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UK TOP NEWS SUMMARY: UK Construction Recovery Slows In August

Fri, 4th Sep 2020 11:07

(Alliance News) - The following is a summary of top news stories Friday.


The UK competition regulator said it has found "troubling evidence" house developers have handed out "potentially unfair" terms concerning ground rents in leasehold contracts and potential mis-selling. As a result, the Competition & Markets Authority has launched an enforcement action as it believes housebuilders may have broken consumer protection law. The CMA has written to four London-listed developers over the action, outlining its concerns: Barratt Developments, Countryside Properties, Persimmon and Taylor Wimpey. All four companies said they would co-operate with the invesigation.

WPP said its digital agency unit Wunderman Thompson has acquired Velvet Consulting, a French customer experience consultancy. The FTSE 100 advertising and marketing firm said clients of Velvet Consulting - which has offices in Paris and Toulouse - include cosmetics firm L'Oreal, beauty store chain Sephora, energy and automation company Schneider Electric and pharmaceutical firm Sanofi. Financial details surrounding the purchase were not disclosed.

Irish airline Ryanair Holdings has raised EUR400 million in a share placing to institutional investors. First announced after the London market close on Thursday, Ryanair said the funds were being raised to help position the firm to "move quickly" should opportunities in the sector be thrown up. "Post Covid-19 growth opportunities include gaining market share from peers retrenching, further European airline failures and competitive unit cost advantage over other carriers. The placing will provide Ryanair with greater financial flexibility to capture these opportunities," said Ryanair on Thursday. The placing should also "significantly de-risk" the group's debt repayments over the next 12 months.

Apple is delaying a new privacy feature in the next version of its iPhone operating system that will make it more difficult for app makers to track people online to help sell digital ads. The decision affects iOS 14, which is expected to be released as a free software upgrade to roughly a billion iPhone users later this month. Apple intended iOS 14 to automatically block tracking as soon as it came out, but the company now says it will hold back the tool until early next year. The safeguard was also supposed be in the next operating systems for iPads and Apple TVs. The feature would require apps to explicitly ask users to give permission to collect and share data about their online behaviour through a unique code that identifies every iPhone. That requirement raised fears that most people would block the tracking, making it more difficult for free apps to sell the ads that generate most of their revenue.


London shares were reversing earlier losses mid-morning on Friday, recovering from a tech-inspired sell-off on Wall Street on Thursday. Housebuilders were in the red following the UK CMA's probe. New York was pointed to a mixed open ahead of the closely-watched US jobs report for August at 1330 BST.

FTSE 100: up 0.6% at 5,883.64

FTSE 250: up 0.9% at 17,619.27

AIM ALL-SHARE: up 0.3% at 956.62

GBP: up at USD1.3296 (USD1.3272)

EUR: up at USD1.1848 (USD1.1825)

GOLD: up at USD1,937.71 per ounce (USD1,926.09)

OIL (Brent): up at USD44.38 a barrel (USD43.42)

(changes since previous London equities close)


Activity in the UK construction sector unexpectedly slowed in August as companies pointed to a shortage of new work, IHS Markit said. The seasonally adjusted IHS Markit/CIPS UK construction purchasing managers' index registered 54.6 in August, down from 58.1 in July. The reading missed the consensus estimate, cited by FXStreet, of 58.5. Still, the score remained above the 50.0 mark which separates expansion from contraction. Markit said the August data pointed to a setback for the recovery in UK construction output, with growth easing from the near five-year high seen during July. Survey respondents mostly suggested that a lack of new work to replace completed projects had acted as a brake on the speed of expansion.

The decline in the eurozone's construction sector picked up pace in August, registering its sharpest fall in three months. The IHS Markit eurozone construction purchasing managers' index slipped to 47.8 in August, deeper below the 50.0 no-change mark, from 48.9 in July. "Survey data showed a broad-based downturn in output across the three sectors, with the sharpest decline recorded in civil engineering activity, followed by commercial building output," Markit noted, adding that the single-currency area's August construction decline was its fastest in three months.

German manufacturing orders climbed on a monthly basis, with its annual decline easing as the sector inches closer to pre-lockdown levels, data showed. Monthly, new orders in manufacturing climbed 2.8% in July, Destatis said, building on a 29% surge in June. Annually, new orders were 7.3% lower, easing from an 11% fall in June. While the monthly figure disappointed the market which expected a 5% climb, FXStreet-supplied consensus also anticipated a 20% yearly plunge, meaning the 7.3% fall was a pleasant surprise.

UK Transport secretary Grant Shapps has acknowledged that varying advice for quarantining when arriving in different UK nations from abroad "creates confusion", amid holidaymakers' calls for clarity. Shapps defended the UK government's decision not to impose restrictions on people entering England from Greece and Portugal despite the Scotland and Wales ordering periods of isolation to slow the spread of coronavirus. He said quarantine powers laid with the devolved administrations and added that Westminster decided not to impose the measure on the popular holiday destinations because figures suggested cases were falling. Shapps told Sky News: "I do realise it creates confusion for people not to have a single rule, but we do have this devolved approach throughout the UK and I can only be responsible for the English part of that."

Diners in Britain ate over 100 million cut-price meals as part of the UK's Eat Out to Help Out scheme, which the UK government said helped protect the country's 1.8 million hospitality jobs. UK government numbers showed 84,700 establishments signed up to the scheme, making 130,000 claims between them worth a total of GBP522 million. The programme, running on Monday, Tuesday and Wednesday during in August, allowed diners to get 50% off meals up to GBP10 each, in a bid by the UK government to get customers through the doors of establishments and ease pressure on businesses which were battered by Covid-19 lockdowns.

Copyright 2020 Alliance News Limited. All Rights Reserved.

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