Yahoo Finance FTSE 100 Live: ‘Bank of England meeting just got interesting’, blue-chips close highest since May, Fed holds
A surprise drop in UK inflation today boosted hopes that the Bank of England is near the peak of its interest rate cycle.
The FTSE 100 index turned higher on the inflation reading of 6.7%, which comes a day before the Bank reveals its latest rates decision.
Attention is also on tonight’s Federal Reserve rates announcement, particularly the outlook for policy in the year ahead.
FTSE 100 Live Wednesday
Stocks rally on surprise inflation dip
Federal Reserve rates decision due
Finsbury Food gets £143m takeover bid
The suit is back, says Next boss
08:29 , Simon English
High street fashion king Next raised profit forecasts again today thanks to strong consumer demand, falling costs and higher wages.
Chief executive Simon Wolfson also noted the return of demand for traditional “smart” suits, as people get back to offices and the trend for smart casual clothes fades.
Next, which also owns Reiss, said full year profits should be £875 million, up from £845 million previously forecast.
Wolfson, the longest serving FTSE 100 chief, told the Standard: “Cost inflation is easing across the board. Everything is moving backwards with the exception of oil. We are much more comfortable than we were.”
That’s good news for both the wider high street and the Conservative Party as it heads nearer a general election.
Wolfson said there is “one important note of caution – the softening of the employment market. But we are much happier than we were six months ago, a year ago seems like a different world”.
He added: “Economic performance is much better than anyone expected. We are in a much better place than we were a year ago.”
Key Bank of England interest rates decision tomorrow
Wednesday 20 September 2023 19:18 , Daniel O'Boyle
Tomorrow will be a big day in the City as markets hope the Bank of England pauses its interest rate rises for the first time after a cycle of 14 consecutive increases.
The decision is seen by City traders as a toss-up, but if the Bank does raise rates, there is strong hope that it will be for the last time.
The Bank will announce its latest decision at noon.
Fed holds interest rates
Wednesday 20 September 2023 19:01 , Daniel O'Boyle
The US Federal Reserve has opted not to raise interest rates, leaving the Fed funds rate at 5.25%-5.5%.
The hold was widely expected, with inflation in the US close to the 2% target.
Neil Shah, executive director at Edison Group, said: “The Federal Reserve’s Open Market Committee’s (FOMC) decision to maintain its benchmark interest rate between 5.25-5.5% comes as no surprise, but is a welcome pause after over a year of tight monetary policy.
“Over this period, interest rates have been hiked to a 22-year high as part of the Fed’s attempt to beat inflation. The Fed has had to maintain a careful balancing act: curbing rising prices in a way that does not choke off the recovery of the world’s largest economy.
“With the Fed set to release a set of encouraging economic results, it is clear that the FOMC believes that it has reached something of a rates Goldilocks zone - at least for now.”
Fed decision looms
Wednesday 20 September 2023 18:11 , Daniel O'Boyle
The US Federal Reserve’s latest interest rates decision is less than an hour away, with markets seeing it as all-but-certain Jerome Powell and co will keep interest rates where they are.
Markets are pricing in a 99% chance of holding rates.
Investors on Wall Street may be paying closer attention to whether the Fed’s comments after the decision suggest a cut could come soon.
In London, there will be hopes that the expected hold encourages the Bank of England to do the same, though significantly higher inflation in the UK makes that far from certain.
City regulator warns insurance firms to make sure they are offering fair value
Wednesday 20 September 2023 18:08 , Daniel O'Boyle
The City regulator has given firms producing a type of add-on insurance to motor cover an ultimatum to demonstrate they are providing fair value.
Firms that are unable to prove they are providing fair value to their customers should expect further action, the Financial Conduct Authority (FCA) said.
The FCA said it had identified evidence that some guaranteed asset protection (GAP) products may be failing to provide fair value to customers.
Rishi Sunak pushes new petrol and diesel car ban back to 2035 in major U-turn
Wednesday 20 September 2023 17:41 , Daniel O'Boyle
The UK ban on new petrol and diesel cars will be pushed back from 2030 to 2035, Rishi Sunak has announced.
The Prime Minister confirmed the move in a speech from Downing Street on Wednesday afternoon.
Mr Sunak insisted he was acting to avoid a public “backlash” by watering down efforts to tackle the climate crisis.
He said a “new approach” was needed given the costs involved for households up and down the country.
City regulator warns insurance firms to make sure they are offering fair value
Wednesday 20 September 2023 16:57 , Daniel O'Boyle
The City regulator has given firms producing a type of add-on insurance to motor cover an ultimatum to demonstrate they are providing fair value.
Firms that are unable to prove they are providing fair value to their customers should expect further action, the Financial Conduct Authority (FCA) said.
The FCA said it had identified evidence that some guaranteed asset protection (GAP) products may be failing to provide fair value to customers.
FTSE 100 closes up 0.9%
Wednesday 20 September 2023 16:39 , Simon Hunt
The FTSE 100 closed at 7,731.65 today, up 0.9%, as the surprise drop in inflation fueled hopes that interest rates will peak soon, if they are not already there.
Housebuilders were among the big risers, with Taylor Wimpey the biggest riser of the day. On the other hand, Smurfit Kappa and WPP were among the fallers.
It’s the highest the FTSE 100 has closed since May.
Delivery Hero in talks to sell FoodPanda
Wednesday 20 September 2023 16:30 , Simon Hunt
German firm Delivery Hero has today said it is in talks to sell its Foodpanda business in a number of markets in Southeast Asia.
The firm said it was in the early stages of talks covering markets in Singapore, Malaysia and Thailand, among others, and it is uncertain if an agreement will be reached.
Delivery Hero did not discuss potential buyers or sums involved in the transaction. It added the deal would be subject to approval in relevant jurisdictions.
Top shareholder calls for FTSE 250 chemicals firm Elementis to be soldTop shareholder calls for FTSE 250 chemicals firm Elementis to be sold
Wednesday 20 September 2023 16:26 , Daniel O'Boyle
The top shareholder of FTSE 250 chemicals maker Elementis has called for the business to be sold in a scathing letter calling out the firm’s management for “value destructive capital allocation” and “inability to improve operating performance”.
Franklin Mutual Series, an autonomous specialist investment manager within Franklin Templeton, holds 9.8% of shares in Elementis, which makes key ingredients in antiperspirants and paint, having first invested in 2020.
But Franklin Mutual said a number of poor decisions had prevented the shares from reaching their potential.
Pendragon rejects fresh takeover offer
Wednesday 20 September 2023 16:05 , Simon Hunt
Car dealership Pendragon has said it has rejected an unsolicited offer offer from Hedin Mobility Group and PAG International to take the company private at 28p per share.
Directors said they “concluded that it fundamentally undervalues the Company and is therefore not in the best interests of shareholders or other stakeholders.”
On Monday the firm said it was poised to sell its UK motor business, including CarStore and luxury vehicle sales firm Stratsone, in order to focus on the sales management tech it offers to other dealerships.
US giant Lithia, which is valued at $8 billion (£6.5 billion) and also owns Jardine Motors in the UK, will buy Pendragon’s dealerships for £250 million. Of that total, £240 million will then be returned to shareholders via a dividend.
“The board is excited about the future prospects for Pendragon as a result of the transaction announced with Lithia...which, if completed, will deliver a substantial cash dividend and create a pure play Software as a Service business with an accelerated growth plan and a strategic partnership to enter North America,” Pendragon said.
Cazoo agrees restructuring deal with lenders to cut debts
Wednesday 20 September 2023 15:47 , Daniel O'Boyle
Online car seller Cazoo has agreed a restructuring deal which will hand equity in the firm over to its lenders.
The firm, which was founded in the UK but listed in New York, revealed it has sealed a debt-for-equity swap on around 630 million dollars (£509 million) of debt.
It said it has swapped this debt with its lenders for 200 million dollars (£161.7 million) of new debt and equity stakes in the company.
Cazoo’s board of directors said the proposed reduction of debt through the deal would be “beneficial to the company’s future” as it recommended shareholders to vote in favour of the move.
Condé Nast seeks buyer for longstanding London headquarters
Wednesday 20 September 2023 15:41 , Daniel O'Boyle
Fashion-loving property investors have the rare opportunity to acquire a famous office where supermodels and designers have visited, with the West End site that Vogue publisher Condé Nast is set to leave on the market.
It has emerged that property agent Knight Frank has been appointed by Condé Nast publications to sell the long leasehold in One Hanover Square, known as ‘Vogue House’.
The company has been in the space for more than six decades and Kate Moss and Linda Evangelista are among the famous faces that have been in the building.
Unilever pushes to sell non-core brands
Wednesday 20 September 2023 15:34 , Simon Hunt
Consumer products manufacturer Unilever is poised to sell off a number of its non-core brands, according to a report by Reuters.
The firm is working with Morgan Stanley and Evercore to sell its Elida beaty and personal care products, including Q-Tips, Timotei and Alberto Balsam.
The Elida portfolio produced revenues of around £600 million in 2022.
US shares rise ahead of likely Fed hold
Wednesday 20 September 2023 14:55 , Simon Hunt
Wall Street shares have risen since markets opened, ahead of the Federal Reserve’s interest rates decision later this evening.
The Fed is seen as all-but-certain to keep interest rates where they are, but its minutes accompanying the decision will be watched more closely, as investors look for clues about when it might be ready to start cutting.
The S&P 500 is up 0.3% to 4,457.56, with computer drive maker Western Digital the top riser.
London Underground station staff to strike next month over pay and conditions
Wednesday 20 September 2023 14:19 , Daniel O'Boyle
Thousands of London Underground station staff are to strike next month in a long-running dispute over pay and conditions.
Members of the Rail, Maritime and Transport union (RMT) will walk out on October 4 and 6, which the union warned would shut down Tube services in the capital.
The union has been locked in a row over cuts it claims will lead to hundreds of job losses.
Manufacturers ‘will not change’ plans despite petrol and diesel car ban expected to be pushed back
Wednesday 20 September 2023 13:19 , Daniel O'Boyle
UK car and van manufacturers have come out to say they ‘will not change’ their plans for electric cars, despite an expected announcement from Prime Mininster Rishi Sunak that the ban on new petrol and diesel cars will be pushed back from 2030 to 2035.
The government previously announced that it would ban the sale of new petrol and diesel cars in 2030, allowing certain hybrid cars to remain on sale until 2035. By then, all new cars had to completely zero-emissions. However, Sunak is expected to announce on Friday (September 22) that certain climate change policies, such as the petrol and diesel car ban, will be delayed.
Many car manufacturers have already made firm commitments to dates when they will move to fully zero-emissions cars – many well ahead of the 2035 deadline – and have said they ‘will not change’, despite the government moving its climate commitments.
Market snapshot - shares rise further
Wednesday 20 September 2023 12:54 , Daniel O'Boyle
Take a look at our market snapshot as the FTSE 100 continues to climb
London house prices rise further
Wednesday 20 September 2023 12:49 , Daniel O'Boyle
London house prices continued to rise in July, despite mortgage prices hitting 15-year highs, Land Registry figures show.
The average house price in the capital edged up by 1.1% month-on-month to £534,000. That comes even as mortgage rates soared in July, with the average five-year fixed-rate deal hitting a peak of 6.36% on the final day of the month.
On a year-on-year basis, London house prices were down, but that was mostly due to a fall in Autumn 2022, following the chaos of the mini-Budget.
Nationally, prices were still rising even on a year-on-year basis, to an average of £290,000.
With the peak of the Bank of England’s interest rates in sight, and mortgage lenders already cutting prices, the data suggests the housing market may have avoided the crash many experts predicted.
Nick Leeming, chairman of London estate agent Jackson-Stops, said: “Any suggestion that a handbrake is being applied to transactions is unfair, with much of the mid to upper markets remaining active, and in a position of strength.”
Emma Cox, managing director of real estate at Shawbrook, said: “The latest house price data gives reason to be optimistic for the UK property market.”
Figures from lenders such as Halifax and Nationwide have shown house prices falling much more sharply, though the Land Registry figures also include cash buyers who are not affected by dramatic rises in borrowing costs.
High noon looms for Bank of England’s long fight against inflation amid talk of peak rates
Wednesday 20 September 2023 12:42 , Daniel O'Boyle
The City spotlight is back on the Bank of England amid mounting speculation that its long run of rate hikes may have already reached its peak.
Its latest decision is due at noon on Thursday. After 14 consecutive rises took the base cost of borrowing to 5.25%, a 15-year high in a long drawn out fight against inflation, there were growing signs this week that the intended effect was kicking in.
The main measure of inflation, the core consumer price index, fell by more than forecast for August, to 6.7% and closer to the BOE’s official 2% target. It was the second month in a row when CPI surprised with a bigger drop.
Mediocre M&G
Wednesday 20 September 2023 11:32 , Simon English
By its own telling, M&G is motoring along nicely.
It has a “resilient” balance sheet and is making “progress” against “all three pillars of a strategy” launched in March by new CEO Andrea Rossi.
Rossi was too busy talking to City analysts to explain to us what those pillars are today, leaving us to read the statement insisting that he remains “confident we have the right ingredients for success”. So far, so bland.
A quick look under the bonnet suggests this engine is stuttering however.
Assets under management are down by more than £9 billion since June, which is odd since the FTSE 100 is on a roll, up 6% in the last month alone.
Rossi says he is looking to cut costs which means 200 staff are out as part of plans to save £50 million.
How are the funds doing? I asked SCM Direct to have a look. Alan Miller analysed £28 billion of their UK retail funds, looking at their performance against their peers. Over the year to September the average fund was firmly second quartile, being placed 39 out of 100.
The performance has been in this region for the last three years, admittedly this is better than the previous three years when their funds would typically be ranked about 60 out of 100.
In Miller’s view the M in M&G should stand for mediocre. M&G used to be an investment powerhouse with the long-term record of its Recovery fund normally shown prominently on posters and advisers extolling its virtues. It is now ranked 213 out of 220 funds over the last 5 years.
According to M&G 50% of its assets need to improve their investment performance. Most of the other 50% aren’t that great either.
If a fund group is doing well, the best advice is often to buy the shares of the company itself, not the funds. In this case, buy neither.
Bank of England may pause interest rate hikes tomorrow after surprise inflation decline, City bets suggest
Wednesday 20 September 2023 11:32 , Daniel O'Boyle
The Bank of England is under pressure to finally offer relief to homeowners and pause interest rates, as official figures showed its preferred measures of inflation falling sharply.
Before today’s reading, markets saw yet another hike, to 5.5%, as overwhelmingly likely. But City traders now believe the decision of whether to hike or pause tomorrow is effectively a toss-up, pricing in a roughly 50% chance of each.
Martin Beck, Chief Economic Advisor to the EY ITEM Club, said “The case that interest rate rises have now gone far enough is looking increasingly convincing and the MPC could present a decision to hold fire as ‘wait-and-see’ rather than a definitive end to rate rises.”
Inflation decision a 'close call’
Wednesday 20 September 2023 11:29 , Daniel O'Boyle
James Smith, developed markets economist at Dutch Bank ING, said today’s inflation figures make the Monetary Policy Committee’s meeting tomorrow “a close call”. City bets on the Bank’s decision continue to see the odds of a hike or a pause as close to 50/50.
“Thursday’s Bank of England meeting just got a lot more interesting,” he said. “All of this makes tomorrow’s BoE meeting a much closer call. We’d already been flagging the risk that the Bank could opt to pause this week while still keeping the door open to another hike in November, and that scenario has now become more realistic.
“Today's downside miss on services inflation followed some slightly dovish news on wage growth last week, where there were hints that this may finally be starting to ease – or is at least reaching a peak. That same report also showed that the jobs market is cooling noticeably.
“It's a very close call, but we’re still tempted to say the Bank will follow through with a hike tomorrow. But we could get a couple more members voting for a pause, and either way a rate hike tomorrow – if it comes – is likely to be the last.”
Pearson shares fall after CEO quits
Wednesday 20 September 2023 11:21 , Simon Hunt
Pearson’s 59-year-old CEO Andy Bird is to quit, the education firm said today as it unveiled plans for his replacement after just three years in charge.
Bird, who joined the firm from The Walt Disney Company in 2020, will be succeeded in the new year by Omar Abbosh, the current president of Microsoft’s Industry Solutions arm and former chief strategy officer at consulting firm Accenture.
Abbosh will be awarded a base salary of £1 million, a 25% cut on Bird’s current base pay, and will be entitled to a bonus worth up to £7.5 million. Bird’s total pay in 2022 stood at £8.5 million. Just shy of a quarter of Pearson shareholders voted against its remuneration report at its 2022 AGM.
In a note, Bird said Pearson had asked him to “come out of retirement” in 2020 and that he had planned to “make the call to retire again” once he had delivered on his priorities. He said: “It has been an enormous privilege to lead Pearson through a period of significant change.”
Pearson shares fell as much as 4.4% to 845p.
Resilience in UK grocery sector, says Supermarket Income Reit
Wednesday 20 September 2023 10:58 , Joanna Bourke
Supermarkets look a resilient sector in the UK commercial property market, with one major stores landlord revealing a solid performance.
Supermarket Income Reit, which leases 55 stores to grocers such as Sainsbury’s and Tesco, said the value of its estate rose to nearly £1.7 billion in the year to June 30, up from £1.56 billion.
The portfolio was lifted as annual rental income gained 30% to £100.6 million, in part helped by acquisitions and having 100% occupancy across the properties.
But chairman Nick Hewson said although supermarket property has been less volatile than other sectors, it was not immune from challenges, with a 14% like-for-like decline in the portfolio value.
However some other real estate divisions saw valuations knocked much more heavily during the pandemic.
Hewson said: “The UK grocery sector has again demonstrated resilience despite the challenging macroeconomic environment we have experienced during the year. We remain focused on our investment strategy of acquiring and managing a high-quality portfolio of omnichannel supermarkets. These give us exposure to the fastest growing segment of the UK grocery market which itself is experiencing strong growth.”
Former Sainsbury’s boss Justin King, a senior adviser to Atrato Partners, Supermarket Income Reit’s investment adviser, said: “It is worth noting that when you examine performance trends over the last 15 years, the supermarket property investment market has been less volatile than the broader UK property market.”
The shares rose 3.2p, or more than 4%, to 78.2p.
Burberry misses FTSE 100 bounce, Galliford Try upgrade boosts shares
Wednesday 20 September 2023 10:23 , Graeme Evans
Burberry shares today failed to make headway despite the benefit of glowing reviews from London Fashion Week.
New creative director Daniel Lee’s first designs for store and online earned praise at the showcase event, but away from the catwalk investors appear more guarded.
Their caution reflects uncertainty over China, a point highllighted today by Deutsche Bank after it downgraded its price targets on several luxury goods stocks including Burberry, Richemont and LVMH.
The bank said: “The Chinese consumer remains the key driver of the sector and we expect a slowdown.
“Signs of economic pressure in the property sector and moderating sentiment around GDP are likely to weigh on luxury consumer spending both domestically and abroad.
Burberry shares today dropped 8p to 2057p, a level similar to the start of the year and down sharply from April’s 2600p. Deutsche Bank rates the shares at 2240p, compared with 2400p previously.
The lacklustre performance for Burberry came during a robust session for the FTSE 100 index, which jumped 0.7% or 50.65 points to 7710.85 after a surprise dip in UK inflation revived housebuilding and property stocks.
The surge came despite tonight’s potentially market-moving US Federal Reserve policy decision. Rates are due to stay in the 5.25–5.5% target range, pausing for the second time in the past six meetings.
The main focus will be on updated economic projections, known as the dot plot, which will reveal the expected movement of rates in the year ahead.
UBS Global Wealth Management said: “We expect the Fed to pause on rates today, and on balance believe the US rate hike cycle is likely done.
“However, we do not expect the Fed to definitively declare an end to the cycle and risk prematurely easing financial conditions.”
Brent Crude fell 1.55% to $92.88 a barrel ahead of the meeting, putting pressure on BP and Shell at the bottom of the FTSE 100 index.
The UK-focused FTSE 250 index jumped 1.3% or 235.48 points to 18,662.18, while in the All-Share construction firm Galliford Try moved closer to a record high.
The shares rallied 3.6p to 211.1p after Galliford upgraded City expectations alongside a 23% rise in underlying profits to £23.4 million. It pointed to a “high-quality” order book worth £3.7 billion, of which 87% is in the public and regulated sectors.
Mortgage prices likely to come down on lower inflation
Wednesday 20 September 2023 09:52 , Daniel O'Boyle
Andrew Montlake, managing director of mortgage broker Coreco, said the inflation decline could lead to more sub-5% mortgages.
He said: “Whilst the inflation battle is not won yet, this is a substantial advance and the Bank of England should pause from any further action to see if this trend continues rather than go too far and cause economic woe.
“I would expect to see Swaprates continue to ease over the coming days which will give lenders more ammunition to escalate the rate war that has been brewing for the past few weeks. We have already seen the first fixed rates under 5% and we are now likely to see more choice at this level.”
Riz Malik, director of R3 Mortgages, said: “You can expect mortgage lenders to continue to reprice downwards, which is great news for borrowers.”
Ten Entertainment rolls into profit
Wednesday 20 September 2023 09:11 , Simon Hunt
Bowling firm Ten Entertainment today said it was battling to keep prices down for consumers after it rolled into Autumn with another period of profitable growth.
CEO Graham Blackwell said he had not increased the price of a standard game of bowling, which continued to stand at below £5, and was adapting the firm’s food offering to swerve steeper price rises.
“We have moved the menu around a bit to make sure we don’t pass on significant increases to customers to keep the price points where they are,” he said.
“We might change the burgers, we may change the burger size but from the customer perspective very little changes.”
Blackwell said a wetter-than-expected summer had provided a sales boost as consumers swapped beach trips and park picnics for indoor fun, with the firm expanding its off-lane entertainment options including increasing the number of laser tag arenas and escape rooms.
But he warned he had seen a slight decline in spend per head as inflationary pressures continued to bite.
The Bedford-based business reported a 3.3% rise in sales to £65.3 million in the six months to July, while pre-tax profits nudged up slightly to £15.8 million.
Shares rose 2.1% to 290p.
Month-on-month inflation ‘consistent with 2% target'
Wednesday 20 September 2023 08:44 , Daniel O’Boyle
Month-on-month inflation fell to below 0.2% in August, which economist Simon French noted would suggest a rate of 2%, the Bank of England’s target, on an annualised basis.
Tomorrow’s interest rate call a toss-up, markets say
Wednesday 20 September 2023 08:42 , Daniel O'Boyle
Tomorrow’s interest rate call from the Bank is effectively a toss-up, City traders believe, after lower-than-expected inflation.
Markets had priced in a more than 80% chance of a hike before this morning’s reading, yet now see it as close to 50/50.
Traders now also firmly see rates peaking at 5.5%. At one stage in July, rates had been seen peaking as high as 6.75%.
Building stocks surge, FTSE 250 up 1.3% on inflation surprise
Wednesday 20 September 2023 08:36 , Graeme Evans
Housebuilding and property-focused stocks have been swept higher on the back of today’s improved interest rate outlook.
Shares in Taylor Wimpey and Barratt Developments jumped 5%, while Land Securities and retail warehouse firm Segro put on more than 3%.
The quartet led the FTSE 100 index to a better-than-expected rise of 47.93 points to 7708.13, with asset manager M&G among others doing well after a positive reaction to results. Shares in the former Prudential division improved 6.4p to 205.8p.
The surprise departure of Andy Bird as boss of Pearson caused shares in the education publisher to drop 4% or 39.6p to 844.6p, while BP and Shell retreated 1% after oil prices fell from yesterday’s 10-month high.
The UK-focused FTSE 250 index jumped 1.3% or 247.03 points to 18,673.73 following the inflation boost, with builders Persimmon, Redrow and Bellway all up by more than 5%.
Market snapshot as FTSE starts higher
Wednesday 20 September 2023 08:31 , Daniel O'Boyle
The FTSE 100 has opened higher after this morning’s better-than-expected inflation reading.
Take a look at our full market snapshot below.
Cake maker Finsbury Food Group in £143m takeover approach
Wednesday 20 September 2023 08:17 , Joanna Bourke
Finsbury Food Group has recommended approving a takeover offer that would see it move to private ownership, in a deal that values the bakery firm at £143.4 million.
The 110p cash per share proposal from a company owned by funds managed by asset management firm DBAY, is a 23.6% premium to the 89p closing price on September 19.
Directors at Finsbury Food Group, which supplies breads, birthday cakes and other products to supermarkets, convenience stores, restaurants and fast-food firms, consider the terms fair and reasonable. The company has been advised by investment bank Oppenheimer.
Peter Baker, non-executive chairman at the cake maker said: “For the next phase of the Finsbury Group’s development the business will need to pursue strategic, transformational M&A to achieve the scale required to be successful in an increasingly competitive and demanding market place. I am confident that Finsbury will thrive under DBAY’s stewardship in the private market, with access to DBAY’s investment and operational support to pursue the current strategy of scaling Finsbury’s buy-and-build M&A in the future.”
Alexander Paiusco, chief executive of DBAY said: “We have been supportive shareholders of the business for over a year and have been impressed with the management team during our ownership, but we strongly believe Finsbury would benefit from transformational M&A including international expansion and this would be better achieved in private ownership without the barrier of the current listing.”
Pound falls towards $1.23
Wednesday 20 September 2023 08:16 , Daniel O'Boyle
The pound has fallen to $1.234, as the surprise fall in inflation boosted hopes that rate rises will end soon.
It is the lowest the pound has fallen against the dollar since May.
Sterling dropped against all major currencies, buying €1.15 and ¥182.6.
Inflation surprise lifts FTSE 100
Wednesday 20 September 2023 07:25 , Graeme Evans
Gloomy expectations for the FTSE 100 index have reversed in the wake of today’s lower-than-forecast inflation print of 6.7%.
IG Index says futures trading puts London’s top flight 0.4% or 32.2 points higher, whereas its opening call before the 7am inflation announcement had been 15 points lower at 7645.
The turnaround comes amid hopes that the Bank of England will have room to ease the pace of monetary policy tightening, starting with its decision due to be announced tomorrow at midday.
Chancellor hails inflation decline
Wednesday 20 September 2023 07:22 , Daniel O'Boyle
Chancellor of the Exchequer Jeremy Hunt said the lower inflation figures show the plan is working.
He said: “Today’s news shows the plan to deal with inflation is working - plain and simple. But it is still too high which is why it is all the more important to stick to our plan to halve it so we can ease the pressure on families and businesses.
“It is also the only path to sustainably higher growth.”
But Labour’s Shadow Chancellor Rachel Reeves MP said: "The UK is forecast to have the highest Inflation of any major economy this year.
“The Prime Minister is too weak to turn things around, while his predecessor Liz Truss continues to call for the same policies that crashed the economy this time last year.
"The Conservatives have wreaked havoc and working people are paying the price.
Dunelm cheers record sales but cautions of “unpredictable” consumer behaviour
Wednesday 20 September 2023 07:19 , Joanna Bourke
Homewares retailer Dunelm has defied High Street gloom to reveal record annual sales of £1.6 billion, but the chain cautioned consumer behaviour remains “unpredictable”.
The chain, which has 180 branches and sells bedding, curtains and kitchen products, achieved the 5.5% growth in the year to July 1.
Dunelm, led by Nick Wilkinson, pointed to the performance being helped by an “unrelenting focus on offering value at all price points, passing on cost reductions across over 1,000 products in the spring”.
But pre-tax profits came in 7.8% lower at £193 million, reflecting tight control of margin “amidst inflation in our operating costs and our ongoing commitment to investment for the future”.
The FTSE 250 company added that it is pleased with trading early in the new financial year, but warned consumer behaviour remains unpredictable.
Food inflation falls but drinks prices rise faster
Wednesday 20 September 2023 07:18 , Simon Hunt
Food inflation has fallen sharply across many essentials in welcome relief to shoppers on squeezed incomes.
However, inflation in drinks, including coffee, tea, spirits, wine and beer, continues to rise, today’s ONS data shows.
Traders focus on US rates outlook, Brent Crude lower
Wednesday 20 September 2023 07:14 , Graeme Evans
Stock markets are struggling for direction as traders await clues from the Federal Reserve on the direction of US interest rates in the year ahead.
Policymakers are tonight expected to leave rates in a range of 5.25-5.5%, with Wall Street’s main focus being on the central bank’s “dot plot” summary of economic projections and comments of Fed chair Jerome Powell.
Traders are currently betting that rates will stay high throughout 2024, with forecasts earlier this week pointing to a level above 5% by June’s policy meeting.
Deutsche Bank strategist Jim Reid said today: “Our US economists still expect the Fed to signal one further hike this year, but they think Powell will leave open the question of when that tightening could occur, and will lean heavily on a message of data dependency.
“And even though they expect the Fed’s forecasts to show softer inflation, they think that stronger growth and lower unemployment should counterbalance that, meaning that the 2024 dot will show one less rate cut in 2024 as well.”
Uncertainty ahead of the meeting meant all three of the major US indices closed yesterday’s session about 0.25% lower.
Brent Crude also retreated today to stand at $93.52, having hit a 10-month high above $95 in yesterday’s session.
Inflation surprisingly declines in August
Wednesday 20 September 2023 07:06 , Daniel O'Boyle
Inflation defied predictions of a rise by dipping further to 6.7% in August.
It had been expected to tick back up to 7.0%.
Core inflation fell to just 6.2%, which is likely to fuel hopes the Bank of England will pause interest rate rises.
ONS Chief Economist Grant Fitzner said: “The rate of inflation eased slightly this month driven by falls in the often-erratic cost of overnight accommodation and air fares, as well as food prices rising by less than the same time last year.
“This was partially offset by an increase in the price of petrol and diesel compared with a steep decline at this time last year, following record prices seen in July 2022.
“Core inflation has slowed this month by more than the headline rate, driven by lower services prices.”
Morning refresh: What you need to know to start the day
Tuesday 19 September 2023 22:43 , Simon Hunt
.Good morning from the City desk of the Evening Standard.
All City eyes are firmly fixed on UK inflation numbers which are expected out at 7am. Analyst forecast have inflation rising to 7% in August from 6.8% in the prior month, the first increase since February, led by higher oil prices.
That would put even more pressure on the Bank of England to unveil another interest rate hike tomorrow. But some economists are urging Governor Andrew Bailey to take a more cautious approach in light of the economic harm higher rates could bring about.
Here’s a summary of our top headlines from yesterday:
Profit warning at B&Q and Screwfix owner Kingfisher, due to slowdown in Poland and France. now expects full-year profit of £590 million, down from £634 million. It reported a drop in first-half profit before tax of a third, to £317 million. But UK is holding up better and the out-of-town DIY depot is coming to the high street
UK’s biggest retail landlord British Land ups its financial guidance for retail parks as strong demand and limited supply means it can up rents
It’s all going sour at Naked Wines - business swings to a £15m loss, warns of material uncertainty on going concern status if a combination of bad factors all hit cash flow over the next year
Tui says it would have beaten expectations if not for Greece wildfires - still expect profits significantly above last year
Trustpilot upgrades earnings guidance after surge in bookings
Ocado revenues nudge up as online grocer cheers boost from price cuts but shopper basket size falls yet again
