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UK growth to hit 72 year high; Capita in Tesco Mobile deal

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5pm: Model traders

Model train company Hornby turned a profit for the first time in nine years, but investors failed to share hobbyists’ enthusiasm and pushed the shares down 2.7%.

Auto Trader’s shares were close to the top of the FTSE 100 with a 6.5% jump as it looks set to gain from a rise in online car shopping.

BT’s shares closed 6.6% higher after Altice took a multi-billion pound stake.

Shareholders in supermarket chain Morrisons overwhelmingly voted against a bonus for its chief executive which was calculated before accounting for the £290 million cost of dealing with Covid-19. However, the vote is not binding, so will not change anything.

The FTSE 100 closed at 7,088.18, up just 7.17 points.

In the US, eyes have been firmly on an inflation report all week, which in the end pushed through expectations.

The 5% rise in the consumer price index was significantly ahead of a 4.7% consensus forecast by analysts.

 


Noon: Kitchens International acquired

Timber group James Donaldson & Sons has acquired the retail business Kitchens International.

Full story


8.15am: Markets await data

Blue chips opened flat ahead of the G7 meeting and today’s economic data from the US. The FTSE 100 was trading just 2 points higher at 7,083.13.


7am: Capita contract with Tesco Mobile

Capita said it will introduce the latest technology following a customer management contract renewal with Tesco Mobile worth £57.6 million over three years.


7am: Covid vaccine deal

Pharmaceutical giants Pfizer and BioNTech are providing the US government with 500 million doses of their COVID-19 vaccine at a not-for-profit price to help end the pandemic.

Full story here


6am: Amazon probe

The Competition watchdog is planning a formal competition investigation into e-commerce company Amazon.com, it has been claimed.

The Competition and Markets Authority has been analysing Amazon’s business for months, reports the Financial Times, adding that the regulator is focusing on how the online retailer uses the data it collects on its platform.


12.01am: GDP growth to be strongest since 1949

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The UK is expected to grow this year by 6.8% – the strongest outturn since official records began in 1949, according to The British Chambers of Commerce.

After Q3 the economy is then expected to return to its pre-pandemic level in Q1 2022 with growth of 5.1% projected for next year. 

The BCC forecast assumes that the UK Government’s roadmap out of lockdown restrictions proceeds as currently planned. Another scenario would lead to revisions in the next forecast. 

Pent-up consumer spending is expected to be the main driver of this year’s economic rebound.  

Business investment is forecast to be strong over the next two years, driven by the anticipated boost from the reopening of the economy and the introduction of the super-deduction incentive.

However, business investment is projected to slow sharply in 2023 as the super-deduction incentive ends and corporation tax increases. 

Other key forecasts:

  • Exports to the EU are forecast to contract by 12% in 2021 by 1.4% in 2022 and by 2.5% in 2023
  • UK unemployment rate to be 5.5%, 5.2% and 4.8% for each of 2021, 2022 and 2023, compared to youth unemployment rate of 15.6%, 15.4% and 15.0%
  • CPI inflation is expected to rise in the near-term peaking at 2.6% in Q3 2021, which would be the highest rate since August 2018. With current price pressures largely transitory, inflation is expected to drop back to the Bank of England’s 2% target in Q2 2022
  • UK official interest rates are expected to start rising in Q2 2023 to 0.25%

Global markets

Economic data released in the US and Europe will be the focus for traders, with inflationary pressures continuing to hound the markets.

The FTSE 100 was expected to follow Asia’s uplift. Japan’s Nikkei was up 91 points whilst Hong Kong’s Hang Seng gained 74 points or 0.26%. The Shanghai Composite added 0.69%.

Wall Street was more downbeat ahead of the consumer prices figures. The Dow Jones closed 152 points or 0.44% lower. The S&P 500 edged down 0.18% whilst the Nasdaq Composite was broadly flat.



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