London midday: Stocks still lower on cost-of-living consternation
London stocks were still in the red by lunchtime on Wednesday amid ongoing worries about inflation and a global slowdown, as investors eyed the Jackson Hole symposium.
At midday, the FTSE 100 was down 0.48% at 7,452.45, and the FTSE 250 was 0.6% lower at 19,191.19.
Sterling was also below the waterline, last trading down 0.51% on the dollar at $1.1776, and weakening 0.02% against the euro to €1.1869.
“There are additional pressure points within the UK economy, which has led some to predict a further sharp rise in inflation even from the current high levels,” said Interactive Investor head of markets Richard Hunter.
“The energy price resurgence and increasing tightness in the labour market, another potentially inflationary factor, has led to concerns as to the severity of a recession in the coming months.
“At the same time, the Bank of England is also set to maintain its assault on inflation with further rate hikes which, set against tepid growth, will exacerbate the situation.”
Hunter noted that the FTSE 250, seen as the “UK barometer on prospects”, had lost 18% in the year to date.
“For the premier index, inaction was again in evidence as the FTSE 100 struggled to make any meaningful headway in early exchanges.
“Increasingly hemmed in by the challenges of overseas economies from which its companies derive most of their income, its 1.2% rise so far this year has been mostly driven by rising commodity prices in general and a weaker sterling which heightens the value of those international earnings.
“Some additional defensive support among its constituents alongside a strong average dividend yield has also proved to be of some attraction to global investors seeking a different investment destination.”
In cost-of-living news, an industry-proposed plan to protect UK households from eye-watering energy bills was revealed that would need more than £100bn in funding over two years, paid off by taxes or energy customers in the long-term.
Scottish Power chief executive Keith Anderson proposed capping energy bills at £2,000 per year for the typical customer in a meeting with business secretary Kwasi Kwarteng last week, according to the Financial Times.
It said that under the plan, suppliers would meet the shortfall between the bill cap and wholesale prices for gas and electricity by borrowing from a state-arranged “deficit fund”.
That fund would be paid off either through tax income, spread over energy bills for up to 15 years, or through a combination of both, the FT said according to people with knowledge of the discussions.
Kwarteng reportedly dismissed the plan on the call with Anderson, apparently reiterating that no decisions would be made until the new prime minister was chosen by Conservative Party members on 5 September.
Corporate news was thin on the ground as the usual summer lull finally kicked in, after several weeks of constant corporate updates.
Flexible workspace provider IWG was weaker, after announcing the appointment of Charlie Steel as chief financial officer, succeeding Glyn Hughes.
Steel would join the board before the end of the year, while Hughes would remain with the business for a transitional period to ensure a smooth handover.
Premier Inn owner Whitbread was also lower, after reporting it had bought a prime freehold property on the Strand in central London, just off Trafalgar Square, for more than £200m.
Subject to planning, 5 Strand would become the newest ‘hub by Premier Inn’ compact-room hotel in the estate, and was expected to open in 2027.
Outside the FTSE 350, infrastructure engineering company Costain was rising after its reported and adjusted group revenue grew 19.5% in its first half to £665.2m, reflecting primarily volume growth and inflation protection mechanisms within contracts.
Car dealership Lookers was ahead more than 8%, meanwhile, despite reporting a dip in interim profit as supply disruption made trading conditions challenging.
In the six months to the end of June, pre-tax profit nudged down to £49.9m from £50.4m in the same period a year earlier, with revenues up 3.6% at £2.23bn.
Reporting by Josh White at Sharecast.com. Additional reporting by Michele Maatouk.
FTSE 100 - Risers
Pershing Square Holdings Ltd NPV (PSH) 2,685.00p 1.51%
Reckitt Benckiser Group (RKT) 6,688.00p 1.43%
Harbour Energy (HBR) 428.50p 1.11%
Admiral Group (ADM) 2,249.00p 1.08%
Spirax-Sarco Engineering (SPX) 10,690.00p 0.94%
Dechra Pharmaceuticals (DPH) 3,450.00p 0.94%
British American Tobacco (BATS) 3,455.50p 0.93%
London Stock Exchange Group (LSEG) 8,406.00p 0.86%
BAE Systems (BA.) 803.40p 0.80%
Compass Group (CPG) 1,916.00p 0.74%
FTSE 100 - Fallers
Prudential (PRU) 928.20p -2.68%
Persimmon (PSN) 1,546.00p -2.31%
Antofagasta (ANTO) 1,135.50p -2.28%
Taylor Wimpey (TW.) 110.80p -2.03%
Legal & General Group (LGEN) 258.20p -1.97%
Anglo American (AAL) 2,885.50p -1.97%
Sainsbury (J) (SBRY) 210.90p -1.95%
Intermediate Capital Group (ICP) 1,392.00p -1.90%
Rio Tinto (RIO) 4,953.50p -1.81%
Barratt Developments (BDEV) 435.70p -1.74%
FTSE 250 - Risers
4Imprint Group (FOUR) 3,830.00p 3.37%
Ibstock (IBST) 191.00p 2.03%
BH Macro Ltd. GBP Shares (BHMG) 4,600.00p 1.77%
Balfour Beatty (BBY) 312.80p 1.69%
Polymetal International (POLY) 223.50p 1.59%
Drax Group (DRX) 742.00p 1.37%
Softcat (SCT) 1,277.00p 1.27%
Tyman (TYMN) 227.50p 1.11%
Baltic Classifieds Group (BCG) 131.40p 1.08%
Wizz Air Holdings (WIZZ) 2,166.00p 1.07%
FTSE 250 - Fallers
Aston Martin Lagonda Global Holdings (AML) 445.80p -6.93%
XP Power Ltd. (DI) (XPP) 2,020.00p -4.04%
Telecom Plus (TEP) 1,992.00p -3.07%
Hill & Smith Holdings (HILS) 1,074.00p -2.89%
Just Group (JUST) 70.55p -2.82%
Hochschild Mining (HOC) 69.15p -2.81%
Petrofac Ltd. (PFC) 119.60p -2.76%
Trainline (TRN) 341.30p -2.74%
Wood Group (John) (WG.) 142.60p -2.56%
IP Group (IPO) 70.60p -2.55%