Yahoo Finance FTSE 100 Live 14 February: Index closes up 0.75% after inflation good news, Lyft soars despite gaffe
The London market’s inflation jitters eased a little today after figures showed consumer prices rose by less than expected in January.
The 4% annual rate of inflation was better than the City’s 4.2% forecast and provided relief after yesterday’s surprisingly strong US figure.
In today’s corporate updates, Dunelm announced a special dividend alongside its half-year results and Bloomsbury Publishing gave another boost to guidance.
FTSE 100 Live Wednesday
UK inflation holds firm at 4%
Dunelm declares special dividend
Bloomsbury Publishing lifts guidance
FTSE 100 closes at 7,568.40
16:35 , Daniel O'Boyle
The FTSE 100 closed at 7,568.40, up 0.75%, after better-than-expected news on inflation
At one stage, the index was as high as 7589, amid greater hope of interest rate cuts.
The risers’ board was led by Coca-Cola HBC, with Persimmon and Frasers next.
Entain and Endeavour Mining were the biggest fallers.
Lyft shares up by a third despite gaffe
15:59 , Daniel O'Boyle
Lyft shares are now up more than 33% in the US, after a wild after-hours trading sessions.
Shares were up by more than 60% at one point last night before it emerged that the ride-hailing firm made an error in its margins outlook, to the tune of about $600 million.
See our full US market snapshot:
Virgin Money agrees to buy Abrdn’s stake in joint investment business for £20m
15:36 , Daniel O'Boyle
High street bank Virgin Money has agreed to buy Abrdn’s stake in its investment platform for £20 million, less than a year after it was launched to customers.
The lender joined forces with investment giant Abrdn in 2019 to start Virgin Money Investments, expanding its offering from traditional retail products like savings and loans.
It launched a new digital platform, including a mobile app, for people to choose a range of investments in April last year.
Bailey: Latest inflation figures don't "broadly change picture" on interest rate cuts
15:08 , Daniel O'Boyle
Bank of England Governor Andrew Bailey remains unconvinced that today’s below-expectation inflation reading means interest rate cuts should come sooner.
Speaking before the House of Lords, Bailey said that the latest inflation figures do not “broadly change the picture” for the Bank on interest rates, compared to where the Bank was when it made its most recent decision to hold rates.
However, he also called the figures “good news”.
US market snapshot: Wall Street rebounds
15:05 , Daniel O'Boyle
Take a look at our latest US market snapshot, as shares rebound from yesterday’s steep falls.
Market snapshot: FTSE 100 still up, but by a little less
14:44 , Daniel O'Boyle
The FSTE 100 is still comfortably up for the day, despite dipping a little in the early afternoon.
Take a look at our full market snapshot:
US stocks set for rebound
14:25 , Daniel O'Boyle
Shares on Wall Street are set to bounce back today after big falls yesterday, according to futures markets.
Dow Jones futures are up 0.3% to 38,449.00, S&P 500 Futures are up 0.5% to 4,994.50, while Nasdaq futures are up 0.6% to 17,779.25.
Big risers include Arm - which was one of the top fallers yesterday - as well as trading app Robinhood and Lyft, though the ride-hailing app’s 21.6% rise wouldn’t be quite as dramatic as investors initially hoped before it was forced to correct its result announcement.
Heineken sales volumes fall as prices rise in 'challenging' 2023
14:18 , Daniel O'Boyle
Dutch brewer Heineken saw sales volumes fall in the UK and globally, in what its boss called a “challenging” 2023.
The beer giant saw revenue increase to €36.4 billion (£31 billion), but that was driven by price rises that came as input costs sharply rose. Profits were down, to €2.3 billion.
Heineken said it often raised prices before many of its rivals last year. That allowed customers to turn to rivals that may not have raised their prices.
Vodafone climbs further after e& board approval.
13:13 , Daniel O'Boyle
Vodafone shares continued to climb, and are now up 5.4% for the day at 67.6p, after approval of a new board director from UAE-owned e&.
The Emerati telecoms group announced a partnership with Vodafone last year, and was given permission to appoint a director.
The shares are still down 3% in 2024
City Comment: Love is in the air — but not for British banks
13:07 , Jonathan Prynn
The evenings are starting to draw out and Valentine’s Day is upon us.
In the City calendar that can only mean one thing — it is that bank reporting time of year.
Things kick off on Friday when NatWest reveals its 2023 numbers, followed by Barclays, HSBC, Lloyds and Standard Chartered. It has been a decent year for the “big five”.
For once there were no scandals requiring multi-billion-pound writedowns, and bad debt impairments remained at remarkably low levels considering the state of the economy.
The UK economy could already be in recession – we’ll find out tomorrow
12:28 , Daniel O'Boyle
An upmarket west London private members club for families described as a “Soho House for kids”, co-founded by the wife of one of Prince William’s closest friends, has abruptly shut down.
Maggie & Rose, which has clubs in west Kensington and Chiswick, stunned members last week when it send out an email saying it was shutting its doors “temporarily” due to “staffing and operational challenges.”
The email added: “Our members safety and experience is our top most priority. We are very sorry for any inconvenience caused.”
United Utilities backs financial outlook despite hit from storms
12:11 , Daniel O'Boyle
North West water supplier United Utilities said that its performance had been knocked off course by a series of storms over the past year, but said its financial outlook remains unchanged.
The business said that the exceptionally high rainfall would take a £25 million chunk out of the amount of incentive payments that it will receive for the financial year.
It now expects to get around £40 million from the outcome delivery incentives (ODI) – a system managed by regulator Ofwat to reward companies for providing good service to customers.
Surprise fall in food prices raises hopes for interest rate cut
11:25 , Daniel O'Boyle
Food prices unexpectedly fell for the first time in two-and-a-half years last month, raising fresh hopes that the Bank of England will be able to start cutting interest rates by June.
The 0.4% drop in January helped keep the overall headline measure of inflation — the Consumer Prices Index (CPI) — unchanged at 4.0%, according to the Office for National Statistics (ONS).
That was below City economist forecasts of 4.1% or 4.2% and shortened the odds of an early summer rate cut.
City markets are now pricing in a 55% likelihood the Bank of England will start reducing the cost of borrowing from its current level of 5.25% by as early as June.
London house prices fell in 2023, but predicted 'crash' didn't happen
10:56 , Daniel O'Boyle
London house prices fell by 4.8% in 2023, faster than any other region and close to a 15-year high, but nowhere near the property market crash that was predicted.
According to Land Registry data, the average London house price was £508,000 in December 2023. While that marks a fall of £25,000 on a year-on-year basis, it’s a long way from predictions of a double-digit percent crash for the capital’s property sector.
House prices remained surprisingly resilient as mortgage rates soared last year, in response to Bank of England rate hikes that were needed to bring inflation back under control.
Coca-Cola HBC tops FTSE 100, Rolls-Royce and Persimmon higher
10:24 , Graeme Evans
Coca-Cola HBC today topped the FTSE 100 index after annual results by the European bottling group beat City forecasts.
The group, which has an exclusive arrangement with the US company as well as partnerships with Monster Energy and Brown–Forman, hiked its dividend by 19% after 6.8% volume growth in the fourth quarter.
Chief executive Zoran Bogdanovic highlighted a third year of double-digit growth and record profits while he also pledged further progress against medium-term targets.
Shares rebounded after their recent weakness to stand 5% or 110p higher at 2316p, fuelled by the forecast of revenues growth of 6%-7% in the current year.
The FTSE 100 index rose 44.05 points to 7556.33, with Persimmon up 50.5p to 1412p amid today’s hopes of interest rate cuts by the summer.
There was also a return to form for Rolls-Royce after City firm Jefferies raised its price target to 390p, a move that helped send shares 4.7p higher to 311p.
Weakness in the mining sector limited some of the FTSE 100 upside as Glencore retreated 4.7p to 388p and Anglo American by 59.8p to 1696.2p.
Ladbrokes owner Entain posted the biggest fall, declining 4% or 41.2p to 932.6p after last night’s results by US partner MGM Resorts.
The FTSE 250 index improved 120.42 points to 19,044.25, with Trustpilot and dockyard firm Babcock International the best performers after gains of 5% and 3% respectively.
Market snapshot: Shares higher, Bitcoin keeps surging
10:21 , Daniel O'Boyle
Take a look at today’s market snapshot as the lower-than-expected inflation reading boosted shares.
Lyft shareholders taken on wild ride
09:20 , Daniel O'Boyle
Shareholders of Lyft were taken on a wild ride last night in the US after the ride-hailing firm made a $620 million error in its results.
Investors piled into the stock in after-hours trading on Wall Street, after Lyft claimed its margins were set to grow by “500 basis points”, which is five percentage points, this year.
That would suggest profits of about $911 million.
Shares soared as high as $19.70 — up by 62% from yesterday’s close — before Lyft admitted it made a mistake. In a corrected release, it said margins will actually grow by 50 basis points, or 0.5 percentage points, suggesting profits around $290 million.
The stock crashed back to earth, wiping about $2 billion off Lyft’s market value.
But investors were still encouraged by strong demand for rides to and from “high-attendance stadium events” like Taylor Swift concerts. The shares finished the after-hours trading session up 16% — that’s 160 basis points — at $14.05.
Checkout.com losses widen to £100 million
09:11 , Simon Hunt
The UK’s most valuable fintech firm today posted a £100 million loss as it blamed high inflation and a normalising of consumer shopping habits after the pandemic for its sluggish growth.
Checkout.com, which manages payments for e-commerce sites and attracted a valuation of $40 billion in a 2022 funding round, posted a net loss of $126.3 million (£100.6 million) for 2022, a more than quadrupling on the $25 million loss the previous year, while revenues slipped 5% to $246.3 million.
Checkout said it had “observed a shift in the macro environment and geopolitical backdrop in 2022, with rising inflation and reduced consumer spending/confidence having an impact on the growth of revenue.
“As Covid lockdown restrictions have been lifted the return of customers to physical retail has also had an impact on the company’s online commerce clients.”
Housebuilders lead FTSE 100 as Vodafone and BT make progress
08:50 , Graeme Evans
Shares in Taylor Wimpey and Persimmon are up 2% and 4% respectively after today’s inflation figures boosted hopes of a continued retreat in mortgage costs.
Retailers JD Sports Fashion and B&M European Value also featured on the FTSE 100 risers board alongside BT Group, which rallied 1.6p to 104p.
Vodafone lifted 1.5p to 65.65p after it said the chief executive of major shareholder Emirates Telecommunications had received regulatory clearance to become a non-executive director.
The best performing stock in the FTSE 100 was bottling company Coca-Cola HBC, which jumped 5% or 104p to 2310p after annual results included a 19% dividend hike.
The top flight rose 44.82 points to 7557.10, while today’s inflation cheer meant the UK-focused FTSE 250 index improved 86.98 points to 19,010.81.
Higher second tier stocks included the retirement savings business Just, which lifted 0.7p to 82.8p.
Inflation figures a relief to markets 'braced for a bump'
08:15 , Daniel O'Boyle
Sarah Coles, head of personal finance at Hargreaves Lansdown, says the latest inflation figures will be a relief as markets were ‘braced for a bump’.
“Like a tall man in a cramped cottage, we were braced for a bump, so it’s a relief that inflation held at 4%. The even better news is that it’s expected to fall sharply from here. However, we can’t afford to relax, because there will still be bumps along the way.
“Behind the placid headline figure, there was plenty of movement. The £94 hike in the energy price cap in January means that electricity was up 4% on the month and gas up 6.8%. Both are down over the year and energy prices are nowhere near as painful as in the immediate aftermath of the invasion of Ukraine.
“Prices are down 18% from the peak in January 2023. However, they’re still far higher than before all this started – up 89% since January 2021. Energy bills are still a stretch for millions of families, and separate ONS figures show that more than two in five say it’s difficult to pay these bills.”
Could the Bank of England cut this Spring?
08:04 , Daniel O'Boyle
Thomas Pugh, economist at leading audit, tax and consulting firm RSM UK, said the expected decline in inflation in the coming months could lead the Bank of England to cut rates this spring.
He said: “Inflation in the UK economy is clearly easing much more quickly than expected and the surge in prices of the pandemic and energy crisis will soon be a bad memory. Indeed, we still expect inflation to fall below 2% as early as April, which would throw the door wide open to an interest rate cut in the spring or early summer.
“Inflation held steady at 4% in January compared to expectations of a rise to 4.1%, continuing its streak of underperformance. Admittedly, there were some mixed messages within the report. Core inflation, which excludes volatile components like food and energy, remained steady at 5.1% while services inflation, which is closely related to price pressures in the domestic economy, ticked up to 6.5%. However, even services inflation came in much lower than expected and the rise was largely related to base effects.”
'Inflation to fall below 2% by April'
07:30 , Daniel O'Boyle
Paul Dales, chief UK economist at Capital Economics, says that while inflation remains above-target, signs from recent months suggest that it is likely to fall below 2% soon.
Dales said: “By staying at 4.0% in January rather than rising as widely expected, January’s UK CPI inflation figures are better than expected and do not mimic yesterday’s surprisingly strong US inflation release. In fact, we think UK CPI inflation will fall sharply in the coming months and will be back below the 2.0% target in April.
“Core inflation was also stable at 5.1% and services CPI inflation did nudge up for the second month in a row, from 6.4% to 6.5%. But even that was below the BoE’s forecast of 6.6%. What’s more, more disinflation has already happened than those annual rates suggest. On our seasonally adjusted measure, the 3-month annualised rate of core prices was just 0.6%. That means there is plenty of room for that rate to rebound in the coming months and the overall annual rate to still come down.”
Dunelm declares special divided as sales rise at homewares chain
07:30 , Joanna Bourke
Homewares retailer Dunelm has reported higher sales and profits, but the chain cautioned the consumer outlook remains uncertain.
In the first half total sales increased 4.5% to £872.5 million. Pre-tax profits rose to £123 million from £117.4 million.
Boss Nick Wilkinson said: “We are encouraged by the wide variety of new customers shopping with Dunelm.”The board declared an interim ordinary dividend of 16p per share, as well as a £71 million special dividend of 35p per share.
Bloomsbury hails "publishing phenomenon" Maas as it upgrades targets
07:28 , Daniel O'Boyle
The boss of Bloomsbury publishing hailed author Sarah J. Maas as a “publishing phenomenon” as it revealed its revenue and profits are set to be “significantly ahead” of expectations.
The business said it would invest more in fantasy following the success of her books, with the most recent release - House of Flame and Shadow in January - being an especially big hit.
Boss Nigel Newton, said: "I am overjoyed to report an exceptionally strong period of trading, principally driven by the increasing demand for fantasy fiction.
“Sarah J. Maas is a publishing phenomenon and we are very fortunate to have signed her up with her first book 13 years ago. Her books have a huge audience which continues to grow backed by major Bloomsbury promotional campaigns, driving strong word of mouth recommendation, particularly through TikTok and Instagram channels.”
FTSE 100 seen higher as inflation jitters ease, Arm Holdings reverses 19%
07:20 , Graeme Evans
The UK inflation reading of 4% appears to have lifted stock market sentiment after yesterday’s elevated consumer prices figure in the United States.
The S&P 500 index last night closed 1.4% lower and the Nasdaq Composite slumped by 1.8% after the annual rate of US inflation fell by less than expected.
The reading of 3.1%, which compared with forecasts of 2.9%, prompted Wall Street to revise bets on the date of the first cut in interest rates to June.
The subsequent rise in bond yields put pressure on valuations in the tech sector, with Magnificent Seven stocks including Meta Platforms and Amazon down by about 2%.
Arm Holdings reversed 19% after a strong run for shares since last week’s results, but semiconductor firm Nvidia held firm thanks to a broker upgrade.
Sentiment in Europe was impacted by the US inflation reading as the Dax fell 0.9% and the FTSE 100 index dropped by 0.8%.
However, IG Index expects London’s top flight to open about 24 points higher at 7532 after futures trading was lifted by today’s unchanged UK inflation reading of 4%.
Inflation figures 'justify the Bank of England's decision to hold rates'
07:18 , Daniel O'Boyle
Jeremy Batstone-Carr, European strategist at Raymond James Investment Services, says that the latest inflation figures, while below expectations and showing a month-on-month drop in prices, justify the Bank of England’s decision to hold rates.
He said: “This morning’s January CPI data shows a continuation of the strengthening inflationary pressures seen in December. Despite the sharp fall in consumer price pressures over the first month of the year, inflation has not abated, justifying the Bank of England’s decision to hold UK interest rates steady at its early February meeting.
“There are numerous forces influencing prices for UK customers – Ofgem’s lifting of the energy price cap has added upward pressures, while a hearty fall in food prices and alcohol duty has provided some respite – and just in time for Valentine’s Day.
“But the Bank of England’s vision is not clouded by rose-tinted glasses, with their recent economic forecasts emphasising that any future decisions regarding interest rate cuts will consider the evolution of price pressures. Today's confirmation of increased year-on-year core consumer prices will signal that rate-setters must not yet drop their guard.
“That being said, today’s inflationary pressures are not expected to last. With winter slowly turning into spring, inflationary pressures will gradually improve, the icing on the cake being the sharp drop in the utility regulator’s energy price cap scheduled for April. All this should drive inflation to the 2% target, as anticipated by the Bank. Should the summer bring a partial reacceleration in inflation, as is forecast, aggressive rate cuts may not be on the horizon. Nonetheless, a partial loosening will provide welcome relief for hard-pressed households and businesses in the months to come.”
Services inflation figures show 'tight labour market sustaining'
07:13 , Daniel O'Boyle
Services inflation was 6.5%, up a little from December but below market expectations of 6.8%.
Members of the Bank of England’s Monetary Policy Committee have said they are watching services inflation particularly closely, as they believe it better reflects underlying price pressure sin the country.
Marion Amiot, senior European economist at S&P Global Ratings, said: “The latest inflation print is another reflection of what is happening in the labour market: a tight labour supply is sustaining.
“High wage growth and thus underlying inflationary pressures, especially in services.
“That said, recent developments will continue to put inflation on a downward path.
“Aside from easing energy, food and producer prices, falling vacancies and easing wage pressures are offering positive signs for the Bank of England, that tighter financing conditions are cooling labour demand.”
Furniture and household goods prevent inflation from rising
07:07 , Daniel O'Boyle
ONS chief economist Grant Fitzner said: “Inflation was unchanged in January reflecting counteracting effects within the basket of goods and services.”
“The price of gas and electricity rose at a higher rate than this time last year due to the increase in the energy price cap, while the cost of second-hand cars went up for the first time since May.
“Offsetting these, prices of furniture and household goods decreased by more than a year ago and food prices fell on the month for the first time in over two years.”
“All of these factors combined resulted in no change to the headline rate this month.”
Inflation steady at 4%, slightly below expectations
07:02 , Daniel O'Boyle
The rate of inflation in the UK ticked up to 4.0% in January, slightly below expectations.
Economists had predicted a small rise to 4.2%.
Core inflation was steady at 5.1%, again a little below expectations.
On a monthly basis, prices were down 0.9%, though big price drops are more common in January.
Investors will hope the better-than-expected figures will lead to interest rate cuts coming sooner than previously thought.
Recap: Yesterday's top stories
06:41 , Simon Hunt
Good morning from the Standard City desk.
Another day, another delisting.
Yesterday Tui investors voted by 98% to approve management plans to make Frankfurt its sole market, delisting from London.
Meanwhile, the big one that got away, Cambridge-based Arm Holdings is on a spectacular run on Nasdaq that has made it the UK’s fourth biggest quoted company. Imagine the incredible shot in the, er, arm, that would have given the London stock market if such a tech champion was still trading over here.
But while London’s public equity markets are still being given the cold shoulder, investment across the capital as a whole has never been stronger.
Figures published yesterday by the London Property Alliance show how the capital has seen a surge in foreign direct investment (FDI) since the end of the pandemic while its biggest global rivals, including New York, Paris and Hong Kong have suffered declines.
In the third quarter alone, London attracted £1.3 billion of FDI capital, by far the most of any European city. In the fourth quarter there were 103 FDI projects recorded, up 16% on the 89 seen in the same period in 2022.
The figures demonstrate London’s resilience as an economic powerhouse even when its traditional financial markets are under a cloud. Nevertheless it is not a good look for London’s shop window financial market to appear so lacklustre compared with rival stock exchanges in America.
Here’s a summary of our other top headlines from yesterday:
Wages rise by a faster than expected 6.2% to keep the pressure on the Bank of England while vacances fall for 19th cpnsecutive month
Daily Mail owner DMGT cuts the value of its tech investments by more than £100 million
Two day court hearing into Gove’s decision to block the demolition of M&S Marble Arch case starts
