- FTSE 100 up 30 points to 8,808
- Close Brothers publishes unscheduled update with motor finance provision
- Barratt Redrow ups guidance and unveils new mid-term targets
4.21pm:
After a bit of a wobble after the US inflation data landed, the FTSE 100 has got back on the horse and cantered to a new record high.
It just reached a lovely looking 8,808.08, with just over 30 points added today.
Prudential is the top riser, after its India asset management spin-off proposal, followed by Barratt Redrow after its interims and strategy update and Entain, rebounding from yesterday, are the top three.
All but two pf the top 10 and five of the top 20 largest stocks in the index are in green. AstraZeneca, BP, Lloyds are all up over 1.5%. Shell and BP are out of the red even though Brent crude has had a down day.
Diageo and Glencore are notable fallers, along with utilities including Centrica, National Grid, United Utilities and SSE as gilt yields climbed in sync with US Treasuries, which spiked on the back of the hot US inflation number.
Germany's DAX and Spain's IBEX are up 0.6% and 1% to top the European risers. In Madrid, banks are driving the gains, while in Germany it's Siemens Energy, BASF and Deutsche Bank.
3.24pm: Pru tops the leaderboard
Prudential PLC (LSE:PRU) is the top riser on the FTSE 100, up 7%, after raising the possibility of spinning out its ICICI asset management arm.
The Asia-focused financial giant said it is "evaluating a potential listing of ICICI Prudential Asset Management Company Ltd involving the partial divestment of its shares".
It said this would be "subject to market conditions, requisite approvals and other considerations".
If ICICI is spun off, the company said it intends to return the proceeds to shareholders. We will provide a further update at an appropriate time.
Behind PRU in Barratt Redrow, up 5.4% still, with Entain now up almost 5% as it claws back some of the gains from yesterday.
2.22pm: US inflation 'takes rate cuts off the table'
The FTSE is back to flat now, but the dollar is still higher, 0.4% on the GBP and 0.2% on the euro.
The big surge in US infaltion "takes rate cuts off the table this year", says Paul Ashworth at Capital Economics.
After a spike in CPI at this time last year there seems to be a "seasonality problem", he adds, but assuming the producer price data tomorrow also comes in a little hot, Ashworth estimates that core inflation rates under the Fed's preferred PCE measure are still elevated.
"That lends support to our view that, with President Trump threatening to impose wide-ranging inflationary tariffs, the Fed won’t resume cutting interest rates this year."
Core CPI inflation edged back up to 3.3%, from 3.2%, levels that have been seen for some time and "clearly isn’t coming down decisively any more", he adds.
"The upshot is that markets are now only pricing in one 25bp rate cut by the Fed this year. We still think that’s too dovish. With tariffs likely to keep core PCE inflation close to, or above, 3% this year now, the Fed will stand pat for at least the next 12 months."
1.39pm: Markets react as US inflation picks up
The FTSE has dropped and the dollar has risen against the pound and euro, US stock futures have perked up after US inflation spiked more than expected last month.
The US consumer price index ended January 0.5% higher than the end of December, which was more than the 0.3% monthly increase that economists expected and up from 0.4% the prior month.
Year on year, CPI was up 3.0%, up from 2.9% in December, with economists forecasting it would remain at 2.9%.
Core CPI, which excludes energy and food prices, rose 0.4% on the month, versus 0.3% expected and 0.2% in December, while core CPI climbed 3.3% year-on-year, up from 3.2% and higher than the 3.1% that the consensus estimate.
The pound is down 0.5% at $1.2385, while the euro is down 0.3% at $1.0327.
1.22pm: Stock markets keeping powder dry ahead of imminent US CPI
European stock indices are all in the green, some like the Footsie and France's CAC are just above flat, while others like Spain's IBEX are stronger.
US stocks are set to start in similarly cautious mode, keeping powder dry ahead of consumer inflation data being published in a few minutes.
Dow Jones and S&P 500 futures were both down more than 0.1% while Nasdaq 100 futures were marginally above flat.
12.50pm: Shu in, French adieu?
Following the Deliveroo speculation about CEO Will Shu leaving, which has been denied by the company, Sky News scoop-machine Mark Kleinmann has a new EXCLUSIVE.
He tweets that the delivery firm's chief operating officer, Eric French, who joined from Amazon in 2021, will "leave the company later this year".
So he got the name wrong before then?
He adds that French is leaving as the Deliveroo board "weighs a succession plan" for founder Shu.
12.15pm: NIESR forecasts for UK
The UK could be the third fastest-growing economy in the G7 this year, with GDP projected to increase by 1.5 per cent in 2025, according to the latest quarterly forecast from the National Institute of Economic and Social Research.
"This growth will be driven mainly by the fiscal expansion announced in the October Budget, which will start having a tangible effect during the course of 2025, coupled with continued growth in business investment," NIESR said.
Real personal disposable income is projected to grow 1.9% in 2025 and 1% in 2026, with lowest-income working households better off thanks to the increases in the minimum wages.
UK inflation is forecast to end the year at 2.4%, after a rise to 3.2% in January and a slow fall back towards the Bank of England's 2% target, leading NIESR to predict just one further interest rate cut this year.
11.50am: Annuity sales make further recovery
Annuity sales reached a 10-year high last year, according to figures from the industry earlier, with insurers selling £7 billion of annuities, a 34% increase on the previous year.
Sales of pension annuity contracts jumped 24% to 89,600 in 2024, which the Association of British Insurers put down to more people looking to secure a reliable retirement income for life amid current economic and geopolitical uncertainty.
The £7 billion in annuities sold was the highest figure since George Osborne’s Budget in 2014 that included 'pension freedom' measures that allowed anyone over 55 access to their pension, with no obligation to buy an annuity leading to a collapse in their sales in subsequent years.
But 2023 and 2024 have seen demand return, with the ABI saying the most common age to purchase an annuity remained 65, where 20% of all sales were made, while a growing number of annuity purchases were made after taking financial advice at 36% up from 29% in 2023.
11.04am: Boost for affordable and social homes
The government has announced a cash boost of £350 million that it says "will help build 1000s more affordable and social homes".
It is intended to invest in increasing the number of affordable and social homes, support homeownership and ease council housing pressures, the Ministry of Housing, Communities and Local Government says.
Up to 2,800 extra homes will be built through a £300 million boost to the Affordable Homes Programme, half of these being homes for social rent.
Just over 250 council homes will be built through a £50 million boost to the Local Authority Housing Fund to provide homes for those in need of better-quality temporary accommodation.
These are "the biggest increase in social and affordable housebuilding in a generation, turning the tide against the unacceptable housing crisis in this country", says Angela Rayner.
Kate Henderson, CEO of the National Housing Federation, the body for housing associations, says the funding "demonstrates that the government recognises that boosting funding for new affordable homes, particularly those for social rent, is essential to meeting its ambitious housing targets and commitment to building a generation of new social homes".
She says housing associations are "facing a number of financial challenges due to decades of funding cuts" and she says the body hopes to see more supportive measures at the upcoming spending review.
Shares in Vistry Group PLC, which has a large partnerships arm that works with these associations, is up over 2% this morning.
10.27am: Deliveroo CEO going nowhere
Deliveroo has issued a statement.
"In response to rumours in the media, the company confirms that there are no plans for Will to step down," a spokeswoman tells me.
"Will remains relentlessly focused on the long term future of Deliveroo and delivering for consumers, merchants and riders."
9.53am: Entain 'not all bad news'
Entain PLC shares are up 1.5% today after their 10% fall yesterday on the back of the departure of chief exec Gavin Isaacs after just five months.
"Entain has struggled to hang on to its CEOs in recent years," says Deutsche Bank, with four more since Kenny Alexander left in 2020.
"Management is adamant that there were no strategic disagreements behind the decision, and it was more an issue of 'stylistic differences'," the German bank noted.
"And it is not all bad news. Stella David, the chairman, only recently spent nine months as interim CEO and did a good job, streamlining the group strategy and rebuilding some upgrade momentum. She has committed to staying on for as long as it takes to find another replacement."
And it comes just a week after the group confirmed a strong end to the year for its US activities.
9.30am: Calm in the air, for now
“There’s an overarching sense of calm in the air, perhaps a little unnerving given the storm of political drama we’ve become accustomed too since Tump took office," says market analyst Matt Britzman at Hargreaves Lansdown.
The flat start for the FTSE 100 after posting another record high yesterday shows it is "still riding on a wave of enthusiasm" though US inflation data later "has scope to upset the apple card" (i think he means cart).
He notes that oil prices have been stopped in their tracks, with brent crude slipping to $76.7 per barrel, snapping a three-day winning streak after a surprising surge in US crude inventories.
"This unexpected spike, far beyond the anticipated 2.8 million, has traders on edge amidst escalating trade tensions and economic uncertainties. However, concerns over Russian and Iranian oil supplies due to sanctions have kept the losses in check."
9.01am: Early movers and shakers
The FTSE 100 and FTSE 250 are both higher after an hour of trading, with the blue-chip index lagging its mid-cap sibling.
Out of the top 20 largest stocks in the blue-chip index, 11 are in the red, including Shell and BP as oil prices give back some recent gains.
London's mid-cap index has gained 125 points or 0.6%, with gains for TBC Bank, Baltic Classifieds and Molten Ventures.
TBC Bank (LSE:TBCG) impressed with record revenues and a big jump in profits in the fourth quarter, with the Georgian bank saying it is looking forward to 2025 "being another year of further scaling up our business in Uzbekistan and continuing to deliver strong and profitable growth in Georgia".
Bigger moves are being seen in the small caps, with cannabis-based medicines developer Celadon Pharmaceuticals PLC soaring 20% on a finance update.
Helium One Global Ltd is up 5% as it begins the countdown to the start of drilling at the Jackson-31 well, part of the Galactica Project in Colorado.
Surgical Innovations Group jumped 20% after the company reported a profitable second half of 2024, marking a successful turnaround.
Andrada Mining Ltd inched higher as it secured a $2.5 million loan from its largest shareholder to fund the construction of a new tin processing plant at its Uis mine in Namibia.
Gelion PLC surged 17% after announcing a breakthrough in its solid state battery technology.
In Europe, the Euro Stoxx index is up 0.25%, with Heineken bubbling up 12%, followed by Barratt Redrow and ABM Amro.
Sparking a rally among other European brewing heavyweights, the Amstel and Birra Moretti brewer toasted stronger than expected revenues and profits by announcing a big share buyback.
8.38am: Analysts on Close Bros
The update from Close Brothers this morning was unscheduled, says analyst Gary Greenwood at Shore Capital, who provides some context around the provision of up to £165 million for motor finance commissions that the lender provided.
As he notes, this is based on a probability-weighted scenario "and so the eventual costs could be materially larger or smaller depending on the outcome of the Supreme Court review", which is scheduled for the start of April, as well as any subsequent FCA redress scheme and eventual claimant behaviour.
Greenwood notes that the consensus of analyst forecasts that include a forecast for motor finance provision is £155 million in the current financial year, with a further £188 million in FY26 and £145 million in FY27.
The first-half trading update "implies an annualised run rate that is consistent with the current company-collated market consensus of £148 million".
With Close Brothers’ shares having rallied sharply in the past few weeks, following the Supreme Court decision to review the Court of Appeal’s prior judgement and intervention by Rachel Reeves that any proposed redress should be proportionate to the harm incurred by the customer, the valuation of 0.4 times net assets "continues to reflect significant ongoing motor finance risk" says Greenwood.
Analyst Rae Maile at Panmure Liberum says: "While some may take solace in a provision being established, we are still a way away from a conclusion on the motor issue.
"And when that has been settled, focus should move to insurance premium finance, while costs also remain too high. Fundamentally the challenge is that what made Close special post-2008 is rather less special today. The stock remains as much a career choice as an investment call."
8.17am: Analyst view on BTRW
Barratt Redrow's first set of results post merger is also coming with a 'capital markets day' strategy presentation by the group later, for which the new medium-term targets of 22,000 homes, 15% operating margins and 20% return on capital employed were all part.
"These are in line with our longer-term expectations," says analyst Clyde Lewis at Peel Hunt.
He also noted that trading since the start of the year has been slightly better than in the first half, at 0.60 private sales per site per week versus 0.57 last year, while forward sales values are up 7% at £3.35 billion.
"The shares have been relatively muted since the Redrow deal and stand 15% down over the past six months. They are flat YTD and on current forecasts, are trading on a P/TNAV of 0.98x to CY25E with a PE of c.13x."
8.10am: FTSE starts higher
The FTSE 100 has started tentatively on the front foot, tiptoeing 10 points higher to 8,788 in initial trades.
Barratt Redrow is the top riser, up 6.5% early doors after its interim results and update of strategic targets.
Precious metals miners Fresnillo and Endeavour Mining are bottom of the list as the gold price retreats below $2,900 per oz.
7.58am: Barratt Redrow ups guidance and outlines new targets
Barratt Redrow PLC (LSE:BTRW) said following the merger agreed last year it plans to make shareholder returns including £100 million of share buybacks per year based on a new annual 22,000 homes sales target.
The FTSE 100 housebuilder said it expects the growth of the business will generate “significant free cash flow in the medium term”, leading to the plan to resume share buybacks with a £50 million programme in the second half of this financial year.
It will also increase its dividend cover target to 2.0x adjusted earnings (excluding the impact of purchase price allocation - PPA), up from 1.75x from the 2026 financial year.
The interim dividend for the past six months has also been hiked 25% to 5.5p.
Chief executive David Thomas said the integration of Redrow is “progressing well” and the group is on track to deliver “at least £100 million of cost synergies”, £10 million ahead of the original target, and full year adjusted profit before tax, before the impact of PPA adjustments, is now expected to be at the upper end of market expectations.
7.40am: Close Bros defines size of motor finance provision
Close Brothers Group PLC (LSE:CBG) will make a £165 million provision relating to motor finance commissions, which is smaller than many analysts estimates.
This will reduce the group's CET1 capital ratio from 13.5%, where it stood at the end of December to 12.0%, which is well above the regulatory requirement of 9.7%, it said in a statement this morning.
With the sales of its asset management arm, which was agreed in September and is expected to close in “coming weeks”, Close Bros said it expected the capital ratio to return to around 13% by the end of the 2025 financial year.
7.17am: FTSE to start higher, Asian markets mixed
The FTSE 100 is expected to start higher on Wednesday, after a mixed session on Wall Street overnight and in Asia this morning.
London's blue-chip benchmark is predicted to climb around three points, according to the futures market, having closed at 8,777.4 the day before, after adding 9.6 points.
The S&P 500 finished just above flat last night, while the tech-heavy Nasdaq Composite dropped 0.4% and the Dow Jones inched 0.3% higher.
In Asia this morning, India's Sensex is in the red amid headlines about Prime Minister Narendra Modi's visit to the White House this week, while most other markets are higher, led by a surging Hang Seng, up 2.2%.
Alibaba, on the back of a reported AI partnership with Apple, and carmaker BYD, on self-driving developments, are the top risers.
5am: What to watch on Wednesday 12 February
Barratt Redrow's update should flesh out more details about the path ahead after its merger... Read more
Announcements due:
Interims: Barratt Redrow PLC
Finals: Smurfit WestRock PLC, TBC Bank Group PLC
US earnings: Barrick Gold, CME Group, The Kraft Heinz Co, Cisco Systems, QuantumScape, The Trade Desk
AGMs: Deltex Medical Group PLC, Unicorn AIM VCT PLC
Economic announcements: Inflation (US)