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5pm: Equities rise

Investors had priced in the interest rates increase and the FTSE 100 closed 44.49 points higher at 7,188.63.

Sterling was trading down 1.83% on the dollar at $1.1183, as it weakened 1.2% against the euro to change hands at €1.1464.

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The US Federal Reserve lifted interest rates by 75 basis points, as expected, and signalled plans to keep raising them, though possibly in smaller increments.

In a policy statement the Fed acknowledged it could take time for rapid increases this year to be reflected in the economy.

The latest increase takes the benchmark lending rate to 3.75% – 4%, a range which is the highest since January 2008.

7am: Construction outlook ‘deteriorating

The marked slowdown in the Scottish construction market continued in the latest quarter, with surveyors now pointing to the weakest period of growth since the beginning of last year, according to the RICS Construction & Infrastructure Monitor for Q3 2022.

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7am: BT raises cuts target

Telecoms group BT is increasing its cost savings target from £2.5bn to £3bn by the end of FY25 in order to manage cash flow.

Reported profit before tax for the half year fell 18% to £831 million from £1.009 billion. This was because of increased depreciation from network build and higher specific costs offsetting a 3% rise in adjusted EBITDA growth to £3.87bn.

Revenue was up 1% to £10.4bn.

CEO Philip Jansen said it remains “laser focused” on modernising and simplifying the group.

BT declared an interim dividend of 2.31 pence per share.

7am: Sainsbury’s profits slump

Supermarket chain Sainsbury’s said profits slumped in the six months ended 17 September as cost of living pressures offset slightly improved revenues.

Group revenue rose 4.4% but pre-tax profits shrank 29% year-on-year to £376m, reflecting higher exceptional income in the prior year from settlement of legal disputes .

The FTSE 100-listed group said grocery sales were up 0.2% year-on-year and statutory group sales were 4.4% higher, excluding VAT, while general merchandise sales were 6.1% lower and retain operating profit was down 9%.

There is an interim dividend of 3.9 pence.

Guidance for FY22/23 is unchanged with underlying profit before tax expected to be between £630m and £690m.

Charlie Huggins, head of equities at Wealth Club, commented: “These are solid enough results from Sainsbury’s, but it is difficult to get excited. It’s just such a tough industry, with fierce competition, fickle consumers and thin margins.

UK grocery shoppers have abundant choice – from premium shops like Waitrose, Ocado and M&S to Asda, Aldi and Lidl at the other end. In the middle is Sainsbury’s. It does its job perfectly well but isn’t perceived as the cheapest or the best. This makes for a tough gig, especially in an inflationary environment.  

“To be fair to Sainsbury’s, it isn’t taking this lying down. It has lowered prices and significantly increased online capacity. But all this comes at a cost. With the economy being strangled by higher interest rates and inflation, Sainsbury’s will have to run very hard just to stand still.”

7am: Rolls-Royce

Aero engine maker Rolls-Royce maintained its annual guidance as the rebound in post-pandemic air travel continues.

“The recent volatility in interest rates and foreign exchange rates have not had a material impact on our underlying cash flows or full-year 2022 group guidance, which is unchanged,” said the baord.

It said it had paid off £2bn in debt with proceeds from the sale of its ITP Aero unit.