- FTSE 100 ticks up 38 points
- UK business confidence falls
- Mondi jumps on German aquisition
3.59pm: Blue chips in line for slight recovery
The FTSE 100 remained on course to close out the day in positive territory come late trading, having chalked up a slight recovery after Tuesday’s 113-point drop.
By the afternoon, London’s blue-chip index was trading 35 points higher at 8,226.
Mondi PLC (LSE:MNDI) climbed 4.8% throughout the day to sit as the index’s biggest riser, after announcing a £531 million acquisition earlier on… Read more
Marks and Spencer Group PLC (LSE:MKS) and Ashtead Group PLC (LSE:AHT) were also among the day’s risers, with a calmer day in London seeing National Grid PLC (LSE:NG.) sit as the biggest loser after a 0.5% drop.
3.51pm: Budget could see tax-free pension withdrawal limit cut
Chancellor Rachel Reeves is reportedly considering cutting the amount savers can take from their pensions without paying tax ahead of this month’s Budget.
Plans are being considered to reduce the amount that can be withdrawn tax-free to £100,000, according to The Telegraph.
This would be down from £268,275 currently, with savers able to withdraw 25% of their pensions up to the limit once over the age of 55.
One of the country's leading pension funds has reportedly been asked to assess the impact of reducing the limit... Read more
3.28pm: Netflix UK wing scores record revenue
Netflix Inc (NASDAQ:NFLX, ETR:NFC)’s UK arm has reported record revenue for last year after the streaming service moved to clamp down of password sharing among viewers.
Revenue ticked up 8% to £1.67 billion over the year to December on the back of a 7% jump in subscribers, the company reported on Wednesday.
This coincided with an increase in prices, which saw the UK arm generate a post-tax profit of £46.5 million, up 74% on 2022... Read more
2.55pm: Petrol prices set to tick up this month
Petrol prices are in line to tick up this month after steadily falling across the UK recently.
Deutsche Bank analysts forecast petrol would be one of the drivers of inflation going forward, after price rises are expected to hit a “cyclical” low of 1.8% in September.
Analysts said the “recent run of energy deflation” was set to “come to an end shortly,” in turn seeing petrol pump prices reverse on their downward trajectory this month.
This would come after prices across UK forecourts hit a three-year low in late September, according to the RAC, with petrol having averaged 135.87p at the time, against as high as 192p in July last year.
2.48pm: Mixed start on Wall Street
Wall Street got off to a mixed start on Wednesday, as investors braced for inflation data and the start of third-quarter earnings season later in the week.
The Dow Jones and S&P 500 opened just above the mark, while the Nasdaq slipped into negative territory.
Investors also awaited Federal Open Market Committee minutes on Wednesday, with these due to be released later in the day.
Following a rapid scaling back of expectations for further steep interest rate cuts by the Federal Reserve ahead, these were due to shed light on the scope for reductions ahead of the release of inflation data on Thursday.
2.35pm: Rolls-Royce mini nuke business posts wider loss
Rolls-Royce Holdings PLC (LSE:RR.)’s mini nuclear reactor business reported a £78 million loss for last year on Wednesday.
The small modular reactor (SMR) business saw losses climb from £61 million a year earlier, as research and development spending grew from £78 million to £115 million.
Administrative expenses also increased, with the company reporting it had 590 staff, while income from government grants partially offset higher costs.
Rolls-Royce is yet to record any revenue from the business, as news on both approval for its SMR design and whether it will receive government support to roll these out is awaited... Read more
1.33pm: Inflation expected to have dipped below 2% in September
Inflation across the UK should have dropped below the 2% mark last month, Deutsche Bank analysts say.
Following an unchanged reading of 2.2% for the year to August, Deutsche said in a note the UK consumer price index was set to have increased by around 1.8% in September.
Core inflation, including energy and food prices, was forecast to have climbed by 3.4%, against 3.1% previously.
September will likely reflect a “cyclical low” for inflation, Deutsche analyst said, as upward momentum likely gathers pace in the months ahead.
“The recent run of energy deflation will likely come to an end shortly,” the bank said.
“Indeed, pump prices are likely to reverse course in October, while dual fuel bills will see a hefty 10% rise.
“The upcoming Autumn Budget also raises risks to short-term inflation, with alcohol and tobacco duty increases potentially in the offing.”
Inflation figures from the Office for National Statistics are due on October 16.
1.16pm: Government cuts NatWest stake by further 1%
The government has sold off another chunk of shares in NatWest Group PLC (LSE:NWG) as a gradual wind-down of its stake in the lender continues.
Just under a per cent of the Treasury’s stake in the bank was sold, a filing showed on Wednesday, leaving the government’s holding slightly off 16%.
This follows repeated selling of its stake in NatWest by the government in recent months, which saw the public’s interest in the bank fall below 20% in July.
The government’s stake had sat at 62% in 2018, after some 84% of the bank was taken into public hands following a bail-out during the 2008 financial crisis.
Chancellor Rachel Reeves scrapped plans earlier in the year to ditch a large stake through a retail sale, noting the move would not provide value for money at the time.
1.01pm: Wall Street set for cautious start as third-quarter earnings season looms
Wall Street looked set for a cautious start on Wednesday after Tuesday saw stocks enjoy gains after a sell-off earlier in the week.
Futures had the Nasdaq falling 0.2% on the opening bell, while the Dow Jones and S&P 500 were seen 0.1% lower respectively.
This would follow gains across the board on Tuesday as markets recovered from Monday’s sell-off, which was prompted by a jump in Treasury yields on falling expectations for steep rate cuts by the Federal Reserve ahead.
A quiet day of scheduled news on Wednesday saw attention turn to Thursday’s inflation reading as a result, which is set to provide further clarity around the scope for future cuts.
“Federal Open Market Committee minutes that are due later today and, crucially, tomorrow’s CPI report for September, will be the most important drivers of rate cut expectations in the short term,” XTB analyst Kathleen Brooks commented.
Wednesday also looked to be a quiet period ahead of the start of third-quarter earnings season later in the week, with Delta Air Lines Inc (NYSE:DAL) reporting on Thursday, before BlackRock Inc (NYSE:BLK), JPMorgan Chase & Co (NYSE:JPM, ETR:CMC) and Wells Fargo & Co (NYSE:WFC, ETR:NWT) on Friday.
12.38pm: Train station spending worth billions a year, report finds
Train stations contribute billions of pounds to the economy annually as passengers visit the likes of coffee, gifts and haircuts ahead of journeys.
Train passengers spend £23 billion across high street stores each year, research commissioned by industry body the Rail Delivery Group (RDG) showed.
Some £9 billion is spent at independent businesses in the meantime, the report said, as train-goers spend an average of £32 in and around stations... Read more
Shares in Upper Crust owner SSP ticked up by 3.2% on Wednesday, as WH Smith PLC (LSE:SMWH) climbed by 0.3%.
12.02pm: German exports boosted by US and UK demand
German exports unexpectedly ticked up in August on the back of strong demand from the UK and US, figures showed on Wednesday.
Federal statistics office data showed exports climbed by 1.3% over the month compared to July, against expectations for a 1% decline.
Exports to the US jumped by 5.5% during the month, the figures showed, while those to the UK increased by 5.7%.
This came as Germany’s trade surplus grew from €16.9 billion (£14.2 billion) to €22.5 billion in August, driven by a 3.4% decline in imports.
The positive figures come as Germany, Europe’s largest economy, has struggled to recover in line with other nations recently.
“The second slight increase in exports in a row is a small glimmer of hope, but no reason to sound the all-clear,” German Chamber of Commerce head Volker Treier said.
11.49am: Global renewable capacity to surge through rest of decade - IEA
Renewable energy capacity is set to grow globally at almost three times the pace seen over the past six years during the rest of the decade.
Some 5,500 gigawatts of capacity is on course to be built between 2024 and 2030, the International Energy Agency said on Wednesday, with China accounting for almost 60% of all new renewables over the period.
This would see renewables able to meet almost half of global electricity demand come 2030, as solar makes up the majority of new capacity.
The new renewables would also roughly equate to the combined current power capacity of China, the European Union, India and the United States... Read more
11.01am: Business confidence falls for first time this year ahead of Budget
Business confidence across the UK has dropped for the first time in a year ahead of this month’s Budget, figures showed on Wednesday.
The Institute of Chartered Accountants in England and Wales’s (ICAEW) Business Confidence Monitor fell from 16.7 to 14.4 in the third quarter.
Though this was still double the pre-pandemic average, the figure dropped for the first time in 12 months as businesses appeared to be bracing for the October 30 Autumn Budget.
ICAEW chief executive Alan Vallance noted firms were becoming “increasingly reluctant to invest” and were “troubled by the tax burden”.
Britain’s new Labour government has previously warned the Budget will be “painful,” with tax hikes expected as ministers grapple with a slated £22 billion “black hole” in public finances.
The survey showed firms still expected an uptick in domestic and export sales over the coming year, though these had weakened compared to the previous quarter.
This came after business reported export growth slowed to 2.7% from 3% previously in the third quarter, while domestic sales climbed by 3.8%, against 3.3% beforehand.
“These figures suggest a slight reality check for the UK economy,” ICAEW Economics Director Suren Thiru added.
“Weaker expected export and investment activity, alongside fears of a painful Budget, dented business confidence.”
9.51am: Vistry under pressure again as Deutsche cuts targets
Vistry Group PLC (LSE:VTY) led the FTSE 100’s fallers yet again on Wednesday as the housebuilder came under further pressure following a share price target downgrade by Deutsche Bank.
Shares in the housebuilder had tanked on Tuesday after it warned profits would be lower over the next three years due to an underestimation of building costs.
Costs were said to have been understated by £115 million across nine developments within its southern division, with Vistry noting this would deal an £80 million blow to profit this year, before £30 million and £5 million in 2025 and 2026 respectively.
Deutsche analysts said expectations for profits over the three years were being reduced as a result.
A ‘buy’ rating was reiterated as brokers highlighted Vistry’s assurances that the issues were confined, meaning the housebuilder’s medium-term targets were left unchanged.
However, Deutsche slashed Vistry’s share price target from 1,180p to 1,513p.
“If this proves to be a one-off problem, Vistry's shares have the potential to bounce back strongly,” Deutsche said.
“However, if this proves to be a wider issue, there could be further downside risk.
Vistry shares fell by 2.9% early on Wednesday.
9.38am: Coventry Building Society ups mortgages in bad news for borrowers
Coventry Building Society is raising rates on selected mortgage products in the first hike by a major lender in weeks.
Lenders have universally been cutting rates in recent months in anticipation of more base rate cuts from the Bank of England.
But with the Budget this month and comments from Chancellor Rachel Reeves that Labour intends to raise allowed borrowing limits to fund its planned spending UK 10-year gilt yields have risen to to 4.20% currently from 3.75% in mid-September.
The situation in the Middle East and mixed signals on the US economy have also increased nervousness in the money markets, said brokers... Read more
9.31am: ‘HS2-light’ reportedly under consideration by ministers
Proposals to extend the HS2 rail link across the north in a more cost-effective way are reportedly being mulled by senior government ministers.
According to The Times, plans for an ‘HS2-light’ railway between Birmingham and Manchester are being considered.
This would see a link built from Birmingham to Crewe to provide a faster service than the existing West Coast mainline, but that was slower than the scrapped high-speed service, reports said.
Transport Secretary Louise Haigh was said by culture secretary Lisa Nandy to be looking “very seriously” at plans to boost transport investment in the north.
Former prime minister Rishi Sunak had ditched plans for the high-speed link beyond Birmingham, with the news coming after assurances on Tuesday that the line would stretch all the way to Euston, rather than ending on the outskirts of London.
9.13am: US mulls breakup of Google
The US Department of Justice has alluded to a potential break-up of Google after a federal judge ruled it to be a "monopolist" earlier this year.
Following judge Amit Mehta's competition decision, DoJ lawyers said in a filing that they are considering "behavioral and structural remedies" for the business owned by Alphabet Inc.
The remedies necessary to restrain Google from maintaining its monopoly "could include contract requirements and prohibitions; non-discrimination product requirements; data and interoperability requirements; and structural requirements," the DoJ said... Read more
9.08am: Chinese stocks tumble in worst day since 1997
Chinese stocks on Wednesday faced their largest declines in years as a lack of new stimulus measures to buoy the country’s struggling economy continued to hit sentiment.
An 8.2% decline for the Shenzhen Composite Index marked its worst day since 1997, while the benchmark CSI 300 dropped by 7.1% and at the fastest pace since February 2020.
Traders had been awaiting news of a string of new economic stimulus measures at a government press conference on Tuesday, following a week-long holiday in the country.
However, no new major packages were unveiled, in turn hitting sentiment after a range of pledges by the government and central bank to stimulate the struggling economy last month.
News on Wednesday that Chinese consumer spending fell during the latest ‘Golden Week’ holiday knocked confidence further on Wednesday, prompting the Shanghai Composite Index to also nosedive by 6.6% overnight.
“The risk is that unless China engages in a more radical package of fiscal reforms to boost government handouts, the stimulus announced so far may not be enough to sustain a long-term pick up in economic growth and domestic demand,” XTB analyst Kathleen Brooks commented.
8.38am: Revolution Beauty plummets after sales drop
Revolution Beauty PLC fell more than 8% after reporting sales dipped by a fifth during the first half.
Sales declined by 20% to £72 million in the six months to August, as Revolution assured growth was set to return later in the year and profits would be in line with the last.
This came as the group looked to sell off stock in a bid to refocus on a simplified product portfolio.
Panmure Liberum noted the hit to revenue had been worse than expected so far, with the update painting a “mixed picture” as profit guidance was maintained.
“The shift in strategy [...] is going well with sell-through rates here holding up, but the clearance of non-core products was always the focus and this has not gone as well as hoped,” analysts added.
Shares in the beauty retailer fell 8.38% to 16.4p early on.
8.22am: Mondi leads early risers after German acquisition
Mondi PLC (LSE:MNDI) led the FTSE 100’s early risers on Tuesday morning after announcing it had snapped up German, UK and Benelux business of cardboard box maker Schumacher.
Shares in the packaging firm ticked up 3.2% following news of the €634 million (£531 million) acquisition, seeing Mondi take the spot as the day’s biggest riser early on... Read more
United Utilities Group PLC (LSE:UU.) and Severn Trent PLC (LSE:SVT) also racked up early gains, after coming under pressure on Tuesday on news the water industry had been ordered to return £158 million to customers due to poor performances on the likes of pollution.
Vistry Group PLC (LSE:VTY) remained under pressure in the meantime following Tuesday’s profit warning, while Prudential PLC (LSE:PRU) also faced further declines.
Overall, the FTSE 100 gained 37 points as trading got underway, marking a slight bounce back after yesterday’s 113-point drop
8.01am: Government borrowing costs tick up as chancellor signals spending plans
Government borrowing costs moved higher yet again on Wednesday morning, after chancellor Rachel Reeves alluded to plans on Treasury spending.
UK 10-year gilt yields inched up to 4.20% by Wednesday morning, having sat at 3.75% in mid-September.
This came after Reeves reportedly signalled the government was lining up to borrow billions more for infrastructure investment, despite concerns about rising debt costs.
She told the cabinet she aims to revise how the Treasury accounts for capital spending to reflect its long-term benefits - a resetting of the so-called fiscal rules… Read more
7.58am: Gold heads towards $2,600 mark
Gold has given up further gains on Wednesday, after peaking above the US$2,680 mark late last month.
Another decline through Tuesday evening and into Wednesday took the sport price of the yellow metal to US$2,612 an ounce, marking a 0.85% drop for the day.
This follows a sudden scaling back of expectations for further steep interest rate cuts by the Federal Reserve over the remainder of the year, after stronger-than-expected non-farm payroll figures last week.
7.50am: CMC Markets back to profit in first half
CMC Markets PLC (LSE:CMCX) has reported a return to profit over the first half of the year.
Net operating income grew by 45% year on year to £180 million in the first half of 2024, the online trading platform said on Wednesday.
Operating costs also fell around 7% to £113 million, with profit before tax hitting £51 million.
It marks a turnaround from the first half of the previous financial year when CMC penned a multimillion-pound loss before tax due to lower client activity and the uncertain market conditions... Read more
7.47am: Marston's grows sales despite rainy weather
Marston’s PLC (LSE:MARS) has reported stronger sales than the wider pubs sector in the past quarter despite rainy conditions threatening to dampen the mood.
Now a pure pub company after selling off a final stake in its brewery business, via the £206 million sales of its final 40% stake in the CMBC joint venture to co-owner Carlsberg in July, the Wolverhampton-based group posted a year-end trading update showing 5.8% sales growth for the 53 weeks to 28 September... Read more
7.45am: Revolution Beauty eyes return to growth as sales slump
Revolution Beauty Group PLC has said sales should return to growth later this year after declining by a fifth in the first half.
Sales over the six months to August fell by 20% to £72 million, the beauty retailer said on Wednesday, as underlying adjusted earnings dropped to £3.1 million from £3.5 million.
Revolution noted the decline came on the back of significant stock clearing as part of a planned simplification of its product portfolio.
A return to growth was guided for the fourth quarter, with sales over the full year expected to fall at a slower rate than in the first.
Guidance for underlying adjusted earnings to be in line with last year’s £12.6 million was reiterated in the meantime... Read more
4.17am: Stocks to climb
Futures had the FTSE 100 climbing by 19 points on Wednesday morning after a tough day for London’s blue chips saw the index fall by 113 points to 8,190.
Miners had dragged the index lower after China’s latest economic measures to stimulate its struggling economy fell short of offering new pledges, in turn hitting sentiment.
Asia-focused stocks had also been hit as a result, while Vistry Group PLC (LSE:VTY)’s profit warning dragged housebuilders lower and oil heavyweights fell on further price declines.
Oil traded largely flat on Tuesday, with benchmark Brent crude sitting at US$77.75, while Asian markets saw a mixed showing overnight as Chinese markets fell.
Attention on Tuesday is set to be on updates from pub group Marston’s PLC (LSE:MARS) and CMC Markets PLC (LSE:CMCX).