Yahoo Finance FTSE 100 Live: Pound tops $1.20 as Brexit NI deal reached, new Ofgem energy price cap revealed
Associated British Foods today said it had been boosted by better-than-expected trading at retail division Primark.
The FTSE 100-listed food-to-retail conglomerate lifted guidance for the full year, aided by a “material improvement” in Primark trading.
Meanwhile, regulator Ofgem has revealed an updated household energy price cap of £3,280 from April.
FTSE 100 Live Monday
AB Foods lifted by strong Primark trading
Ofgem cuts energy cap but higher bills loom
Bunzl reports higher earnings and dividend
Palantir to cut 2% of jobs in bid to slash costs
16:56 , Simon Hunt
Software business Palantir said it planned to cut 2% of its workforce in a bid to slash operating costs, in a move that will see at least 70 jobs go.
A Palantir spokesperson said: “Our company is at an inflection point, and to continue to evolve we are making the tough choice of reducing teams in several areas.
“While less than 2% of our workforce is impacted by these changes, these are incredibly painful decisions but the right ones for the company’s future.”
FTSE closes up 56 points to 7,935.11
16:41 , Simon Hunt
The FTSE 100 made gains at the end of the day’s trading session in London, climbing 56 points to 7,935.11.
The blue-chip index was relatively unchanged by news of a new Northern Ireland deal agreed between the UK and the EU, suggesting that the outcome was either priced in or carried little economic weight. Parties in Northern Ireland have yet to announce whether they support the terms of the deal.
Bloomberg chief European economist Jamie Rush said: “A yawning gap between the UK and advanced-economy peers suggests Brexit is costing as much as 4% of GDP annually.
“Monday’s deal with the European Union, which should significantly reduce trade frictions on the Northern Ireland border, won’t directly move the dial on UK GDP. But, by trimming uncertainty and unblocking avenues to a closer UK-EU relationship, the agreement could represent a landmark moment.“
City reacts to Sunak Brexit deal on Northern Ireland
16:19 , Simon Hunt
Business leaders are reacting to news Rishi Sunak has agreed a new deal with the EU over the Northern Ireland Protocol.
Richard Burge, Chief Executive of the London Chamber of Commerce and Industry (LCCI), said: “Since the conclusion of Brexit, our economic and political relationship with the EU has been much more fraught than it should have been. Despite claims of Brexit being ‘done’, it has felt anything but. To thrive, businesses need stability and predictability.
“That is why we are pleased that Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen have agreed a new deal on the Northern Ireland Protocol and we hope today marks the start of a more collaborative relationship with our largest trading partner, one which will lead to greater shared prosperity.”
“The measures introduced to enable the free flow of trade between Great Britain and Northern Ireland will be of significant value to businesses in England, Wales, and Scotland trading with Northern Ireland and vice-versa. However, we recognise that the result is still far from a perfect solution.
Miles Robinson, partner in the litigation & dispute resolution team at Mayer Brown, said: "The NI protocol deal will likely be a source of concern for many businesses, who will be wondering what they must do - and how - to meet the new requirements it introduces.
“Although we don’t know what the finer details of the deal are yet, what we do know is that businesses with trading links to Northern Ireland will face changes to their current procedures - and possibly increased costs of compliance.
“Businesses will therefore be looking carefully at their existing contracts to assess how they are affected, and in particular whether there are clauses that address the impact of changes in legislation.”
Parliament will vote on deal ‘at appropriate time’
15:57 , Simon Hunt
Parliament will have a vote on today’s post-Brexit deal “at the appropiate time”, Prime Minister Rishi Sunak said, but MPs will need to take time to go through the details.
Prime Minister Rishi Sunak said the DUP will want to digest the detail of today’s agreement, but politics aside, the deal answers concerns of the people of Northern Ireland.
Ursula von der Leyen confirmed the European Court of Justice will have the final say on EU law and single-market issues.
Sunak: ‘We have made a decisive breakthrough'
15:40 , Simon Hunt
“I’m pleased to report we have now made a decisive breakthrough,” Rishi Sunak told reporters as he stood beside Ursula von der Leyen at a news conference.
“Together we have changed the original protocol and today are announcing the new Windsor Framework.”
The prime minister said the new deal delivers smooth trade and “safeguards sovereignty for the people of Northern Ireland”.
The prime minister said today’s agreement removes “any sense of a border in the Irish Sea”.
Rishi Sunak said food that is available on supermarket shelves in UK will be available also in Northern Ireland.
He also said today’s agremeent means anyone sending mail or online shopping between the UK and Northern Ireland will have to complete no customs papework.
Pound gets a lift as NI Protocol agreement reached
14:27 , Simon Hunt
The pound has risen to an intraday high of $1.20 after news emerged the UK has reached a deal with the EU over the Northern Ireland Protocol.
Sterling has jumped around three quarters of a cent to $1.2020 since markets opened this morning as investors welcomed the prospect of an end to political uncertainty and disruption to trade.
A source told the BBC: “An agreement has been reached. The deal is done.”
Earlier today, Rishi Sunak met with EU Commission president Ursula Von der Leyen to hammer out the final terms of a deal.
Full details of the deal are expected to be released later today.
A senior government source tells the BBC:
“An agreement has been reached. The deal is done.” https://t.co/kXhfpoDlq9— Chris Mason (@ChrisMasonBBC) February 27, 2023
Wall Street: Stocks to make gains after worst week since December
14:12 , Simon Hunt
Stocks are set to make gains in New York today, partially reversing a bitter week for Wall street, the worst week since December.
Economic data released today shows orders for durable goods fell the most since April 2020, but when excluding transportation equipment, durable goods rose higher than expected. In signs of green shoots for the US economy, orders for business equipment at factories rose in January, suggesting firms are continuing to make capital investments rather than hoard cash.
City Comment: Small firms offer hope of an end to ‘the great chaos’
12:44 , Simon Hunt
Is the great business investment drought finally coming to an end? Firms’ unwillingness to commit money to the long term during “the great chaos”— the period from David Cameron’s announcement of the Brexit referendum in February 2016 to the resignation of Liz Truss in October 2022 — has been one of the biggest factors in Britain’s recent years of miserable economic underperformance.
It is only a straw in the wind but a poll finance broker Charles & Dean releases today suggests that London’s small and medium sized businesses — a real engine room of the economy — have finally decided it is safe to invest again.
In 2022 just 59% made a significant business investment but this year 96% plan to do so. The average earmarked for investment is £316,000 — not in itself a huge sum, but multiplied across hundreds and thousands of enterprises enough to give the economy a real boost.
It makes a welcome change from businesses hoarding their cash at a time of bewildering and at times frightening uncertainty over a period that included the rancour of the Brexit fallout, the Covid pandemic, Russia’s invasion of Ukraine, the revolving- door changes of leadership at the top of the Government, and finally the disastrous experiment with Trussonomics.
The poll finds most businesses still do not believe the Government is doing enough to encourage investment, but that is not stopping them pressing the button on decisions that will often only yield returns years down the track.
If Britain is to have a chance of moving towards the head of the G7 economic leaderboard that trend will have to be sustained. The new era of dull stability that Rishi Sunak and Jeremy Hunt have managed to keep going for six months now is a huge help. And is a reason why the Chancellor will do little that could risk unsettling the markets come Budget day next month.
Sajid Javid to join Centricus Asset Management: reports
11:27 , Simon Hunt
Ex-chancellor Sajid Javid is set to join Centricus Asset Management, according to a report by Bloomberg.
The MP for Bromsgrove, who worked for American bank JP Morgan before joining parliament, is to become a senior adviser to the $40 billion investment firm.
In December Javid said he would not be standing as an MP at the next general election.
It follows a similar move by former chancellor George Osborne, who worked for investment firm Blackrock before joining asset manager Robey Warshaw after he left front-line politics.
Begbies eyes boom in business as firms suffer in downturn
10:43 , Simon Hunt
An economic slowdown might be bad for most of us, but insolvency specialist Begbies Traynor is eyeing up more business.
It said today it is seeing “an encouraging level of new insolvency appointments across all market segments”.
The on-going administration of Paperchase is one of its deals. There are “resilient income streams and a continuing flow of new instructions”.
Sales in the third quarter are in line with the first half of the year, it reassured the market. City analysts expect Begbies to make profit for the year of around £20 million.
The shares rose 4p to 136p.
FTSE 100 rallies, Rolls up another 4%
10:18 , Graeme Evans
The FTSE 100 has made a better-than-expected start to the week, lifting 0.8% or 67.14 points to 7945.80.
The risers board is led by engines giant Rolls-Royce, which is up another 4% or 6p to reach a fresh three-year high at 142p. That compares with 107p prior to Thursday's bullish turnaround comments from new boss Tufan Erginbilgic alongside forecast-beating 2022 results.
Sentiment was further helped today when Airbus predicted that airlines based in the Pacific region will take delivery of 920 new aircraft over the next 20 years, including 170 widebodies like the A330neo and A350.
Other risers in the FTSE 100 included Prudential, which added 24p to 1240.5p after UBS raised its price target to 1575p.
In the FTSE 250 index, shares in Dechra Pharmaceuticals slumped 16% after the vet products specialist forecast annual profits towards the lower end of City expectations.
The Cheshire-based company has seen unpredictable trading at the start of the year as US wholesalers look to reduce inventory levels. With the animal healthcare market returning to more normalised levels of growth following the boost during Covid-19 lockdowns, half-year operating profits fell 22% to £44.6 million.
Today’s share price decline of 504p to 2600p means the former FTSE 100 stock has lost all this year’s gains, but broker Liberum is supportive with an unchanged target of 3100p.
The FTSE 250 index rose 63.13 points to 19,759.66, with Trainline up 3% or 7.3p to 253.3p after analysts at Deutsche Bank raised their price target to 350p.
Primark on the up
09:29 , Simon English
PRIMARK’S focus on the high street and on cut price fashion looks set to make it one of the retail winners in the post-pandemic world as shoppers on the hunt for a bargain flock to its stores.
John Bason, the finance director of parent group ABF said people are enjoying the thrill of being in actual shops instead of waiting for deliveries at home.
“Not only are they back, they are back with a bang,” he told the Standard. “We have consigned those bad Covid days to the past. Oxford Street is doing incredibly well.”
Sales at its 419 stores should rise 16% to £4.2 billion in the half-year to March 4, which suggests consumer spending is holding up better than economic pessimists have feared.
Ofgem reveals big drop in energy price cap
09:17 , Graeme Evans
Ofgem today revealed that April’s energy price cap will be set at an annual level of £3280 for a dual fuel household on typical consumption.
That represents a reduction of almost £1000 from the current level of £4279 due to recent falls in wholesale energy prices.
The government’s Energy Price Guarantee means that consumers will not pay the full level of the energy price cap, although from April the threshold on this support is set to be £3000 for the typical bill compared with £2500 currently.
Ofgem chief executive Jonathan Brearley said: “Although wholesale prices have fallen, the price cap has not yet fallen below the planned level of the Energy Price Guarantee. This means, that on current policy, bills will rise again in April. I know that, for many households this news will be deeply concerning.”
He said today’s cut in the energy price cap was a sign that some of the immense pressure in the energy markets over the last 18 months may be starting to ease.
Brearley added: “If the reduction in wholesale prices we’re currently seeing continues, the signs are positive that the price cap will fall again in the summer, potentially bringing bills significantly lower.”
Hinkley Point nuclear reactor arrives in the UK
08:58 , Simon Hunt
The construction of the Hinkley Point C nuclear power plant hit a major milestone today after the first reactor for a British power station in over 30 years arrived in Somerset.
The 500-tonne, 13-metre long reactor is the first of two to be installed at the plant in Somerset, with each one able to create enough energy to power three million homes.
It was produced by Framatome in France, at the same factory at which the last nuclear reactor for a British power station was built, for Sizewell B in Suffolk, which became operational in 1995.
On its journey from France, reactor first arrived in Britain at Avonmouth Docks in Bristol before being transported by barge to Combwich Wharf on the River Parrett in Somerset.
FTSE 100 rebounds, Bunzl shares up 4%
08:22 , Graeme Evans
The FTSE 100 index is 0.7% or 59.97 points higher at 7938.63, representing a better-than-expected rebound from the selling pressure seen at the end of last week.
London’s top flight fell 0.4% on Friday after a sharp jump in the Federal Reserve’s preferred inflation measure led to US traders pricing in three further quarter point rate increases over the March to June period.
The upbeat mood was matched in Europe, where benchmarks in France and Germany are trading about 1% higher.
In London, shares in Associated British Foods were 2% or 38.54p higher at 1985p after it raised full-year profit guidance. Bunzl rose 4% or 124p to 3137p after its annual results and Rolls-Royce continued to improve as shares added another 3.7p to 139.8p.
Bunzl lifts payout to shareholders after profits rise and sales volumes recover
07:42 , Michael Hunter
FTSE 100 business supplies and packaging distributor Bunzl has upped its payout to shareholders and reported a rise in annual earnings, after it was able to pass price rises onto customers, with volumes recovering.
After a rise of almost 12% in pre-tax profit for 2022 from revenue of nearly £635 million, up almost 10%, it put its dividend up 10% to 62.7p per share.
The company, which supplies a range of essential goods from coffee cups to hard hats, has made alomst 200 bolt-on acquisitions since 2004.
Its latest deal brings German workwear and safety gear company Arbeitsschutz-Express into Bunzl, while the deal to buy Canadian packaging distributor Capital Paper closed today.
AB Foods reveals strong Primark trading
07:38 , Graeme Evans
Associated British Foods today revealed that Primark has traded “well ahead of expectations” amid a surge in footfall in the UK and Europe.
The grocery-to-retail conglomerate expects Primark sales to be about 16% stronger in the first half of its financial year, including a 10% surge in like-for-like sales due to higher volumes and average selling prices.
The performance has contributed to improved guidance for the year to September, with the FTSE 100-listed group now forecasting annual operating profit and adjusted earnings per share to be broadly in line with the previous financial year.
AB Foods said: “Trading at Primark has been good in all its markets, well ahead of expectations, and represents a material improvement in both the UK and Europe on the second half of our last financial year.”
However, it remains cautious about the outlook for consumer spending due to continuing inflation in the cost of living and higher interest rates.
It added: “Our expectation is that like-for-like sales growth in the second half will be lower than that achieved in the first half but, based on our experience to date, will be better than our previous expectation.”
Forward Partners hit by tech slump as portfolio shrinks 40%
07:21 , Simon Hunt
Tech investor Forward Partners has become the latest victim of the tech slump after it posted a 40% decline in the value of its portfolio.
The London-based firm, which makes early-stage investments in UK tech companies, stressed that 84% of its top 15% investments still had enough cash to survive the next 18 months as its total portfolio shrunk to £79 million from £117 million the year before.
CEO Nic Brisbourne said: "2022 has been a year of challenge and change for tech firms and their investors across the globe and the companies within our portfolio faced significant headwinds.
“The recovery remains fragile, but we are encouraged by the signs of improvement in the market,”
Recap: Last week’s top stories
06:40 , Simon Hunt
Good morning. Here’s a look back at our top stories from last week.
HSBC moved to fend off pressure from one of its biggest shareholders to break up the group and return chunks of cash to investors.
WPP offered hope that the economy could be in for a “soft landing” as clients resumed spending and profits zipped past £1 billion.
A tumble in UK house prices this year began to look a racing certainty today when the biggest mortgage bank forecast they would fall 7%.
Today we’re expecting:
Primark owner Associated British Foods trading update
GlobalData results
EU Consumer Confidence
US Pending Home sales
