- FTSE 100 closes 11 points lower
- US stocks weak ahead of expected rate hike
- Federal Reserve rate decision due at 7.15pm GMT
4.45pm: Eyes on the Fed
At the close, the FTSE 100 had lost 11 points to finish 0.1% lower at 7,761.
Preparing for the US Federal Reserve's decision this evening, IG's Chris Beauchamp lamented the "gloomy tone" to the trading day.
“The second half of the week’s action-packed schedule has provided a reason for investors to take risk off the table, as they await the Fed decision, and then the other major data that will follow on Thursday and Friday," Beauchamp noted.
"Caution is the watchword today, and could well be the case tomorrow and Friday too. A hawkish Fed and poor tech numbers on Friday would be a decent catalyst for a rout in stocks, while the bulls will be hoping for good news on which to pin a fresh rally.”
3.45pm: Steel bending
British Steel has been drawing up secret plans to axe hundreds of jobs, Sky News has reported, even as it continues talks with ministers about £300mln of taxpayer funding that would partly depend on decade-long employment guarantees.
Britain's second-biggest steel producer has been discussing launching a consultation on around 800 redundancies, principally focused on the Scunthorpe plant in north Lincolnshire where the company is based, the report said.
The planned cuts would arise from the closure of coke ovens, although Scunthorpe's two blast furnaces and other mills within the Chinese-owned group would continue to operate, an insider told Sky News.
Any redundancy proposals would be certain to draw a sharp response from the government given that its offer of £300mln of state support is partly predicated upon providing job guarantees lasting for a decade, the report said.
Last week, Sky News revealed that British Steel and larger rival Tata Steel would be required to guarantee thousands of jobs until 2033 in return for £600mln of government support to help decarbonise the industry.
3.35pm: Currys wanted
Currys PLC saw its shares jump 9% higher in late afternoon trading after analysts at Investec upgraded their rating for the electricals retailer's stock to 'buy' from 'hold' and hiked the price target on the shares to 93p from 59p.
The bank's analysts said Currys recent trading statement assuaged some of the concerns it had after the group's interim results with regards to market share declines, showing a "material" improvement in UK & Ireland margins.
They said the company's strong gross margin performance and further second-half gross cost savings gave them confidence to upgrade their full-year 2023 pre-tax profit forecast by 15%.
The analysts noted that Currys' Nordics business "threatens to remain a drag on profits in FY24E, hence our outer year forecasts remain broadly unchanged."
"Nevertheless," they added, "we believe the market valuation not only reflects a worse-case scenario, but ignores the ID Mobile business optionality."
The Investec analysts said the ID Mobile business could ultimately be valued at as much as £374mln if it can grow its active subscriber base to 3 million.
In late afternoon trading, Currys' shares were up 9.3% at 70.75p.
3.15pm: US factory data disappoints
In more weak US data ahead of the Federal Reserve rate decision, the Institute for Supply Management's (ISM) closely-watched manufacturing sector Purchasing Managers' Index (PMI) fell to 47.4 in January, from a reading of 48.4 for December, well below forecasts for 48.1.
A key gauge for new orders also weakened further, falling from 45.1 to 42.5, while that for prices rose from 39.4 to 44.5. The employment subindex only edged lower from 50.8 to 50.6 and was indicative of continued hiring as it remained above the 50 point threshold.
New York indexes remained weak, with the Dow Jones Industrial Average shedding 197 points or 0.6% at 33,888 points, while the S&P 500 index was down 0.2%, and the Nasdaq Composite off 0.1%.
In London, the FTSE 100 index was up just 4 points, or 0.1% at 7,775.
2.50pm: New York cautious
As expected, US stocks dipped into the red at the open ahead of the Federal Reserve’s highly-anticipated interest rate hike decision due around 7.15pm GMT.
About 20 minutes after the New York market opened, the Dow Jones Industrial Average was down 172 points or 0.5% at 33,984 points, while the S&P 500 index and the Nasdaq Composite both lost 0.2%.
Major movers included Snap Inc, which fell more than 13% at the open on yet another round of disappointing quarterly earnings and forecast revenue declines for 1Q 2023, while Peloton Interactive Inc added 7.2% on better-than-expected results which showed the strength of its subscriptions revenue stream.
Meanwhile, US private payrolls increased less than expected in January according to the ADP National Employment report. However, the labor market may remain stronger than this data indicates with ADP chief economist Nela Richardson noting the impact of weather-related disruptions on employment during the reference week used to compile the report.
“Hiring was stronger during other weeks of the month, in line with the strength we saw late last year,” Richardson said.
In spite of the Wall Street decline, the FTSE 100 index managed to hold on to gains of 10 points, or 0.1% at 7,782.
2.25pm: Autotrader gear change
Auto Trader Group PLC shares were weak after being downgraded by analysts at UBS who think the company faces "increasing risk" as car listings are expected to decline.
The bank's proprietary car tracker points to trade used car listings falling in December and are down 8% in the year to date, while the shares are up circa 20%. Trade used cars listed on the FTSE 100 group's platform are now 7% below the average for 2022, though listings on other European auto platforms have been rising, with around a 14% rise on average compared to last year.
"We think the key reason is that demand for used cars in the UK remains surprisingly strong, while supply has still not recovered," said the Swiss bank's analysts
"We accept upside catalysts do reman though if we see: (1) a recovery in listings as supply improves and demand weakens; (2) evidence of progress in digital transactions; and (3) an improvement in Autorama performance, should new car supply normalize during 2023," they added
The UBS rating was lowered to 'neutral' from 'buy' but the share price target was lifted to 630p from 600p, with the shares slipping 0.06% lower to 626.60p.
2.05pm: ADP data won't move needle
Ahead of today's US interest rate decision, and a precursor for Friday's January non-farm payrolls report, the latest ADP report showed a 106,000 increase in US private payrolls in January, well below the consensus for 180,000.
In a quick reaction, economists at Pantheon Macro noted: "This is only the sixth iteration of the new ADP methodology, so we have no way of knowing if its apparent tendency to undershoot the official initial private payroll reading is structural or just noise. For the record, the median difference between ADP and the official number in the past five months is -39K.
"That appears to suggest a private payroll number of about 150K on Friday, but the range of ADP errors has been huge, from -176K in August to +15K in December. In short, we have nothing like enough history to evaluate the usefulness of ADP. We’re sticking to our 175K forecast for the official headline number, but we also expect job growth to slow to 100K or less by the end of the quarter, and to be close to zero in Q2."
With less than half an hour to the US open, futures for all three major US stock indexes remained lower as investors stayed on the sidelines ahead of the Federal Reserve meeting decision announcement, but the FTSE 100 index managed to hold gains of 16 points, or 0.2% at 7,788.
1.35pm: Some top risers and fallers in today’s markets
Pathfinder Minerals PLC (AIM:PFP) moved 45% higher to 62p after the natural resources company announced that Acumen Advisory Group (AAG) has exercised its exclusive option to acquire Pathfinder’s subsidiary, IM Minerals Limited.
Orcadian Energy PLC (AIM:ORCA) was down 30% after the company announced the completion of a heavily discounted placing of new stock.
Synergia Energy Ltd (ASX:SYN, AIM:SYN) shed 15% to 0.88p following a mixed update on its India-based Cambay C-77H gas well.
Crimson Tide PLC (AIM:TIDE) was up 28% on a three-year contract win in the US.
1.00pm: Weak start seen across the pond
The Footsie held its gains, up 17 points now, trading in a fairly narrow range with investors now eyeing the US open.
Wall Street is expected to open lower as February trading gets underway, with investors anticipating the outcome of the US Federal Reserve’s first interest rate decision of the year and a raft of quarterly earnings reports from large tech companies.
Futures for the Dow Jones Industrial Average (DJIA) fell 0.4% in Wednesday pre-market trading, while those for the broader S&P 500 index also shed 0.4%, and contracts for the Nasdaq-100 declined 0.3%.
The Federal Open Market Committee wraps up its two-day rate-setting meeting today, followed by a press conference with Fed chair Jerome Powell that will be watched closely for clues on the future path for interest rates.
Ahead of that, the major US indexes ended higher on Tuesday, with the DJIA closing up 1.1% at 34,086, the Nasdaq Composite adding 1.7% to 11,585 and the S&P 500 gaining 1.5% to 4,077. That took January’s gains for the Nasdaq to 10.7%, while the S&P rallied 6.2% and the Dow added 2.8%.
“After a very positive January, the start of February today marks a pivotal three days for markets that have the potential to decisively set the tone for the weeks ahead,” Deutsche Bank strategist Jim Reid commented in a morning note to clients.
“We have the Fed’s latest policy decision and Chair Powell’s press conference tonight. Then tomorrow we’ve got more policy decisions from the ECB and the BoE, an array of major earnings including Apple, Amazon and Alphabet, followed up by the US jobs report for January on Friday,” he added.
When it comes to the Fed’s decision, a 25 basis points rate hike is now widely expected by both markets and economists, and anything other than that would be a massive shock, Reid noted.
“It would also mark the first 'normal' sized hike since March 2022 when this hiking cycle began, before they embarked on a series of supersized hikes to swiftly get the policy rate into restrictive territory," he said.
"Given that the 25bps move is anticipated, the main focus today will instead be on any changes to forward guidance, both in the statement and from Fed Chair Powell’s press conference.”
Meanwhile, companies reporting quarterly earnings today include Facebook, Alibaba, Novartis, Accenture, and T-Mobile. Thursday sees Apple, Amazon and Alphabet releasing their latest financial statements.
12.50pm: Stonegate could sell 1,000 pubs - reports
Stonegate Pub Company could sell 1,000 pubs less than four years after spending £1.3bn buying rival Ei Group to become Britain's biggest pub group, according to reports.
The Slug and Lettuce chain owner, which is owned by private equity firm TDR Capital, is looking to offload more than a fifth of its pubs for an estimated £800mln, according to Bloomberg.
The pub giant has struggled to make up ground lost during the pandemic and is grappling with a £2.6bn debt pile.
According to Bloomberg, Stonegate has appointed real estate investment bank Eastdil Secured to advise on its planned pub sale, which is likely to kick-off by spring.
12.30pm: British Steel could axe 800 jobs - reports
Britain's second-biggest steel producer has been drawing up secret plans to axe hundreds of jobs even as it continues talks with ministers about £300mln of taxpayer funding that would partly depend on decade-long employment guarantees, according to Sky News.
The report said British Steel has been discussing launching a consultation on around 800 redundancies, principally focused on the Scunthorpe plant in north Lincolnshire where the company is based.
One industry insider said there was a possibility that trade union officials could be briefed on the proposals as early as Wednesday, although there remained a possibility that their disclosure could be delayed pending the outcome of negotiations with the government, Sky noted.
12.15pm: Network Rail makes new bid to end rail strikes
The rail union, the RMT, has received a “revised offer” from Network Rail in its long-running dispute over pay.
According to the Telegraph the deal reportedly includes the 9% pay offer over two years that was rejected by union bosses in December but with added reforms to modernisation plans.
The offer comes as thousands of rail staff across the country stage strike action today, with another walkout due to take place on Friday.
The rail union also received a revised offer from the Rail Delivery Group, representing train operating companies, on the 19th January.
Both offers are now being discussed.@RMTunion: "An update on our next steps will be forthcoming in due course."
— Taj Ali (@Taj_Ali1) February 1, 2023
An RMT spokesperson said: "We have received a revised offer from Network Rail and our NEC will consider its contents."
"No decision has been made on the proposals nor any of the elements within them."
"We will now consult members through branch and regional meetings."
"An update on our next steps will be forthcoming in due course."
11.45am: Girl power
Severn Trent PLC (LSE:SVT) may have made boardroom history today becoming the first FTSE 100 firm to have women in the top three jobs - chair, chief executive and chief financial officer.
The water company announced the appointment of Helen Miles as the new CFO today replacing James Bowling, who is retiring.
Miles, who will formally start in new the role on 1 April, joins Liv Garfield as chief executive and Christine Hodgson as chair in what is believed to be the first and only time all three senior positions have been held by women in a FTSE 100 company.
11.05am: Euro inflation cools in January
Good news over in Europe as Eurozone inflation has come in below forecast according to data from Eurostat.
Euro area #inflation at 8.5% in January 2023, down from 9.2% in December 2022. Components: energy +17.2%, food, alcohol & tobacco +14.1%, other goods +6.9%, services +4.2% - flash estimate https://t.co/CnJEEwxuoo pic.twitter.com/a28dEhvPJd
— EU_Eurostat (@EU_Eurostat) February 1, 2023
The flash estimate for Euro area inflation was 8.5% in January, down from 9.2% in December, and below forecasts of 8.9%.
Inflation in Europe has now slowed for the third month in a row, falling from a record high of 10.6% in October.
But core inflation, excluding energy and food, was unchanged at 5.2%, slightly ahead of the 5.1% forecast
10.35am: Rio's radioactive device found
Someone at Rio Tinto PLC (LSE:RIO) will be sleeping easier tonight.
Authorities in Australia say they have found a tiny radioactive capsule which went missing last week, according to the BBC.
Emergency services had "literally found the needle in the haystack", authorities in Western Australia said.
A huge search was triggered when the object was lost while being transported along a 1,400km (870-mile) route across the state.
The mining giant apologised for losing the device, which could have posed a serious danger if handled.
10.10am: Darktrace rallies after buy-back but will relief be short-lived
Darktrace PLC (LSE:DARK) rallied 2% today, after falling heavily yesterday, as management moved to show their confidence in the cyber security company by starting a £75mln buy back programme.
AJ Bell investment director Russ Mould noted “This sends a message to the market that Darktrace’s management clearly thinks the shares are too cheap” and reinforces the message yesterday that the business doesn’t think it has done anything wrong, saying it has ‘full confidence’ in its accounting practice.
By he noted last year’s report by ShadowFall, and “damning criticism” from Quintessential Capital Management means a lot of investors “will have lost faith in the business.”
Quintessential, which has declared a short position in Darktrace, has raised questions about the group’s accounts.
In a report entitled “Autonomy 2.0 – The Dark Side of Darktrace” it raised concerns about the “validity” of the group’s financial statements fearing that “sales, margins, and growth rates may be overstated and close to a sharp correction.”
It said it had “detected numerous transactions in the period leading to Darktrace’s IPO seemingly involving simulated or anticipated sales to phantom end-users through a network of resellers.”
Quintessential added “increasing competition, questionable product value, “front loading” of existing contracts, high churn rates and lack of sustainable cash generation, point to a rapid, possibly sharp, deterioration financials.”
“We are of the opinion that Darktrace’s financial statements may not be relied upon as the company looks like a sophisticated replica of the Autonomy debacle” it concluded.
Darktrace insisted it was fully confident in its practices and in the integrity of its independently audited financial statements.
“We have rigorous controls in place across our business to ensure we comply fully with IFRS accounting standards,” Darktrace said, adding that it had not been contacted by the authors of the report before it was published.
Mould said the buy-back “might provide short-term relief to the share price but ultimately Darktrace needs to come up with some detailed responses to Quintessential’s accusations or investors are simply going to walk away.”
9.45am: Manufacturing sector contracts but improves from December's low - PMI
UK manufacturers faced a tough operating environment at the start of 2023, the latest S&P Global/CIPS UK Manufacturing Purchasing Managers Index (PMI) report showed today.
But the seasonally adjusted manufacturing PMI of 47.0 in January was up from December's 31-month low of 45.3 and above the flash estimate of 46.7.
????????The downturn across the #UK manufacturing sector softened in January (#PMI headline at 47.0; Dec: 45.3) but reductions in output and demand were sustained. Read more: https://t.co/4OvYrVUK3U @cipsnews pic.twitter.com/3K8h9sq742
— S&P Global PMI™ (@SPGlobalPMI) February 1, 2023
Nevertheless, it showed a contraction for the sixth month in a row.
Output and new orders fell further, leading to job losses for the fourth successive month while weak demand, elevated price inflation, plus raw material and staff shortages all impacted production.
There was some better news, however, as the downturn showed further signs of easing, cost increases slowed and pressure on supply chains lessened, the report said.
The steepest rates of decline in both variables were registered in the intermediate goods category, whereas the contractions seen at investment goods producers were only mild in both relative and absolute terms.
9.35am: Shop prices yet to peak - BRC
Shop prices have yet to reach their peak - despite record highs seen in January, it has been warned.
Prices are now 8% higher than they were last January, up from 7.3% in December and above the three-month average of 7.5%, according to the British Retail Consortium (BRC)-NielsenIQ Shop Price Index.
Overall food inflation rose to 13.8% from 13.3% in December - the highest inflation rate in the category on record.
Today at @the_brc we published the latest Shop Price Inflation report, covering the month of January ????????
Shop prices hit fresh highs ???? pic.twitter.com/jACmMLYw1L
— Harvir Dhillon (@HarvirDhillon) February 1, 2023
Helen Dickinson OBE, the BRC’s chief executive said more rises could be on the way.
With “retailers still face ongoing headwinds from rising energy bills and labour shortages, prices are yet to peak and will likely remain high in the near term as a result” she stated.
But she added: “With global food costs coming down from their 2022 high and the cost of oil falling, we expect to see some inflationary pressures easing.”
9.15am: ITV shares switch on after reports of interest in ITV Studios
Shares in British broadcaster, ITV PLC (LSE:ITV), rose 3.25% in early exchanges after a report on Reuters said veteran Hollywood producer Peter Chernin and French TV production group Banijay’s parent have expressed interest in ITV Studios, the maker of hit show “Love Island”.
Citing sources familiar with the matter Reuters noted other private equity-backed studios firms have also assessed the asset on and off in recent months with the business valued at as much as £3bn according to analysts.
The report added that ITV, Britain’s biggest free-to-air commercial broadcaster, is open to selling a minority stake in Studios to a strategic partner such as a larger TV producer or private equity firm with production assets, but it wants to retain majority control.
9.05am: Bestway buys more of Sainsbury's
Shares in J Sainsbury PLC (LSE:SBRY) edged higher after it emerged Bestway Group has increased its stake in the food retailer.
The owner of Costcutter now owns 4.47% of Sainsbury’s a filing to the London Stock Exchange showed after announcing it had taken a 3.45% holding last week.
At the time the family-owned business said it may make further purchases from “time to time” and it has been true to its word.
Shares were 0.7% higher in early trading.
8.55am: FTSE holds firm
So far so good for the Footsie today with the lead index now up 24 points helped by gains in the US and Asian markets.
But all eyes remain focused on the Federal Reserve with the latest rate call due after London’s close today.
Neil Wilson at markets.com noted the US central bank “is all but certain to raise rates by 25bps but the complacency we see sets up for a volatility-driven event if Powell pushes back hard – and why not?”
Wilson suggested there was “no reason for the Fed to signal a pause – financial conditions have loosened considerably, inflation remains high, the labour market tight and commodity-linked inflation could be rearing its head again.”
He cautioned “as we have seen countless times, the market is willing to take a dovish read to just about anything the Fed says.”
Back in London and Entain PLC (LSE:ENT) remained close to the top of the FTSE 100 risers after upping guidance for the full-year. Strong trading during the World Cup helped and the hope this will be reflected across the industry pushed Flutter Entertainment 1.6% higher too.
Matt Britzman, equity analyst at Hargreaves Lansdown said: “BetMGM, the joint venture with MGM in the US, remains a shining star.”
“Recent performance beat expectations and cash profit should start to flow as we move into the second half of the year.”
“The real question here is how long this will remain a joint venture, it seems unlikely both parties will want to continue their US gambling exposure in its current form indefinitely.”
“If we had to put money on it, a bid from MGM to take full control looks the most likely outcome – time will tell.”
Elsewhere and shares in ITV PLC (LSE:ITV) rose on reports of interest in the UK broadcasters ITV Studios arm while Darktrace PLC (LSE:DARK) rallied 2.6% after the cybersecurity firm announced share buybacks, a day after a short-seller report knocked its shares by as much as 10%.
But Vodafone Group PLC (LSE:VOD) remained the main drag on the FTSE 100, down 2.6%.
Michael Hewson at CMC Markets noted “New CEO Margherita Della Valle acknowledged the company needed to do better, however apart from the €1bn cost saving program announced a few months ago there is little sign that management have a plan that can stem the recent share price declines, amidst concern that the dividend could be at risk of a cut.”
8.30am: House price growth slows - Nationwide
Annual house price growth slowed to 1.1% in January from 2.8% in December, the lowest rate since June 2020, according to latest figures from Nationwide Building Society.
Property values fell 0.6% in January from December, following a 0.3% drop in December, marking the fifth monthly decline in a row and the longest string of declines since the financial crisis in 2009. Annual price growth slowed to 1.1% from 2.8%.
Nationwide report UK house prices rose just 1.1% in the year to January 2023.
Prices are already below February 2022 levels and 5.6% below their August 2022 peak based on their non seasonally adjusted index. https://t.co/ahaJkrl15o
— Neal Hudson (@resi_analyst) February 1, 2023
The average home is now worth £258,297, down from £262,068 a month ago, and prices are 3.25% lower than their August peak.
Robert Gardner, Nationwide’s chief economist, said there were some “encouraging signs that mortgage rates are normalising, but it is too early to tell whether activity in the housing market has started to recover.”
“The fall in house purchase approvals in December reported by the Bank of England largely reflects the sharp decline in mortgage applications following the mini-Budget” he added.
“It will be hard for the market to regain much momentum in the near term as economic headwinds are set to remain strong, with real earnings likely to fall further and the labour market widely projected to weaken as the economy shrinks” he suggested.
8.16am: FTSE starts February on the front foot
FTSE 100 made a bright start to the month although investors may be wary as central banks in the US, UK and Europe prepare to make their latest decisions on interest rates.
At 8.15am London’s lead index was up 20 points to 7,791 while the FTSE 250 rose 77 points to 19,930.
The Federal Reserve will announce its call after the London market close today with a 25bp rate rise expected while the ECB and the Bank of England will reveal their decisions tomorrow with 50bp increases forecast.
Ahead of that and there were some encouraging trading updates to lift the mood with GSK PLC (LSE:GSK, NYSE:GSK) topping forecasts helped by strong sales of its popular shingles vaccine, Shingrix. Shares edged higher, up 0.4%.
While the owner of Coral and Ladbrokes, Entain PLC (LSE:ENT), pulled the punters in during the World Cup which has helped it raise guidance for the full year.
The FTSE 100 listed group now expects full-year group EBITDA between £985mln to £995mln, well ahead of the £925mln-£975mln range given in October. Shares rose 2%.
But Vodafone Group PLC (LSE:VOD) fell 2.4% after it reported a slowdown in revenue growth in quarter three from quarter two and said “we can do better.”
The telco attributed the slowdown to weaker performances in Europe although it continues to target its previously announced guidance of adjusted EBITDA of between €15.0bn to 15.2bn and adjusted free cash flow of around €5.1bn for the full year.
Richard Hunter, head of markets at interactive investor, commented “Vodafone faces the twin perils of an extremely competitive landscape and some deteriorating economic conditions, and the latest update highlights the effects of both.”
7.54am: GSK tops forecasts, Entain ups guidance
Good news from GSK PLC (LSE:GSK, NYSE:GSK) which has reported better-than-expected fourth-quarter results, largely due to strong sales of its popular shingles vaccine, Shingrix.
The pharma giant, which spun out its Haleon consumer business last summer, posted adjusted earnings of 25.8p per share on revenues of around £7.4bn.
Ahead of the figures, the consensus for sales was £7.1bn, while EPS was 21.2p.
Also pleasing investors was Entain PLC (LSE:ENT) which has predicted full-year profits ahead of expectations boosted by the World Cup which drove 11% growth in net gaming revenues (NGR) in the fourth quarter.
The owner of Coral and Ladbrokes now expects full-year group EBITDA between £985mln to £995mln, well ahead of the £925mln-£975mln range given in October.
This would represent growth of around 12% year-on-year with NGR also up 12%.
In a trading update the FTSE 100-listed group said quarter four saw record online NGR, up 12% on the previous year reflecting a “successful” men's World Cup, partly offset by weather disruptions to sporting fixtures.
7.35am: Revenue growth slows at Vodafone
Vodafone Group PLC (LSE:VOD) said it “can do better” as it held guidance after reporting a slowdown in revenue growth in quarter three.
The FTSE 100 listed company said it was continuing to target adjusted EBITDAaL between €15.0 to 15.2bn and adjusted free cash flow of around €5.1bn.
But Margherita Della Valle, group chief executive said: "Although we're continuing to target our financial guidance for the year, the recent decline in revenue in Europe shows we can do better.”
She was commenting as the telco reported that group service revenues for the quarter were €9,520mln, up 1.8% on a like-for-like basis, but below the 2.5% growth seen in the previous quarter. On a reported basis the number was 1.3% lower on quarter two.
Total revenue for the quarter was €11,638mln, down 0.4% on a reported basis on the previous quarter, and 2.7% higher on an organic basis.
The slowdown in group service revenue growth from quarter two was driven by Europe where declines in Germany, Italy and Spain partially offset by good growth in UK and other European countries.
The quarterly trend was also impacted by lower roaming growth and phasing of business revenue in the fiscal year.
Germany service revenue declined by 1.8% on an organic basis compared to a 1.1% in quarter two largely reflecting customer losses related to the implementation of new sector legislation.
In the UK, service revenue increased by 5.3% compared to 6.9% in quarter two driven by good customer growth and price increases offset by lower roaming and visitor revenue growth, and ARPU dilution from retail price competition.
Vodafone Business service revenue growth of 2.4% driven by its digital services.
7.00am: FTSE seen higher
FTSE 100 is expected to open higher with investors eyeing the latest rate call from the Federal Reserve which is due after London closes, the first of three key interest rate decisions due this week.
Spread betting companies are calling the lead index up by around 10 points.
The markets are expecting a 25 basis point hike from the US central bank. In contrast, half a percent hikes are expected from the BoE and the ECB.
Ahead of that and there is plenty of corporate news in the diary with results from heavyweight names such as GSK PLC (LSE:GSK, NYSE:GSK), Entain PC, Severn Trent PLC (LSE:SVT) and Vodafone Group PLC (LSE:VOD).
In the US markets rose strongly with the Dow closed up 387 points, 1.1% at 34,086, the Nasdaq Composite adding 191 points, 1.7%, to 11,585 and the S&P 500 improving 59 points, 1.5%, to 4,077.
The last session of January closed a banner first month of 2023 for the benchmarks. The Nasdaq Composite added more than 10% in January, while the S&P 500 and Dow rallied 6.2% and 2.8%, respectively. For the Nasdaq, January was the best-performing month since July, and for the S&P, this was the best January since 2019.
Stocks in Asia were higher, despite some disappointing data about China and Japan's manufacturing sectors.
In Tokyo, the Nikkei 225 index was up 0.1%. In China, the Shanghai Composite was up 0.7% and the Hang Seng index in Hong Kong was up 0.9%.