Yahoo Finance FTSE 100 Live 21 March: Index soars by 2%, approaching 12-month high as Bank of England holds interest rates
London’s top-flight stock index has soared amid greater hope of global interest rate cuts coming soon.
The Bank of England has kept its base rate at 5.25%, as was widely expected.
Summer interest rate cut hopes lifted global markets ahead of today’s Bank of England policy decision.
No change in the 5.25% base rate is expected, but traders expect action later in the year after the Federal Reserve last night signalled three cuts in 2024.
Today’s results by Next underlined the optimism as boss Simon Wolfson told investors: “It’s been a long time since we started a year in a more positive frame of mind.”.
FTSE 100 Live Thursday
Markets rally on rates cut outlook
Next upbeat after profits record
Direct Line targets cost savings
$100 billion wiped off Apple's market value amid US Justice Department 'smartphone monopoly' lawsuit
Thursday 21 March 2024 15:55 , Daniel O'Boyle
As much as $100 billion was wiped off of Apple’s market valuation today as its shares tumbled after the US Department of Justice sued the tech giant and claimed it had a “monopoly” on smartphones.
Shares in the iPhone maker fell by 3.8%, far enough to take $100 billion off the tech giant’s market cap.
The US Department of Justice filed the suit in a federal Court in New Jersey.
Bailey: 'UK recession appears to be finished'
Thursday 21 March 2024 15:04 , Daniel O'Boyle
Andrew Bailey has said the UK’s recession ‘appears to be finished’ in the latest boost to hopes that the country is already in recovery.
Meanwhile, he warned that there is still “some way to go” to beat inflation.
Importantly, he gave his view on the market expectations of heavy interest rate cuts this year, calling the market pricing “reasonable”.
FTSE 100 up 150 points
Thursday 21 March 2024 14:51 , Daniel O'Boyle
The FTSE 100 is now up more than 150 points, or 2%, in its biggest surge of 2024.
Miners continue to make up many of the top risers as lower interest rate expectations boosted demand for gold. But private equity business 3i outpaced all other risers after a strong update today.
'Eggflation' arrives for Easter: cost of traditional chocolate treats soars, warns consumer group Which?
Thursday 21 March 2024 14:41 , Daniel O'Boyle
Easter 2024 could be remembered as the year of record “eggflation” as the cost of the nation’s favourite springtime treat boils over – soaring by over 50% for some household-name brands.
Consumer group Which? has warned shoppers of the rise into the four-day weekend, which shops and hospitality businesses are counting on to give them a boost after a long, wet winter.
The weather is behind the price rises. Cocoa producers in West Africa have been struggling with a dry spell, meaning falling yields have sent prices for the crop on global markets have doubled in a year.
City Comment: Payments glitches like at Greggs could cost more than a few steak bakes
Thursday 21 March 2024 14:24 , Simon Hunt
Yesterday, the nation nearly fell to its knees after a catastrophe akin to the financial crash sent shockwaves through our towns and cities.
I am of course referring to the saga at Greggs, where for several hours, Brits were denied access to steak bakes and custard doughnuts after a payments IT glitch forced shop closures.
Mercifully, the crisis was resolved forthwith. Panic buying at bakeries and a run on the banks were narrowly averted.
Year-on-year inflation 'an unhelpful calculation'
Thursday 21 March 2024 14:12 , Daniel O'Boyle
Economist Simon French says he was pleased to see the bank of England paying closer attention to quarter-on-quarter inflation, as the drastic price changes last year make year-on-year figures less useful.
Another record for US stocks
Thursday 21 March 2024 13:50 , Daniel O'Boyle
The S&P 500 is at another new record as markets continued to react to the Fed signalling rate cuts could be coming soon.
It’s the 20th different day this year that the US’ main stock index hit a new high. It currently sits at 5,256.40, up 0.6% today and up almost 11% for the year.
No MPC member votes for hike
Thursday 21 March 2024 13:43 , Daniel O'Boyle
The Bank of England’s two hawks switched their votes to a hold today.
Take a look at the full MPC vote here
Sun and Daily Mail publishers’ printing tie-up gets go-ahead
Thursday 21 March 2024 13:28 , Daniel O'Boyle
Plans by the publishers of The Sun and Daily Mail to combine their printing operations have been cleared by the competition watchdog.
It follows the announcement last October that Rupert Murdoch’s News UK and Lord Rothermere’s DMG Media – two of the UK’s biggest newspaper publishers – planned to combine their printing operations amid a climate of declining print sales.
Market snapshot: FSTE 100 soars by 1.5%
Thursday 21 March 2024 12:45 , Daniel O'Boyle
Take a look at today’s market snapshot as the FTSE 100 is now up 1.5% for the day and approaching its highest level in a year.
"We've come a long way" - Bailey
Thursday 21 March 2024 12:27 , Daniel O'Boyle
Bank of England governor Andrew Bailey said: “Over the past year, inflation has fallen steadily, and is now about 4% and we’re expecting it to fall further over the coming months.”
“We’ve held rates because even though there has been good news on inflation, we need it to fall back to our 2% target and stay there sustainably.”
“We’ve come a long way, and while we can’t yet declare victory in the battle against inflation, we’re heading in the right direction.”
...or will we have to wait until August?
Thursday 21 March 2024 12:15 , Daniel O'Boyle
Marion Amiot, senior European economist at S&P Global Ratings, was less optimistic about the timing of the first rate cut.
Amiot said: “The Bank Of England will need to see a lot more moderation in wages and services prices before it starts cutting rates. We don’t expect that to be before August as the labor market remains tight.
“While vacancies are falling, the workforce is barely expanding, supporting pay increases that are well above productivity gains and the 2% inflation target.”
Could Bank of England cut in May?
Thursday 21 March 2024 12:13 , Daniel O'Boyle
Professor Joe Nellis, MHA’s Economic Advisor and Professor of Global Economy, Cranfield School of Management, said today’s announcement may offer signs that the Bank could cut in May.
He said: “Yesterday’s sharper than expected fall in headline inflation for February shows that the UK economy is beginning to show signs of recovery. While the MPC voted to keep rates unchanged this month, optimism around GDP coupled with the downward trend for inflation indicates that they could start to cut rates sooner than expected – perhaps as early as May.
“There are likely to be at least two additional cuts in interest rates this year after the initial cut in May or June. Interest rates are likely to normalise at around 3.5 to 4% by the beginning of 2025, but they will not be falling to the record lows enjoyed by borrowers in previous years. The Bank of England’s default position is to set interest rates at 2 to 3% above inflation to give them some leverage and control over inflationary pressures – they would prefer to be in a position of ‘pulling on a string’.”
Bank could cut rates before inflation fight is won
Thursday 21 March 2024 12:11 , Daniel O'Boyle
The Bank of England’s minutes on its latest decision suggested that it is open to cutting interest rates even if there are still signs of inflation persistence, as it believes rates could continue to be ‘restrictive’ even after a cut.
It said: “The Committee recognised that the stance of monetary policy could remain restrictive even if Bank Rate were to be reduced, given that it was starting from an already restrictive level.”
Read more on latest interest rate decision
Thursday 21 March 2024 12:09 , Daniel O'Boyle
The benchmark cost of borrowing in the UK is staying at a 16-year peak, at least for now, after the Bank of England kept interest rates on hold at 5.25%.
Read more about the decision here
Shares soar further
Thursday 21 March 2024 12:06 , Daniel O'Boyle
The FTSE 100 is even higher thanks to the two hawks’ flip to hold.
London’s top flight is now up a huge 1.5% to 7,852.23, the highest since April 2023. It was already up by more than 1% on the back of a dovish outlook from the US Fed.
8-1 split on MPC
Thursday 21 March 2024 12:05 , Daniel O'Boyle
Eight members of the Monetary Policy Committee voted to hold rates, as both Jonathan Haskell and Catherine Mann changed their vote.
The two most hawkish members of the committee had both voted for a rise last time. Haskell was widely expected to flip to a hold but Mann’s vote was less certain.
Swati Dhingra remained the only member voting for a cut.
Bank of England holds rates
Thursday 21 March 2024 12:00 , Daniel O'Boyle
The Bank of England has kept its base rate at 5.25%, as was widely expected.
Rate hold all but certain
Thursday 21 March 2024 11:53 , Daniel O'Boyle
With a little over 5 minutes until the Bank of England’s interest rate call, markets see a hold as near-certain.
But in the ultra-slim chance there is a move, traders believe it’s more likely up than down, with markets pricing in a 3% chance of a hike.
Hope for the high street as Next profits soar
Thursday 21 March 2024 11:33 , Daniel O'Boyle
Next offered hope for the battered high street today as it seemed set to hit profit of £1 billion before long and CEO Simon Wolfson said: “It has been a long time since we started a year in a more positive frame of mind.”
With rents down, costs down and inflation falling, there has been a burst of consumer confidence that could be good for Rishi Sunak’s election prospects, though Wolfson, a Conservative life peer, declined to comment on politics today.
With rival mid-market stores such as Ted Baker and Superdry in the mire, both Next and M&S are on the up.
PMI is 'another reason to keep raters on hold'
Thursday 21 March 2024 11:18 , Daniel O'Boyle
Martin Beck, Chief Economic Advisor to the EY ITEM Club, says the latest PMI figures will only add to the case for keeping interest rates at 5.25%.
Beck said: “The fact that the economy's contraction last year looks increasingly likely to have been short-lived is one reason why the MPC probably won't be in a rush to cut interest rates just yet. Another is concern that underlying inflationary pressures haven't yet eased sufficiently. March's survey is unlikely to calm that worry. The survey's measure of input cost inflation eased only slightly from February's six-month high, with respondents citing higher transportation costs and still-strong pay growth. And higher costs were passed through to prices, with growth in the latter the highest since July 2023.
“All in all, evidence of healthier growth amid still-present inflationary pressures offers another reason to think the MPC will keep policy on hold when its next interest rate decision is announced later today.”
Swiss National Bank in surprise rate cut
Thursday 21 March 2024 10:37 , Daniel O'Boyle
The Swiss National Bank became the first major Western central bank to cut interest rates in this cycle today, boosting hopes that cuts could be on their way in the UK soon.
The surprise cut comes with Swiss inflation already below the 2% target, and sent the Swiss Franc down more than 1% against the dollar. The currency had made big gains in the past year.
ING analysts said: “A further rate cut in September is also likely, but will obviously depend on the central bank's inflation forecasts at that time.”
The chances that the Bank of England follows suit are still extremely slim, with higher inflation in the UK and Swiss monetary policymakers being known for occasional surprises.
Manufacturing output up
Thursday 21 March 2024 10:31 , Daniel O'Boyle
The UK manufacturing sector is rebounding from a prolonged slump, as today’s PMI figures showed the industry's output growing for the first time in more than a year.
The PMI ‘flash’ UK manufacturing output index for March came to 50.2, above the 50 mark that separates growth from decline. That ends 12 consecutive months of slumping output, and is driven by greater restocking from shops.
Composite PMI figures also showed growth for the third straight month, at 52.9, in the latest sign that the UK’s end-of-2023 recession may already be over.
Thomas Pugh, economist at RSM UK, said: “Overall, the PMIs paint a picture of a fragile economic recovery.”
'Further signs of UK having pulled out of recession'
Thursday 21 March 2024 09:36 , Daniel O'Boyle
The UK private sector is continuing its rebound in March, the latest PMI survey suggests.
The ‘flash’ composite PMI for the month came to 52.9, a little below expectations but firmly above the 50 mark and therefore in ‘growth’ territory.
The survey has now shown growth in each of the first three months of the year, suggesting the UK is already out of its end-of-2023 recession.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said: “Further signs of the UK economy having pulled out of last year's brief recession are provided by the provisional PMI data for March. A further robust expansion of business activity ended the economy’s best quarter since the second quarter of last year.
“The survey data are indicative of first quarter GDP rising 0.25% to thereby signal a reassuringly solid rebound from the technical recession seen in the second half of 2023.”
Eurozone private sector stagnates in March
Thursday 21 March 2024 09:07 , Daniel O'Boyle
The Eurozone private sector is in stagnation, according to the latest PMI survey.
The March flash PMI reading for the currency union came to 49.9, barely below the 50 mark that separates growth from decline. The figure was slightly up from February.
The service sector grew, with a nine-month high reading of 51.2, while manufacturing remained in decline.
Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said: “If you were hoping for a recovery in the manufacturing sector in the first quarter, it's time to throw in the towel.”
But added: ““These are the times that make you humble and where a modest monthly expansion is already good news. In this sense, the fact that the services PMI moved further into expansionary territory at 51.1 should be seen as a positive development, especially as it marks the second consecutive month of growth. Similarly, the fact that new business rose for the first time in nine months is notable and fits with the further improvement in business expectations.”
France and Germany private sectors still in decline
Thursday 21 March 2024 08:42 , Daniel O'Boyle
The private sectors of the Eurozone’s two biggest economies continue to slump, according to the latest PMI surveys for France and Germany.
The HCOB Flash France PMI showed a reading of 47.7, below the 50 no-change mark and down from 48.1 last month.
In Germany, the index improved but was also in decline territory, at 47.4.
Norman Liebke, Economist at Hamburg Commercial Bank, said: “The French economy is delaying its recovery into at least the second quarter. The HCOB Composite Flash PMI fell slightly compared to February, staying in contraction territory. This is especially due to lower demand as the PMI for new business fell at a steeper rate.”
Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said: "Germany is not getting back on track. The manufacturing sector closed the first quarter of 2024 with a disconcerting rate of contraction, echoing the woes of the previous month. By contrast, the services sector has managed to hold its ground, maintaining activity at the weak levels observed in February.”
Both countries narrowly avoided recessions to end last year.
Miners drive FTSE 100 to 10-month high, Next up 3% after results
Thursday 21 March 2024 08:37 , Graeme Evans
The FTSE 100 index has rallied 1.2%, up 90.54 points to a 10-month high of 7827.92 after mining stocks surged on the Federal Reserve’s rate cut guidance.
Anglo American and silver miner Fresnillo jumped 5%, while Glencore and Antofagasta put on 3%.
Other stocks on the risers board included Rolls-Royce, which added another 11.5p to 418.2p, and Prudential after recouping some of yesterday’s results-led slide with a gain of 20.8p to 766p.
Next improved 3% or 278p to 8778p after it forecast a 5% rise in current year profits to £960 million, while the annual results of asset manager M&G helped its shares up 7.9p to 239.4p.
The FTSE 250 index rose 1% or 185.7 points to 19,669.05, with Peru-based gold miner Hochschild Mining up 4% or 4.5p to 119.9p after the price of the precious metal hit a fresh record above $2200 an ounce.
Mediterranean oil and gas group Energean also rallied 5% or 49p to 1078p after results and FirstGroup improved 2.8p to 184.5p after securing the TfL contract to operate the cable car service linking the Greenwich Peninsula with the Royal Docks.
Market snapshot: FTSE 100 up 1%
Thursday 21 March 2024 08:36 , Daniel O'Boyle
There’s lots of green on our market snapshot this morning with the FTSE 100 up more than 1%
Nationwide approves Virgin Money deal after 'comments' from members
Thursday 21 March 2024 08:21 , Daniel O'Boyle
Nationwide has pledged to keep all its branches open to 2028 as it pushed through its acquisition of Virgin Money after “comments” from members, but not a full vote.
The building society agreed to buy Virgin Money in a £2.9 billion deal last month, which upset many members who felt it went against its mutual principles.
Today, it has given its full approval to the deal, and extended its promise not to close any branches until 2028. The promise will also apply to Virgin Money branches.
Gareth Thomas MP, Chair of the All Party Parliamentary Group on mutuals, said: “This deal will create a stronger building society and extend the benefits of mutuality to new markets, like business banking. At a time when many banks are closing branches, the extension of Nationwide’s promise to keep branches open until 2028 is particularly welcome. A thriving mutual sector benefits consumers and increases competition. More generally, we need to make it easier for other mutuals to grow and raise capital.”
'Feel-good factor' in markets today
Thursday 21 March 2024 08:05 , Daniel O'Boyle
Susannah Streeter, head of money and markets at Hargreaves Lansdown, says: “’With inflation largely keeping in step with central bank forecasts, policymakers are continuing to dance to the same ‘wait-and-see’ tune, but interest rate cuts still hover on the horizon, providing plenty of cheer.
“The Federal Reserve stayed steadfast to its repeated mantra that more data is needed before cuts can come but welcomed the march down in prices. The status quo has reassured investors that cuts will arrive in the summer, although more patience is needed. It’s helped stocks surge on another wave of enthusiasm and the feel-good factor is set to keep reverberating through early trading today.”
Next sets profit record after better-than-expected year
Thursday 21 March 2024 07:51 , Graeme Evans
An upbeat Next today recorded a 5% rise in annual profits to a record £918 million, with revenues for the year to January up 5.9% to £5.8 billion.
The clothing retailer’s profit guidance for the current financial year also points to a further increase of 4.6% to £960 million..
Chief executive Simon Wolfson told investors in the annual report: “It has been a long time since we started a year in a more positive frame of mind.
“Last year was much better than we anticipated at this time last year, and the group has delivered its highest ever levels of revenue and profit.
“Perhaps more encouragingly, we enter the financial year with new avenues of growth along with a cost base that feels under control.”
A final dividend of 141p is due to be paid on 1 August, taking the total for the year to 207p.
‘Too early for Bank of England to cut interest rates’, despite inflation falling
Thursday 21 March 2024 07:51 , Daniel O'Boyle
City experts stuck with predictions that today is still too early for a Bank of England interest rate cut, despite figures yesterday showing the rate of inflation has fallen at its fastest pace in 50 years over the last 12 months.
That slide put the BoE’s official 2% target within reach, possibly as soon as next month, according to respected forecasters.
Economists at ING predicted that the headline consumer price index inflation will “be below 2% from May and for much of 2024”. Official data confirmed CPI hit 3.4% for February, down from 4% the month before, to a two-year low. It had been forecast to read 3.5%.
Gatwick handles almost 41million passengers in 2023
Thursday 21 March 2024 07:30 , Michael Hunter
The number of passengers who used Gatwick Airport neared 41 million in 2023, up by almost a quarter.
That took demand to 88% of pre-pandemic levels. Traffic was boosted by “a string of new airlines and destinations at the start of summer 2023.”
At the peak of demand, hit in July and also October, passenger numbers reached 94% of 2019’s levels, before Covid struck,
London’s second biggest international travel hub said revenue for the year reached £1.015 billion, up over 30%. Profit rose almost 70% to nearly £315 million.
Games Workshop dividends rise to £4.20
Thursday 21 March 2024 07:28 , Simon Hunt
Games Workshop today issued a dividend of 105p, taking the total dividends issued in its financial year to £4.20, up from £4.15 the previous year.
The figurine retailer said it was trading in line with expectations -- the first time in a while it hasn’t said it was exceeding them.
Public borrowing figures 'disappointing'
Thursday 21 March 2024 07:25 , Daniel O'Boyle
Ruth Gregory, deputy chief UK Economist at Capital Economics, said today’s public borrowing figures are ‘disappointing’ despite the decline from 2023.
She said: “February’s disappointing public finances figures suggest that the OBR’s new 2023/24 borrowing forecast published in March’s Budget already looks too optimistic. But this may not prevent the government from squeezing in another pre-election tax-cutting fiscal event later this year.”
Direct Line to slash costs after fending off bid
Thursday 21 March 2024 07:23 , Daniel O'Boyle
Direct Line is to slash costs as its board hopes to convince shareholders it was right to reject a £3.2 billion takeover offer last week.
The firm will cut £100 million of costs by end of 2025 by “improvements in digital capability, reduced technology costs and removing complexity across the group”.
The firm returned to profit last year after a £300 million loss in 2022.
Its boss Adam Winslow, who started in the role three weeks ago, said: “While the picture has improved, we need to do more to drive performance and we have identified immediate actions we can take in 2024 to create value, including substantially reducing our cost base, driving claims excellence and optimising pricing capabilities whilst returning us back to higher quotability levels.”
Direct Line rebuffed a £3.2 billion offer from Belgian insurer Ageas last week.
Markets rally on Federal Reserve guidance, gold tops $2200 an ounce
Thursday 21 March 2024 07:13 , Graeme Evans
Blue-chip shares are set for a strong session after last night’s Federal Reserve announcement kept alive hopes for three interest rate cuts in 2024.
The guidance by policymakers helped the S&P 500 index close 0.9% higher, while the Dow Jones Industrial Average rose 1% and the Nasdaq Composite by 1.2%.
With the Nikkei 225 and the Hang Seng index 2% higher, IG Index said futures markets are pointing to a rise of about 0.9% or 71 points to 7809 for London’s FTSE 100 index.
The rate cut speculation in the US meant the pound strengthened to $1.28 ahead of today’s Bank of England decision, when there’s likely to be no change in the 5.25% base rate.
Gold, meanwhile, topped $2200 an ounce for the first time as the outlook for lower borrowing costs has boosted the appeal of the non-interest bearing asset.
Public borrowing down in February
Thursday 21 March 2024 07:08 , Daniel O'Boyle
Public borrowing came to £8.4 billion in February, as frozen tax thresholds while pay rose continued to bring up tax receipts.
The figure was down almost 30% from the same time last year. It means borrowing for the financial year-to-February 2024 was £106.8 billion.
ONS statistician Jessica Barnaby said: “This was the fourth consecutive month in which borrowing was lower than in the same month a year ago, with growth in tax receipts exceeding growth in spending. Across the financial year to date, borrowing was the lowest it has been for four years.
“Relative to the size of our economy, debt remains at levels last seen in the early 1960s.”
Recap: Yesterday's top stories
Wednesday 20 March 2024 23:01 , Simon Hunt
Good morning from the Standard City desk.
The wheels have come off the British EV sector in the past few months.
It began in October with the collapse of electric lorry maker Volta, wiping out 600 engineering jobs in the UK. Next came electric bus manufacturer Arrival, which entered administration in February after cutting more than 800 UK roles. And just this week we saw the failure of the commercial arm of Silverstone-based electric ‘upcycler’ Lunaz, which will likely take another couple of hundred jobs with it.
These were all nascent startups that were low on cash and lacked clear business models. But only a couple of years ago, investors were prepared to throw bags of money at them at heady valuations. Lunaz was once reportedly worth $200 million, Volta had raised 300 million euros at a 600 million valuation and Arrival once hit a giddy $13 billion market cap on the Nasdaq.
What has changed since then? For a start, the global EV market has proved a lot harder to crack than hoped. American electric carmaker Rivian has seen a more than 90% drop in its share price since its 2021 IPO after hitting production troubles and missing sales targets, while tech giant Apple has reportedly abandoned all plans to launch its own vehicle.
But there is something specific to the UK that made things worse: a speech by Rishi Sunak in September in which he tore huge chunks out of the government’s net zero commitments, including delaying the ban on selling new petrol cars.
Aside from decimating EV investment, this short-sighted manoeuvre has already pushed consumer behaviour into reverse gear. In December, battery-electric vehicle sales fell by more than a third, while petrol car sales jumped by a similar proportion. The OBR previously forecast more than two-thirds of car sales would be electric by 2027. Now? Less than half.
We will still all be driving an electric car in twenty years’ time — that hasn’t changed. But the chances that the vehicle will be British-made are becoming vanishingly small.
Here’s a summary of our other top stories from yesterday:
Inflation falls to lowest level in two years at 3.4%, down from 4% in January, Offers hope of interest rate cut sooner than later (maybe July/August)
City watchdog calls on financial advice firms to review their processes when providing retirement income advice - some are " not even getting the basics right and putting their customers' futures at risk", by not considering a sustainable level of income to support retirement or not providing the right information to customers.
Prudential profits jump 43% to $3.1bn. Will Asia focussed insurer quit London stock market?
Lloyds Bank and PayPoint link up to offer business accounts and loans.
And...Mike Ashley's train set -- The anorak's favourite hobby firm is getting some help from one of the UK's biggest names in retail. Mike Ashley has signed an unpaid "consultancy agreement" with Hornby, the model train maker, in which his Frasers Group is also a shareholder
