The former chief executive of Abercrombie & Fitch is now fit to stand trial on sex- trafficking and prostitution charges after spending months in hospital, prison officials say.

Mike Jeffries was declared “mentally incompetent” by a court in May and said to be suffering with dementia and late onset of Alzheimer’s disease. A judge ordered him to be treated for up to four months to see if he was likely to regain competency.

US prosecutors now say that medical experts have found him competent to stand trial.

Mr Jeffries was arrested and charged last October along with his British partner, Matthew Smith, 61, and their alleged middleman, James Jacobson, 72. All three deny the allegations.

Mr Jeffries, 81, was released from FMC Butner – a federal prison in North Carolina for men with special health needs – in late November, according to court documents.

Writing to Judge Nusrat Choudhury, prosecutors said that prison officials had concluded that Mr Jeffries was “able to understand the nature and consequences of the proceedings against him and to assist properly in his own defense”.

In a court hearing on Thursday, assistant US attorney Megan Farrell said this followed an assessment by a neuropsychologist and psychologist.

A final competency hearing will be set for early 2026 with prosecutors requesting a trial date for October next year, the court heard.

The former fashion executive and two others were charged with running an international sex-trafficking and prostitution business from at least 2008-2015.

All three have pleaded not guilty to the charges, which carry a maximum sentence of life in prison.

Federal prosecutors accused them of using their money and influence to prey on vulnerable men for their own sexual gratification and said they used force, fraud and coercion to make aspiring models engage in “violent and exploitative” sexual acts.

Their arrests followed a 2023 BBC documentary and ongoing podcast series that revealed the trio had been at the centre of a sophisticated operation scouting young men for sex around the world while Mr Jeffries was chief executive of Abercrombie & Fitch.

In March, a court ruled that Abercrombie & Fitch had to pay for Mr Jeffries’ criminal defence costs – a figure lawyers say is likely to run into millions – as a result of an indemnification agreement he signed while stepping down in 2014.

Then, in May, Brian Bieber, Mr Jeffries’ criminal defence lawyer, said his client had been evaluated by doctors who determined he had Alzheimer’s disease, Lewy Body disease, and the residual effects of a traumatic brain injury requiring around-the-clock care, which was supported by two medical experts.

Alongside criminal charges, Mr Jeffries, his partner Matthew Smith and Abercrombie & Fitch have been defending multiple civil lawsuits brought by alleged victims.

Earlier this year, the BBC revealed that more than 40 men have now come forward with civil allegations of rape, sexual assault or drugging, accusations Mr Jeffries and Mr Smith “vehemently deny”.

One of the plaintiffs, who asked to remain anonymous as he’s been interviewed by the FBI as part of its criminal investigation, said he was shocked and relieved by the latest opinion that Mr Jeffries is fit to stand trial.

“For the first time, it feels like we’re now moving toward a future where he must answer for what happened and for what so many of us endured.

“It means the truth could finally be heard in a courtroom, and for survivors, that moment for accountability has been a long time coming.

“I hope the system will finally require him to stand up and face the weight of everything he’s spent years avoiding.”

Abercrombie & Fitch did not respond to requests for comment, though it has previously said that it had no knowledge of alleged sexual misconduct or sex trafficking and “up until the moment that the BBC’s reporting was released in October 2023, there was nothing public about the allegations against Jeffries”.

It said that new leadership had since transformed the company, and it has “zero tolerance for abuse, harassment or discrimination of any kind”.

The FTSE 100 forged ahead on Thursday as a less “hawkish” than feared rate cut by the US Federal Reserve and a brighter US economic outlook spurred stocks, despite some fresh AI worry.

The FTSE 100 index closed up 47.63 points, 0.5%, at 9,703.16. The FTSE 250 ended 21.13 points higher, 0.1%, at 21,852.10, and the AIM All-Share ended up 1.04 points, 0.1%, at 747.66.

In Europe on Thursday, the CAC 40 in Paris closed up 0.8%, while the DAX 40 in Frankfurt ended 0.7% higher.

After Europe’s close on Wednesday, the US central bank cut interest rates by 25 basis points as expected and chairman Jerome Powell struck a softer tone than some had feared.

Bank of America called it an “unintentionally dovish cut”, Citi said markets “had overestimated how hawkish Mr Powell would sound,” while JPMorgan noted Mr Powell’s opening remarks were “less forceful than those used in October”.

“Relative to markets that were looking for Powell to push back more strongly at the potential for further cuts, this was a dovish outcome,” Citi said.

Goldman Sachs said “dovish labour market comments” and the “lack of a stronger lean toward a January pause led to a dovish market reaction”.

In addition, the Federal Reserve raised expectations for economic growth in the US for 2026 through to 2028, expecting a bounce back after the government shutdown.

Sarah House, analyst at Wells Fargo, said: “Our base case remains that the current easing cycle is not over yet but rather that it is entering a slower phase.”

Stocks in New York were mixed at the time of the London equity close after rising sharply on Wednesday in the wake of the Fed’s rate call.

The Dow Jones Industrial Average was up 1.0%, the S&P 500 index was 0.4% lower, while the Nasdaq Composite was down 1.1%.

Oracle knocked the more optimistic market mood after hours on Wednesday by warning of higher capital expenditure as it grapples with buoyant artificial intelligence demand.

Shares in the Texas-based cloud technologies-focused company were 14% lower in New York on Thursday around the time of the London close.

Stifel noted shares are being hit by “continued uncertainty around exactly how Oracle is going to fund its data centre build-out requirements”.

The Fed rate call saw bond yields drop and the dollar fade.

The yield on the US 10-year Treasury was quoted at 4.12%, down from 4.18% on Wednesday. The yield on the US 30-year Treasury was at 4.77%, trimmed from 4.78%.

The pound was quoted higher at 1.3416 dollars at the time of the London equities close on Thursday, compared with 1.3332 dollars on Wednesday.

The euro stood at 1.1746 dollars, up against 1.1647 dollars. Against the yen, the dollar was trading lower at 155.24 yen compared with 156.36 yen.

Figures showed the US trade deficit unexpectedly decreased markedly in September.

According to data published by the US Census Bureau and the US Bureau of Economic Analysis the country’s trade deficit narrowed by 11% monthly in September to 52.8 billion dollars, from 59.3 billion dollars in August.

The FXStreet-cited consensus was for the trade deficit to increase to 63.3 billion dollars in September.

The last time the US’s trade deficit was lower was in June 2020, when it was at 49.16 billion dollars.

US exports climbed 3.0% to 289.3 billion dollars, while imports edged up 0.6% to 342.1 billion dollars.

In London, renewed strength in the gold price lifted Endeavour Mining, up 3.2%, and Fresnillo, up 3.0%.

Magnum Ice Cream continued its strong first week of trading, rising a further 5.6%, while an AI collaboration with IBM supported Pearson, up 2.0%.

Grocer J Sainsbury was lifted 2.1% by an upgrade by Citi to “buy” but the same broker reiterated a “sell” rating on Primark owner Associated British Foods, helping push shares down 1.6%.

Also on the wane, betting operator Entain, which fell 2.2% after stating Rob Wood, its chief financial officer and deputy chief executive, will step down in 2026 after 13 years at the firm.

On the FTSE 250, RS Group took the spoils, up 6.2%, after netting an upgrade to “overweight” from JPMorgan.

But Ceres Power slid 11% after a scathing attack from activist short-seller Grizzly Research.

In a report, Grizzly Research said Ceres is “hiding a flawed business model with abysmally small revenue potential behind a facade of big-name announcements and lofty projections”.

Grizzly said its research shows that Ceres has a history of “ambitious partnerships and unrealistic projections that keeps repeating”.

Faring better, Drax Group advanced 1.4% after stating it expects full-year adjusted earnings before interest, tax, depreciation and amortisation to be at the top end of the consensus forecast range of £892 million to £909 million.

In addition, the electricity generator said it is looking at opportunities to maximise value from the Drax Power Station site, which covers 1,000 acres in North Yorkshire.

Brent oil was quoted at 60.91 dollars a barrel at the time of the London equities close on Thursday, down from 61.42 dollars late Wednesday.

The biggest risers on the FTSE 100 were Magnum Ice Cream, up 63.20 pence at 1,186.20p, Ashtead Group, up 225.00p at 5,010.00p, JD Sports Fashion, up 2.80p at 81.72p, Endeavour Mining, up 110.00p at 3,544.00p and IAG, up 12.00p at 397.60p.

The biggest fallers on the FTSE 100 were Informa, down 30.60p at 899.00p, Smith & Nephew, down 34.50p at 1,214.50p, Entain, down 16.60p at 743.20p, AB Foods, down 33.00p at 2,097.50p and Centrica, down 2.20p at 165.30p.

Friday’s economic calendar has CPI prints in France and Germany and UK GDP and industrial production figures.

Friday’s UK corporate calendar has half-year results from Taylor Maritime.

– Contributed by Alliance News