Wednesday Update

DB Live: Tennent’s hit; inflation jumps; retail ‘fragile’


4.30pm: London closes sharply lower

The FTSE 100 closed at 5,776.50, down 112.72 (1.91%).

2.30pm: Pubs hit out at lack of consultation on closures

Nicola Sturgeon has again been accused of imposing restrictions on businesses without any prior consultation.

Full story here

11.15am: Crane replaced

The tower crane at Ferguson Marine shipyard in Port Glasgow is being replaced in a £500,000 investment by the yard.

The existing tower crane has stood in the shipyard for 37 years, becoming a local landmark, but has reached the end of its serviceable life.

9.30am: GDP rises

Scotland’s GDP increased by 2.6% in August, according to statistics announced today by the chief statistician. This is the fourth consecutive month of increasing GDP following the large falls in March and April, but represents a slowdown from the increase of 6.4% in July.

Despite the increases in the last four months, GDP remains 9.4% below the level in February, prior to the direct impacts of COVID-19.

In August there was a more uneven pattern of growth among the main sectors of the economy than seen in recent months.

Output in the services sector is estimated to have increased by 3.3% compared to July, output in the production sector fell by 0.3%, and construction sector output increased by 3.8%.

9am: London lower

London stocks edged lower in defiance of expectations that investors would follow the US on the back of stimulus hopes.

Instead, traders were nervously digesting the latest UK inflation and borrowing figures (see below).

After the first hour of trade the FTSE 100 was 76.25 points (1.29%) lower at 5,812.97.

7am: Tennent’s sees 65% fall in volumes

The closure of pubs and restaurants resulted in Tennent’s on-trade volumes declining 64.8% compared to H120.

Volumes have recovered strongly since trade recommenced.

Parent company C&C said: “We have continued to invest and strengthen our brand innovation, with the launch of Tennent’s Light in March 2020 to meet evolving health conscious and wellbeing consumer trends.

“The brand is in over 300 outlets in the on-trade and was launched in the off-trade in July with products listed in over 1,000 multiple retail and convenience stores. In addition, Tennent’s Zero, a 0% lager was launched in the off-trade in October with multiple retailers.”

Dublin-based C&C said group net revenue more than halved in the six months to 31 August, but gradual relaxation of restrictions saw the company return to profit generation in July.

Net revenue declined 55.4% to €386.7 million in the first half of the company’s financial year, resulting in an operating loss of €11.7m. That compared to a profit of €64.4m a year earlier.

Inflation rises, borrowing up

UK inflation jumped to 0.5% in September, from 0.2% in August. This will trigger a 2.5% rise in the state pension next year.

Sam Fuller, director of Financial Markets Online, commented: “The UK has dodged the deflationary bullet, for now at least.

“August’s ‘Eat Out to Help Out’ scheme dragged inflation down perilously close to negative territory, so September’s increase to conventional, albeit weak, price growth is a return to a semblance of normality if nothing else.”

Government borrowing hit £36.1bn in September as the UK continued heavy spending to support the economy during the coronavirus pandemic.

The figure was £28.4bn more than last year, and the third-highest borrowing in any month since records began in 1993.

Prince St retail shopping

Retail still fragile

Scottish sales remained fragile in the run-up to the crucial Christmas shopping period, not helped by the closure of the hospitality sector.

Sales decreased in September by 6.3% on a like-for-like basis and total sales by 8% compared with September 2019.

Ewan MacDonald-Russell, head of policy and external affairs at the Scottish Retail Consortium said: “There are severe headwinds ahead. Whilst shops can continue to trade, the lockdown of hospitality businesses removes reasons to visit town and city centres.

“Policymakers need to avoid further pressure on the industry, there is no capacity to absorb further costs whilst the current crisis continues.”


US equities rallied on investor optimism that a deal would be reached in Washington to provide new relief measures for the economy.

The Dow Jones Industrial Average was up 113.37 points, or 0.40%, and the S&P 500 was 16.20 points, or 0.47% higher, while the tech-heavy Nasdaq Composite rose 37.51 points, or 0.33%.

Today’s agenda

First Minister Nicola Sturgeon is due to give an update on Scotland’s temporary coronavirus restrictions following a meeting of the Scottish Cabinet.

Today’s top Daily Business headlines

Firms ‘need clarity now’ on what comes next

Scotland lures finance firms as Leonard demands reform

Big Partnership cuts staff as pandemic takes toll

Liverpool and Man Utd in Euro League plot

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