- FTSE 100 down 17 points at 9,225
- AB Food falls after mixed update
- Trump calls for EU to join higher China tariffs
4.45pm: FTSE 100 pulls back
The FTSE 100 finished the day 17 points lower at 9,225.
Across the Atlantic, Wall Street saw a mixed start as US producer prices unexpectedly declined.
“US producer prices unexpectedly declined 0.1% month-on-month in August, the first drop in four months, as service costs fell sharply - driven by a 3.9% plunge in machinery and vehicle wholesaling margins - while prices for goods edged up 0.1% on gains in tobacco, meat, and energy products,” IG senior technical analyst Axel Rudolph said.
“Several categories including chemicals, furniture, food, alcohol, and data processing also saw declines, underscoring broad disinflationary pressures.”
Investor attention will now turn to Thursday’s US PPI release.
4pm: Slightly negative tone in London
London's blue-chip index relinquished early gains to slip into negative territory in mid-afternoon, with the FTSE 250 in red also.
Led by a 12.7% fall for Associated British Foods, there have been falls for many consumer-focused shares, including British Airways owner IAG, Marks & Spencer, easyJet, Auto Trader, Next, Whitbread and Games Workshop.
Only two of the index's 10 largest companies is in green.
"Heightened concerns over global trade dynamics have introduced a cautious tone, dampening bullish sentiment," says market analyst Patrick Munnelly at Tickmill.
"This apprehension stems from persistent geopolitical tensions and trade policies that threaten to disrupt international supply chains," he adds, pointing to Trump advocating for further tariff hikes on China and India to target Russian oil imports.
3.17pm: Starling Bank testing demand for shares
Starling Bank is reportedly preparing a secondary share sale that could value the London-based digital lender at up to £4 billion.
According to the Financial Times, the bank has hired advisers, including Morgan Stanley and Rothschild, to oversee the process, according to people close to the matter.
The sale will give existing backers such as Goldman Sachs, Railpen, Chrysalis Investments and Fidelity an opportunity to reduce their holdings, while creating space for new investors.
Starling was last valued at £2.5 billion in 2022, but its worth was marked down in 2023 after Jupiter Asset Management sold its stake, cutting the bank’s valuation to between £1 billion and £1.5 billion.
2.54pm: FTSE in red, Wall Street mixed
The FTSE 100 has dipped a toe below the water after a mixed open on Wall Street.
A drop of 0.24% for the Dow Jones is contrasted by a 0.47% rise for the S&P 500, while the Nasdaq Composite is up 0.33%.
The Dow's main losers are Amazon and Apple, both down over 2%, followed by McDonalds and Disney.
Top of the S&P leaderboard is Oracle, up 37%, followed by Broadcom, up 7%.
2.14pm: What could make the BoE cut rates more?
Oxford Economics believes the chance of another rate cut by year-end is now less than 50:50.
"However, several factors could prompt the MPC to shift to a more dovish stance over time,” says Michael Saunders, a senior economic advisor to the firm, and a former MPC rate setter himself.
Weaker than expected economic growth, more certainty that pay growth will slow next year, and that lower pay growth will feed through to services inflation.
"The case for further easing may not come together quickly but will likely strengthen over the next few quarters," says Saunders.
"GDP growth probably will underperform the MPC's forecasts, with unemployment rising, while pay growth is likely to return to a target-consistent pace over the next 12-18 months, with evidence of pass-through to services prices."
He says Oxford Economics' base case is that the MPC will keep rates on hold at 4% to year-end, then next year cut to 3.5% and to 3.0% by 2027.
1.41pm: US PPI inflation comes in below forecasts
The market is likely to increase the probability of Federal Reserve rate cuts after US factory gate inflation softened.
August producer price inflation fell to 2.6%, below expectations of 3.3%.
Core PPI inflation fell to 2.8%, below expectations of 3.5%.
Month-over-month PPI inflation was negative at -0.1% for the second time since March 2024, with the consensus forecast looking for 0.3% after a rise of 0.9% in July.
1.04pm: Klarna 'buy now' after IPO
Klarna Group PLC shares will begin trading on the New York Stock Exchange today with an initial market valuation of $15.2 billion.
The initial public offer for the buy-now-pay-later firm was priced at $40 a share, above the $35-37 initial range, with the offer said to be around over 25 oversubscribed.
Not surprisingly, many people are expecting a breakout debut.
A price of $50 a share is a possibility, says technical analyst Axel Rudolph at IG, calling the listing "one of the defining fintech IPOs of 2025 - underscoring both investor appetite for innovation and the company’s resilience in a shifting market.
"The IPO seems perfectly timed as Wall Street is trading at record highs, making a $50 share price a distinct possibility before year-end."
12.33pm: LSE in the red despite broker support
The London Stock Exchange Group PLC (LSE:LSEG) shares are down 5% this week, despite support from UBS and JPMorgan.
A 22% fall in the shares in 2025 makes it one of the weakest performers in the sector, with the latest worries triggered by fears that rivals are muscling in on its territory as a competitor announced a new partnership and product upgrade to reignite the debate over whether LSEG can keep flexing its pricing power.
At the same time, some investors are fretting about what artificial intelligence could do to the economics of desktop solutions and data sales, a lucrative part of the business that underpinned the 2020 Refinitiv acquisition.
JP Morgan and UBS both think the worries are overdone.
JPMorgan analyst Enrico Bolzone says "these concerns seem exaggerated at this stage, and the share price reaction unwarranted"that both the competitive threat and the spectre of AI disruption look exaggerated for now. They say the recent sell-off is not justified by the fundamentals.
Likewise, Michael Werner at UBS says the "magnitude of risk is low" for LSEG's Desktops division, with the AI risk "almost fully priced in...despite zero evidence of any market share shifts".
12.22pm: FTSE snakes and ladders
The FTSE had climbed a ladder of optimism to almost a 50-point gain just before midday before sliding back down a snake of uncertainty.
AB Foods continues to drag, with the shares down almost 12% now.
IAG, JD Sports and Ashtead are next - all companies with a US angle.
Meanwhile, US stock futures are mixed, with the Dow Jones down 0.2% but the S&P 500 and Nasdaq 100 up 0.3%.
Klarna and Oracle are ones to watch, with the former beginning trading today.
Oracle rocketed 32% in after-hours trading after a deal with OpenAI and a jump in quarterly bookings.
11.47am: Reeves should raise personal taxes, says CBI
The boss of the CBI has called on Chancellor Rachel Reeves and Kier Starmer to abandon Labour’s manifesto pledge not to raise taxes on working people.
CBI chief executive Rain Newton-Smith, the lobby group's former chief economist, called for higher personal taxes rather than more taxes on business.
To enable Labour to raise much-needed funds in the Budget, she warned the government against "slavish adherence" to their previous tax promises.
"The fact is that geopolitics and global markets have shifted. The world is different from when Labour drafted its manifesto, and when the facts change so should the solutions,” Newton-Smith wrote.
"The chancellor cannot raid corporate coffers again so she must look elsewhere, embracing long-term strategic tax reforms rather than maintaining a slavish adherence to manifesto promises on tax or ideas based on the world as it was 18 months ago.”
Newton-Smith also called for the reform of business rates, VAT thresholds for small firms and stamp duty.
11.10am: AB Foods 'disappointing' say analysts
Primark's trading update "a bit weaker than expected largely due to Primark", says Deutsche Bank analyst Adam Cochrane.
And that seems to be the broad opinion of most in the City.
Cochrane says the main news from the statement today is Primark sales growth of 1% in the second half, with LFLs down 2%, driven by ongoing weakness in Europe, along with EBIT margin down around 80bps despite gross margin gains.
While City and investor expectations had lowered on the run-in, "this is still disappointing for Primark," Cochrane says, who reiterates his 'sell' rating on the ABF shares.
"Whilst the other divisions, especially Sugar, are important for earnings momentum and sentiment, we see Primark as the main driver of investor sentiment and valuation.
Clive Black at Shore Capital, who has a 'buy' on the shares, concedes that the update could have been better.
"In a nutshell, FY25 is expected to deliver a slightly weaker outcome than we anticipated, which is likely to lead to a sideways/nudge down
to our forecasts that we'll confirm once we have spoken to management," he says.
While he still feels "there is much to like" about ABF, Black says "for shareholders to be rewarded on an ongoing basis, it needs to deliver sequential earnings progress".
10.25m: Trump calls for tariffs on China and India as part of Russia sanctions
Donald Trump has, according to reports from the Financial Times and Bloomberg, asked the EU to hit China and India with 100% tariffs, as part of sanctions on Russia to try and end attacks on Ukraine.
US officials said Washington was prepared to act as long as the EU "mirrors" tariffs on China and India.
President Trump made the demand on a phone link to a meeting being held between senior US and EU officials in Washington.
"The president came on this morning and his view is that the obvious approach here is, let’s all put on dramatic tariffs and keep the tariffs on until the Chinese agree to stop buying the oil. There really aren’t many other places that oil can go," one US official told the FT.
The US president told reporters yesterday that he expected to have a call with Russian president Vladimir Putin "this week or early next week".
9.42am: Vistry mixed
Vistry’s half-year results paints "far from a pretty picture", says market analyst Dan Lane at Robinhood UK, but he says "there are signs of life", with management reducing debt and sticking to profit guidance.
"Vistry’s been a real FTSE 250 laggard since 2024 and we’re still seeing the bleak effects of a series of profit warnings, which have punished the company badly.
"Sticking to profit guidance, which includes a goal to top last year, will be the first sign the corner has been turned but, given a shaky history in this regard, it might be a case of seeing is believing."
9.05am: Poland and Russia brushed off by markets
"Financial markets are once again defying gravity as we move through September, which is seasonally a weak month for stocks," says market analyst Kathleen Brooks at XTB, after the S&P 500 hit a record on Tuesday and brushed off concerns about an Israeli attack on what it said were Hamas figures sheltering in Qatar.
"For now, the attack looks localized, President Trump assured the global community that it would not happen again and reiterated that Qatar is an ally of the US.
"Other roadblocks that stocks have brushed off this morning include news that Russian drones had gone into Polish airspace, and news that Donald Trump is pressuring the European Union to put higher tariffs on Chinese and Indian imports."
Defence stocks in London are in green but not much higher, BAE Systems is up 1%, Babcock 0.2%.
Neil Wilson at Saxo says the Russian drones in Polish airspace are "a worrying escalation but hopefully more of a navigational accident than deliberate provocation".
But he notes that it "does come ahead of a big Russian military exercise near the Polish border that’s likely to see heightened tensions between Nato and Moscow".
This morning, EU Comission president Ursula von der Leyen said "we will build a drone wall" on the bloc's eastern flank of its shared borders/
This echoes comments from EU defence commissioner Andrius Kubilius. "Once again Russia tests frontier states, EU & NATO," Kubilius wrote in a post on social media. "We shall work together with Member States, frontier countries and Ukraine. Russia will be stopped."
Polish President Karol Nawrocki has called a meeting of the National Security Council.
"News that we will have full information about what happened in Poland within 48 hours led me to the decision to convene the National Security Council within 48 hours," Nawrocki said, adding the situation was an unprecedented moment in NATO's and Poland's history.
French president Emmanuel Macron, fresh from appointing a new Prime Minister, said the Russian incursion was "simply unacceptable".
8.27am: DCC completes healthcare sale
Correction: DCC PLC (LSE:DCC) does have some news, with the completion of the sale of its healthcare division and a £600 million return to shareholders.
As announced in May, the intention is to return £800 million of the sale proceeds to its shareholders, which began at the time with a £100 million share buyback, which is expected to complete in the coming weeks.
A £600 million tender offer, equating to 13% of the current market cap, is planned for shortly after interims in November, with completion expected in December.
The final £100 million is to be returned to shareholders following receipt of the unconditional deferred consideration payable for the healthcare division in roughly two years.
8.15am: FTSE climbs despite AB Foods plunge
The FTSE 100 has climbed 24 points to 9,267 in opening trades, despite a big fall from AB Foods.
Shares in Primark's parent company are down 9.2% after the pre-close update.
At the other end, gains are led by Haleon, DCC and Anglo American, none of which seem to have any news out today.
8am: Vistry profits fall
Vistry Group PLC (LSE:VTY), the housebuilder with a strong line in social housing partnerships, has reported a 55% fall in first-half profits or 23% on an underlying operating basis, as completed sales shrank 12%.
CEO Greg Fitzgerald said the first-half performance was "in line with expectations and we are well positioned to deliver for the full year".
"Working with our partners, we have a strong pipeline of development opportunities which will drive our second half performance, with an expected significant step-up in completions and profits."
Adjusted operating profit fell to £124.4 million from £161.8 million, as completions of 6,889 were down from 7,792 a year ago due to the lower level of demand from housing association partners in the first half.
Total average selling price increased 4% due to changes in the sales mix, leading to adjusted revenues dropping 6% to £1.85 billion.
7.35am: Novo jobs cuts
Wegovy-maker Novo Nordisk (NYSE:NVO) is cutting 9,000 jobs, or roughly 11.5% of its workforce, in a restructuring announced this morning.
The diabetes and weightloss drug maker is looking to save $1.26 billion a year, as it battles rising pressure from US rival Eli Lilly.
7.29am: Primark decline eases for AB Foods
Associated British Foods PLC (LSE:ABF) said its Primark retail arm saw a slight improvement in the fourth quarter's like-for like sales.
LFL sales in the second half are expected to be around 2% below last year, with a decline of 2.4% in the third quarter and a decline of around 2% in the fourth.
For the full year in 2025, total sales growth, including new store space, is around 1%, with both Q3 and Q4 growing at 1%.
The troublesome Sugar segment is expected to see an adjusted operating loss for the full year of close to £40 million, with Vivergo plant closure confirmed.
7.17am: Baby steps for FTSE 100
The FTSE 100 looks like taking baby steps higher on Wednesday, adding to gains from the previous day as the big moves seem to be happening overseas this week, with US factory gate inflation in focus today.
Futures are predicting an increase of around 12 points for the London index, which yesterday put on 21 points to finish at 9,242.5.
Oil and gold prices were in focus after Israel confirmed it was behind a rocket attack on a building in Qatar, lifting producers of those commodities.
Overnight, US stocks pushed higher despite data showing a weaker-than-expected jobs market, with the Nasdaq closing up 0.3% at a new record high, while the Dow Jones rose 0.4% and the S&P 500 climbed 0.3%.
Asian markets are also climbing this morning, led by a 1.3% gain for Hong Kong's Hang Seng.