(Bloomberg) -- Hi, I’m Leo from Bloomberg's UK Breaking News team, catching you up on this morning’s business stories. 

EasyJet Plc said customers are pulling back amid the war in the Middle East, hurting sales and preventing the budget airline from narrowing its losses this winter.

Still, shares rose in early trading after bookings appeared strong for next summer. And as competitors struggle to field planes, the company said the overall outlook for the coming year is positive. The airline also benefitted from growth at its holidays offerings and — perhaps most annoyingly for passengers — its ancillary revenue, which includes baggage fees. 

What’s your take? Ping me on X, LinkedIn or drop me an email at lkehnscherpe@bloomberg.net. 

Key Business News

 Rolls-Royce Holdings Plc set ambitious medium-term targets of higher cash flow and return on capital as Chief Executive Officer Tufan Erginbilgic takes his turnaround effort at the UK engine maker to the next phase. The manufacturer will also look to divest assets that don’t meet profitability goals, it said in a stock exchange filing ahead of its capital markets day. Erginbilgic, a former BP Plc executive, has taken a much tougher approach to pricing as Rolls-Royce focuses on profit instead of offering steep discounts to win business. Shares popped as much as 4.6% in early trading.

Barclays Plc is exploring cutting ties with thousands of investment banking clients as the bank’s management team looks to boost profitability, according to the FT. The details follow reports last week that the London-based bank is looking to reduce costs across the group by as much as £1 billion over several years, which could involve slashing as many as 2,000 jobs, mainly in the back office. 

Meanwhile, homebuyers are getting the edge in the UK property market, forcing the growing ranks of sellers to slash prices to secure deals. The gap between asking prices and the values achieved at sale rose to a five-year high of 5.5% in the first half of November, with one in four deals involving a reduction of more than 10%, according to property portal Zoopla.

Finally, inflation in UK shops has fallen to a 17-month low as retailers fight to attract shoppers ahead of the crucial holiday period.

Bloomberg Opinion’s Take

What will it take for Jeremy Hunt to sell the government’s stake in NatWest Group Plc?

The government has held a stake in NatWest since bailing it out —when it was called Royal Bank of Scotland — during the global financial crisis. It now owns 39%, down from 84% in 2009. But prior sales haven’t created much value for buyers. 

Hunt must hope that at a low valuation of 5.2 times consensus earnings for next year, there is something there for retail investors. With 19 million customers, NatWest itself has the fuel to bolster stock ownership in the UK. But unlike with British Telecom and British Gas, the narrative that the government’s exit can be a catalyst for upside is moot. This one’s all on the bank.

— Marc Rubinstein

Marc Rubinstein is a former hedge fund manager. He is author of the weekly finance newsletter Net Interest.

What’s Next? 

Fresh mortgage approval data will be in focus at 9:30 a.m. tomorrow.

Slightly cheaper deals should lead to to a small uptick in applications over the next few months, Bloomberg economists reckon.

Still, around half the impact of the Bank of England’s quickest rate-hike series in decades has yet to come through. Households’ lower purchasing power will remain a “significant headwind” for house prices, the economists say. 

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