FTSE 100 Live 1 February: Stocks close lower after Bank of England interest rate hold, BT shares fall
The Bank of England held its interest rates as expected, after a three-way voting split with two votes for a hike and one for a cut.
Markets are focused on when interest rates will begin to fall after the Federal Reserve last night dashed hopes of a March cut.
Meanwhile, traders focused on the latest profits haul at Shell as well as updates by Glencore, BT and savings business Phoenix.
FTSE 100 Live Thursday
Bank of England holds rates
Shell posts slide in profits
Bailey suggests markets pricing in too many cuts
Rank eyes gambling reform
BT rises on new boss's first day
FTSE 100 closes 0.1% lower
Thursday 1 February 2024 16:37 , Daniel O'Boyle
The FTSE 100 has closed down 0.1% today at 7,622.16, on the day the Bank of England held its interest rates for the fourth consecutive meeting.
London's top flight was as high as 7671 at the time of today's rates call, and remained in positive territory after the decision and Andrew Bailey's initial comments.
However, it slipped into the red late in the day.
Blue-chips slip into negative territory
Thursday 1 February 2024 16:16 , Daniel O'Boyle
The FTSE 100 has fallen into negative territory for the day, after a second late-day decline in two days.
With 15 minutes before markets close, it's at 7,610.84, having been as high as 7671 when the Bank of England announced its fourth consecutive interest rate hold.
BT is among the stocks that started the day ahead but has since fallen into the red, having lost 7p, or 6%, since it peaked in the morning.
When is the next interest rates announcement and will they increase?
Thursday 1 February 2024 16:13 , Daniel O'Boyle
The Bank of England has kept interest rates at 5.25 per cent as it forecast that inflation is set to fall to its target level a year-and-a-half earlier than expected.
The Bank’s Governor, Andrew Bailey, said there had been “good news” on inflation in recent months but that the committee needs to see more evidence that inflation will fall “all the way to the two per cent target, and stay there” before it can reduce interest rates.
At the last review, interest rates were held steady, much to the relief of many mortgage owners.
But when is the next meeting and what might happen there?
Nationwide raises mortgage prices as Bank of England holds interest rates
Thursday 1 February 2024 15:23 , Daniel O'Boyle
Nationwide revealed today that it is set to raise its mortgage prices, on the same day the Bank of England opted to hold its base rate
The country’s largest building society says it’ll increase rates by up to 0.3 percentage points on selected mortgage products. The higher rates will come into effect tomorrow (2 February).
It comes as the Bank of England seemingly poured cold water on hopes of spring interest rate cuts after holding its base rate at 5.25% today. The Bank’s governor Andrew Bailey noted that, based on amount of the interest rates that had been implied by the market, inflation would likely remain above the Bank’s 2% target all the way until 2027.
'Upside risk' for bond yields
Thursday 1 February 2024 15:18 , Daniel O'Boyle
Gurpreet Gill, Macro Strategist, Global Fixed Income, Goldman Sachs Asset Management, says there could be an 'upside risk' to gilt yields, as markets are pricing in a significant reduction in interest rates in 2024.
: “The Bank of England removed its hiking bias but remains cautious on pivoting towards rate cuts. We continue to think the downtrend in inflation and subdued activity will see the Bank descend from its “table mountain” posture this spring, with rate cuts at subsequent meetings throughout the year.”
“With market pricing for UK monetary easing now converging to our outlook and the potential for looser fiscal policy presenting upside risks to bond yields, we are cautious on UK gilts.”
City Comment: Make way for new offices — London has enough ugly bits to knock down
Thursday 1 February 2024 14:15 , Daniel O'Boyle
The post-pandemic conventional wisdom that London would be saddled with millions of sq ft of empty office space in the working from home era is now looking laughably wide of the mark.
As a new report today shows, the opposite is true.
The pipeline of new office schemes is in fact nowhere near full enough to meet the demand for extra new space from companies hauling their workers back into central London.
Will Bank change its tune on inflation?
Thursday 1 February 2024 13:51 , Daniel O'Boyle
Paul Dales, chief UK economist at Capital Economics, thinks upcoming data might force the Bank of England into a reverse-ferret on inflation.
Dales says: "While leaving interest rates at 5.25% for the fourth meeting in a row today, the Bank of England sent a signal that the next move will be a cut, but it pushed back strongly against the idea that rates will be cut soon or far. Our forecast that inflation will fall further and faster than the Bank expects suggests it will change its tune in the coming months."
US jobless claims ahead of forecasts
Thursday 1 February 2024 13:43 , Daniel O'Boyle
There were 224,000 unemployment claims in the US this week, up from 215,000 last week .
The latest figure is ahead of the expected 214,000.
The world's largest economy will publish its latest monthly jobs and employment stats tomorrow.
Deutsche Bank to axe 3,500 jobs to cut costs
Thursday 1 February 2024 13:19 , Daniel O'Boyle
Deutsche Bank has revealed plans to cut 3,500 jobs by the end of next year to slash its costs.
The German banking giant said the move is part of efforts to cut 2.5 billion euros (£2.1 billion) of costs to help improve its profits.
Deutsche Bank told investors the jobs cuts will be “mainly in non-client-facing areas”.
The company employs around 90,000 people globally, with roughly 7,000 workers in the UK. It has not disclosed how many of its UK staff will be impacted.
'Surprise' to see two votes for hike
Thursday 1 February 2024 13:04 , Daniel O'Boyle
Janet Mui, head of market analysis at wealth manager RBC Brewin Dolphin, says it was a 'surprise' that two votes opted for another hike.
She said: “It was a surprise to see there are still two members of the Monetary Policy Committee (MPC) voting for a rate increase. Balancing that out is one member who voted for a rate cut and the BOE has dropped its reference to the risk of further tightening. The hawkish bias from the BOE is only eased slightly compared to market expectations, as it retains its “sufficiently restrictive for sufficiently long” guidance.
“The BOE’s inflation forecasts suggest there is scope for rates to be lowered later this year as it sees CPI falling to just 1.4% in 2 years if interest rates stay constant. The BOE is still relatively pessimistic on near-term growth outlook relative to economists’ consensus despite upgrades."
Are markets right to keep pricing in a full percentage point of cuts this year?
Thursday 1 February 2024 12:51 , Daniel O'Boyle
Shane O’Neill, Head of Interest Rates at Validus Risk Management, says: “The Bank of England matched market expectations this afternoon and kept policy rates on hold, the decision came with a batch of forecast revisions – all of which made for positive reading. Inflation is expected to fall to 2% in 2024 before picking up slightly to 2.3% in 2026, GDP forecasts were revised higher with 0.25% growth in 2024, followed by 0.75% and 1% growth in the two following years. Despite this, the BoE still see inflation risks skewed to the upside and the governor noted that they need to “see more evidence that inflation is set to fall all the way to 2%” before they can consider cutting interest rates.
"This rhetoric supports our view that the market is currently overzealous in their pricing of rate cuts – before the meeting markets were pricing 115bps of cuts for this year and this has been marginally adjusted lower to 110bps following the release, and we believe this has further to go. The MPC were split on their decision to keep rates on hold – one member voted for a cut, two voted for a hike, and the other six voted to keep rates on hold. This is the first time since 2008 we have seen the committee vote in different numbers for a hike, cut and hold in the same meeting."
Bailey hints markets got too enthusiastic on cuts
Thursday 1 February 2024 12:49 , Daniel O'Boyle
Andrew Bailey has dropped a hint that market-implied interest rates, which the Bank uses for its projections, may be lower than the Bank's own plan.
"If we were to follow the market conditioning path, we think inflation will be above target for much of the next three years," he said.
Read more on the latest interest rate decision
Thursday 1 February 2024 12:30 , Daniel O'Boyle
The MPC said that while " services price inflation and wage growth have fallen by somewhat more than expected, key indicators of inflation persistence remain elevated.
Read more on the Bank's decision to hold rates here
Inflation set to fall to 2% target within months, Bank says, but only 'temporarily'
Thursday 1 February 2024 12:28 , Daniel O'Boyle
Inflation will hit the Bank of England’s 2% target within a matter of months, the Banks says, but only “temporarily” before it rises again later in the year.
The Bank’s latest projections, accompanying today’s decision to hold interest rates at 5.25% show inflation is set to hit 2% in the second quarter of this year, but will rise again in the third and fourth, as the comparative figures for energy prices.
Inflation will then stay above target through 2025 and 2026, only returning to 2% in 2027. The Bank says this was due to "the persistence of domestic inflationary pressures".
How did they vote? Three-way split on MPC
Thursday 1 February 2024 12:16 , Simon Hunt
No MPC members voted for a rate cut last time. But one did today, in signs the tide may be beginning to turn.
Bank may keep 'slow and steady' strategy
Thursday 1 February 2024 12:07 , Daniel O'Boyle
Jonny Black, Chief Commercial & Strategy Office at abrdn adviser, said: “Another ‘hold’ decision reflects the Bank of England’s desire to not act too hastily in unwinding rates amid still volatile economic conditions.
“Indicators like slowing wage growth suggest that some inflationary drivers are easing. But the surprise rise in the latest CPI figures show that price rises remain strong, although are widely expected to slow in the months to come.
“All of this may mean that the Bank keeps to its ‘slow and steady’ strategy in the race to bring inflation back to target, and that the early start to rate cutting that many are hoping for won’t materialise. Advisers should be taking the time to help clients understand what future rate holds, rises or falls could mean for their plans, and to re-assure them of how their current strategies are prepared to keep delivering good outcomes, whatever the circumstances.”
Bailey: 'Good news on inflation, but we need more'
Thursday 1 February 2024 12:02 , Daniel O'Boyle
Andrew Bailey, Governor of the Bank of England said: “Today we've decided to hold interest rates at 5.25%. We have had good news on inflation over the past few months. It has fallen a long way, from 10% a year ago to 4%. But we need to see more evidence that inflation is set to fall all the way to the 2% target, and stay there, before we can lower interest rates."
Bank holds rates
Thursday 1 February 2024 12:00 , Daniel O'Boyle
The Bank of England held interest rates at 5.25% as expected.
Six members voted to hold, two for a hike and one for a cut.
Bank of England 'unlikely to jump to conclusions'
Thursday 1 February 2024 11:43 , Daniel O'Boyle
Ahead of the Bank's decision, oel Kruger, market strategist at LMAX Group, says: "There is an expectation that the BOE will follow in the footsteps of the Fed, and other central banks, signalling a move towards rate cuts at some point in the future. At the same time, it is unlikely the BOE will want to jump to any conclusions in its battle against inflation, which should keep it from signalling an imminent rate cut.
"If there is to be one big change that comes from today's decision, it will likely come from the voting split as last seen in December when three members voted for a rate hike while the remaining six voted to maintain the bank rate. Since then, GDP readings have been less than impressive, retail sales has disappointed and wage and inflation data have cooled. Therefore, we expect today's meeting to produce a unanimous decision where the hawks relent and all members vote for rates to stay on hold."
Labour makes surprise 25% corporation tax pledge in new City charm offensive
Thursday 1 February 2024 11:24 , Daniel O'Boyle
Labour vowed on Thursday to cap corporation tax at its current rate of 25 per cent if it wins power this year, as the party wooed big business at a London conference with vows of sound economic stewardship.
Sir Keir Starmer and shadow chancellor Rachel Reeves extended their City outreach at the gathering of some 400 corporate big-hitters, also vowing to bring more women including women of colour into boardrooms.
The party released a new plan for financial services, authored by shadow City minister Tulip Siddiq, that promised to streamline regulations with a pledge to cut out “outdated and prescriptive rules” at the Financial Conduct Authority (FCA).
Markets pricing hike at same odds as Spurs winning league
Thursday 1 February 2024 11:00 , Daniel O'Boyle
With a little over an hour until the latest decision out of Threadneedle Street, markets are still pricing in a hold as near-certain.
According to City interest rate swap markets, there is a 3% chance of a hike. That’s about the same probability as Spurs winning the Premier League this season, according to bookies’ odds.
Euro inflation down, but by less than expected
Thursday 1 February 2024 10:46 , Daniel O'Boyle
Inflation in the Eurozone slowed to 2.8% in January, official figures show today.
However, that reading was higher than the 2.7% expected by economists, and so it may cool hopes that the ECB will cut interest rates soon.
Core inflation came to 3.3%, also down but ahead of expectations.
There is still a stark difference between inflation rates across the currency union. In Italy, Finland and Latvia prices are rising significantly slower than the ECB's 2% target, but in Austria, Slovakia and Croatia, inflation is still close to 5%.
Foxtons boss: Mortgage rates could rise after Bank holds rates
Thursday 1 February 2024 10:43 , Daniel O'Boyle
Foxtons CEO Guy Gittins says mortgage rates could rise after the Bank of England holds interest rates today:
He says: “A freeze on interest rates since September of last year resulted in 2023 finishing with a far higher degree of mortgage market positivity than many had forecast and it’s now clear that this positivity has carried over into 2024. We’ve already seen a promising start to the year compared to January last year, as buyers have returned to the market.
“However, the potential now is that mortgage rates could start to climb following a fourth consecutive decision to keep the base rate frozen at 5.25% and we’ve already seen evidence of lenders increasing swap rates in recent weeks in anticipation of today’s news.
“This will further add to the air of urgency shown by buyers of late, who have been encouraged by sub 4% mortgage opportunities and have been keen to secure them while they are available.”
Rightmove buys HomeViews
Thursday 1 February 2024 10:21 , Daniel O'Boyle
Rightmove has bought build-to-rent reviews platform HomeViews for £8 million.
HomeViews will continue to be led by CEO Rory Cramer after the deal.
Rightmove's CEO Johan Svanstrom said: "The HomeViews team has built an impressive platform that gives consumers additional useful information to make decisions. It also provides valuable feedback for industry operators, especially in the build to rent sector, which is an exciting and fast-growing segment of the UK property market. This acquisition provides Rightmove with yet another opportunity to further enrich our market-leading property information set for UK consumers and to create new and effective relationship tools for our build to rent operator partners. We're very excited to have Rory and the entire HomeViews team onboard."
Cramer said: "Joining Rightmove gives us a brilliant opportunity to expand our services for our partners and other stakeholders. Rightmove's brand leadership, its ongoing digital and product innovation, and the breadth and depth of its reach across the UK property market make this a fantastic combination. We can't wait to start working together to leverage those benefits for the rapidly expanding build to rent market."
FTSE 100 higher despite Wall Street slump, retailers under pressure
Thursday 1 February 2024 10:18 , Graeme Evans
BT shares have risen 2.6p to 114.8p after new chief executive Allison Kirkby presented a reassuring third quarter update.
She stuck by guidance for the 2023/24 financial year as price increases contributed to a 3% rise in year-to-date revenues to £15.8 billion, with cost controls pushing earnings up 3%. The rollout of ultrafast full fibre broadband accelerated to 73,000 properties a week.
Other blue-chip risers included Airtel Africa, up 4% or 5p to 117.2p as the mobile money services firm unveiled a share buyback alongside third quarter results.
Savings and retirement business Phoenix also rallied 7p to 512.4p after reaching its 2025 new business long-term cash target two years early.
The FTSE 100 index stood 36.16 points higher at 7666.73 as a positive reaction to Shell results offset last night’s sell-off on Wall Street after the Federal Reserve dashed hopes of a March interest rate cut.
Retailers dominated London’s fallers board, with Next down 184p to 8284p after analysts at Barclays removed their “overweight” stance. JD Sports Fashion also retreated 2.6p to 114.5p following a forecast by Germany’s Adidas that 2024 sales will grow at a mid-single-digit rate.
The UK-focused FTSE 250 index lost 39.45 points to 19,318.50, despite gains of 2% for low-cost airlines Wizz and easyJet.
Stocks in recovery mode included pavings firm Marshalls, which lifted 11p to 291.6p after Berenberg switched to a “buy” recommendation, and Spirent Communications after an improvement of 5% or 5.9p to 124.2p.
'Rough seas ahead' until rate cut comes
Thursday 1 February 2024 09:49 , Daniel O'Boyle
Professor of Global Economy and Deputy Dean of Cranfield School of Management, Joe Nellis says: “The interest rate is unlikely to fall this Thursday (1st Feb), despite a recent drop in the Consumer Price Index, including food price inflation.
“Unfortunately, the Bank of England remains in deep water and the decision to keep rates at 5.25 per cent won’t turn the tide for millions of households who are struggling with the cost of living. Tension in the Middle East as well as new Brexit food checks are testing Britain’s supply chains and applying upward pressure on prices. This means more rough seas ahead for consumers in the short term until a possible interest rate cut in May.”
Manufacturing downturn goes on
Thursday 1 February 2024 09:36 , Daniel O'Boyle
The UK manufacturing sector’s long decline continued in January, at a slower pace than December but faster than expected, according to a closely watched survey.
The S&P Global UK Manufacturing PMI for the month came to 47.0 in January, below the initial ‘flash’ figure of 47.3. It is the 18th consecutive month in which the survey has shown the sector in decline, with the reading coming in below 50.
Rob Dobson, Director at S&P Global Market Intelligence, said: “The downturn in UK manufacturing continued at the start of 2024, with output, new orders and employment all reduced in January. The contraction was widespread, with declines in all three variables seen across the consumer, intermediate and investment goods sub-industries. The ongoing weakness is leading to an increasingly costcautious approach at manufacturers, compelling cutbacks in purchasing and stock holdings as companies aim to achieve effficiencies, protect cash flow and defend fragile margins.”
'Don't get excited' message expected from Bank
Thursday 1 February 2024 09:22 , Daniel O'Boyle
Steve Clayton, head of equity funds at Hargreaves Lansdown, says that after the Fed’s hold and comments yesterday, the Bank of England is set to deliver a similarly hawkish-leaning message.
“The Fed’s move has very likely set the stage for a similar ‘rates on hold, don’t get excited’ message from the Bank of England when they make their next rates announcement at lunchtime today. Chairing a central bank on either side of the Atlantic is likely to be a thankless task this year. Upcoming elections put the bankers in the spotlight.
“If they cut, opposition parties will accuse them of paving the way for the incumbent to win. Hold tight, and the shouting will come from the other direction, arguing that the bank is needlessly restricting the economy. In the worst case, from the central banks’ perspective, the economy will be obviously in need of changed rates, in either direction, just as electorates are heading to the polls.”
BT shares higher after update, Marshalls rallies in downbeat FTSE 250
Thursday 1 February 2024 08:45 , Graeme Evans
BT shares are among the biggest risers in the FTSE 100 index after new boss Allison Kirkby stuck by the group's targets for the 2023/24 financial year.
The shares rallied 2.3p to 114.5p, putting back some of the 10% decline seen so far this year. Airtel Africa also lifted 4% or 4.7p to 116.9p after it included a share buyback announcement alongside its latest update.
Retail stocks dominated the fallers board, with Next down 138p to 8330p after analysts at Barclays removed their “overweight” recommendation. JD Sports Fashion also retreated 2.7p to 114.35p.
The FTSE 100 index stood 7.15 points higher at 7637.72 but the UK-focused FTSE 250 index lost 0.6% or 109.67 points to 19,248.28.
Strong performers in the second tier included paving firm Marshalls, up 11.4p to 292p after Berenberg switched to a “buy” recommendation with 420p target price. Spirent Communications also improved 5% or 5.9p to 124.2p.
Market snapshot: FTSE 100 slightly higher
Thursday 1 February 2024 08:44 , Daniel O'Boyle
The FTSE 100 is slightly higher this morning ahead of the Bank of England's rate call.
Take a look at our full markets snapshot:
AG Barr fizz on acquisitions as new CEO unveiled
Thursday 1 February 2024 08:44 , Simon Hunt
AG Barr today unveiled its new CEO as a string of new acquisitions helped the Irn Bru maker grow annual sales by more than a quarter.
Barr bought the Rio soft drinks brand in October for £12.3 million, as well as energy drink Boost at the end of 2022 for £20 million. That contributed to a 26% rise in revenues to circa £400 million for the year to 28 January.
CEO Roger White told the Standard inflationary pressure was coming down but warned: “Inflation in people costs, whether direct labour or the embedded costs of labour costs in everything we buy will be a significant part of the inflation picture this year.”
New CEO Euan Sutherland, a former Saga and Superdry CEO, will be replacing White in May, ending a 20-year tenure at the company during which time the shares have appreciated by around five-fold.
Barr shares rose 2% to 578p.
BT revenue up as new boss starts
Thursday 1 February 2024 08:40 , Daniel O'Boyle
BT’s revenue grew by 3%, the company revealed today as new boss Allison Kirkby started.
Revenue for the nine months to 31 December climbed to £15.76 billion, while underlying profits hit £6 billion.
Matthew Dorset, equity research analyst at Quilter Cheviot, said: “BT had a strong third quarter, with revenues increasing 3% compared to the same period last year, slightly surpassing market expectations. Its earnings before interest, taxes, depreciation, and amortisation (EBITDA) also saw a 1% rise, aligning with forecasts. The results mark the first day in the job for new CEO Allison Kirkby who emphasised the company's dedication to its core mission and strategic goals, which largely suggests continuity.
Kirkby said: “"We are providing great digital connectivity and services, while laying the foundations for future growth that will benefit our customers, investors and the UK. As I assume the role of Chief Executive, we remain committed to our purpose and our strategic focus, and I am looking forward to leading BT Group into its next phase of development."
Bank of England seen as near-certain to hold
Thursday 1 February 2024 08:34 , Daniel O'Boyle
The Bank of England is widely seen as near-certain to hold interest rates at 5.25% for the fourth successive meeting at noon today, after the US Federal Reserve held its own rates.
Markets are currently pricing in a 96.6% chance of a hold, with the remaining slim chance being for a hike. While a cut today is off the cards, many economists have predicted that the Bank’s language today could signal when the first cut will be.
Ben Laidler, Global Markets Strategist at eToro, said: “The Bank of England (BoE) has been the most hawkish of major central banks and this has made Sterling one of the best recent currency performers. With UK inflation still double its 2% target, economic growth has been better-than-feared, and the government set for more tax cuts at its March budget.”
Coppa Club owner sees 'generational opportunity' despite loss
Thursday 1 February 2024 07:45 , Daniel O'Boyle
AIM-listed Coppa Club owner Various Eateries says it is “poised to accelerate” and faces a “generational opportunity” despite a £6.7 million loss last year.
The business said it chose to “to absorb the majority of price rises to strengthen the Group’s longer-term prospects” as it remained loss-making.
Executive chairman Andy Bassadone said: ““Performance in the year under review was solid given the host of challenges faced by the industry. We have continued to focus on customer loyalty, brand reputation and maintaining revenue, and I am proud of our teams for all their hard work.
“We enter the new financial year in a position of strength having raised £10.1m and converted debt into equity in December. The convergence of site availability, reduced competition and changing consumer behaviours has brought forth a generational opportunity akin to the casual dining revolution of the 90s and we are well set to capitalise.”
Phoenix hits cash target two years ahead of schedule
Thursday 1 February 2024 07:32 , Daniel O'Boyle
Pensions giant Phoenix has hit its cash generation target for new business two years early,after £7 billion was poured into its funds last year.
Its workplace pensions arm was boosted by the transfer of Siemens’ pension scheme, one of the largest pension transfers in recent years.
CEO Andy Briggs said: "I am delighted that Phoenix Group has delivered another year of strong organic growth in 2023, with increased new business net fund flows supporting us in delivering £1.5bn of new business long-term cash.
“This means we have achieved our 2025 new business long-term cash target two years early, reflecting the focus and investment we have put into our growth strategy. Our capital-light fee-based Workplace business continues to go from strength to strength, nearly doubling its net fund flows year-on-year, including the transfer of one of the largest workplace schemes tendered in the UK market in recent years. Our BPA business also performed well in a buoyant market, with c.£6bn of premiums contracted at a reduced capital strain of less than 5%."
Rank boss: Casino reforms 'cannot come soon enough'
Thursday 1 February 2024 07:24 , Daniel O'Boyle
The boss of Grosvenor Casinos owner Rank says reforms to the sector “reforms cannot come soon enough”, despite the company returning to first-half profit.
Profits came to £10.2 million, after a huge £109 million loss a year earlier due to high energy costs and one-off items.
Revenue for the period rose by 7%, with revenue at Grosvernor venues up 10%, mostly driven by a rise in customers.
CEO John O’Reilly said: “After what has been a very challenging few years for Rank due to a wide range of external macro factors, we are starting to build revenues and, with our strong operational leverage, we are improving our profitability, with the group delivering revenue and operating profit growth across all businesses.
We are well positioned to optimise the opportunities afforded by the UK Government’s planned landbased regulatory reforms which will hopefully be implemented through the passing of secondary legislation in the summer of 2024. These reforms cannot come soon enough in enabling us to modernise our proposition to better meet our customers’ expectations.”
The reforms include an increase to the number of machines that a casino can have on its floor and introduction of cashless payments.
US shares slump on rates guidance, FTSE 100 steady ahead of BoE vote
Thursday 1 February 2024 07:15 , Graeme Evans
Wall Street markets finished last night’s session sharply lower after the US Federal Reserve dashed hopes of a March cut in interest rates.
Traders are now looking at May or June for a first move after the central bank said it needed more evidence that inflation is on a sustainable path to its 2% target.
The Dow Jones Industrial Average lost 0.8%, while rate-sensitive stocks in the technology sector left the S&P 500 index down 1.6% and the Nasdaq Composite off 2.2%.
Alphabet shares fell 7% and Microsoft by 3% as the guidance added to pressure on their high-flying valuations following results the previous evening.
Asia markets have posted a mixed session on the back of the US developments, while the FTSE 100 index is forecast by CMC Markets to open nine points lower at 7621 after a fall of 0.5% yesterday.
The Bank of England is today due to leave interest rates unchanged at 5.25%, with the focus on the stance of three policymakers who voted for a quarter point hike at December’s meeting.
Shell makes over $19 billion for 2023 even as profit hit by lower energy prices
Thursday 1 February 2024 07:14 , Michael Hunter
Shell has reported a 54% tumble in annual profits as tracked by a key industry measure, due to "lower refining margins"
The UK's biggest energy company said that for 2023, profit attributable to shareholders slumped 4% to $19.4 billion (£15.3 billion) from $42.3 billion
For the fourth quarter, it dropped to $474 million , down from $7.04 billon in the same period a year ago.
Shell said the decline also came from "lower margins from crude and oil products trading and optimisation, and higher operating expenses" as well as the moves in refining margins.
Nonetheless, it announced plans for another payday for shareholders, worth $3.5 billion. It alsoupped its annual, regular payout to shareholders by a quarter.
The quarterly figure also included the $3.9 billion impact of a write-down on the value of its Singapore refinery and chemicals hub, which it is selling off.
For 2023, lower oil and gas prices explained the move, as global energy markets moved on from the immediate disruption of Vladimir Putin's invasion of Ukraine. Shell added that was "partly offset" by "by higher LNG trading and optimisation margins, and higher Marketing margins."
The industry faced a wave of popular anger art perceived profiteering during the price spike when war broke out in Europe. Today''s drop back from record highs did not leave the UK's second most valuable company free of controversy.
Jonathan Noronha-Gant, senior campaigner at Global Witness, , said:
"The turmoil in fossil fuel markets, caused by war in Europe and the Middle East, has helped Shell rake in enormous profits – but instead of investing in clean energy, the company has doubled down on oil, and gas."
Recap: Yesterday's top stories
Thursday 1 February 2024 06:43 , Simon Hunt
Good morning from the Standard's City desk.
Much ink was spilled yesterday on the long-running political soap opera that is Brexit. It is four years to the day since Britain ceased being a member of the European Union.
Almost unbelievably, it is now more than 11 years since David Cameron uttered the fateful words, “It is time for the British people to have their say.”
And the economic verdict, more than a decade on from the birth of Brexit?
This much we do know. There is barely an importer or exporter that this paper speaks to who says that trading with the European Union has got easier. For many it is horribly harder and for food importers, even worse as new border rules finally come into force today.
On the macroeconomy, the “with one bound we are free” theory of liberation from the Brussels yoke is plainly a non-starter. The UK is currently growing slightly faster than the major economies of the Continent but, on the brink of recession, is very far from the offshore European Tiger that was promised.
As for the UK’s global reputation as a place to invest? The feeble performance of the unloved London stock market tells you all you need to know.
Four years on, the rest of the world still does not know what to make of an “independent” Britain… and is largely giving it the swerve.
Here's a summary of our top stories from yesterday:
New Year bounce lifts property market 0.7% in January as lower mortgage rates drive buyers back to the market
Fed holds interests rates in the US as BoE expected to do the same
GSK upgrades growth prospects as annual turnover hits £30 billion and profits beat market expectations
Crypto firm Fetch.AI seeks to reassure investors after UK firm put into administration
Electric car maker Polestar says UK doing least of any country in Europe to encourage switch to EVs as it launches first car without a rear window
