- FTSE 100 up 24 points
- Unilever, Barclays, Softcat and Bloomsbury results impress
- Thames Water creditors offer lifeline
3.59pm: FTSE 100 on course for positive finish as Barclays surges
London’s blue chips looked on course to close out Thursday in positive territory, having climbed by 24 points to 8,283 by late trading.
Barclays PLC (LSE:BARC) led the way after reporting a 16% jump in profit for the third quarter earlier in the day, which prompted shares to surge 5.4%.
Anglo American PLC (LSE:AAL) and Unilever PLC (LSE:ULVR) followed with gains of over 3.3% each after also reporting on Thursday morning.
Anglo had updated that it was on track with divestment plans which were put in place to ward off a bid from BHP Group, while Unilever’s report sat marginally ahead of forecasts.
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) led the day’s fallers in the meantime, having dropped 2.6% as gold moved further from its record highs seen earlier in the week late on Thursday.
3.33pm: BoE policymaker warns ‘a long way to go’ on inflation
Bank of England policymaker Catherine Mann has warned inflation within the UK’s service sector was still a way from settling in line with the targeted 2%.
“Our headline price print [...] was lower than projected in the August Monetary Policy Report,” she acknowledged while speaking on the sidelines of the International Monetary Fund’s meeting in Washington on Thursday.
However, Mann added there was “a little bit of a concern” given “goods prices are a little bit higher”.
“In order to get to a target consistent [with the] 2% inflation rate, services still have a long way to go,” she said.
3.20pm: Chancellor firms up fiscal rule changes
Chancellor Rachel Reeves has confirmed she will change fiscal rules in next week’s Autumn Budget in order to increase borrowing to fund billions in new investment.
“They will set the basis for stable fiscal policy, prudent management of day-to-day spending and responsible investment for growth,” she wrote in the Financial Times on Thursday.
A “stability rule” will be introduced to ensure spending matches revenues, alongside a new “investment rule”, according to Reeves.
Financial Times-cited sources said Reeves was set to adopt a broader measure of government finances, known as “public sector net financial liabilities,” which includes the likes of student loans and other financial assets.
This would give Reeves room to borrow an additional £50 billion a year by 2030 and still meet aims to bring debt down.
Reeves added in the article that the stability rule would “bite hardest” and mean “will need to rise to ensure this rule is met” and “tough decisions on spending and welfare”.
2.54pm: Nasdaq, S&P 500 up as Tesla surges, but Dow Jones falls
The Nasdaq and S&P 500 enjoyed brighter starts on Thursday morning as a surge in Tesla Inc (NASDAQ:TSLA) shares following results helped fuel gains.
Tesla jumped 17.2% as the market opened following Wednesday evening’s update that profit had hit US$2.2 billion in the third quarter.
This helped lift tech stocks, prompting a 0.4% gain and 0.1% rise for the Nasdaq and S&P 500 respectively as the market opened.
The Dow Jones remained downtrodden however, with a 0.3% drop as the market opened placing the index on course for a fourth straight daily drop.
2.39pm: Pound regains against the dollar
Sterling regained ground against the dollar on Thursday after facing pressure earlier on in the week on growing expectations for slower interest rate cuts across the Atlantic.
Come the afternoon, the pound was up 0.45% at US$1.2981 for the day, having slipped to a weekly low of US$1.2908.
Increasing anticipation that the Federal Reserve could hold base interest in its next meeting while the Bank of England cut had weighed on the pound, alongside uncertainty around the UK’s upcoming Budget and presidential election in the US.
“The foreign exchange market may not express a directional bias until the budget passes and we can assess growth and sentiment after the tax changes that are expected,” XTB analyst Kathleen Brooks commented.
“[It] could be in wait-and-see mode until the two big political events: the UK budget and the US Presidential election, pass.”
2.21pm: Lost pension pots worth over £31bn
Some £31.1 billion is said to have effectively been lost in inactive or unclaimed pension pots.
According to the Pensions Policy Institute, there were now 3.3 million lost pension pots in the UK holding an average of almost £9,500 each.
This was against 2.8 million pots collectively worth around £26 billion two years ago, with the amount in lost pensions having surged by almost £12 billion since 2018.
For those aged between 55 and 75, the average lost pot was found to be worth just over £13,600, against £6,500 for those above the age of 75... Read more
1.13pm: Thames Water creditors offer £3bn lifeline
Thames Water creditors have reportedly drawn up plans to offer the embattled supplier a multi-billion pound package to allow more time for a restructuring of its debt.
A group holding hundreds of millions of pounds in Thames’ class B debt have proposed a £3 billion alternative liquidity package, according to Reuters.
This comes after the supplier to London warned previously it only had enough cash to last until May as costs of servicing some £15 billion worth of debt have soared in recent years.
Bloomberg reported separately that the junior creditors were planning a £1.5 billion package which would include interest of 8%.
Class A debt holders were also said to be planning an offer of finance, according to Bloomberg, as creditors raced to protect their interests in the utility.
12.42pm: Nasdaq, S&P 500 seen bouncing back in mixed start on Wall Street
Wall Street looked set for a mixed start on Thursday as the S&P 500 looked on course to break a three-day losing streak.
Futures had the S&P 500 up 0.4% ahead of the open, while the Nasdaq was seen jumping 0.8%, on the back of gains for tech stocks after Tesla Inc (NASDAQ:TSLA)’s earnings on Wednesday evening.
Third-quarter results showed profit jumped to US$2.2 billion from US$1.9 billion a year earlier, sending Tesla shares up 13% in pre-market trading on Thursday.
The Dow Jones looked set to fall by 0.2% in the meantime, placing the index on course for a fourth successive daily decline.
This came as “market anxiety” was being “exacerbated by growing expectations of Donald Trump's potential return to the White House,” Tickmill Group partner Patrick Munnelly commented.
12.08pm: November rate cut ‘near certainty’ - analysts
EY ITEM Club analysts have said another cut to base interest by the Bank of England in next month’s meeting is all but set in stone.
Pointing to purchasing managers index (PMI) data on Thursday, which signalled slowing private sector growth, analysts noted a November cut from 5.00% was “near certainty”.
S&P Global’s PMI data showed declines within both the services and manufacturing sectors earlier in the day.
“[This] supports the view that the Bank of England will likely continue cutting rates at a relatively gradual pace,” EY ITEM Club said, forecasting a 25 basis point reduction next month.
It comes after Bank of England governor Andrew Bailey said in a speech on Wednesday that inflation had subsided quicker than anticipated.
“Disinflation - and the UK is part of this - has actually taken place faster than we expected it to,” he said.
However, service inflation remained above target, Bailey warned, leaving “a very unbalanced mix of inflation components”.
11.36am: Applied Nutrition nabs £350mln valuation
Applied Nutrition has been valued at £350 million as its initial public offering in London raised £157.5 million, the protein shake-maker said on Thursday.
Some 112.5 million shares were sold by existing stakeholders at a price of 140p each, reflecting the lower end of Applied’s guided range and equating to 45% of its issued capital.
JD Sports Fashion PLC (LSE:JD.) (JD Sports Fashion PLC (LSE:JD.)) and founder Thomas Ryder had been among those previously said to be lining up to sell shares through the offering, which attracted backing from the likes of Asda co-owner Mohsin Issa.
Shares began trading on the London Stock Exchange on Thursday on a conditional basis, ahead of admission on October 29... Read more
11.04am: Bond sell-off continues ahead of chancellor's debt rule tweaks
Bonds continued to be sold off on Thursday morning as traders braced for speculated tweaks to debt rules by chancellor Rachel Reeves.
Yields on UK 10-year gilts surged 0.17% higher on Thursday morning to 4.21%, having sat below the 3.80% mark in mid-September.
This came as reports emerged that Reeves was to unveil plans to change debt rules on Thursday to open the door for some £50 billion worth of infrastructure spending in next week’s Budget.
According to the Guardian, Reeves will unveil the method for assessing UK debt at the International Monetary Fund’s annual meeting in Washington.
10.49am: Boeing falls as workers reject latest offer
Boeing Co (NYSE:BA, ETR:BCO) shares fell further on Thursday after confirmation of hefty losses over the third quarter was followed by news striking workers had rejected its latest pay offer.
Some 300,000 Boeing workers in the Seattle region will remain on strike as a result, having initially walked out on September 13.
According to union the International Association of Machinists and Aerospace Workers, 64% of those who cast ballots voted to reject Boeing’s latest pay deal.
This had offered a 35% pay rise over the coming four years and comes after another offer was batted off last month... Read more
9.55am: Consumer confidence falls to lowest this year ahead of Budget
Consumer confidence in the UK has fallen to its lowest level this year as households brace for the upcoming Autumn Budget, PwC has reported.
PwC’s tracker showed on Thursday that sentiment had fallen to -8 by late September, against a neutral reading in July following the general election.
This marked the largest quarterly decline since spring 2022 and took the reading to its lowest level of 2024 so far.
The largest decline was seen among those over the age of 65, PwC said, reflecting “concerns around changes to benefits and taxes” in the October 30 Budget.
“The upcoming Budget may well be a watershed moment for consumer confidence in the months ahead,” PwC added.
9.37am: UK PMI below expectations
The UK 'flash' purchasing managers' index survey is out, with the composite PMI falling more than expected at 51.7 versus the 52.5 consensus forecast.
Services and manufacturing both are down in this preliminary reading.
The flash services PMI fell to 51.8 from 52.4, while the manufacturing PMI dropped to 50.3 from 51.5, with both having been expected to stay the same as in September's reading.
S&P Global says the October data "pointed to a moderate increase in UK private sector output, but the rate of expansion slowed for the second month running to its lowest since November 2023".
Respondents to the PMI survey commented on the impact of delayed decision-making among clients and heightened economic uncertainty in October, which next week's Budget is likely to be a big reason.
Employment was a particularly weak spot, with overall staffing numbers decreasing for the first time in 2024 to date, the report said.
9.31am: Bunzl retreats
Bunzl PLC (LSE:BNZL) is the biggest faller on the FTSE 100 this morning, with shares the distributor of working capital items retreating further from their recent all-time high.
This is despite the group reporting an improving sequential organic revenue performance through the third quarter, with a decline of 1.2%.
Group revenues at constant currency grew by 5.8%, with acquisitions delivering 6.8%.
On valuation, analysts at Stifel note that the shares trade at an 2025 P/E of 17x, "in line with its historical average".
"We are 'hold' rated and remain watchful of underlying trading trends, which remain subdued due to deflationary and volume pressures. That said, Bunzl's margin has been resilient and the updated capital allocation policy at the group's interims with ongoing buybacks is likely to provide share price support."
9.19am: Unilever 'turnaround in full swing' and Barclays 'UK the stand-out'
Let's get some analyst thoughts on some of the results from this morning.
On Unilever, with shares up 3.6%, Barclays calls it a "solid print in Q3" with 4.5% organic sales growth versus consensus at 4.3%, despite drag from Indonesia and China.
"The turnaround appears in full-swing, with all five businesses posting positive volume growth for the first time."
As for Barclays' own results, which have sent the shares up 4%, profit before tax of £2.2 billion was 13% above consensus and 15% above the second quarter, notes broker Peel Hunt, adding that revenues were 1% ahead of consensus, costs were 2% below expectations and impairments 17% below consensus.
"Barclays UK was the stand-out performer where PBT was 27% above consensus, benefiting from lower deposit churn and a strengthening structural hedge contribution (which is similar to Lloyds).
"Barclays has exposure both to the US presidential elections (c.40% of income is in US$) and the forthcoming UK Budget, but performance as witnessed in 3Q24 suggests there could be further re-rating to come."
9.03am: FTSE motoring
The FTSE 100 is motoring more now, up almost 60 points or 0.6% a minute ago.
As well as results-boosted gains for Unilever, Anglo America and Barclays, another to have made a positive impact with its results is London Stock Exchange Group PLC, which smashed expectations with revenue growth across all segments.
Capital markets was the star segment with a 22.4% rise in sales, bringing in £468 million... read more here.
Also helping lift the blue-chip index is a 1%-plus rises for BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) on the back of an uptick in oil prices.
The FTSE 250 is not motoring as much, up 17 points or less than 0.1%.
Talking of motors, the UK September car output numbers are out, showing a 20.6% fall, which the industry said was due to factories preparing for all-new electric models.
Manufacturing for domestic and overseas markets were down 20.8% and 20.6% respectively, according to the Society of Motor Manufacturers & Traders (SMMT).
This comes as new analysis from the SMMT shows the auto industry remains UK’s largest exporter of manufactured products, with shipments of cars, vans and components worth almost £47 billion - likely something the industry put together to argue its point with Rachel Reeves in recent lobbying efforts.
8.50am: Abdrn and Travis Perkins (LSE:TPK) disappoint
Looking at the fallers in the FTSE 350, Abrdn PLC (LSE:ABDN) is down the most, off 7.7% after its lukewarm 2024 performance continued in the third quarter, with net outflows across all segments.
Net outflows in its core investments division hit £3.5 billion, while the advisor segment saw outflows of £1 billion. Inflows into its retail investment platform Interactive Investor partially offset this.
Abrdn boss Jason Windsor said: "We have plans in place to address our challenges and our transformation programme is on track".
Next-worst is Travis Perkins (LSE:TPK) PLC, where its new boss has started his tenure with a profit warning.
Pete Redfern, who took over last month, said the group had become "distracted and overly internally focused" as its sales slide accelerated in its latest quarter.
He is taking direct control of the General Merchants business as MD and will combine this with his role as group CEO, which he said will allow him to shorten reporting lines and develop a new strategy.
Sales in the three months to end-September dropped by 5.7% with merchanting down by 7.1%, though Toolstation saw a 1.7% improvement.
8.38am: Frasers says Boohoo board has 'lost its ability to manage the business'
More details from the open letter from Frasers Group PLC (LSE:FRAS), which has ripped into Boohoo’s "leadership crisis" and "abysmal" trading performance that has caused "continued value destruction".
The letter, signed by company secretary Robert Palmer, but likely to be penned by Frasers founder and former CEO Mike Ashley, condemned the online fashion retailer's board, stating it has "lost its ability to manage Boohoo’s business and investment".
Frasers, which owns a 27% stake in Boohoo, has proposed that Ashley takes over as chief executive as "the best solution to Boohoo’s leadership crisis", which has been exacerbated by the recent resignation of John Lyttle...read more here.
8.21am: Softcat (LSE:SCT) and Bloomsbury among top risers
Topping the mid-caps are Softcat PLC (LSE:SCT) and Bloomsbury Publishing PLC (LSE:BMY) after their updates.
Softcat (LSE:SCT), the provider of IT infrastructure products and services, put out full-year results showing revenue down 2.3% but operating profit up 9.3% and a special dividend on top of the standard payout.
Bloomsbury meanwhile said its full-year results would likely exceed market expectations after a strong first half and 'good trading' in September and October.
For the six months ended August 31, the company, which joined the FTSE 250 over the summer, posted a 32% rise in revenue, reaching £179.8 million, while profit grew by 50% to £26.6 million.
8.08am: FTSE 100 rises as Unilever and Barclays earnings impress
The FTSE 100 has indeed got off to a flapping, if not quite flying, start as it climbs 36 points or 0.4% to 8,295.
Top of the early leaderboard is Unilever PLC (LSE:ULVR), up 2.7% as its third-quarter sales volumes grow by the most in three-and a-half-years, with growth also slightly better than analysts expected.
Anglo American PLC (LSE:AAL) is next, up 2.2% as it reports progress with iron ore and copper mining projects in an operational update.
Barclays PLC (LSE:BARC) shares are up 2% too as its profits topped forecasts and it nudged up full-year guidance.
7.58am: Tesla impresses with profit margin recovery
Those earnings from Tesla, which sees the stock set for a 12% gain when trading opens later today, included better earnings than expected from the electric vehicle maker, despite revenue growing less than forecast.
Tesla’s profit margin, a closely watched measure after the price cuts in recent quarters, improved to 19.8% from 17.9% a year ago and 18% in the previous quarter of 2024, as well as beating the 17.2% that Wall Street expected.
Operational highlights from the quarter included Tesla’s Cybertruck becoming the third best-selling EV in the US behind the company’s Model Y and Model 3, and achieving more than 2 billion miles driven cumulatively on Full Self Driving (supervised).
7.42am: Mike Ashley wants to be made CEO of Boohoo
Elsewhere among the trading updates, after giving up the chase of Mulberry yesterday, Mike Ashley's Frasers Group PLC (LSE:FRAS) is keeping busy by writing an open letter to one of its other targets, Boohoo Group PLC (AIM:BOO).
The Sports Direct owner is calling for Ashley to be made CEO of Boohoo, with Mike Lennon as a director.
It is requisitioning a general meeting, which it can do as the largest shareholder with a 27% stake, to try and push this through "without delay".
7.38am: Barclays results look good
Among the glut of FTSE results this morning, Barclays PLC (LSE:BARC) reported a 16% increase in profit for the third quarter, beating forecasts, and raised some elements of its full year outlook.
Group income of £6.5 billion in the quarter was up 5% on a year ago, with its investment bank delivering the strongest growth, of 6%, as it extracted higher fee income in advisory and debt & equity capital markets, offsetting lower income from corporate banking.
Barclays UK income was up 4%, as higher structural hedge income was partially offset by mortgage margin pressure, the UK corporate bank was up 1% and the private banking & wealth management arm saw income decrease 3% due to “the non-repeat of a timing related one-off” from the previous year offset growth in client balances.
Overall, Barclays chief executive CS Venkatakrishnan hailed a return on tangible equity (RoTE) of 12.3% for the quarter and 11.5% for the nine months of the year so far, keeping the bank “on track” to deliver against the 2024 target of greater than 10%.
7.16am: FTSE 100 tipped for rebound as oil prices rise
The FTSE 100 is tipped to bounce back on a busy Thursday, helped by a renewed rise in oil prices, after falls for stock markets on both sides of the Atlantic the day before.
Futures markets have London's blue-chip index rising up to 40 points, recouping most of the 48 points lost yesterday when it closed at 8,258.6.
Overnight, US tech stocks led the stateside decline, with the Nasdaq Composite slumping 1.6% lower, and both the S&P 500 and Dow Jones sliding more than 0.9%.
After the closing bell Tesla impressed with its earnings report, sending its share shooting 12% in afterhours trading.
Asian markets are mixed, mostly red, with only Japan's Nikkei in positive territory among major benchmarks, India's Sensex flat, while the Hang Seng is down 1.3% in Hong Kong and the Shanghai Composite is 0.9% lower.
Brent crude oil prices are up 1% to $75.72 a barrel, which should boost a small handful of London's largest stocks.