- FTSE 100 falls 3 points
- Bitcoin breaks above $92K
- Smiths and Babcock report strong results
- US CPI inflation little changed
4.10pm: FTSE almost flat,
The FTSE 100 is currently just below flat, with all but three of the index's ten largest companies in green, while the FTSE 250 is down 70 points or 0.35%.
Smiths Group (LSE:SMIN) PLC is the top riser, up 10% after its quarterly update offered reassurance that things were not as bad as they seemed at its final results in the summer.
Dowlais Group PLC (LSE:DWL), the former GKN Auto business spun out of Melrose, rocketed to the top of the FTSE 250, up 6.2% as the car parts maker said things are tough but not getting worse.
Chrysalis Investment rose 4.5% after getting a boost from the news that one of its major investments, Klarna, has kicked off its IPO process.
Babcock International rose 4%, after earlier shooting 19% to a four-year high, on the back of a strong set of interims.
After a strong run for much of the year, Intermediate Capital Group (LSE:ICP) was bottom of the FTSE 350 list today as investors banked some profits after interim profits at the mezzanine finance provider dropped 18%.
Close Brothers was another notable faller, down 5.2% after the FCA announced an extension to the motor finance complaints deadline.
Across the pond, US stocks are mixed, but little moved essentially, following the earlier inflation reading.
And out in the cryptoverse, bitcoin has just topped $93,000.
3.59pm: New support for retail, hospitality and leisure sector
The government has proposed new legislation today that it says will cut business rates for retail, hospitality and leisure properties.
That will not be until 2026, to "help smooth the transition" there will be 40% relief off business rates for retail, hospitality and leisure businesses up to £110,000 per business.
To help smaller businesses, there is also legislation proposed to increase the employment allowance from £5000 to £10,500, meaning 865,000 employers will not pay employer national insurance next year.
The rates tax cut will be funded by a tax rise for the top 1% of large and high-value business properties, such as warehouses for online retailers like Amazon.com Inc (NASDAQ:AMZN).
3.44pm: Motor finance thoughts
The FCA's announcement on the extension of the motor finance complaints process might open up the process to anyone who has bought a car using finance.
That is the assertion from Martin Lewis, the founder of Money Saving Expert website owned by Moneysupermarket.com (LSE:MONY), who tweeted that "almost everyone who has had car finance deals may have a complaint".
The FCA said this morning that it was consulting on pushing back the time for firms "to respond to consumer complaints about motor finance where a non-discretionary commission was involved, and for consumers to refer them to the Financial Ombudsman Service".
But Lewis said in his tweet that if the process was expanded to everyone who has had car finance deals, it "potentially more than doubles the number of people involved, and would really start to look more like PPI scale of payouts (and a substantial threat to the car finance industry)".
Analysts at credit rating agency Fitch has warned about the impact for lenders such as Lloyds, Close Brothers, Barclays and Santander, which have motor finance arms, from the Court of Appeal ruling, as it "materially increases" the likelihood of a redress scheme to compensate customers.
Shares in Close Bros are down 7% today, but Lloyds is up 1.2% and Barclays 0.6%.
3.32pm: US national debt warning
America’s national debt could surge under Donald Trump, analysts from the Institute of International Finance (IIF) have warned.
Tax cuts without spending reductions may push the debt-to-GDP ratio from 100% to 135% within a decade, as rising inflation and higher interest rates are expected as tariffs increase import costs.
"Recent rate cuts have been part of the Fed’s strategy to support growth, yet the fiscal expansion under Trump could force the Fed to reconsider this path, particularly if inflationary risks emerge more rapidly than anticipated," analysts at the IIF said, according to a report in the Telegraph.
They noted that yields on 30-year Treasuries have already climbed, which "signals investor concerns about the sustainability of an expanding debt load and the potential for inflation as fiscal pressures mount".
This adds to a warning from the Congressional Budget Office last month, which noted that public debt averaged 48.3% of GDP for the 50 years to 2023 but in 2025 will overtake GDP for the first time since the build-up to world war two, with the ratio having topped out at 106.1% in 1946.
The CBO projected that debt will rise to 122.4% of GDP in 2034 and climb further.
3.11pm: Another bitcoin high
Bitcoin has broken above $90,000 at the time of the US inflation reading and in the past hour has spiked above $91K.
The cryptocurrency topped $91,700 a short while ago and has dropped back to $91,267.
Crypto research strategist Matt Mena at 21Shares says that in recent months, bitcoin has "shown sensitivity to macroeconomic indicators, especially those tied to inflation".
The CPI reading alleviates some of the uncertainty weighing on investors' minds, "potentially opening the door for traders to push bitcoin to new highs past its $90k resistance level", Mena adds.
"This may also complete the trifecta we needed to see a $100,000 Bitcoin: 1) Trump’s presidential win; 2) further Fed easing as seen with the recent 25 bps rate cut; and 3) CPI data coming in as expected or better than expected.
"Together, these factors could drive a powerful new wave of investor confidence, setting the stage for Bitcoin’s next major milestone."
2.58pm: Lack of direction for stocks
US stocks have open mixed, with a general lack of direction pervading the Wall Street air.
The S&P 500 has dropped just over one point, ie less than 0.1%, and Nasdaq Composite has dropped 27 points or just over 0.1%.
The Dow Jones has gained 67 points or 0.15% and the Russell 2000 has popped 0.8% higher.
Big risers in the S&P include lithium miner group Albemarle Corp, up 7%; Peter Thiel's Palantir Technologies Inc (NYSE:PLTR), up 5.2% as the firm extends its contract with mining giant Rio Tinto.
Telsa is the big riser among the $1 trillion tech gang, up 4.7%, while smaller EV rival Rivian has gained 17%.
Back in Europe, the FTSE 100 is down 17 points or 0.2%, while the DAC and CAC 40 have dropped 0.5%.
2.09pm: Inflation reading keeps Fed cut on table for December
For those that are happy enough with one decimal place, October saw the third consecutive 0.3% month-on-month gain in the core CPI.
This is "not too concerning," says Stephen Brown at Capital Economics, as his team's preliminary calculations point to a lower and more "target-consistent" 0.18% monthly level for core PCE prices, the gauge that the Fed favours.
While core inflation was unchanged at 3.3% on a year-on-year basis, a flat month for energy prices and food prices rising 0.2% on the momnth and unfavourable base effects (ie comparison to last year), this meant that the annual headline CPI rate rebounded to 2.6% from 2.4%.
Brown says expectations of a lower rises for the core PCE price index in October are likely to change after the October PPI release tomorrow.
"A target-consistent gain would keep core PCE inflation on track to fall toward 2% in early 2025 and would dampen speculation that the Fed might decide to remain on pause at its final meeting of the year.
"Nonetheless, with the incoming Trump administration seemingly intent on imposing import tariffs relatively quickly, the return of inflation to the 2% target may prove short-lived."
Quincy Krosby, strategist for LPL Financial, said the CPI "triggered a sigh of relief" in bond markets, with the 10-year Treasury yield inched lower.
"Equity futures edged higher, but with the equity market extended following days of strong performance, the focus was on Treasury yields as concerns over still stubborn inflation has dominated headlines.
"Still, the 2.6% year-over-year print, while expected, may keep the Fed mindful from declaring victory over its campaign to quell inflation."
1.54pm: US stock futures perk up on CPI
The FTSE 100 (momentarily) and US futures have shifted from the red into the green after the US inflation print.
S&P 500 and Nasdaq 100 futures are up 0.2% now, with Dow futures rising 0.15%.
London's benchmark is being held back by falls for the likes of Experian, down 4% despite first-half results that were generally ahead of expectations, and BAE Systems, down 2.3%.
Housebuilders and other property stocks are also on the back foot, with Rightmove down 2.4%, Persimmon falling 1.9%, followed by declines for Barratt Redrow, Taylor Wimpey, Land Securities and British Land.
1.42pm: US inflation as expected
The US consumer price index last month remained largely unchanged, as expected.
The headline CPI remained up 0.2% month-on-month in October, as the previous month and as expected. This meant it was up 3.3% year-on-year, where it was expected to remain as seen a month ago.
Core CPI also remained at 0.3%, as forecast (down from 0.31% to 0.28% for those who want to be extremely precise). This meant core CPI was up 2.6% on the year, up from 2.4% in September, as expected.
1.21pm: Dollar takes a breather
The pound and euro are a bit more stable today - so far - with the GBP/USD hovering at 1.274 and the EUR/USD up 0.1% at 1.0632.
A pause for breath for the USD follows its strong gains since the US election, and a wait-and-see policy before today’s US CPI inflation report.
"In view of the inflationary connotations of Trump’s fiscal and tariffs policies, a softer than expected report today would be a relief," says currency strategist Jane Foley at Rabobank.
"It could imply that the US economy is entering the new Trump phase with muted price pressures. Optimistically, this could prompt the conclusion that the Fed would have a free rein to continue cutting rates."
An alternative view, Foley suggests, would be that "the inflationary impact of Trump’s policies will make the Fed cautious into next year irrespective of today’s release", so a hotter than expected CPI inflation report today "would clearly imply more limited scope for Fed rate cuts".
Ahead of taking office in the new year, President-elect Trump has created a new "department of government efficiency" aimed at cutting bureaucracy, with billionaire entrepreneurs Elon Musk and Vivek Ramaswamy at its helm.
Musk claimed on the campaign trail that $2 trillion could be saved from the budget this current fiscal year, with speculation suggesting this would be from the loss of federal jobs and cuts to various entitlement programs.
"There has been plenty of speculation in the market recently about whether bond vigilantes would restrict Trump’s fiscal policies going forward," the strategist adds, though there is no clear consensus on the extent the US bond market would be rattled by Trump’s fiscal policies.
"Either way, the USD is unlikely to be as sensitive to US budgetary issues as other currencies would be to domestic borrowing concerns," Foley said, pointing out that this is to a large part due to the greenback's status as a safe-haven and primary reserve currency, with around 50% of the world’s trade invoices still written in US dollars
"This, however, does not mean that the USD would be totally immune to a surge in fears regarding the US budget."
1.05pm: Watching out for the US inflation reading
The US inflation reading is the big macroeconomic data release today, with an update for October's CPI after last month's reading showed the highest level of core CPI in six months at 0.31%.
Economists think that core CPI, which excludes more volatile prices such as on food and fuel, will remain around 0.3%, keeping the year-on-year reading at 3.3%.
Headline CPI is forecast to stay at 0.2% month-on-month, but rise to 2.6% year-on-year from 2.4% last time.
US CPI will be a "key factor" in the US Federal Reserve’s rates decision next month, says Deutsche Bank macro strategist Jim Reid.
He says the inflation number is "particularly important this time around", as there’s been speculation the Fed might not cut rates at this coming meeting, with futures currently pricing a 59% chance of a cut next month.
But Fed speaker Neel Kashkari, one of the more hawkish central bank voices, suggested yesterday there was still a reasonably high bar for the Fed to pause next month, saying that "there’d have to be a surprise on the inflation front to change the outlook so dramatically".
12.10pm: Stocks into the red
The FTSE 100 has dropped into the red, along with its European counterparts, as US stock futures also point to another day on the back foot.
London's blue-chip index is down 12 points or 0.1%, while Germany's DAX and France's CAC 40 indices also down by the same percentage.
Looking across the pond, S&P 500, Nasdaq 100 and Russell 2000 futures are all down 0.2%, while Dow Jones futures have declined 0.3%.
Big pre-market movers include Tesla rival Rivian Automotive Inc (NASDAQ:RIVN), after VW agreed to extend their partnership with an extra $800 million investment, taking its total promised backing to US$5.8 billion.
CAVA Group is up 17% pre-market after the Mediterranean restaurant chain upped its guidance overnight.
11.35am: Thames Water gets bondholder approval for 'liquidity extension'
Thames Water has struck a deal with lenders for £3 billion of extra loan funding, after recently warning it only had enough cash to last until May.
The water company, which has been struggling with operational performance and under the weight of its £16 billion debt pile, said it has received approval from over three-quarters of its 'class A' bondholders to take out the new loan and other elements of its "liquidity extension".
Having gained support from most of its key bondholders, High Court approval is due next month, with a creditor meeting and sanctions hearing in January due before the effective date.
11.16am: Home' on the Range
As Homebase heads for administration, The Range is set to snap up more than half of the DIY chain's stores, saving 1,500 jobs but leaving uncertainty around a further 1,700.
Teneo is reportedly being lined up as an administrator and will oversee the sale of up to 75 stores, the Homebase brand and website to The Range in a £30 million deal, according to Sky News.
A sales process for Homebase’s remaining 50 stores is set to follow, bringing an end to six years of ownership by Hilco Capital, which bought the chain for £1 in 2018.
10.45am: 'World first' stock market for private companies
Chancellor Rachel Reeves will revive plans for London to host the first "private stock market" in her Mansion House speech tomorrow, as this is seen as a way of attracting more companies to the City.
She will outline proposals for a regulated stock exchange system called Pisces - standing for the Private Intermittent Securities and Capital Exchange System - allowing investors to trade shares in private companies, CityAM is reporting, citing Treasury sources.
This was a proposal that had been mooted under the previous government to revive UK equity markets, providing partial exits for some investors and a stepping stone for smaller firms not quite ready for a full public float.
10am: Klarna IPO set in motion
Klarna has made the first step in launching its initial public offer, with the buy-now, pay-later group filing documents for a New York listing.
The Sweden-based fintech said it "confidentially submitted" a draft IPO registration statement to the US Securities and Exchange Commission. with the number of shares and price range still up in the air.
Analysts recently calculated a potential valuation of around $15 billion...read more
9.42am: Oil update
Oil prices have spiked on reports that Iran has made plans to keep oil exports stable under the incoming Donald Trump administration.
Iran's state-run Shana news agency cites oil minister Mohsen Paknejad, according to a report picked up by Reuters.
Brent crude has just risen 0.7% to $72.40. Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) are up 0.5% and 0.6% this morning.
Shell PLC (LSE:SHEL, NYSE:SHEL) will complete the sale of its Singapore refinery to a Glencore PLC (LSE:GLEN) joint venture early next year, according to another report from the news agency.
Glencore and Indonesia's Chandra Asri are apparently earmarking a fifth of the output for Shell following completion of the deal.
Oil prices have been under pressure in the past few days on "sluggish Chinese, global demand, ample supply from non-OPEC countries, and the absence of fresh tensions from the Middle East", says market analyst Ipek Ozkardeskaya at Swissquote Bank.
"Add to that the fact that OPEC cut its oil demand forecast for fourth consecutive month this week, and you have a comfortably bearish picture in crude oil."
Trends remain "comfortably bearish," she says, "meaning that there is room for the selloff the extend in the short run".
However, besides geopolitical risks, the other major upside risk is another delay to the end of OPEC production restriction plans.
"I see that coming big as a mountain. But that decision will certainly not come before the 1st of December, at OPEC’s next scheduled meeting, unless we see an accelerated meltdown in oil prices that would necessitate an early announcement from the cartel."
Ozkardeskaya says the downside pressure in oil prices will weigh on oil company valuations, but these companies’ share prices remain are being supported by "optimism that Donald Trump loves oil companies and will want them to pump and sell as much as possible to lower energy prices".
9.17am: European stocks tiptoe higher
The FTSE 100 has continued to creep higher, having now advanced 0.4% to 8,055, with other European indices also making their way higher after sharp and widespread losses yesterday.
Germany's DAX is up 0.3% and France's CAC 40 0.4%, with the Euro Stoxx 600 rising 0.1%.
Top risers in the pan-European index are led by Just Eat Takeaway.com, up 20% off the back of its long-awaited but cut-price sale of Grubhub.
Siemens Energy AG is up 19% after its Gamesa subsidiary reported lower losses than expected.
Dowlais Group PLC (LSE:DWL), the car parts business spun out of Melrose International, is up 15% after its reassurance that the full-year outlook remains unchanged, with the shares having almost halved this year.
Intermediate Capital Group (LSE:ICP) is bottom of the fallers, down 5%, as investors banked some profits after first-half profits dropped 18%. Shares in the mezzanine finance lender are still up over 50% over the past 12 months.
8.51am: Business outlook survey finds optimism shrinking
A survey overnight showed UK and European businesses were less optimistic about their future activity levels in October.
The tri-annual UK business outlook survey from S&P Global found the net balance of UK private sector services and manufacturing firms projecting an expansion in business activity over the next 12 months remained strongly positive, but slipped to +41% in October from +44 in June.
Eight of the 12 nations tracked by the survey recorded a decline in sentiment, including most European countries.
Although this was the lowest UK reading in a year, firms remained "generally positive", the survey found, with the UK one of the most optimistic nations, helped by robust demand projections, forthcoming technology investment and hopes of more interest rate cuts, offset by concerns about the Budget and international geopolitics and increasing employment costs.
As well as the loosening of monetary policy, some firms anticipate a boost to demand from rising government spending.
8.27am: Crisis of confidence?
The UK stock market is "having something of a crisis of confidence," says market analyst Richard Hunter at Interactive Investor, "given various uncertainties over recent weeks including, but not limited to, the potential fallout from both the Budget and the US election".
After yesterday's poor session, he says the FTSE 100's positive start has been "unconvincing".
"There was some limited buying of more risk-on and China-facing stocks such as the miners, Prudential and HSBC, although such gains were muted."
The Square Mile benchmark is still up by 3.9% in the year to date, but "apparently unable to build on any positive momentum", Hunter says, down 3% in the past month and almost 5% shy of the record levels seen in May.
8.15am: FTSE starts in the green
The FTSE 100 has started tentatively on the front foot on Wednesday, rising just over nine points to 8,035, recovering a small portion of the 99 it lost the day before.
Top of the early leaderboard is Smiths Group (LSE:SMIN) PLC, leaping 12% on the back of a stronger-than-expected start to its new financial year, leading to the outlook being raised.
The big faller is Intermediate Capital Group (LSE:ICP), down 6.9% on the back of its interim results, which look alright on first glance.
The FTSE 250 is up 62 points or 0.3%, with Dowlais Group PLC (LSE:DWL) and Babcock International topping the risers.
7.58am: SSE boss steps down after 11 years
FTSE 100-listed renewable power producer SSE PLC (LSE:SSE) has announced that chief executive Alistair Phillips-Davies will retire from the energy firm next year.
The announcement was made alongside news of a 24.1% jump in profits in the first half of the year.
Having led the company for over 11 years, Phillips-Davies will step down when a successor is recruited.
7.46am: Did somebody say, Just deplete?
Just Eat Takeaway.com NV (LSE:JET, NASDAQ:GRUB) is selling its US-based Grubhub for $650 million after buying it for $7.3 billion three years ago.
The Anglo-Dutch group said it has struck a deal with Wonder Group Inc resulting in net cash proceeds of "up to $50 million", plus the transfer of $500 million of bonds.
Getting rid of the US subsidiary improves the group's overall capital structure, liquidity and free cash flow generation, it said, as well as increasing its ability to invest in other countries where it "has the greatest competitive advantage".
7.32am: FCA to extend motor finance complaints period
The City watchdog has proposed allowing more time for motor finance providers to respond to an expected wave of new customer complaints about potential mis-selling.
The Financial Conduct Authority said it plans to consult on putting an extension in place for firms to respond and for consumers to refer complaints to the Financial Ombudsman Service.
It follows last month's Court of Appeal decision that ruled car dealers offering loans to customers for car purchases were liable to potential compensation for mis-selling.
Off the back of that judgment, the FCA said it has since undertaken "extensive industry engagement" alongside the government, has spoken with 63 firms and discussed the implications with consumer representatives.
"Motor finance firms are likely to receive a high volume of complaints in response to the recent Court of Appeal judgment. Any complaint extension would allow them time to consider how these might be efficiently and effectively handled," it said in a statement today.
"This would help prevent disorderly, inconsistent and inefficient outcomes for consumers making complaints, motor finance firms and the market."
7.16am: FTSE 100 to stabilise after big fall
The FTSE 100 is predicted to stabilise and even rebound slightly on Wednesday after almost a 100-point decline the day before as global markets continue to reprice forecasts for a second Donald Trump presidency of the world's largest economy.
London's blue-chip index has been called 9 points or 0.1% higher on the futures market, having dropped 1.2% to 8,025.77 yesterday, the lowest since early August.
Overnight, US stocks fell back slightly after their initial post-election rally, with the S&P 500 dropping 0.3%, the Dow Jones losing 0.9% and the Russell 2000 tumbling 1.8%, while the Nasdaq Composite was down 0.1% as many of the tech titans remained in green.
Asian markets are mostly in red this morning, with the Nikkei down 1.7%, Hang Seng falling 0.6% and India's Sensex declining 0.7%, though the Shanghai Composite is up 0.5%.
Today's corporate results in London include Experian, SSE, Babcock and Fuller, Smith & Turner.