepreneur is trying to rejoin the board of TRG Pakistan, the biggest shareholder in Afiniti

What happened overnight 

Asian shares fell on Thursday, extending a global slump after Federal Reserve meeting minutes pointed to a faster-than-expected rise in US interest rates due to concerns about persistent inflation.

Worries over higher US rates combined with growing concerns about the rapid spread of the omicron coronavirus variant to weigh on riskier assets.

Asian shares took their cue from overnight losses on Wall Street. The Nasdaq plunged more than 3pc on Wednesday in its biggest one-day percentage drop since February and the S&P 500 fell the most since November 26, when news of the omicron variant first hit global markets.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.95pc, Australian shares slid 1.53pc and Japan’s Nikkei stock index fell 2.08pc.

Chinese blue-chips fell 1.37pc as a private sector survey showed China’s service sector activity expanded more quickly in December, but continuing Covid outbreaks weighed on the outlook.

Coming up today

  • Corporate: Clarkson, Greggs,, Mattioli Woods, Next (Trading update)
  • Economics: Final services and composite PMI (UK), services PMI (China), inflation (Germany), jobless claims, factory orders, durable goods orders (US)

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