LONDON BRIEFING: Air Fares And Restaurant Tabs In UK Trimmed In August

(Alliance News) - The UK government's Eat Out to Help Out dining discount scheme helped to push down inflation in August, figures from the Office for National Statistics showed on Wednesday.

The annual consumer price inflation rate slowed sharply to 0.2% in August from 1.0% in July. Month-on-month, prices fell by 0.4% in August after 0.4% growth in July.

The ONS noted that the government's Eat Out to Help Out scheme - which ran in August and discounted meals out up to a maximum of GBP10 per person - pushed down prices in restaurants and cafes, while other downwards contributions came from air fares and clothing prices.

Prices at restaurants and cafes fell 2.6% in the year to August, after growth of 3.4% in July.

Jonathan Athow, deputy national statistician for Economic Statistics at the ONS, said: "The cost of dining out fell significantly in August thanks to the 'Eat Out to Help Out' scheme and VAT cut, leading to one of the largest falls in the annual inflation rate in recent years."

"For the first time since records began, air fares fell in August, as fewer people travelled abroad on holiday. Meanwhile the usual clothing price rises seen at the time of year, as autumn ranges hit the shops, also failed to materialise."

Producer prices remained in deflation in August. Output producer prices slipped 0.9% annually in August, while input factory prices fell 5.8%.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: called down 15.54 points, 0.3%, at 6,090.00

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Hang Seng: down 0.1% at 24,720.35

Nikkei 225: closed up 0.1% at 23,475.53

DJIA: closed up 2.27 points at 27,995.60

S&P 500: closed up 17.66 points, or 0.5%, at 3,401.20

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GBP: up at USD1.2892 (USD1.2858)

EUR: flat at USD1.1851 (USD1.1847)

Gold: down slightly at USD1,960.50 per ounce (USD1,951.10)

Oil (Brent): up at USD41.30 a barrel (USD40.16)

(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

0930 BST UK house price index

1100 CEST EU foreign trade

0700 EDT US MBA weekly mortgage applications survey

1000 EDT US NAHB housing market index

1030 EDT US EIA weekly petroleum status report

1400 EDT US interest rate decision

1400 EDT US Federal Reserve economic projections

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Japan's parliament elected Yoshihide Suga as prime minister, with the former chief cabinet secretary expected to stick closely to policies championed by Shinzo Abe during his record-breaking tenure. Suga, 71, won an easy victory, taking 314 votes of 462 valid ballots cast in the lower house of parliament, where his ruling Liberal Democratic Party holds a commanding majority. Suga is expected to announce his cabinet later Wednesday, with local media reporting he will retain a number of ministers from Abe's last government.

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Japan's trade was in surplus in August as imports fell by more than exports on a year before, the Ministry of Finance reported. Japan's trade surplus stood at JPY248.30 billion in August, compared to a JPY152.21 billion deficit recorded for the same month a year ago. The country's exports shrank by 15% to JPY5.233 trillion in August from JPY6.139 trillion a year before. Imports however fell by 21% to JPY4.984 trillion from JPY6.291 trillion year-on-year.

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BROKER RATING CHANGES

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JEFFERIES RAISES BAE SYSTEMS TO 'BUY' ('HOLD') - TARGET 600 (615) PENCE

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JEFFERIES RAISES BHP GROUP TO 'BUY' (HOLD) - PRICE TARGET 2200 (1750) PENCE

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CREDIT SUISSE RAISES WEIR GROUP TO 'OUTPERFORM' ('NEUTRAL') TARGET 1600(1380) PENCE

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COMPANIES - FTSE 250

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Plus500 said it is confident in its outlook after an "outstanding performance" so far this year. The operational momentum achieved during the first half has continued into the second half to date, the contracts for difference technology platform said. Revenue, in particular Customer Income, has remained strong in the second half thus far, while a "high level of new customers" have been onboarded. "While market conditions remain uncertain, macroeconomic and sector-specific newsflow continue to provide significant trading opportunities for customers. Therefore, the board remains very confident about the outlook for Plus500, particularly given the company's outstanding performance so far this year," said Plus500.

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Housebuilder Redrow reported a fall in annual profit but said it has got off to a good start to the new financial year, eyeing the resumption of dividend payments in 2021. Revenue for the year to June 28 fell 37% to GBP1.34 billion from GBP2.11 billion, with completions also down 37% due to Covid-19, the firm said. Pretax profit slumped to GBP140 million from GBP406 million, which Redrow also said was due to the pandemic as well as costs and impairments in connection with the scaling back of the London business. The homebuilder said it has seen encouraging trading since the start of the new financial year, with reservations 12% ahead. No final dividend was recommended for the recently-ended year, and back in March Redrow had decided to cancel its interim dividend.

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COMPANIES - MAIN MARKET AND AIM

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Galliford Try said its results for the financial year that ended June 30 were in line with expectations, with the construction business "well-placed" for the new year. Pretax loss narrowed to GBP34.6 million from GBP64.5 million, though excluding exceptional items the loss widened to GBP59.7 million from GBP17.2 million. Revenue declined to GBP1.12 billion from GBP1.40 billion. Looking ahead, Galliford's order book stands at GBP3.2 billion, up from GBP2.9 billion a year before. Following the sale of the Linden Homes and Partnerships housing divisions to the former Bovis Homes, completed in January, Galliford said it is focusing on its core strengths of building, highways and environment. It hopes to reinstate dividend payments once it returns to profit.

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COMPANIES - GLOBAL

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The Thomas Cook brand has been "reinvented" as an online travel company. Chinese firm Fosun Tourism Group acquired the brand for GBP11 million after the 178-year-old travel company collapsed in September 2019. The new version began selling holidays online and over the phone on Wednesday but does not have any stores. It employs around 50 people and retains the brand's logo. Alan French, who was group strategy and technology director at Thomas Cook when it collapsed, has been hired as UK chief executive of the new travel agency and described the relaunch as "an honour".

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Wednesday's Shareholder Meetings

Plus500

Redcentric

Eckoh

Mirada

Auto Trader Group

Games Workshop Group

Jupiter Green Investment Trust

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By Tom Waite; thomaslwaite@alliancenews.com

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