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BUSINESS LIVE: Inflation slows to 6.8% in July
By Live Commentary Published: 07:29 BST, 16 August 2023 | Updated: 10:33 BST, 16 August 2023
Consumer price inflation slowed to 6.8 per cent in July, in line with forecasts, though persistently high core inflation looks set to maintain pressure on the Bank of England ahead of its next rate setting meeting.
The FTSE 100 is down 0.3 per cent in early trading. Among the companies with reports and trading updates today are Aviva, Balfour Beatty, Marshalls, Plus500, Essentra and Admiral Group. Read the Wednesday 16 August Business Live blog below.
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I clicked on one link and crooks snuck into my bank account
When celebrity hairdresser Ramona Mihalache received a direct message on Instagram from a close friend asking her to endorse her flower shop as part of an online vote, she didn’t think twice.
A minute later Ramona received a text message on her mobile phone with the link to the vote which she clicked to open.
Aviva profits boosted by private health insurance demand
Aviva has hiked its interim dividend and lifted full-year earnings expectations after first-half profits were boosted by soaring demand for private health insurance.
The London-listed insurance company saw private health sales soar 58 per cent in the first six months of the year as Aviva expands its services to corporate and individual customers.
Lack of drivers is slamming the brakes on our family coach firm
A lack of drivers is proving ‘catastrophic’ for coach operators across the country, according to one family-run business.
Candice Mason, who runs Hertfordshire-based Mason Coaches, said the firm has been forced to jack up wages by a fifth to bolster their workforce.
Jobs market not as bad as 2008, says Robert Walters recruitment boss
Toby Fowlston knows better than most how tough it can be to fill the shoes of a firm’s eponymous founder, writes Leah Montebello.
But you combine this with a tricky jobs market and soaring interest rates, it can be even more of a challenge.
Russia hikes interest rates to 10% in desperate bid to prop up the crumbling rouble
Russia carried out a bumper interest rate hike yesterday in a desperate bid to prop up its crumbling currency.
Following criticism from the Kremlin over her handling of the economy, central bank governor Elvira Nabiullina called an emergency meeting with officials that ended with a rate rise from 8.5 per cent to 12 per cent.
The rouble – which plunged to its lowest level against the dollar for a year and a half on Monday, triggering a rebuke from president Vladimir Putin’s economic adviser – bounced higher after the move.
Market open: FTSE 100 down 0.2%; FTSE 250 off 0.1%
London-listed stocks are trading lower agains today as inflation data continues to build a case for more interest rate hikes by the Bank of England (BoE), while Marshalls fell on lower half-year profit.
Industrial metal miners have shed 1.1%, leading sectoral losses, after data showed top metals consumer China’s new home prices fell for the first time this year in July, adding to a string of downbeat data from Beijing.
Marshalls shares are down 1.1%, after the firm reported a 26% slump in half-year profit.
UK tech can power Britain’s recovery, says L&G boss Sir Nigel Wilson
Britain’s thriving creative industries should inspire investment in other parts of the economy to boost recovery, the boss of Legal & General said.
Sir Nigel Wilson called yesterday for investment in UK tech and life sciences claiming that the country’s success in attracting major productions such as Game Of Thrones should act as a motivation.
Wilko could disappear from the High Street as potential bidders look to hoover up its shops
Wilko could disappear from the High Street as potential bidders look to hoover up its shops for their own brands in the wake of its collapse.
The homeware discount chain crashed into administration last week, putting 400 stores and 12,000 jobs at risk.
Administrators at PwC have set a deadline of today for suitors to submit their offers to rescue the stricken firm.
Aviva hikes dividend after bumper first half
Insurance giant Aviva has hiked its interim dividend after a jump in half year profits. Operating profits jumped 8 per cent in the first six months of the year to £715million, thanks to bumper sales of general and health insurance. As a result, Aviva has lifted its interim dividend by 8 per cent to 11.1p, while the group now expects full year profits to grow by as much as 7 per cent.
Higher interest rates weigh on Balfour Beatty order book
Aarin Chiekrie, equity analyst at Hargreaves Lansdown: ‘It’s been a robust start to the financial year for infrastructure giant Balfour Beatty. ‘Revenues came in higher as HS2 volumes stepped up in the UK and activity increased at airport projects in Hong Kong. ‘But the current high-interest rate environment is causing delays in some projects going to contract, mainly in the US commercial office sector, as customers wait for economic stability – driving a decline in the group’s order book over the first half. ‘Despite this, the order book’s still sitting at a healthy £16.4bn, which gives plenty of visibility in the short to medium term. ‘But it’s worth keeping in mind that even in the good times margins in the construction sector are pitifully thin. That’s why it’s encouraging to see the operating profit margin begin to creep back up towards 2% over the first half. ‘Such low margins leave little room for error, but Balfour reiterated its expectation that full-year profits are likely to land in line with 2022 levels.’
Inflation dips again to 6.8% in respite for hard-pressed Brits – with Bank of England facing knife-edge decision on how far to hike interest rates
Inflation eased again last month as Brits were given some respite from relentless cost-of-living pressures. The headline CPI measure was 6.8 per cent in July, down from the 7.9 per cent recorded in June and the lowest since February last year.
Chancellor Jeremy Hunt hailed the drop as evidence the government’s plan is working, while warning ‘we’re not at the finish line’.
Harrods profits beat pre-Covid levels as the luxury department store bounces back
Harrods profits surpassed pre-pandemic levels last year as the department store bounced back.
The company, famed for its Knightsbridge store in London, reported profits of £135.8million for the year to January 28, 2023.
This compared with the £20.7million pocketed the previous year and also slightly higher than 2019-20 levels of £130.5million.
‘More pain for mortgage-holders and first-time buyers in the months to come’
Giles Coghlan, chief market analyst at HYCM: ‘In theory, rising GDP and falling inflation figures should be good news for the UK economy – in reality, however, other indicators show that the UK’s inflation fever shows no signs of breaking soon. ‘Although the headline rate of inflation has declined to 6.8%, the latest data suggests that strong wage growth is likely to keep inflation elevated – not to mention more persistent – in the coming months. ‘The Chancellor has already forewarned that wage growth and an uptick in clothing prices could see inflation rebounding again in August, tempering any optimism that today’s release may produce.’ With next month’s expected rise in [interest rates] hanging over today’s release like a dark cloud, the markets are still pricing in one or two further quarter point rises from the Bank of England, which could mean more pain for mortgage-holders and first-time buyers in the months to come. ‘The market reaction to strong GDP data last week was relatively muted, and as rate expectations gradually ease, this scenario is likely to weigh on sterling.’
‘Labour hoarding’ keeps markets tight
David Baker, partner at Mazars comments: ‘The surprise strength of CPI suggests that higher inflation in the UK may be becoming endemic as companies are enjoying an environment where input prices can be passed through to consumers, and low unemployment strengthens the hand of employees in the face of higher debt servicing costs. ‘Industrial action in the public sector is proving effective and has emboldened trade unions, whilst the private sector is submitting to higher wages to avoid having to recruit from a tight labour market. ‘This latter example of labour hoarding is a feature of companies being pragmatic in an economy where the labour force growth has levelled…
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