FTSE 100 Live: ‘Massive house price rises may be nearing end’; Next faces shareholder revolt; shares up
Plans for mass job cuts at BT and a big loss at the owner of strike-hit Royal Mail are among today’s major corporate developments.
Investors have also heard from the bosses of Burberry, National Grid and the Mr Kipling owner Premier Foods.
The FTSE 100 index, meanwhile, is higher after Wall Street was boosted yesterday by optimism that the US can avoid a debt default.
Here’s a look at how the markets have moved as of midday London.
Click through the buttons below to explore the different charts.
FTSE 100 Live Thursday
BT reveals job-cutting plan, shares slide
Royal Mail owner reveals big loss
US debt ceiling optimism boosts markets
Lloyds Bank faces pressure from staff over ‘attack’ on flexible working
15:37 , Daniel O'Boyle
Lloyds Banking Group has come under pressure from unions over trialling changes to its hybrid working policy, accusing the bank of discriminating against working parents, women and carers.
The banking giant’s chairman, Robin Budenberg, also faced disruption from climate protesters at the group’s annual general meeting (AGM) in Glasgow.
Mr Budenberg said the policy changes – which reportedly will ensure staff go into the office for two days a week – were part of a pilot scheme and not set in stone.
Markets snapshot as trading opens in New York
14:54 , Simon Hunt
Here’s a snapshot of markets in the US as trading opens on Wall Street. The Nasdaq has made gains but the S&P is down slightly.
Queen Elizabeth’s funeral cost the Government £161.7million, Treasury reveals
14:46 , Daniel O'Boyle
Queen’s Elizabeth’s funeral and related events cost the Government £161.7million, the Treasury revealed on Thursday.
The queen’s funeral on September 19, 2022, was preceded by a period of national mourning which included a lying-in-state at London’s Westminster Hall to give the public a chance to bid goodbye to their longest-reigning monarch in person.
Next faces shareholder revolt in chairman re-election vote
14:32 , Daniel O'Boyle
Retail giant Next saw more than 20% of its shareholders vote against the re-election of chairman Michael Rooney, as they rebelled against the company’s pay policy.
At the retailer’s annual general meeting, shareholders representing 20.8% of votes opted to reject the motion to re-elect Rooney as chair, while 16% also voted against Next’s remuneration policy. Next CEO Simon Wolfson is set to make £2.5 million in base salary and could make up to £3.75 million in bonuses.
“Whilst Resolution 12, to re-elect Michael Roney, was passed with a clear majority, the Board recognises that there was also a significant vote against this resolution,” Next said. “The board will seek to engage with those shareholders who voted against this resolution.”
Wealth management firm St James’ Place also faced a revolt over directors’ earnings, with 22.2% of votes cast against its pay policy.
US shares set to fall slightly
14:20 , Daniel O'Boyle
US shares are set to open down slightly today, despite lower-than-expected jobless claims.
Dow Jones futures are down 0.3% to 33350, while S&P 500 futures are down 0.2% to 4162. Nasdaq futures are down 0.1% to 13633.
That comes as US initial jobless claims came in lower than expected at 242,000, as the US labor market continues to appear more resilient than expected.
“Today’s US jobless claim numbers came in lower than expected at 242,000 versus an expected 251,000,” Ryan Brandham, head of global capital markets for North America at Validus Risk Management, said. This brings the figure back into more normal ranges following last week’s elevated print, perhaps suggesting the outlier result was a one-off. Following the news, we’re seeing at the margin bullish US rates and bullish USD for today’s session.”
In today’s Standard...
14:10 , Simon Hunt
In today’s Evening Standard: BT’s job cuts, Royal Mail’s losses, National Grid’s update, Easyjet, De La Rue, Mortgages and more.
The papers will be hitting the streets soon...pick up a copy from your nearest tube station.
Bank of England will not reduce balance sheet to pre-2008 levels, says Governor
14:04 , Daniel O'Boyle
The Bank of England will not return its balance sheet to levels from before the financial crisis, the central bank’s Governor has told MPs.
The bank started a programme of quantitative easing following the 2008 financial crisis, where it purchased government bonds.
Top Italian investment bank Mediobanca buys London’s Arma in tech sector push
13:57 , Daniel O'Boyle
Italian investment bank Mediobanca has agreed to buy boutique advisory firm Arma Partners, which is based in The Shard, as it hopes to get closer to London’s top tech companies.
Arma, which employs 86 people, has advised on a number of major tech deals, including Atos’ acquisition of Cloudreach and EQT’s purchase of Suse. In total, it has advised on more than $85 billion worth of deals and its revenue last year was more than $100 million.
Mediobanca is among the largest investment banks in Italy, making a profit of €907 million last year. CEO Alberto Nagel said he wanted to deepen ties with top tech firms, and buying Arma was the best way to do so.
Ovo and Good Energy to pay £4m compensation for overcharging customers
13:01 , Daniel O'Boyle
Ovo Energy and Good Energy are set to pay £4 million in compensation after overcharging customers during the energy crisis.
Some 18,000 households did not receive protection they were due, Ofgem said.
Ofgem said it was “totally unacceptable” that people were overcharged during an “already so challenging and stressful time” for consumers.
Burberry in new warning on tourist tax as minister breaks ranks
12:13 , Daniel O'Boyle
The boss of Burberry on Thursday warned that the tourist tax is diverting vital spending away from its London stores to Paris as a government minister broke ranks to urge Jeremy Hunt to scrap it.
Burberry’s chief executive Jonathan Akeroyd said the Government’s “disappointing” decision to end the 20 per cent VAT shopping refund for foreign visitors was costing the company dear.
Announcing annual financial results for Britain’s biggest luxury fashion brand, he said London stores — including the Regent Street flagship — were recovering from the pandemic much more slowly than outlets on the Continent.
An end to big house price rises?
12:02 , Daniel O'Boyle
A senior economist at the Office for Budget Responsiblity (OBR) says that the "age of massive rises of house prices may be nearing an end.”
Speaking at the Economics Statistics Centre for Excellence’s conference, David Miles said that the forces driving up price rises “are going to be much weaker” over the next 40 years than they have been for the last 40.
“This unusual age of massive rises of house prices may be nearing an end”.
Young female stars crowned winners of 2023 TechGirl awards
11:48 , Daniel O'Boyle
A competition to find future female tech stars has awarded its latest set of prizes for ideas on how technology can be used to improve schools and education.
Girls aged 16-18 from across England were invited to submit their ideas as part of the TechGirl 2023 competition, its second annual award series. They were encouraged to think critically about their own school experience to identify an important challenge facing the education system, and to think creatively about how technology can be used to solve that problem.
Home repossessions are up 50%. Should we be worried?
11:16 , Daniel O'Boyle
The needle on the home repossessions dial is starting to flicker again.
Latest data from UK Finance today showed 750 owners had their homes forcibly taken away from them in the first quarter of the year, up 50% on the 500 in the last three months of 2022. Should we be worried?
National Grid calls for ‘agile’ regulation in green power push as profits near £5 billion
10:51 , Daniel O'Boyle
Annual profits at the distributor of the UK’s electricity neared £5 billion today, and its boss said measures used to keep the lights on this winter by cutting demand were a “glimpse of the future” as the UK drops fossil fuels.
National Grid’s overall operating profit for 2023 hit £4.8 billion, up 12%, with profits from its core electricity distribution business surging by almost two-fifths to £1.2 billion.
Future shares under pressure, Vistry and Genuit higher in FTSE 250
10:37 , Graeme Evans
Shares in Four Four Two and Country Life publisher Future today fell 16% or 163.5p to 882.5p, leaving the former high-flying FTSE 250 stock back where it was in the early days of the Covid pandemic.
The £200 million sell-off came as Future reported a 3% decline in profits to £130.3 million and said the full-year outturn was likely to be towards the bottom end of City hopes.
It has been dealt a blow by a fall in online visits and revenues at its Games, Entertainment & Technology arm, partly due to the impact of a Google algorithm change.
The shares had been as high as 3940p at the end of 2021 but have slumped amid a rotation from growth stocks and the recent departure of Zillah Byng-Thorne, whose decade in charge transformed Future from a £30 million small cap company.
New boss Jon Steinberg said today: “The macroeconomic environment remains tough, but we are well positioned to continue to outperform the industry.”
Future’s decline failed to prevent the FTSE 250 index from rising 86.46 points to 19,301.91, with housebuilder Vistry up 26.5p to 840.5p after its AGM update highlighted improving market conditions and unchanged full-year guidance.
Genuit, the former Polypipe business involved in the supply of water, climate and ventilation products, jumped 8% or 23.5p to 321.5p after its update pointed to full-year profits slightly ahead of City hopes.
Other second tier risers included pub chain Mitchells & Butlers, up 14.1p to 213.2p as analysts at Jefferies lifted their price target to 270p following yesterday’s results.
In the FTSE 100 index, risk appetite improved on optimism that the US leaders will find a way to avoid a US debt default.
The top flight ended a run of lacklustre performances by rallying 0.7% or 51.06 points to 7774.29, with JD Sports Fashion back in favour after a rise of 5.25p to 168.25p. Housebuilders also rallied to leave Persimmon 32.5p higher at 1352p.
Trench coat revival helps boost Burberry sales
10:09 , Daniel O'Boyle
Burberry said a renewed focus on its classic trench coat under new chief creative officer Daniel Lee helped drive its sales beyond the £3 billion mark for the year to 30 April.
The luxury fashion brand held a runway show at Kennington Park celebrating the iconic piece of outerwear, which was designed in 1912. At the same time, it launched a fresh version of the trenchcoat.
“As a result, we saw very strong acceleration in heritage rainwear, with comparable store sales doubling in the quarter,” Burberry said.
Sales for the year were up 10% to £3.1 billion, thanks to strong growth in continental Europe, while profits rose by 21% to £634 million, thanks in part to a new team to manage supply chains.
Burberry shares are down by 163p to 2,359p today.
The serial start-up man whose final stop will be delivery vans
10:01 , Daniel O'Boyle
When Tristan Thomas has some spare time on his hands, rather than sink into a Netflix binge, he starts a new business.
It was while working as head of marketing at digital bank Monzo that he launched a wine company side hustle — “it was lockdown,” he says, “and I found myself with time on my hands and a desire to source cheap wine.” And it was while he was running the wine business and about to leave Monzo that he decided to start a logistics company.
De La Rue picks turnaround specialist Whiley as chair
09:38 , Daniel O'Boyle
Banknote printer De La Rue has appointed seasoned turnaround specialist Chris Whiley as its new chair, after its share price fell by 60% in the last six months.
Whiley is currently chair of Mothercare, leading the retailer through the collapse of its UK business and turning it into a brand focused on overseas markets.
He was also chair of funeral director Dignity from 2019 until he was ousted in a shareholder revolt in 2021. He joined the business after its share price had fallen by more than 80% in the space of just over 18 months.
De La Rue, which has seen shares tumble after repeated profit warnings in the past year, noted that Whiley “is capable of operating in all operational, financial or regulatory circumstances”.
“I am keen to lend my proven experience and knowledge to assist management as it strives to optimise the underlying intrinsic value of the business,” Whiley said.
Markets live: Snapshot after FTSE open
08:39 , Simon Hunt
Here’s a look at how the markets have moved in the first minutes of trading in London this morning.
Click through the buttons below to explore the different charts.
BT shares slide 8%, FTSE 100 up 0.5%
08:28 , Graeme Evans
Shares in widely-held BT and Royal Mail owner International Distributions Services are struggling today after the former state-owned pair published annual results.
The telecoms giant slumped 8% or 12.6p to 135.5p in the FTSE 100 index, while the strike-hit postal firm retreated 2.3p to 219.9p after initially being 5% lower.
Other big moves today included a 5% drop for Burberry after its full-year results, while digital publisher Future lost 10% or 103p to 943p on the back of its cautious full-year guidance.
The FTSE 100 index is 0.5% or 42.01 points higher at 7765.24, with the UK-focused FTSE 250 index up 64.90 points at 19,280.35.
National Grid profits near £5 billion as it calls for rule changes on green power connections
08:01 , Michael Hunter
Annual profits at the distributor of the UK’s electricity neared the £5 billion mark today, and it emphasised its call for changes to the rules on connecting green energy projects to the network.
National Grid’s operating profit for 2023 hit £4.8 billion, up 12%, with profits from its core electricity distribution business surging by almost two-fifths to £1.2 billion. It raised investment to a record £7.7 billion, up 15%.
The FTSE 100 company’s CEO. John Pettigrew, said the numbers came “at a pivotal moment in the decarbonisation journey” and repeated his call for rules to be overhauled.
“I think everyone is starting to recognise the scale of the transformation that is going to be required ... we need a much more agile regulatory framework,” he told The Standard.
He called for an end to the first-come-first-served approach to connecting new power projects to the grid, in favour of a more selective approach, to prioritise ones that are ready, and an “amnesty” for ones that need to leave the queue.
BoE governor to be quizzed by Treasury committee
07:58 , Graeme Evans
Bank of England governor Andrew Bailey is to appear before MPs this morning as the cross-party Treasury select committee continues its inquiry into quantitative tightening.
The session will examine the impact of the previous policy of quantitative easing in the outbreak of double-digit inflation and whether tightening will bring inflation down.
Deputy governors Ben Broadbent and Dave Ramsden are also due to give evidence in a hearing that is taking place at Threadneedle Street from 10.15am.
Quantitative easing, which involves bond buying in order to bring down long-term interest rates, was last used in November 2020.
The Bank has faced criticism for being too slow in tightening monetary policy, although Bailey has argued that no-one could have foreseen the price impact of the Russian invasion of Ukraine.
The Bank started its rate hiking cycle in December 2021, when inflation was at 5.1% and over double the 2% target, and began selling the assets it purchased from last November onwards. It has now lifted the base rate for 12 meetings in a row to 4.5%, with more likely to be needed if inflation pressures persist.
Mass job cuts to come at BT
07:29 , Simon English
UP to 55,000 jobs could go from BT by the end of the decade as AI powered robots are employed to do customer service and the telecom giant completes its full-fibre internet network.
At the moment BT employs 130,000 and has been, in the words of CEO Philip Jansen, “building like fury” its ultra-fast broadband matrix.
Once that is done, a new, “leaner, high-tech” company will need far fewer people to service the network.
While no jobs are directly on the line today, BT is trying to prepare workers and the market for where it thinks the business will be in seven or eight years time.
In a results statement today the company guided for a reduction in the “labour resource” from 130,000 to between 75,000 and 90,000.
Unions are likely to begin fighting for those jobs very soon.
Continental Europe drives profit up at Burberry as shoppers flock to Paris over London
07:28 , Daniel O'Boyle
Continental Europe drove profit up for Burberry in the year to the end of April, in the latest sign that foreign tourists are ditching London for Paris and Rome as the “tourist tax” continues to hit the capital.
Profit came to £634 million, up 21%, as sales rose above £3 billion.
Much of the growth was driven by Burberry’s Europe, Middle, East, Asia and Africa division. This includes the UK, where sales were up to £257 million, but the fashion house said that the main overperformer was continental Europe.
Burberry’s chair Gerry Murphy has been among the business leaders warning that the end of VAT-free shopping for tourists in the UK would cause shoppers to choose cities in mainland Europe over London.
Royal Mail made £1 billion loss after cutting thousands of jobs
07:15 , Simon Hunt
Royal Mail made a loss of £1 billion in the year to the end of March 2023 after the postal service was hit by a wave of strikes and slump in demand for parcel deliveries.
Royal Mail owner International Distribution Services said the loss was “due to industrial action, inability to deliver the in-year benefits of planned productivity improvements, lower test kit volumes and a weaker online retail market.”
The firm said it had completed a 10,000 reduction in its staff numbers by the end of March, and last month reached a deal with the Communication Workers Union that would see a 10% pay rise and profit share scheme for remaining staff.
IDS chair Keith Williams said: “I said before that we had reached a crossroads at Royal Mail. Now that we have a negotiators agreement with CWU that will shortly go out to ballot, and thanks to the good progress made on our five-point plan to stabilise Royal Mail, our destination is coming into sight.”
“If ratified, the CWU agreement provides greater job security and increased rewards - through both pay and profit share - for our employees. Successful delivery of the agreement will be key.”
US debt ceiling optimism boosts Wall Street, FTSE 100 seen higher
07:11 , Graeme Evans
The FTSE 100 index is set for a stronger session after Wall Street markets rallied on optimism that the US can avoid a debt default.
The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite all finished in the region of 1.2% higher after encouraging comments on the debt ceiling were made last night by President Joe Biden and House Speaker Kevin McCarthy.
The buying momentum means the 100 leading shares of the tech-focused Nasdaq have now retraced 50% of the declines from the November 2021 record highs.
CMC Markets expects London’s FTSE 100 index to end this week’s downbeat run by opening 26 points higher to 7749.
Meanwhile, sterling stood slightly lower at just below $1.25 as attention turns to this morning’s Treasury Select Committee appearance by Bank of England governor Andrew Bailey.
Recap: Yesterday’s top stories
06:43 , Simon Hunt
Good morning. Here’s a summary of our top stories from yesterday.
Beleaguered property business PurpleBricks, which once had a market cap of £1.4 billion, was bought by Strike in a £1 rescue deal.
MPs have said crypto has ‘no useful purpose’ and should be classed as gambling
Business leaders have complained the scrapping of VAT-free shopping is harming London.
Today we’re expecting results from:
Royal Mail owner International Distribution Services