Interest rate jitters continued today after eurozone inflation remained at 5.3% this month.
The reading is a setback to hopes that the European Central Bank will be able to pause interest rate hikes at its meeting on 14 September.
For UK borrowers, a leading Bank of England policymaker today flagged the possibility that rates may peak lower but stay high for longer.
FTSE 100 Live Thursday
Flat inflation print delivers blow to ECB
Rates peak warning by BoE policymaker
Park Plaza owner worried by borrowing costs
End-of-day market snapshot
16:55 , Daniel O'Boyle
Take a look at the key market data as the FTSE 100 finished half a percentage point lower today.
FTSE closes down at 7,439.13 after afternoon fall
16:36 , Daniel O'Boyle
The FTSE 100’s streak of five consecutive days of gains has come to an end, with the index closing at 7,439.13.
The index reached 7497 in the early afternoon, but lost almost 60 points late on.
Asia-exposed stocks were the biggest losers, with Prudential, Glencore and Endeavour Mining at the top of the fallers board.
However it was a much better day for Ocado, with shares up by more than 8%.
Resurrection of Monarch Airlines fails to take off
16:28 , Daniel O'Boyle
Plans to resurrect Monarch Airlines six years after it failed have collapsed due to a lack of money.
A company named Monarch Airlines Limited launched a website and activity on social media earlier this morning, pledging to “usher in a new era for one of the UK’s favourite travel brands”.
We have been seeking alternative routes
But on Thursday, a statement from its board read: “It is with immense regret that we announce today that we have been forced to put the brakes on our process to relaunch Monarch.
“This is not a decision that we have taken lightly, however since taking over the business two weeks ago we have drawn close to exhausted (sic) the start-up funding provided to us far more rapidly than anticipated.”
Market snapshot as FTSE 100 dips into red
16:13 , Daniel O'Boyle
The FTSE 100 is in losing territory now, with its gains from the early afternoon erased.
Miners Glencore and Endeavour are some of the big losers. On the other hand, Ocado shares have surged this afternoon.
Anne McElvoy: CNN is beset by a sea of trouble – ex-BBC chief ‘Thomo’ is perfect to take the helm
“Can you imagine an American broadcasting company asking an Englishman to take charge?”, the broadcaster Ed Murrow asked on declining Winston Churchill’s wartime offer to become deputy director-general of the BBC.
Murrow’s predictive powers turned out to be less than sharp on this one. Mark Thompson, the former New York Times and ex-BBC chief, has been named the new chief executive and chairman of cable news giant CNN. At the New York Times, Thompson headed the digital transition that out-stripped rivals in subscriptions and pivots to new formats.
He takes over a durable brand beset by a sea of trouble, ranging from falling audiences to firefighting internal revolts over his predecessor’s decision to screen a Donald Trump “town hall” which descended into a bully pulpit — with emphasis on the bully.
No 2p coins were produced last year, according to Royal Mint figures
15:46 , Daniel O'Boyle
No 2p coins were minted last year, figures from the Royal Mint show.
According to figures on the Mint’s website, the mintage for 2ps in 2022 was zero, following a mintage of 117,700,000 in 2021 for this coin denomination.
It is not the first year that no 2ps were minted, with mintages for the years 2018, 2019 and 2020 also at zero for this coin.
There were also no mintages for 1p coins recorded in the years 2018 and 2019.
US shares climb after PCE and jobless data
15:40 , Daniel O'Boyle
US shares rose this morning , after jobless claims this week came in slightly below expectations, while the core PCE inflation index ticked up as expected.
The data is far from showing a clear victory for the Federal Reserve in its battle with inflation, but should still be positive enough to convince Jerome Powell that another hike is not needed.
Take a look at all of our key market data.
Nationwide cuts mortgage prices again
15:19 , Daniel O'Boyle
Nationwide has cut the rates on its mortgages yet again, hours after a top Bank of England policymaker signalled that the Bank’s interest rates may peak at a lower level than expected, but stay high for longer.
The country’s largest building society cut 0.15 percentage points off many of its fixed-rate mortgage products, while also introducing reductions for some of its tracker range too.
Ashley Thomas, director of City-based mortgage broker Magni Finance, noted that while the cut was not large, it is the latest in a wave of reductions, which all of the top lenders cutting rates at least three times in the last six weeks.
Market snapshot with shares slightly higher
14:22 , Daniel O'Boyle
The FTSE 100 is slightly higher, and could be on to finish ahead for the sixth conseuctive day.
Take a look at our key market data.
Wilko job cuts to begin on Monday with support staff to be laid off after full rescue deal fails
13:21 , Daniel O'Boyle
Wilko is to start cutting jobs, letting go of its support staff such as HR on Monday and distribution staff later this week, the union that represents a third of its employees said, as the only bid to save its entire business was seen as unviable.
The GMB Union said it had been told by administrators at PwC that “the one bid for the entire business”, understood to be from private equity firm M2, has fallen through, after the bidder “failed to provide the necessary evidence” to prove it could afford to buy the discount retailer.
M2 emerged as a possible rescue bidder for Wilko over the weekend, claiming it aimed to save all of Wilko’s staff and give them part-ownership of the chain.
But questions soon emerged over whether it had the financial backing in place for such a deal. Adminsitrators at PwC set a deadline of yesterday for M2 to submit evidence it had that backing.
Whole Foods axes luxury products in favour of discounted items as losses widen
12:45 , Daniel O'Boyle
Whole Foods is scrapping luxury offerings and ramping up its range of cut-price products at London stores as it seeks to rekindle its appeal to middle-income shoppers amid widening losses.
The high-end supermarket has axed its famous ‘cheese vault,’ a separate room at its flagship Kensington site packed with fine cheeses that carried a hefty price tag, as well as slashing its range of eco-friendly, packaging-free grains and nuts that can be purchased using refillable containers.
The Amazon-owned firm has also scaled back checkout staffing and introduced self-service checkouts resembling those of mid-market supermarkets Tesco and Sainsbury’s.
It has introduced scores of “low prices” signs across stores as well as a raft of discounted items.
Today’s market snapshot
12:25 , Daniel O'Boyle
Take a look at all our key market data, with the FTSE 100 almost perfectly flat.
London fintech Wise accused of ‘inappropriate’ controls over Russia financial sanctions
11:47 , Daniel O'Boyle
London fintech Wise has been accused of ‘innapropriate’ controls over financial sanctions rules by a government watchdog.
Wise permitted a cash withdrawal held by a company owned or controlled by a person under the government’s Russia sanctions list in late June, according to the Office of Financial Sanctions Implementation (OFSI).
The £250 cash withdrawal, while small, was considered a “moderately severe” breach of the sanctions rules, according to the OFSI.
Shares initially fell by 3.3% but quickly recovered.
City Comment: Stubborn euro inflation is a fresh headache for the Bank of England
11:00 , Jonathan Prynn
Inflation had been subsiding faster in the eurozone than in the UK. But now it appears to be stuck.
Today’s figures show that consumer prices rose 5.3% across the single currency area in August, the same rate as in July.
That was higher than the 5.1% consensus forecast, and still two-and-half times above the target, with food and drink prices the main culprit.
It delivers a tricky conundrum for officials at the ECB ahead of their decision on rates next month. ECB hawk Isabel Schnabel describes Euro inflation as “stubbornly high”, suggesting that a further turn of the interest rate screw is still likely.
Frasers ups Boohoo stake, FTSE 250-bound 888 gets upgrade
10:22 , Graeme Evans
Frasers Group has revealed it holds 9.1% or £40 million of Boohoo after disclosing the second big purchase of shares in the past month.
The Sports Direct and House of Frasers chain, which is majority owned by founder Mike Ashley, also increased its holding of Boohoo rival ASOS earlier this week.
Other recent investments have included Currys and AO World as Frasers takes advantage of fallen valuations to ramp up its portfolio of high street interests.
Boohoo shares are down 40% since April but rallied 0.6p to 33.8p after the regulatory filing. Frasers shares are up 17% since mid-July and lifted 6.5p to 803p today.
That put the retailer among the blue-chip frontrunners in a session when traders struggled to find reasons to commit new money. The FTSE 100 index was barely changed, up 2.24 points at 7475.91 and on course to finish a disappointing month 3% lower.
Some of the day's biggest moves came from stocks trading without the value of their upcoming dividends. They included the mining giant Glencore, which slid 5% or 201.5p to 418.5p.
On the risers board, a gain of 8p to 1070.5p for Persimmon came too late to prevent its relegation as last night’s quarterly reshuffle ended a decade in the top flight.
The housebuilder will next month be joined in the FTSE 250 by William Hill owner 888 Holdings, which is back among London’s mid-caps after doubling in value since April.
The gambling group’s shares today added another 4.7p to 129.1p after analysts at Jefferies upgraded their price target to 175p.
The FTSE 250 index fared better than its top flight counterpart by adding 86.58 points to 18,651.10, with building materials provider Grafton 22p higher at 877.5p after announcing a further buyback of shares alongside in-line half-year results
In the FTSE All-Share, Tullow Oil recovered a penny to 35.1p after falling yesterday on fears over the potential impact of the coup in Gabon on its operations in the country.
Eurozone inflation unchanged in blow to ECB
10:19 , Daniel O'Boyle
Inflation in the Eurozone remained at 5.3%, defying expectations of a further decline, official statistics revealed.
The lack of a fall is likely to prompt the European Central Bank to believe it cannot yet stop its interest rate hikes. Core inflation, which the ECB watches closely, was also 5.3%, down from 5.4%.
Food, alcohol and tobaco were the biggest driver of price rises, while energy costs declined.
The rate of price rises varied wildly across the currency union, from 2.4% in Belgium to 9.6% in Slovakia.
Marc Schartz, European Equities Portfolio Manager at Janus Henderson Investors, said: “Today’s European CPI prints show that inflation is proving sticky. While we can expect some inflationary components, like logistics or material costs, to ease into year-end, we also believe that a return to the era of “no inflation” is unlikely any time soon. Forecasting precise inflection points or eventual levels of inflation is a tricky business and not at the core of our investment approach.
“However, given tight labour markets, trends towards onshoring of manufacturing as well as investments required to drive the energy transition, we believe that inflation is likely to remain at meaningful levels for longer. The return of more sustained underlying inflation and hence the end of zero interest rates (i.e. free money) should play out in favour of our investment philosophy that is based on identifying companies with pricing power and robust return generating abilities independent of financial leverage.”
London hotel construction threatened by interest rate rises
10:07 , Simon Hunt
Fears were growing today that London’s hotel building market is being threatened by interest rate rises as sky-high borrowing costs prompt operators to pull back on investment decisions.PPHE group, which operates the Park Plaza chain of high-end hotels, today said build costs on its landmark 27-storey art’otel site in Hoxton were set to come in several million pounds higher than planned after repayments on construction finance soared.PPHE CFO Daniel Kos said: “There’s only one item that drives [the higher build cost] and that’s the interest cost. We borrowed £180 million in 2020 [to fund the Hoxton site] and since that time the interest rate went up significantly.“If you want to build something at this moment interest costs are up to 10% and construction costs are up too.”Kos said he had not gone as far as to halt all future London hotel developments until interest rates cooled, but added: “With any project we need to look at the underwriting in terms of what we can achieve in this market.”It comes as PPHE reported record revenues in the first half of 2023 amid a resurgence in tourism and work travel.Trade in the firm’s London hotels was especially strong, led by a bumper summer events calendar including the coronation of King Charles.PPHE shares rose 5.2% to 136p. The Hoxton hotel is due to open in early 2024.Revenues rose 59% to £180 million as the company swung back to a pre-tax profit of £3.6 million.
Bank of England’s Pill says rates could peak lower, but stay high for longer
09:38 , Daniel O'Boyle
City traders are pricing in a lower peak to interest rates after Bank of England chief economist Huw Pill said today he believed it was better that rates stay at an elevated level for a long time rather than spike to an especially high level.
Speaking at the South African Central Reserve Bank biennial conference, Pill noted that there were multiple paths to bring down inflation but said he preferred a “table mountain” profile to a spike in interest rates.
Following the speech, markets now see interest rates peaking at 5.75% rather than 6%. However, rates are expected to still be at 5.25% or higher into 2025.
Price rises drive profits up at Pernod Ricard
09:03 , Daniel O'Boyle
Profits at spirits and champagne maker Pernod Ricard grew to €3.35 billion in the year to 30 June, driven entirely by higher prices.
Sales volumes were flat for the maker of Absolut Vodka, Jameson and Perrier-Jouët, but a hike in prices of 11% on average drove sales and profit up at roughly the same rate.
Price rises were steepest, at 15% or more, for its scotch whisky brands Ballantine’s, Royal Salute and Chivas Regal, while the aperitif Ricard saw the slowest price increases.
Shares fell by 6.89p, or 3.5%, to 187.5p in Paris this morning.
Glencore down 5% in flat FTSE 100, Grafton up 2%
08:42 , Graeme Evans
London’s leading share index is barely changed after stocks including Glencore traded without the value of their upcoming dividend.
The mining giant posted the biggest fall in the FTSE 100 with a decline of 5% or 22.45p to 416.2p.
Housebuilder Persimmon, which is about to trade outside the FTSE 100 index for the first time in a decade, rallied 13p to 1075.5p as the best performing stock in the top flight.
Overall, the FTSE 100 index was flat at 7474 and the FTSE 250 index rose 76.85 points to 18,641.37.
Strong performers in the second tier included building materials provider Grafton, which lifted 2% or 18.3p to 873.7p after announcing a further buyback of shares alongside in-line half-year results.
Today’s market snapshot
08:33 , Daniel O'Boyle
Take a look at our key market data with the FTSE 100 little changed
Shake up for growth investment
08:29 , Simon English
CITY traders are launching a market that will make it easier for big investors to buy shares in unlisted companies, potentially ending decades of frustration and aiding calls from the government for pension funds to give more support to “fast growth” firms.
With investors increasingly vexed with the stock market – share values are low which makes it hard to attract new London floats – JP Jenkins is linking with Square Mile stalwarts Winterflood Securities to match buyers and sellers in UK growth businesses.
JP Jenkins CEO Mike McCudden says: “There’s a problem. Unlike the US, growth companies in the UK are unable to tap into the capital they need and mature companies find themselves with limited vexit routes. It’s clear there’s demand – from policymakers, politicians and the City – for more options to help these growth businesses flourish, but the longer it takes, the more wealth creation we see leaving the country.”
JP Jenkins is using tech from parent company InfinitX to link its systems with Winterfloods.
That means buyers can trade these securities from their current trading platforms, providing a huge improvement in accessibility.
It already boasts almost 50 unlisted stocks and could have 100 by early 2024. They include Prax Exploration, Thrive Renewables, yacht maker GYG - and Stanley Gibbons, the stamp auctioneer.
Grafton Group profits fall as interest rates bite
08:09 , Daniel O'Boyle
Profits fell at building materials provider Grafton Group in the first half of the year, as the business “was adversely affected by cost-of-living pressures caused by the current environment of high inflation and successive interest rate increases”.
However, the group still expects profits in line with analysts’ expectations.
Profit fell to £93.6 million, as fast-rising interest rates have discouraged housebuilding and renovations. The group said it expects “continuing caution” among builders in the UK as the year goes on.
“Whilst market conditions are expected to remain challenging over the remainder of the year amid a backdrop of high inflation, high interest rates and cost of living pressures, our management teams lead our businesses with a through-the-cycle mindset and we are confident in the medium to long term strength of the Group’s brands and market positions to deliver superior returns” the group said.
M&S promoted to FTSE 100, Moonpig into FTSE 250
07:42 , Graeme Evans
Marks & Spencer’s four-year exile from the FTSE 100 index will end on 18 September after the results of the quarterly reshuffle were confirmed last night.
The other promoted stocks are seals and controls business Diploma, Hikma Pharmaceuticals and takeover target Dechra Pharmaceuticals.
Persimmon, Johnson Matthey, the asset manager Abrdn and specialist insurer Hiscox are the stocks to make way. The former Electrocomponents business RS Group survives, having been tipped for relegation last week.
The new entrants in the FTSE 250 are gambling group 888, construction materials firm Breedon, the recently listed CAB Payments, clean energy firm Ceres Power, sustainability-led asset manager Foresight Group and greetings card business Moonpig.
EU and US rates outlook in focus, FTSE 100 seen slightly higher
07:26 , Graeme Evans
Europe’s August inflation figure and the release of one of the Federal Reserve’s favoured price benchmarks will be closely watched by traders today.
The updates at 10am and 1.30pm respectively will feed into speculation over the potential for further interest rate rises in Europe and the US later this month.
Ahead of the releases, CMC Markets expects the FTSE 100 index to open six points higher at 7479 after posting a small rise in yesterday’s session.
Hopes that US interest rates have peaked meant Wall Street markets improved for the fourth day in a row yesterday, with the Nasdaq Composite 0.5% higher and the S&P 500 up 0.4%.
Today’s personal consumption expenditure index, which is the Fed’s preferred gauge of inflation, is the lowest since September 2021 at 4.1%.
Meanwhile, the EU flash CPI number currently stands at 5.3% and is expected to remain close to that mark. However, CMC points out that with the divergent nature of the various readings of the big four eurozone economies there is a risk of an upside surprise.
At the last ECB meeting President Lagarde suggested a pause might be appropriate at the 14 September meeting, acknowledging that policy was starting to become restrictive.
However, Deutsche Bank said this morning that market pricing is suggesting a 55% chance of a quarter point increase.
Recap: Yesterday’s top stories
06:52 , Daniel O'Boyle
Good morning. Here’s a summary of our top stories from yesterday:
Mortgage approvals fall, as buyers feel the impact of fast-rising interest rates
Superdry suspends shares and delays its financial results
Gatwick Airport profits surge to £79.1 million in the first half as passenger volumes rise to 86% of pre-pandemic levels