FTSE 100 Live: Swiss central bank will offer Credit Suisse liquidity if needed, FTSE year-low
Chancellor Jeremy Hunt delivered his first full Budget amid signs of a growing global crisis, as banking shares across the globe fell.
The worries centred on Credit Suisse as its stock plunged by around 20% before trading was halted after top shareholder, the Saudi National Bank, ruled out providing more support for the scandal-prone lender.
Ahead of Hunt’s address to MPs, the Treasury had already announced that the Energy Price Guarantee will be kept at £2,500 for an additional three months from April to June in a move saving a typical household £160.
FTSE 100 Live Wednesday
FTSE 100 index back under pressure
Energy price cap to continue
Prudential backs London listing
FTSE closes at lowest level of 2023 amid banking sell-off
16:38 , Daniel O'Boyle
The FTSE 100 closed at 7344.45 today, as fears about the banking sector prompted a wider sell-off in shares.
Despite holding steady upon opening, the FTSE declined throughout the day amid concerns about Swiss bank Credit Suisse and the wider banking sector.
The closing figure was the lowest total the FTSE reached at any point this year and the lowest end-of-da total in almost four months.
Prudential, which announced its financial results this morning, was the biggest faller of the day, with shares dow 12.5%.
Credit Suisse seeks to sell stake in Brazil hedge fund
16:21 , Simon Hunt
Credit Suisse is in talks to sell a stake in the Brazil hedge fund Verde, according to local news site Brazil Journal, as the bank wrestles to regain stability amid a plunge in its share price.
The Zurich-based business is reportedly in negotiations with asset management business Lumina Capital to agree the terms of a sale.
Credit Suisse holds a 25% stake in Verde, which manages over $5 billion in assets, acording to Brazil Journal.
US Treasury says it’s closely monitoring situation with Credit Suisse
15:53 , Simon Hunt
The US Treasury says it’s closely monitoring the Credit Suisse situation as its derivatives his crisis levels.
The Treasury added it was in touch with its global counterparts.
Credit Suisse derivatives reach 2008 financial crash levels as it seeks central bank support
15:44 , Simon Hunt
The cost of Credit Suisse-linked derivatives hit levels not seen since the 2008 financial crash today in further signs the bank is in crisis.
The firm appealed to the Swiss central bank for a show of support in a bid to reassure investors, according to the FT, but so far the central bank has declined to comment.
Rival banks are rushing to seek protection against default by Credit Suisse in order to reduce their exposure to its potential collapse.
It shares plunged 30% today after its biggest shareholder said it didn’t plan to increase its stake.
‘Brexit pubs guarantee’ cheered by beer sector
15:35 , Daniel O'Boyle
Chancellor Jeremy Hunt has unveiled measures to reduce the tax paid on draught beers and ciders, in a move that the pub industry has cheered.
In what Hunt called “a Budget for growth”, the government announced Draught Relief has been extended to 9.2%, higher than the 5% duty discount that was due to come in from August.
The move has largely been welcomed, although many commentators said more help is still needed to help pub companies and brewers.
Capital allowances: the biggest business win in the Budget?
15:09 , Simon Hunt
From April 2023 until the end of March 2026, companies can claim 100% capital allowances on qualifying plant and machinery investments, in a move that offers billions of pounds of incentives to businesses who make investment committments.
Could this be the biggest business win for businesses in the Budget?
PwC Tax partner Adrian Sutton tells the Standard: “This measure allows companies to write off their investments in capital assets in one go, whereas normally you would need to expense it over a number of years.
“In theory this should stimulate capital investment in particular in manufacturing but also office tables and chairs. It does replace what was called the "super-deduction" but it goes further in providing these incentives to the tune of £8bn in the next tax year and £10.7bn in the year after that.”
Credit Suisse debacle is “just the tip of the iceberg” says JPMorgan
14:25 , Simon Hunt
JPMorgan Asset Management Chief Investment Officer Bob Michele has said the Credit Suisse crisis is “just the tip of the iceberg” and “there is a lot more pain to come” in the banking sector amid soaring interest rates.
Bob Michele, JPMorgan Asset Management CIO and global head of fixed income, says Credit Suisse is "the tip of the iceberg" https://t.co/fgU0gpeo0I pic.twitter.com/wwttTpKZ0n
— Bloomberg TV (@BloombergTV) March 15, 2023
US shares down with big banks among top fallers
14:21 , Daniel O'Boyle
Shares in US businesses dipped - but by less than their European counterparts - as trading opened this morning.
The country’s top banks, though, were among the biggest fallers, as fears of a global banking crisis deepen.
The S&P 500 was down 56.78 points to 3862.58, while the Dow Jones was down 512.16 points 31643.24. The Nasdaq fell by 133.62 points to 11294.52.
However big banks - which had avoided the share plunges experiences by some regional lenders - fell more quickly than the top indices.
Goldma Sachs shares were down 4.5%, JPMorgan Chase by 3.4%, Bank of America 2.5%, Citigroup 4.9%, Morgan Stanley 3.9% and Wells Fargo 3.5%.
UK borrowing costs ease as markets track fears over global banks rather than Hunt’s Budget
14:16 , Michael Hunter
There are deep and wide losses across UK stock markets after Jeremy Hunt’s first Budget as Chancellor, but they are the result of global concern about the problems faced by the banking sector across the world.
London’s FTSE 100 was trading down by almost 220 points, or around 3%, at 7418.80.
The second-tier FTSE 250, often seen as more representative of the domestic UK economy, was down 420 points or over 2% to 18711.55.
The yield on benchmark UK government debt fell by 20 basis points to 3.276% amid strong demand for the bonds, with assets prized for their safety faring well in the turmoil. There was a similar move on US Treasuries over the same duration.
Budget will see the biggest-ever fall in living standards: Paul Johnson
14:10 , Simon Hunt
Institute for Fiscal Studies director Paul Johnson weighs in on Jeremy Hunt’s budget.
He Tweeted: “OBR may be more positive about inflation and the economy.
“But it is still projecting that 2022 and 2023 will see the biggest ever fall in living standards.”
Here are the key charts. Look at big income losses last year and this and how real incomes are falling back to where they were almost a decade ago https://t.co/SpuPKr7aMy pic.twitter.com/l9ZYnqBgPj
— Paul Johnson (@PJTheEconomist) March 15, 2023
PwC - childcare policies will be popular but benefits to parents may take time to feed through
14:07 , Simon Hunt
Laura Hinton, head of PwC’s UK Tax and People Consulting business, responds to the Budget childcare policy.
“The government’s plan to expand the 30 free hours to children under three is a big boost to working parents juggling the cost of childcare. It may take time for parents to feel the benefit, given we won’t yet have the childcare facilities or workers in place to cover the need.
“However, combined with other policies such as increasing wrap-around care, it sends a signal that the Government is on the case to support working parents.”
It comes after PwC research showed the UK’s gender pay gap has widened as sharp increases in the cost of childcare has worsened a “motherhood penalty”, pricing women out of work.
As Jeremy Hunt concludes his Budget speech, there are fears of a wider banking crisis
13:40 , Simon Hunt
Credit Suisse shares tumbled 30% as part of a wider bank sell-off that has left some asking if we are at the beginning of another financial crisis.
The Saudi National Bank, the Swiss bank’s biggest shareholder, said it could not offer more financial support for the bank for “regulatory issues”.
In New York, Credit Suisse bonds fell to levels that indicate distress. The cost of insuring those bonds against default soared.
This follows an announcement from the bank on Tuesday that it has found “material weaknesses” in its financial reporting controls.
Key points from today’s budget
13:37 , Simon Hunt
Here are some key points from today’s budget.
UK to avoid ‘technical recession’ this year
Inflation to drop from 10.7 per cent to 2.9 per cent by end of 2023
Energy Price Guarantee will remain at £2,500 for next three months
Pre-payment metre charges brought in line with comparable direct debit charges
Defence spending to rise to nearly 2.25 per cent of GDP
Alcohol duty freeze continues until August 1 and pints to be cheaper - duty on draught products in pubs 11p lower than supermarkets
Fuel duty frozen for the next 12 months
12 new Investment Zones confirmed - ‘12 potential Canary Wharfs
Potholes Fund boosted by £200m
Hunt concludes speech: the declinists are wrong
13:36 , Simon Hunt
Jeremy Hunt wraps up his budget speech in the commons.
“Madam Deputy Speaker in November we delivered stability. Today it’s growth. We tackle the two biggest barriers that stop businesses growing - investment incentives and labour supply.
“The best investment incentives in Europe. The biggest ever employment package. For disabled people, more help. For older people, barriers removed.
“ For families feeling the pinch… …fuel duty frozen. …beer duty cut. …energy bills capped. And for parents, 30 hours of free childcare for all under 5s. Today we build for the future with… …inflation down …debt falling …and growth up.
“The declinists are wrong, and the optimists are right. We stick to the plan because the plan is working. And I commend this statement to the House. “
Not everyone is a fan of the 12 investment zones plan...
13:30 , Simon Hunt
Not everyone is a fan of the 12 new Investment Zones plan.
Robert Salter at tax advisor Blick Rothenberg calls it a “damp squib”.
He adds: “Such zones remain in many respects ‘unproven’ and the funds which have been allocated to this idea – circa £80m per zone over 5 years – is basically ‘nothing’ from an overall Government spending perspective.”.
But Hunt’s energy policy has received praise.
The ban on more expensive energy tariffs on pre-payment meters has been welcomed by campaigners.
Tara Flynn from price comparison site Choosewisely, said: “It’s always been unfair for households with prepayment meters, who are often vulnerable or have low incomes, to be charged more than other customers.
“Therefore, it was morally correct to ensure that prepayment meter customers pay the same as everyone else, and this action should have been taken much earlier”.
Surprise as pension lifetime allowance abolished
13:28 , Simon Hunt
Pension life time allowance - currently at £1.07 million - is abolished altogether in a major surprise.
The Chancellor said this would “incentivise our most experienced and productive workers to stay in work for longer. … and simplify our tax system, taking thousands of people out of the complexity of pension tax.”
The annual tax free contribution is increased from £40,000 to £60,000. Mr Hunt said “no one should be pushed out of the workforce for tax reasons.”
Chancellor unveils reforms to bring Brits back into employment
13:17 , Simon Hunt
Hunt announced a number of reforms that he said “remove barriers that stop people who want to from working”, as part of what he has labelled his “back-to-work Budget”.
The government plans to abolish the work capability assessment and separate benefit entitlement from the right to work.
“Benefit claimants will be able to seek work without fearing losing their support,” he said.
The Chancellor said he would also aim to get more people into work by tightening the rules around Universal Credit for jobseekers.
Hunt noted that there are more than 2 million jobseekers without a health condition who are looking for work or on low earnings.
“Sanctions will be applied more rigorously to those who fail to meet strict work search requirements or who fail to take up a valid job offer,” he said.
No plan to improve the London Stock Exchange says Hunt, but I’ll be back with something in the Autumn
13:13 , Simon Hunt
The Chancellor said he will return in his Autumn Statement with a plan to boost the London Stock Exchange as a “more attractive place to list”.
This will include “measures to unlock productive investment from defined contribution pension funds and other sources”.
This will be welcomed in the City, which has been calling for a change to the pension fund rules for some time. At present, they are forced to hold “safer” government bonds than some say starve the growth companies of funding.
Wetherspoon boss welcomes beer duty freeze
13:11 , Simon Hunt
Tim Martin, the founder and chairman of JD Wetherspoon, welcomed the freezing of duty on beer. But he says more needs to be done to close the gap in tax on pubs versus supermarkets.
He said: “Any reduction in the tax disparity between pubs and supermarkets is welcome. We have been campaigning for tax equality for a long time. This gesture by the government is a tacit acknowledgement that something needs to be done.”
He added: “We will investigate how much of the tax disparity remains after this move. We retain our view that anything less than equality is an unsustainable distortion and is economically counterproductive.”
The future of the tech industry is secured after SVB takeover, says Hunt
13:10 , Simon Hunt
Jeremy hunt has said the future of UK tech companies is secure after he worked to save Silicon Valley Bank.
“Over the weekend, I worked night and day with the Prime Minister and the Governor of the Bank of England to protect the deposits of thousands of our most cutting-edge companies.
“We successfully secured the sale of the UK arm of Silicon Valley Bank to HSBC, so the future of those companies is now safe in the hands of one of Europe’s biggest and most creditworthy banks.”
Chancellor says business taxes will be best regime in the world despite corporate tax jump
13:02 , Simon Hunt
The Chancellor said that the UK will have “the most pro-business tax regime in the world,” even after the upcoming rise in corporation tax.
“Conservatives know the importance of a low-business tax regime, but I want us to have the most pro-business, pro-enterprise tax regime in the world,” he said.
Hunt said that even after the rise in corporation tax from 19% to 25% in April, the UK will have the lowest rate in the G7.
He announced a new policy of “full expensing”, allowing for companies to deduct all of their spend on IT equipment, plants or machinery from their tax bills.
The policy will be in place for the next three years, but Hunt said the Government intended to make it permanent.
“It is a corporation tax cut worth an average of £9 bn a year for every year it is in place,” Hunt said.
“We are the best country to invest in” boasts Hunt
12:59 , Simon Hunt
The Chancellor hit out at “declinists”, arguing the UK is “the best country in the world to invest in”.
Though concerns have been raised in recent weeks of UK learning top firms to the US, Hunt said the UK is still “the best country to invest in”. He said the UK was just the second country in the world to have a stock of direct foreign investment worth $2 trillion.
England is to be home to 12 new investment zones, based on the model which created Canary Wharf. They will be in the West Midlands, Greater Manchester. the North East, South and West Yorkshire and Liverpool, as well as “at least one” in Scotland, Wales and Northern Ireland.
Hunt said: “Canary Wharf and the Liverpool Docks were two outstanding regeneration projects that happened under a previous Conservative government.
“I pay tribute to Lord Heseltine for making them happen because they transformed the lives of thousands of people. They showed what’s possible when entrepreneurs, government and local communities come together. So today I announce that we will deliver 12 new Investment Zones, 12 potential Canary Wharfs.”
No recession this year, says Chancellor
12:54 , Simon Hunt
The Chancellor said the UK will not enter a recession this year as previously feared, according to OBR forecasts.
Jeremy Hunt said the UK economy is now projected to contract by 0.2% this year, rather than the previous 1.4% projection, before rebounding in the following years, with growth of 2.5% in 2025/26 before growth slows again in the following years.Unemployment, Hunt said, is projected to rise by just 0.1% to 4.4%. (e
Hunt: UK is world’s third trillion dollar tech company
12:53 , Simon Hunt
Hunt says the UK is now “the world’s third trillion dollar tech economy after the US and China,” adding: ’We built the largest life sciences sector in Europe, producing a COVID vaccine that saved 6 million lives and a treatment and save a million more. Our film and TV industry has become Europe’s largest with our creative industry is growing at twice the rate of the economy.
“Our advanced manufacturing industries produce around half the world’s largest civil aircraft wings. And thanks to a clean energy miracle, we become a world leader in offshore wind.”
Debt forecasts: what is the UK’s debt position?
12:49 , Simon Hunt
The Government will meet its goal of debt as a percentage of GDP to fall within five years, according to OBR forecasts.
Jeremy Hunt said that while debt will rise over the next four years, it will decline in 2027-28.
“That means more money for our public services and a lower burden for future generations,” he said.
He also noted that borrowing will fall in every year of the Government forecast, from 5.1% of GDP in 2023-24 to 1.7% by 2027-28.
“Even better in the final two years of the forecast our current budget is in surplus, meaning we only borrow for investment and not for day-to-day spending,” Hunt said.
Underlying debt is forecast to be 92.4% of GDP next year, says the Chancellor, then 97.3% 94.6% 94.8% For for falling to 94.6% in 2027/28.
“We are meeting the debt priority and with a buffer of six and a half billion pounds. It means we are meeting our fiscal rules to have debt falling as a percentage of GDP by the fifth year of the forecast as a proportion of GDP.” he adds.
Fuel duty freeze: Now is not the right time to uprate, says Hunt
12:46 , Simon Hunt
Jeremy Hunt announces another freeze on fuel duty.
He said in the Commons: “I have heard the representations from the Honourable Member from Stoke on Trent North, my Rt Hon Friend for Witham and my Rt Hon Friend from South Thanet and the Sun newspaper about the impact on motorists of the planned 11p rise in fuel duty.
“I notice the party opposite called for a freeze on this duty. Somehow they forgot to tell the British people they have voted against every single fuel duty freeze for the last 12 years.
“Because inflation remains high, I have decided now is not the right time to uprate fuel duty with inflation or increase the duty.”
Pubs will be boosted by the Chancellor announcing that duty on draft beer will be frozen.
12:43 , Simon Hunt
Earlier this week Andy Slee, who leads the Society of Independent Brewers warned the industry “is facing steeply rising costs, and a fall in consumer spending due to the cost of living crisis. For many breweries the battle to stay afloat is proving a real challenge”.On draft relief a 5% duty discount was due to come in from August 1.
Today Hunt said: “ In December, I extended the alcohol duty freeze until 1 August, after which duties will go up in line with inflation in the usual way.
But today, I will do something that was not possible when we were in the EU and significantly increase the generosity of Draught Relief, so that from 1 August the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets, a differential we will maintain as part of a new Brexit pubs guarantee. Madam Deputy Speaker, British ale may be warm, but the duty on a pint is frozen.”
Brexit Pubs Guarantee - Chancellor increases lower duty rate for beer sold in pubs. An 11p differential - need to see full duty rates post August to understand % difference but substantially higher than previously announced.
— Kate Nicholls OBE (@UKHospKate) March 15, 2023
Inflation set to drop to 2.9% by the end of the year, says Jeremy Hunt
12:37 , Simon Hunt
Inflation is set to fall to 2.9% by the end of the year, Jeremy Hunt has said.
Hunt said: “Despite continuing global instability, the OBR reports today that inflation will fall from 10.7% in Q3 of last year, to 2.9% by the end of 2023.”
No UK recession this year according to economic forecasts from the Office of Budget Responsibility
12:34 , Simon Hunt
There will be no recession this year, says Jeremy Hunt in the Commons.
The Chancellor says energy support measures worth £94 billion this year and next, or £3,300 per UK household
“In the autumn we took difficult decisions to deliver stability and sound money. Since mid-October, 10-year gilt rates have fallen, debt servicing costs are down, mortgage rates are lower and inflation has peaked,“ he said.
“The International Monetary Fund says our approach means the UK economy is on the right track.”
“The British economy is proving the doubters wrong"
12:32 , Simon Hunt
“The British economy is proving the doubters wrong," Jeremy Hunt boasts as he begins his Budget speech.
Jeremy Hunt stands up to begin Budget speech
12:31 , Simon Hunt
Jeremy Hunt has just stood up to begin giving his Budget speech.
Market snapshot as Hunt prepares to give Budget speech
12:23 , Simon Hunt
Here is snapshot of he main market numbers for UK assets just before Jeremy Hunt stands up in the Commons.
The pace of global financial trading was being set by worries over the health of big-name European banks rather than events in Westminster.
The trading pattern shows the pound and UK stocks under pressure as global traders seek safety during choppy times. UK government debt looked steady.
10yr yield: 3.3560; -0.13% on the day
5yr yield: 3.43 +0.045% on the day
2yr yield: 3.52 +0.024% on the day
FTSE 250 : 18,654.20 -475.46; -2.49%
FTSE 100: 7,451.67-185.44; -2.43%
POUND $1.2067 -0.0091 cent ; (-0.75%)
“Back-to-work budget” set to include childcare and benefit reforms
12:08 , Daniel O'Boyle
Encouraging the economically inactive back into the workforce is expected to be a major theme of Jeremy Hunt’s Budget.
The “back-to-work Budget” is expected to include new childcare tax credits, while welfare reforms will mean claimants can continue to receive the payments after they return to employment.
Increased allowances for pensions contributions are expected to remove an incentive for experienced workers to retire early and to encourage others to re-enter the workforce.
We now have three tiers of banks, warns billionaire Bill Ackman
12:07 , Simon Hunt
Bill Ackman, the billionaire investor behind London-listed Pershing Square Holdings, has weighed in on fears of a crisis unfolding in the banking sector.
“We now have three tiers of banks. SVB and Signature Bridge Banks - which are now the safest banks with explicit guarantees on all deposits, the SIB banks - which have implicit guarantees on all deposits, and all other banks,” he said.
The irony of the @SVBFinancial_ intervention is that we now have three tiers of banks. SVB and Signature Bridge Banks - which are now the safest banks with explicit guarantees on all deposits, the SIB banks - which have implicit guarantees on all deposits, and all other banks.
— Bill Ackman (@BillAckman) March 15, 2023
City hopes Budget will keep top firms in London
11:49 , Daniel O'Boyle
City figures will be on the lookout for measures designed to encourage UK pension funds and other institutional investors to put money into the stock market as jeremy Hunt delivers the Budget today, after a decline in their use of it has cut the amount of capital available in London.
James Hughes, chief analyst at Scope Markets, said the Chancellor has “an ideal opportunity” to “incentivise more investment into the UK equity market”.
Fears over banking sector grow as Credit Suisse shares plunge
11:45 , Daniel O'Boyle
European banks moved to the centre of a growing global crisis over big-name financial stocks amid growing fears that the sector may be badly exposed to the impact of a stark drop in the value of government bonds.
The worries centred on Credit Suisse as its stock plunged by around 20% before trading as halted, with the scandal-prone lender at the centre of market speculation over its financial health. Its top shareholder, the Saudi National Bank, ruled out providing more support for Switzerland’s second biggest bank, which has been grappling with a run of customers withdrawing deposits.
High street banks quietly luring SVB UK’s customers away after HSBC takeover
11:40 , Simon Hunt
High Street banks are quietly stepping up their efforts to lure startups away from Silicon Valley Bank UK as the beleaguered firm’s customers weigh up whether to keep their accounts open after a last-minute rescue deal by HSBC.
The Canary Wharf-based bank wrote a letter SVB UK’s customers, telling them it had poured close to £2 billion of extra liquidity into the bank and adding that it was “ready to deploy more cash and liquidity as needed.”
Some told the Standard they had seen a marked increase the availability of attractive alternatives.
Seb Wallace, a venture capital investor at Triple Point, said: “The learning is that all companies need more than one or two main bank accounts.
“It seems like the other major UK banks, who historically have been difficult to open accounts with, have adopted a more pragmatic, startup-friendly approach in the last three days. Hopefully it continues.”
Saudi Bank boss says no more money for Credit Suisse
11:09 , Simon Hunt
The Chair of the Saudi National Bank, Abdul Wahed Al Khudairy, said he would offer no further assistance to the struggling Credit Suisse.
No more money for Credit Suisse
That's what Saudi National Bank Chairman Ammar Abdul Wahed Al Khudairy told @youseftv when asked about more assistance for the troubled lender https://t.co/GFLboCOwyj pic.twitter.com/iSjco40v8D
— Bloomberg TV (@BloombergTV) March 15, 2023
Trading in European banks including Credit Suisse halted
10:50 , Daniel O'Boyle
Trading in a number of mainland European banks including Credit Suisse has been halted, as fears over the banking sector grow.
Shares in Credit Suisse, Societe Generale and Italy’s Monte dei Paschi and UniCredit has been halted, after the chair of the Saudi National Bank said he would “absolutely not” invest more in the troubled Swiss institution.
Credit Suisse shares have fallen by more than 12% in the past week after US regulators raised questions about its accounts.
New CEO at John Lewis Partnership
10:36 , Joanna Bourke
The parent of John Lewis and Waitrose has appointed Nish Kankiwala to lead the employee-owned business and help with its turnaround.
Kankiwala, who has been a non-executive director of the John Lewis Partnership since April 2021, will start in the newly created chief executive role on March 27.
Over the last three years chairman Sharon White has effectively been doing a dual role and also acting as chief executive, helping steer the partnership through the pandemic and cost of living crisis.
The latest hire will allow White to concentrate on wider strategies at the company, which is in the midst of a turnaround plan to boost sales, trim costs and create new revenue streams, such as building rental flats over some of its shops.
Read more HERE.
FTSE 100 falls 1%, BP and Shell down 2%
10:12 , Graeme Evans
London’s FTSE 100 index today slumped 1.2% or 91.46 points to 7545.65, unwinding the gains of yesterday when global shares rebounded on hopes the fallout from the collapse of Silicon Valley Bank had been contained.
Banking stocks were again under pressure as Barclays fell 2% and Lloyds Banking Group eased 1%, but the bigger losses were seen in the resources sector as investors worried about the economic outlook following a rapid run of interest rate rises.
The mood was not helped by figures from China’s Covid recovery showing industrial output missed hopes with growth of 2.4% in February.
There were also jitters ahead of tomorrow’s meeting of the European Central Bank, with policymakers expected to hike interest rates by another 0.25% in the fight against inflation.
BP and Shell fell more than 2% with Brent Crude futures below $78 a barrel, while iron ore mining giant Rio Tinto dipped 118p to 5524p and commodities trader Glencore declined 10.85p to 450.6p.
The FTSE 250 index retreated more than 1%, down 196.61 points to 18,933.05, with fast fashion business ASOS and cruise ship company Carnival 5% lower.
Corporate merchandise firm 4imprint provided a bright spot for mid-cap investors by declaring a big special dividend alongside robust annual results.
The Manchester-based firm generates the majority of its revenues from the US and Canada, supplying branded products ranging from pens and mugs to trade show displays.
Revenues topped $1 billion and profits jumped 243% to $103.7 million (£85.5 million), with the company upbeat on prospects after “encouraging” trading so far in 2023. Shares jumped 7% at one point before settling up 2% or 70p at 4540p.
Consumer Confidence Index positive for first time since mini-Budget
10:04 , Daniel O'Boyle
Consumer confidence in February was positive for the first time since September 2022’s disastrous mini-Budget, according to polling from YouGov for the Centre for Economics and Business Research (Cebr).
The Consumer Confidence Index was 100.4 in February, with a score above 100 indicating positive sentiment. The index had plunged by 4..2 points in September - the month of the mini-Budget - before falling another 1.1 points in October.
While the index improved in subsequent months, the overall score remained negative until this most recent release.
“The upward trend in consumer sentiment continued last month as February saw an increase across all sub-indicators of the YouGov/ Cebr Consumer Confidence Index,” Kay Neufeld, Director and Head of Forecasting and Thought Leadership at Cebr, said. “This was enough to lift the Index back into positive territory, following a six-month spell of mostly negative sentiment.
“The turnaround in consumer sentiment adds to the more positive economic picture that has emerged since the start of the year, partly driven by a much more benign outlook for energy prices.
“Nevertheless, the crunch on households’ budgets remains in place with both scores under this sub-indicator edging up only marginally and remaining well below their long-run averages.”
Keywords Studios shares fall despite profit growth
09:44 , Daniel O'Boyle
Shares in Keywords Studios - which owns a number of video game developers - fell by 6.8% today despite profit growing by a third to €146.9 million.
Revenue was up 34.8% to €690.7m, as the business said there had been a “continuing trend” towards game publishers relying on more third-party service providers such as those under the Keywords umbrella.
Businesses owned by Keywords Studios have worked on games including Legend of Zelda: Skyward Sword, the Madden NFL series and Age of Empires.
“Whilst mindful of the increasing uncertainty within the broader industry and potential for foreign exchange movements, we are excited about the opportunity ahead with our business model, highly diversified client base, adoption of technology and geographic reach,” CEO Bertrand Bodson said. “We are increasingly well positioned to support our clients in generating engaging content for their leading franchises and trading has started well, in line with our expectations for the year.”
Keywords shares are currently trading at 2,706p, down by 196p.
PurpleBricks confirms talks with Strike over potential sale
09:25 , Daniel O'Boyle
Troubled online estate agent PurpleBricks has confirmed that it has been in talks with rival Strike as it aims to sell itself, but said there was no bid yet.
PurpleBricks put up the ‘for sale’ sign last month after announcing a profit warning and fresh redundancies.
Its board said that while the brand had value because of its name recognition, it may be more likely to reach its potential “under an alternative ownership structure”.
Under the City Code on Takeovers, Strike must now announce whether or not it plans to bid for PurpleBricks within the next 28 days.
FTSE 100 lower, Prudential shares fall 3%
08:19 , Graeme Evans
European stock markets have made a disappointing start to the session, with the FTSE 100 index 0.4% or 29.97 points lower at 7,607.14.
Prudential shares lost 3% or 36p to 1147p after its annual results, while major banks including HSBC and Barclays were up to 1% lower.
The risk averse session for financial stocks highlights the increasingly uncertain outlook, even though the immediate danger from SVB’s collapse appears to have passed.
The FTSE 250 index declined 42.43 points to 19,087.23, but Balfour Beatty shares surged 6% or 20.20p to 360.80p after its annual results included a 17% dividend hike alongside a £150 million buyback for a third consecutive year.
Corporate merchandise firm 4imprint jumped 7% or 305p to 4775p as it announced a special dividend of 200 cents a share and said recent trading had been encouraging.
Revenue tops $1 billion at 4imprint
07:58 , Michael Hunter
4imprint, the Holborn-based company that sells a range of branded corporate goods from pens to hoodies reported revenue of over $1 billion (£0.8 billion) today, helped by a strong showing in its North American business.
Sales rose 45% to $1.14 billion, with operating profit more than doubling to $103.7 million, both landmark figures in the company’s history.
The FTSE 250 company started in 1987 and uses direct marketing of its products to businesses, at first via free samples, a catalogue and a freephone number rather than the visit of a salesman. It now has an extensive website and a major US business based in Wisconsin and operations in Canada and Ireland.
Prudential backing for London
07:53 , Simon English
PRUDENTIAL, the mighty insurer founded in 1848, today insisted it would keep its stock market listing in London, in a boost to the City.
With businesses large and small complaining that other stock markets, notably New York, offer higher valuations and more fluid access to capital, the Pru said it has “no plans” to leave London.
That’s of particular interest since nearly all of the Pru’s business is now in Asia.
New CEO Anial Wadhwani said: “We are a UK domiciled company. We don’t have any plans as of now to change our UK domicile. There is no plan to change that.”
Lately Arm Holdings and CRH opted for a New York listing. WANdisco said the same before accounting irregularities were exposed.
There were fears that the City was being undermined and needed a radical shake-up of its listing rules.
The Pru today reported sales up 9% to $4.4 billion for 2022.
CFO James Turner said the insurer had only a tiny exposure to SVB, the Silicon Valley Bank that failed last week. He put it at $1 million out of a $23 billion Pru book of debt. “It really is tiny. We are very conservative in the positioning of our balance sheet.”
Stock markets recover after SVB turmoil
07:40 , Graeme Evans
Stock market conditions look to have stabilised after three sessions of turbulence caused by the collapse of Silicon Valley Bank (SVB).
Wall Street shares rebounded last night, with the 1.65% improvement for the S&P 500 index and 2.1% jump for the tech-focused Nasdaq aided by a further slowdown in the annual rate of US inflation to 6%.
Deutsche Bank strategist Jim Reid said: “Obviously we’re still a long way from the pre-SVB state of affairs that prevailed last Wednesday, but with worries about bank contagion starting to subside, we’re finally seeing some optimism return to financial markets again.”
Reid said the back stopping of bank depositors in the United States had starved the immediate crisis of oxygen, although he added the episode showed that higher interest rates were now having an impact with the usual lag.
The FTSE 100 index rallied 1.2% yesterday and IG Index expects London's top flight to hold those gains when trading resumes this morning.
Science and fantasy combine to deliver profits at Bloomsbury Publishing
07:39 , Daniel O'Boyle
Bloomsbury Publishing said “disparate” ends of its publishing strategy - fantasy novels and academic publishing - combined to deliver a strong end to 2022-23, helping it report profit of £30 million.
The publisher reported revenue of £260 million for the year ended 28 February, with Samantha Shannon’s A Day of Fallen Night, Johan Hari’s Stolen Focus and BAKE by Paul Hollywood among its best sellers.
“Two of our strongest performances in the year have come from very disparate ends of our publishing strategy - fantasy novels on the one hand and academic digital resources on the other - showing how well our balanced consumer and academic portfolio is working in practice,” CEO Nigel Newton said.
“Throughout a year which has been characterised by rising inflation and cost of living pressure, it is notable that reading remains hugely popular throughout the world with books regarded by many readers as an affordable pastime.”
Sales up at H&M
07:32 , Daniel O'Boyle
Foreign exchange changes helped make up for the impact of the war in Ukraine for H&M in the three months to 28 February.
Sales were SEK 54.9 million in the first quarter of the fashion brand’s financial year, up by 12%.
On a constant currency basis, the rise was only 3%, though this would increase to 7% if sales from Russia, Ukraine and Belarus in the prior year are excluded.
Burberry poaches finance chief from car maker McLaren
07:27 , Joanna Bourke
Burberry has named Kate Ferry as the British fashion firm’s next finance boss, who joins from luxury car maker McLaren Group.
Ferry, who will report to Burberry’s chief executive Jonathan Akeroyd, will join the FTSE 100 company by early September at the latest.
She is currently chief financial officer at McLaren and a non-executive director at bakery chain Greggs.
Akeroyds said: “Kate has extensive experience of public markets, business transformation and development and an excellent understanding of the luxury industry. She is a strong addition to our leadership team and I am excited about her joining to support this next phase of Burberry’s development.”
The appointment comes after Burberry announced last year that finance chief Julie Brown would be stepping down from the role at the close of the group’s financial year on April 1.
Energy Support Guarantee extended ahead of full Budget announcement
07:21 , Michael Hunter
It’s been confirmed that millions of household are to be spared a £160 rise in their gas and electric bills.
The Treasury said that the government’s Energy Price Guarantee will be extended at its current level for an extra three months.
It will now keep the average household energy bill at £2,500 until the end of June, than rather than putting it up on April 1.
The Treasury said:
“The Chancellor’s three-month extension of the Energy Price Guarantee at £2,500 means households won’t feel the full force of Ofgem’s Price Cap between April and June – which stands at £3,280 – helping to bridge consumers into the summer.”
City experts had widely expected such a move, after a fall in wholesale gas prices followed improvements to storage capacity across Europe and a mild winter
Laura Suter, head of personal finance at AJ Bell, had called an extentsion a “no-brainer” for Chancellor Jeremy Hunt. “It is expected to cost the government around £3 billion but … the Energy Price Guarantee hasn’t cost the government as much as expected, providing it with some wiggle room,” she said.Millions of households were on Wednesday spared a £160 rise in their gas and electric bills.
Zara parent Inditex’s sales reach €32.6 billion
07:21 , Joanna Bourke
Inditex, the retail giant behind the Zara and Massimo Dutti fashion chains, today revealed sales last year leapt 17.5%.
The Madrid-listed company said sales reached €32.6 billion (£28.8 billion), while pre-tax profit rose 28% to €5.4 billion.
Growth was led by shop performances. Inditex, which is also behind brands such Pull & Bear and Bershka said footfall and store sales “increased markedly” during the period, and continue to do so. Bricks and mortar retailers were helped last year by no new lockdown rules.
Online sales increased 4% over the 2021 record figure to reach €7.8 billion.
The company was founded by Amancio Ortega, and the billionaire today owns a 59% stake in Inditex.
Chief executive Oscar García Maceiras called the results “excellent”.
Providence Equity Partners to buy event organiser Hyve
07:19 , Daniel O'Boyle
Private equity group Providence Equity Partners is set to buy exhibitions business Hyve in a £481 million deal.
In a bid recommended by Hyve’s board, Providence will pay 108p per share of the event organiser. Hyve shares were trading at 100p per share at the close of play today, having risen by more than 20p when the business announced it had received two bids from a then-unnamed bidder, now revealed as Providence.
“Providence believes that Hyve has established a strong platform for future organic and inorganic growth underpinned by Hyve’s portfolio of high-quality global brands and market-leading events focused on developed markets and in growing sectors,” the private equity group said.