(Alliance News) - UK consumer inflation quickened in September, data on Wednesday showed, as the 'Eat Out to Help Out' scheme drew to a close.
Consumer prices rose 0.5% annually, in line with forecasts and accelerated from 0.2% in August.
"Transport costs, and restaurant and cafe prices, following the end of the Eat Out to Help Out scheme, made the largest upward contributions," the Office for National Statistics said.
"This was partially offset by smaller downward contributions from furniture, household equipment and maintenance; games, toys and hobbies; and food and non-alcoholic beverages."
The UK 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 in August.
On a monthly basis, consumer price rose 0.4%, though consensus according to FXStreet forecast a 0.5% uptick. In August, consumer prices fell 0.4% month-on-month.
Output producer prices fell 0.9% annually in September, ONS data on Wednesday also showed, in line with forecasts and following a fall of the same rate in August. Monthly, output PPI slipped 0.1%, following 0.1% growth in August.
Input producer prices dropped 3.7% yearly, eased from a 5.6% plunge in August. A 5.5% drop was expected for September. Monthly, input prices were up 1.1%, confounding market expectations of a 0.4% drop and reversing a 0.2% fall in August.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.5% at 5,859.63
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Hang Seng: up 0.9% at 24,797.42
Nikkei 225: closed up 0.3% at 23,639.46
DJIA: closed up 113.37 points, 0.4%, at 28,308.79
S&P 500: closed up 0.5% at 3,443.12
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GBP: up at USD1.2988 (USD1.2958)
EUR: up at USD1.1860 (USD1.1825)
Gold: up at USD1,918.36 per ounce (USD1,908.45)
Oil (Brent): up at USD42.78 a barrel (USD42.48)
(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
0700 EDT US MBA weekly mortgage applications survey
1030 EDT US EIA weekly petroleum status report
1400 EDT US Beige Book
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Local politicians have warned of a "winter of hardship" in Greater Manchester as the area is forced into harsher coronavirus restrictions. UK Prime Minister Boris Johnson imposed the stringent Tier 3 rules when negotiations between ministers and local leaders broke down after more than a week, but only confirmed a fraction of the funds Manchester politicians wanted from government. Greater Manchester Mayor Andy Burnham accused Johnson of "playing poker" with people's lives when a deal could not be reached on cash for the region to support them through the measures. Burnham said leaders of the authorities in Greater Manchester had originally wanted GBP90 million – GBP15 million a month until the end of the financial year – to protect incomes for people forced out of work. They eventually reduced that sum to GBP65 million – which Burnham described as the "bare minimum to prevent a winter of real hardship" – but ministers would only offer GBP60 million.
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The UK government has confirmed it is scrapping a planned multi-year spending review, and instead holding a one-year review at the end of November, PA reports. Chancellor Rishi Sunak said the decision was taken to prioritise the response to Covid-19 and focus on supporting jobs, setting departmental resources and capital budgets for 2021-22, and the devolved administrations' block grants for the same period. Funding for the NHS and schools will remain multi-year, along with priority infrastructure projects.
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Chances for approving a new spending package to support the US economy improved dramatically on Tuesday after the senior Democratic lawmaker said a bill is in the works and the top Senate Republican said he would bring it to a vote. Both sides said they made progress in talks, but whether negotiations can be completed in time for Congress to approve the package before the November 3 presidential election remains a question mark. US House Speaker Nancy Pelosi said on Bloomberg TV that legislators are starting to commit the measure to paper. While the bill must go through legislative steps, including approval by the House Appropriations Committee, "I am optimistic" it can get bipartisan support, Pelosi said, but cautioned "Legislation is tough." The bill's prospects got a boost after Senate Majority Leader Mitch McConnell, who repeatedly signalled that he would not support a massive package, said he would bring the measure to the Senate floor for a vote.
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Former president Barack Obama holds his first rally Wednesday in support of US election front runner Joe Biden, while Donald Trump campaigned frantically and accused his opponent, who stayed home in Delaware, of going "into hiding". Two weeks before the polls, the contrast in campaign strategies between Trump, 74, and Biden, 77, has never been more pronounced: the Republican president led another rally in the battleground state of Pennsylvania Tuesday, while Democrat Biden stayed mostly out of sight ahead of a pivotal televised debate later in the week. Polls show Biden ahead and, with the clock running down, he appears confident.
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BROKER RATING CHANGES
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JEFFERIES RESUMES METRO BANK WITH 'BUY' - TARGET 73 PENCE
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RBC CUTS METRO BANK PRICE TARGET TO 100 (110) PENCE - 'SECTOR PERFORM'
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SHORE CAPITAL INITIATES DFS FURNITURE WITH 'BUY' - TARGET 330 PENCE
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COMPANIES - FTSE 100
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Miner Antofagasta said copper production in the third quarter of 2020 came in 4.6% lower quarter-on-quarter at 169,600 tonnes. The company said it lost on output due to "due to major maintenance work" at its Los Pelambres mine in Chile. For the nine-month period, output was in line with forecasts at 541,300 tonnes, though down 7.3% annually. Meanwhile gold output fell 17% quarter-on-quarter but molybdenum production was up 9.7%. "Copper production guidance for 2020 is unchanged at the lower end of the original 725-755,000 tonnes range," Antofagasta said, adding that government-imposed virus restrictions in Chile are easing.
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Fresnillo said it has "marginally reduced our full-year guidance for gold" as working restrictions due to the virus at its Herradura mine in Mexico have hurt production. Gold output fell 6.3% quarter-on-quarter to 172,718 ounces in the period to September. Total silver fell 2.3% to 13.3 million ounces. Elsewhere, lead output fell 6.4% and zinc dropped 1.5%. Fresnillo now expects annual gold production in the range of 745,000 to 775,000 ounces. Its previous guidance range was between 785,000 and 815,000 ounces.
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COMPANIES - FTSE 250
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Bookmaker William Hill, the object of an agreed GBP2.9 billion takeover from US casino giant Caesars, said its trading in the 13 weeks to September 29 was "robust". With the live sporting calendar getting busier, group net revenue fell just 9% annually, compared to the 32% plunge seen in the first half. Online net revenue improved 4% in the third quarter, and the retail like-for-like fall eased to 2% from a sharp 49% decline in the lockdown hit first-half. In the US, net revenue was 10% higher.
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Metro Bank said activity levels are continuing to "gradually recover". "In a challenging environment, Metro Bank has delivered a good performance with loan growth reflecting our support for government-backed lending schemes," Chief Executive Officer Daniel Frumkin said. Assets rose 5% annually in the third quarter ended September to GBP22.14 billion and loans grew 1% to GBP15.09 billion. Deposits were up 10% to GBP15.62 billion. Its CET1 ratio "remains materially in excess of regulatory minima" at 20.2%, the company said.
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Egyptian gold miner Centamin reported 128,240 ounces of production in the third quarter at an all-in sustaining cost of USD961 per ounce. It confirmed 2020 guidance of 445,000 to 455,000 ounces of output at an AISC of USD950 to USD1,050, including capex spending expected in the fourth quarter..
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Quilter reported a "steady" third quarter with improved year-to-date net inflows despite a "more challenging market backdrop". The wealth manager said assets under management and administration at September 30 was GBP109.5 billion, up from GBP107.4 billion as at June 30. Gross sales for the quarter ended September 30 were down to the year prior at GBP2.7 billion compared to GBP2.8 billion a year before. Net inflows for the quarter were flat to the year prior at GBP400 million. Year-to-date net inflow was at GBP1.2 billion, however, swinging from a net outflow of GBP200 million a year prior. Chief Executive Paul Feeney said: "Despite a more challenging market backdrop, we are pleased with the substantial year-on-year improvement in net flows."
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COMPANIES - GLOBAL
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Nestle reported a drop in nine-month sales for 2020, with falls for almost all products and for all regions during the period. Sales for nine months ended September came to CHF61.91 billion, around USD68 billion, down 9.4% from CHF68.37 billion a year before. More positively, organic growth came to 3.5% and real internal growth was 3.3%. The company upgraded its 2020 guidance slightly. It is now expecting 3% organic sales growth for the year as a whole. In July, Nestle had guided for full-year organic sales growth between 2% and 3%. It still expects to see improvement in its underlying trading operating profit margin, with underlying earnings per share forecast to increase at constant currency, along with capital efficiency, as it did in July.
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Hong Kong's Cathay Pacific Group announced it will be cutting 8,500 positions in an effort to save its airline businesses and will immediately cease operations of its regional subsidiary Cathay Dragon. Some 5,900 jobs are to be cut directly, while 2,600 currently open positions will not be filled, ultimately reducing the workforce by nearly a quarter. As part of a restructuring plan, which the group says it must undergo as a result of the coronavirus pandemic, Cathay Pacific will freeze in recruitment, and up to 5,300 Hong Kong based employees will be face redundancy.
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Wednesday's Shareholder Meetings
Alumasc Group PLC - AGM
Duke Royalty Ltd - AGM
Local Shopping REIT PLC - GM re listing transfer, new strategy, name change to Alina
Frontier Developments PLC - AGM
DWF Group PLC - AGM
Standard Life UK Smaller Companies Trust PLC - AGM
Triple Point Social Housing REIT PLC - re share placing
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
Centamin PLC (CEY)
Dfs Furn (DFS)
Metro Bank (MTRO)
Quilter (QLT)