(Alliance News) - The UK annual inflation figure raced to just shy of a 30-year high in January, figures from the Office for National Statistics showed Wednesday.
Inflation accelerated to 5.5% in January from 5.4% in December. The figure topped market estimates cited by FXStreet, which had forecast inflation to remain steady in January.
January's figure was the hottest since the current series began in 1997. It is the chunkiest annual inflation figure since a historic series registered 7.1% in March 1992.
Excluding food, energy, alcohol and tobacco, annual core inflation accelerated to 4.4% in January from 4.2% in December.
On a monthly basis, consumer prices edged down 0.1% in January, following a 0.5% increase in December. It was the first time since January 2021 that consumer prices declined monthly. Excluding July, when they were unchanged from June, prices have risen every month since January 2021.
The monthly decline for January 2022 still was less than market forecasts of a 0.4% fall.
At a producer price level, inflationary pressures accelerated in January.
Producer prices climbed 9.9% annually in January, following a 9.3% increase in December. January's figure topped market consensus of 9.1%. Monthly, producer prices rose 1.2% in January, following growth of 0.3% in December. A lesser hike of 0.6% was expected for January, however.
"Consumer prices have once again been driven up by a perfect storm of high energy costs, resurgent post-Omicron demand for goods and services, alongside persistent supply chain disruption," commented Shafiq Shabir at specialist margin trading broker Intertrader.
"All eyes will yet again be on the Bank of England next month, as today's data only strengthens the narrative that central banks will be compelled to raise rates multiple times this year. In the meantime, we expect market traders will remain wary of riskier and more speculative assets."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: marginally higher, up 0.95 point at 7,609.87
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Hang Seng: up 1.4% at 24,700.57
Nikkei 225: closed up 2.2% at 27,460.40
S&P/ASX 200: closed up 1.1% at 7,284.90
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DJIA: closed up 422.67 points, or 1.2%, at 34,988.84
S&P 500: closed up 69.40 points, or 1.6%, at 4,471.07
Nasdaq Composite: closed up 348.84 points, or 2.5%, at 14,139.76
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EUR: up at USD1.1376 (USD1.1365)
GBP: up at USD1.3555 (USD1.3535)
USD: down at JPY115.64 (JPY115.70)
Gold: up at USD1,855.80 per ounce (USD1,848.09)
Oil (Brent): up at USD93.84 a barrel (USD92.50)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's key economic events still to come
1100 CET EU industrial production
0930 GMT UK ONS house price index
0700 EST US MBA weekly mortgage applications
0830 EST US retail sales
0830 EST US import & export price indexes
0915 EST US industrial production
1000 EST US NAHB housing market iIndex
1030 EST US EIA weekly petroleum status report
1400 EST US Federal Open Market Committee meeting minutes
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Russia on Wednesday said military drills in Moscow-annexed Crimea had ended and that soldiers were returning to their garrisons, a day after it announced a first troop pullback from Ukraine's borders. "Units of the Southern Military District, having completed their participation in tactical exercises, are moving to their permanent deployment points," Moscow's defence ministry said in a statement. State television showed images of military units crossing a bridge linking the Russia-controlled peninsula to the mainland. The statement said tanks, infantry vehicles and artillery were leaving Crimea by rail. It comes a day after Moscow said it was pulling back some of the troops deployed on its neighbour's borders. But Western leaders remain concerned that Russia could still launch an attack on Ukraine, with US President Joe Biden warning on Tuesday that an attack by Moscow remained "very much a possibility".
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With plans to gradually relax the anti-coronavirus measures imposed in Germany, the 16 state premiers are again due to consult with Chancellor Olaf Scholz on Wednesday afternoon. In a submission for the videoconference, it is said that by March 20 the current coronavirus restrictions should be largely and gradually abolished. The proposal, which is considered the basis for Wednesday's discussions, has been agreed upon between the chancellor's office and the chair and co-chair of the group of state premiers, of which the most populous state, North Rhine Westphalia, is currently the chair.
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BROKER RATING CHANGES
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Barclays cuts Hargreaves Lansdown target to 1840 (1980) pence - 'overweight'
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Jefferies cuts AstraZeneca price target to 8800 (9100) pence - 'hold'
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COMPANIES - FTSE 250
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Indivior posted earnings growth for 2021. The North Chesterfield, Virginia-based maker of treatments for opioid addiction also unveiled plans to pursue a US listing. Revenue in 2021 increased 22% to USD791 million from USD647 million. Indivior posted a pretax profit of USD190 million, swinging from a USD173 million loss in 2020. Looking to 2022, Indivior expects its Sublocade opioid treatment to be its strongest revenue driver, and the company may be on the lookout for acquisitions. "With over USD1 billion in cash on our balance sheet, we have the financial strength and flexibility to pursue a balanced capital allocation strategy. Our primary focus remains on reinvesting in the business, but we also have the potential for additive inorganic growth opportunities and consideration of other value enhancement options," Chief Executive Mark Crossley said. He added: "Together with the board, we have been assessing the optimal listing structure for Indivior's shares. Our preliminary view is that an additional US listing is likely to be beneficial to the group's profile and visibility, as approximately 80% of the group's net revenue is generated in the US. We are aware that this is an important topic, and the board and management intend to consult extensively with shareholders before concluding on any future path." Indivior expects revenue between USD840 million and USD900 million for 2022.
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COMPANIES - MAIN MARKET AND AIM
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Soft drink bottler Coca-Cola Europacific Partners said revenue increased 30% to EUR13.76 billion in 2021, from EUR10.61 billion in 2020, due to its acquisition of Coca-Cola Amatil in Australia. Pretax profit was up by almost double to EUR1.38 billion from EUR695 million. The Uxbridge, England-based soft drinks bottler bought Sydney-based Coca-Cola Amatil from its independent shareholders and US brand owner Coca-Cola Co. The deal valued Amatil at AUD9.77 billion, about GBP5.17 billion at current exchange prices, and completed back in May of last year. Following the acquisition, CCEP renamed itself Coca-Cola Europacific Partners from Coca-Cola European Partners. CCEP said pro-forma comparable currency-neutral revenue growth was 7.5% in 2021. By the same measure, it expects 6% to 8% growth in 2022. CCEP lifted its annual payout by 65% to EUR1.40 per share. For 2022, it will pay two interim dividends, rather than one final one.
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Nutrition products firm Kerry posted improved earnings for 2021. Revenue climbed 5.7% to EUR7.35 billion from EUR6.95 billion. Pretax profit rose 28% to EUR816.3 million from EUR635.3 million. It lifted its final payout by 10% to 66.7 cents per share. Its total dividend for 2021 was also 10% higher at 95.2 cents. "While recognising that the current market environment and inflationary pressures continue to present challenges across our industry, Kerry is stronger positioned and more resilient than ever as we enter a new strategic cycle. Our earnings guidance range for 2022 reflects the group's strong growth prospects and the net effect of recent portfolio developments," CEO Edmond Scanlon said. Kerry expects adjusted earnings per share to rise between 5% and 9% in 2022. Adjusted EPS increased 12% at constant currency in 2021 to 380.8 cents.
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Franchise Brands has agreed to acquire fellow AIM listing Filta for GBP49.2 million in an all-share deal. The enlarged company will be worth GBP191.2 million, Franchise Brands said. Franchise Brands will issue 1.157 new shares for each Filta share, which values Filta shares at 170.7 pence each. The deal already has support for 62% of Filta shares. Franchise Brands is based in Manchester and owns brands such as ChipsAway, Willow Pumps and Metro Rod. Filta is based in Rugby, England and provides cooking oil filtration and fryer management services. "The Filta board believes that there are a number of opportunities to grow and diversify its business and that, whilst Filta has a powerful and successful franchise formula in North America, it has found it more challenging to grow its franchise network in the UK, a major market. The offer provides an opportunity for Filta to become part of a more diversified group, with greater scale, highly complementary services, and a strong balance sheet, offering Filta enhanced growth potential," a joint statement read.
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Gateshead, England-based car dealership Vertu Motors said its Macklin Motors subsidiary has been awarded a Toyota franchise for the west of Scotland, starting April 1. It is the first time that Macklin has represented Toyota. "The new Toyota operations will offer the full range of new and used Toyota vehicles including the new Yaris Cross, Aygo X, the iconic Land Cruiser and the further extensive range of Toyota hybrid and electric vehicles. Motability customers will also be welcomed. Recruitment has now commenced for the new operations," the company said. Vertu plans to open four Toyota dealerships, with the first in south Glasgow.
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COMPANIES - GLOBAL
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Air Liquide said achieved an excellent annual performance in 2021 despite the pandemic and strong inflationary pressures related to an increase in energy prices during the second half. The Paris-based industrial gas supplier reported total revenue of EUR23.34 billion, up 14% from EUR20.49 billion in 2020. Air Liquide's earnings per share for the year rose to EUR5.45, from EUR5.16 in 2020. Likewise, net profit rose 5.6% to EUR2.57 billion from EUR2.44 billion.
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Wednesday's shareholder meetings
Liontrust Asset Management PLC - GM re directors' remuneration policy
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By Tom Waite; thomaslwaite@alliancenews.com
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