The unemployment And The reward The numbers are in focus as well city Looking for signs of this Bank of England interest rates reached its climax.
The UK unemployment rate remained at 4.2% in the three months to September, while wages excluding bonuses rose in line with expectations.
With Vodafone, Imperial Brands and Land Securities among those reporting, the FTSE 100 index fell slightly ahead of the US inflation reading this afternoon.
FTSE 100 Live Tuesday
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Glencore seals £5.6bn coal deal
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BT reveals significant reduction in pension deficit
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Wage and jobs numbers are in line with expectations
The FTSE 100 rose on improving global interest rate expectations
13:52 , Daniel O’Boyle
The FTSE 100 rose and government bond yields fell after the latest US inflation data suggested cuts in US interest rates could be on the horizon.
Ocado shares, which are among the most sensitive to interest rates, rose significantly on the release.
Take a look at our market snapshot
Inflation in the United States stabilizes at 3.2%
13:40 , Daniel O’Boyle
The inflation rate in the United States remained at 3.2%, contrary to expectations for an increase.
Core inflation was also below expectations at 4.0%.
That would raise hopes that global interest rates have peaked and that the Fed may consider cuts soon.
On a monthly basis, prices did not change.
Richard Flynn, UK managing director of Charles Schwab, said the numbers make “the prospect of a soft landing more likely than ever”.
He said: “The numbers revealed today indicate that the Fed is closing in on its 2% target for the CPI.
“This good news reinforces the likelihood that central bankers will be reluctant to raise interest rates this cycle, a direction they appear to be leaning towards anyway. With wage growth slowing and sectors like manufacturing losing ground, there is a risk that further tightening could spell trouble for… Economy.
“Higher US interest rates would also make it more expensive to borrow US dollars, which would create difficulties for emerging market economies that do so. Overall, ‘higher for longer’ seems like a more rational move than ‘higher for longer’. “Higher than that.”
Halifax, First Direct and HSBC UK are among lenders to cut mortgage interest rates.
13:12 , Daniel O’Boyle
Major lenders have announced new mortgage interest rate cuts, widening options for borrowers looking for deals under 5%.
First Direct announced interest rate cuts of up to 0.40 percentage points from Tuesday.
Halifax also announced mortgage rate cuts of up to 0.46 percentage points effective Wednesday.
This includes reducing the five-year fix for borrowers with a 10% deposit by 0.24 percentage points to 4.97%.
Imperial Brands sees weaker growth in the first half amid heavy spending in the vaping space
12:29 , Daniel O’Boyle
Tobacco giant Imperial Brands said it expects its profits to rise in the next financial year but to decline in the first six months due to pricing measures and investment in cigarette alternatives.
The maker of Winston and John Player Special cigarettes said it expects core operating earnings to increase “near the middle of our mid-single-digit range” in 2024 with revenue increasing by the low single digits.
Rising prices helped push underlying profits higher in the year to September 30, up 3.8% on a constant currency basis to £3.9bn.
Land Sec says the West End is full
11:31 , Daniel O’Boyle
Property giant Land Securities today announced that its West End offices are “full” and in another sign of London’s return to business, the latest industry data showed companies are in talks to allow more space – enough to fill six Gherkin towers.
Landsec said today that the overall occupancy rate in central London was 96.5%. The West End performed better – 99.6% leased – meaning the capital’s cultural center was “virtually full”, at least as far as the FTSE 100 portfolio was concerned.
Mark Allen, chief executive of office development owner Lucent behind the popular Piccadilly Lights advertising site, has become the latest big name in the industry to point to a trend driving demand since Covid: “Clients are focusing on best-in-class space.” he added:
“In London, our well-located, sustainable offices in vibrant, amenity-rich areas continue to see increasing occupancy, increased use, increased client space requirements and consequently increased rents.”
Glencore has agreed to acquire Teck’s coal arm in the city’s biggest deal of 2023
10:29 , Daniel O’Boyle
Miner Glencore ended a months-long takeover saga with the city’s biggest takeover of the year today, agreeing to buy Canadian rival Teck’s steelmaking coal business for $6.9bn (£5.6bn).
Glencore initially planned to buy Teck’s entire business for $22.5 billion, but after that offer was rejected, it set its sights solely on its coal arm.
The miner intends to spin off its combined coal operations, which generate strong profits but have made Glencore shares less attractive to sustainability-focused investors.
In a blow to the city, this coal arm is set to list in New York. In June, Glencore Chairman Gary Nagel said European investors were placing greater emphasis on environmental, social and governance considerations.
The deal trumps private equity group EQT’s plan to buy Dechra Pharmaceuticals as the city’s biggest acquisition in 2023 – a year in which mega mergers have been rare.
Glencore shares rose 14.2p to 444.6p this morning.
DCC and Informa lead the FTSE 100 and Babcock’s dividend yields
10:28 , Graeme Evans
Historic earnings helped Babcock International shares today as the defense services company’s turnaround continues to show progress.
Plans to pay January’s 1.7 pa share will be the first dividend in four years following a long-running campaign by Babcock to strengthen its balance sheet.
Efforts under CEO David Lockwood included a £400 million turnover and a focus on higher quality, lower risk and more predictable business.
Interim results today revealed an order backlog of £9.6bn, alongside a 2% increase in revenue to £2.2bn and a 27% increase in operating profits to £154m.
The results for the Rosyth and Devonport shipyard owner follow last week’s four-year £750 million MoD contract to support and sustain the UK’s submarine fleet.
Babcock shares had reached 272p in July but settled today at 417.6p after improving by 2%, or 8p, after the results.
The performance came in a stronger session for the FTSE 250 index, which added 0.4%, or 66.72 points, to 17,980.37.
Oxford Instruments was the best mid-cap company, with Scientific Research Partner up 6% or 121p to 2,045p on the back of a 6.5% increase in profits and 10% growth in the order book to £332m.
The FTSE 100 rose 6.63 points to 7,432.46, led by three of the less important A-tier stocks.
These included business events and academic knowledge business Informa, which jumped 6% or 40 points and is now up 25% in the past year to 742 points following today’s latest upgrade to 2023 guidance.
Dublin-based DCC Group, whose operations span healthcare to heating oils, also rose 7%, or 323p, to 4,989p after announcing a 12% rise in operating profit during a seasonally quieter first half.
The results were accompanied by a £140 million acquisition of German company Progas in a move targeting Europe’s largest energy market.
Medical products company Convatec added 3%, or 6.2p, to 214.8p after improving its 2023 revenue growth guidance to between 6.75% and 7.5%.
On the bearish board, Imperial Brands fell 7.5 points to 1,780.5 points after cigarette maker Lambert & Butler raised its dividend by 4% alongside a 5% increase in operating profit to £3.9 billion. Shares are down about 15% this year.
BT reduces pension deficit
10:24 , Daniel O’Boyle
BT today revealed that it has more than halved its pension fund deficit since 2020, and that it should be fully funded by 2030.
The scheme’s liabilities, the UK’s largest corporate pension scheme with 270,000 members, were £8bn above its assets in 2020. But after a number of payments from the telecoms company, that deficit was reduced to £3.7bn.
Pension managers were moving assets into less risky investments. By 2034, the fund should consist “predominantly” of bonds and “bond-like investments.”
Simon Loth, BT’s chief financial officer, said reducing the deficit would help the company focus on investing in improving infrastructure.
Informa leads flat FTSE 100, Vodafone shares suffer
08:34 , Graeme Evans
Events and Academic Knowledge Informa is the best-performing stock in the FTSE 100 after its recent boost to its results guidance.
Shares rose 5%, or 32p, to 734p, before Glencore improved 14.3p to 444.5p as the commodities trading giant unveiled a deal to buy a 77% stake in Teck Resources’ steelmaking coal business.
Vodafone’s share remains under pressure after its half-year results, falling by 0.8p to 76.6p despite the mobile giant’s earnings being unchanged.
The FTSE 100 was down 13.67 points at 7,412.16, with the FTSE 250 down just 1.81 points at 17,911.84.
One of the best-performing mid-cap stocks was defense company Babcock International, which rose 4% or 16.8p to 426.4p after highlighting progress with its first dividend payment in four years.
Wages and jobs data arrived as expected ahead of Sunak’s D-Day inflation pledge
08:28 , Daniel O’Boyle
Wages and jobs figures hit expectations this morning, in news likely to calm nerves at the Bank of England in its final interest rate decision of the year and in Downing Street, where the Prime Minister’s inflation pledge faces a lively moment later in the week.
The national unemployment rate held steady at 4.2% for September, while average earnings excluding bonuses rose 7.7%, also as expected. Including bonuses, wages rose 7.9%, more than the 7.4% city experts had expected, but down from 8.2% last time.
Meanwhile, the number of people out of work and claiming benefits rose just above the 15,200 forecast of 17,800 in October, but in the three months to the end of September, it fell by 207,000, about 9,000 more. Then expected.
The FTSE 100 saw a decline ahead of the US inflation reading and higher oil prices
07:20 , Graeme Evans
Investor caution ahead of this afternoon’s US inflation reading means the FTSE 100 is expected to open 0.2% lower at around 7410.
The annual CPI rate is expected to fall from 3.7% to 3.3% but with core inflation unchanged at 4.1% in the previous month.
Evidence that inflation is resisting higher interest rates will heighten concerns on Wall Street that the Federal Reserve may be forced to take further action.
US markets recorded a flat session yesterday, while the FTSE 100 index rose 0.9% or 65.28 points as the top tier recovered some of the heavy losses incurred on Friday.
Meanwhile, the strong week for oil continued today after Brent crude futures rose 0.3% to $82.77 per barrel. Gold was trading at $1,945 an ounce.
Unemployment remains at 4.2%
07:03 , Daniel O’Boyle
The UK unemployment rate remained at 4.2% in the three months to September, defying expectations for a rise as markets continue to hope for a “soft landing” from recently soaring inflation.
The rate was slightly lower than the expected rate of 4.3%.
Pay excluding bonuses rose in line with expectations, although they remain close to historical highs, at 7.7%. But including bonuses, wages rose 7.9%, above the expected 7.3%.
Yesterday’s most important news
06:48 , Daniel O’Boyle
Good morning from the city desk of the Evening Standard, here’s a selection of yesterday’s top stories.