Bank move | jobless falls | Heathrow alert | Iomart cautions
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5pm: FTSE 100 falls again
The FTSE 100 fell by 1.06% at the close to finish 74.08 points lower at 6,885.23.
Stocks weakened as the Bank of England resumed its bond buying to stabilise a volatile and threatening gilt market and IMF repeated its warning about the impact of the Chancellor’s tax cuts.
8.30am: Stocks open lower
Shares fell sharply at the open as the Bank of England stepped in again today to stabilise the markets and, in particular, further concerns about gilt yields, while real wages fell and the Institute for Fiscal Studies predicts the government needs to find £60bn of spending cuts.
The FTSE 100 was trading off its earlier lows, down 43 points at 6,916.64.
Traders got some relief from broker upgrades for Next and Centrica, but the blue chip index is down 6% so far this year.
7am: Unemployment and pay
The UK unemployment rate slipped to 3.5% and stands at the lowest level since 1974.
However, rises in regular wages are failing to keep up with the rising cost of living.
Regular pay – which excludes bonuses – grew at an annual rate of 5.4% in the June to August period.
This is the strongest growth in regular pay seen outside of the coronavirus pandemic period, the UK statistics body said.
But taking the rise in prices into account, the value of regular pay fell by 2.9%, the ONS said.
The estimated number of vacancies in the three months to September fell by 46,000 to 1,246,000, which is the largest fall since mid-2020 during the Covid pandemic.
In Scotland the unemployment rate stands at 3.3%.
Heathrow said the outlook for winter was uncertain, given the growing economic headwinds plus the impact of a new Covid-19 wave and the volatile situation in Ukraine.
Britain’s biggest airport said 5.8 million passengers passed through in September, 15% below levels seen in 2019, showing that travel was recovering from pandemic lows but was held back by a cap on departures introduced by the airport to cope with labour shortages and congestion.
The airport is due to remove the 100,000 daily cap at the end of October.
Simon Fuller, group chief financial officer, and the company “have mutually agreed that it is an appropriate time for Simon to step down and move on to new challenges.”
Q3 and September revenue performance at the owner of the Mirror, Express and Record titles was distorted by impact of the passing of the Queen which benefited circulation but significantly reduced advertising due to the blackout during national mourning
July and August were more indicative of underlying revenue performance: print down 2.8%, digital up 5.9%. Full story here
The Glasgow-based cloud computing firm said revenue and profit in the second half of the year are expected to be higher than the first half.
However, in the face of potential economic headwinds, margin are not expected to fully recover and that profit for the full year is therefore likely to be at the lower end of the board’s original expectations.
For the six months to 30 September 2022, the group expects to report revenue of approximately £52.5 million (H1 FY22: £51.9 million), adjusted EBITDA of c.£17.8 million (H1 FY22: £19.6 million) and adjusted profit before tax of c. £7.3 million (H1 FY22: £9.1 million).
Wall Street stocks closed lower on Monday ahead of a busy week of Q3 earnings from the banks.
At the close, the Dow Jones Industrial Average was down 0.32%, extending losses in the previous session after September’s non-farm payrolls left investors thinking that the Federal Reserve will likely hike short-term interest rates by another 75 basis points at its next meeting.
The S&P 500 was 0.75% weaker and the Nasdaq Composite eased 1.04%.