Shares slip as inflation hits 11.1% | Scots retail dips
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5pm: Londons stocks slip
The FTSE 100 slipped into negative territory mid-morning and closed 18.25 points lower at 7,351.19 as traders digested a higher than expected jump in inflation ahead of tomorrow morning’s Autumn Statement.
7am: Inflation rises
Prices rose by 11.1% in the year to October, significantly higher than the 10.7% consensus forecast, and up on 10.% in September.
Grant Fitzner, chief economist at the Office for National Statistics (ONS), said: “Rising gas and electricity prices drove headline inflation to its highest level for over 40 years, despite the Energy Price Guarantee.
“Over the past year, gas prices have climbed nearly 130% while electricity has risen by around 66%. Increases across a range of food items also pushed up inflation.
“These were partially offset by motor fuels, where average petrol prices fell on the month, while the price for diesel rose taking the disparity in price between the two fuels to the highest on record,”
“There was further evidence that costs facing businesses are rising more slowly, driven by crude oil and petroleum prices.”
Chancellor Jeremy Hunt said: “The aftershock of Covid and Putin’s invasion of Ukraine is driving up inflation in the UK and around the world.
“This insidious tax is eating into pay cheques, household budgets and savings, while thwarting any chance of long-term economic growth.
“It is our duty to help the Bank of England in their mission to return inflation to target by acting responsibly with the nation’s finances. That requires some tough but necessary decisions on tax and spending to help balance the books.
“We cannot have long-term, sustainable growth with high inflation. Tomorrow I will set out a plan to get debt falling, deliver stability, and drive down inflation while protecting the most vulnerable.”
Energy giant SSE posted a 221% rise in adjusted pre-tax profits to £559.4m (2021: £174.2m) for the half year to the end of September.
7am: Deliveroo quits Australia
Deliveroo is pulling out of Australia where it has been unable to make a profit and is putting its operations into voluntary administration.
It said the decision is “driven by the company’s disciplined approach to capital allocation”.
In Australia, the market is highly competitive with four global players, and Deliveroo does not hold a broad base of strong local positions. In H1 2022, the Australian business represented approximately 3% of Deliveroo’s total Gross Transaction Value (GTV) and negatively impacted the Company’s adjusted EBITDA margin (as % of GTV) by approximately 30 basis points.
“The company has determined that it cannot reach a sustainable and profitable scale in Australia without considerable financial investment, and the expected return on such investment is not commensurate with Deliveroo’s risk/reward thresholds,” it said.
Accounting software firm Sage described “significant strategic progress” in its full-year results, as revenue rose 5% to £1.95bn, and organic total revenue advanced 6% to £1.92bn.
The FTSE 100 company said its organic operating profit was ahead 8% year-on-year in the 12 months ended 30 September at £383m, while operating profit itself fell 2% to £367m.
The board recommended a final dividend of 12.1p per share, up 4%, taking the full-year payout to 18.4p.
12.01am: No uplift to retail sales
Scottish retailers had a disappointing start to the ‘golden trading quarter’, according to new data.
Retail sales slipped backwards in real terms in October as the rise in sales was outweighed by inflation.
“Despite being the first month of the golden trading quarter, retailers will be disappointed not to have seen any surge in sales either for Halloween or early Christmas-related trading,” said David Lonsdale, director of the Scottish Retail Consortium.
“Even with the soccer World Cup just around the corner there was little sign customers were getting ready, with no discernible uplift in television sales.
“Weak trading is a huge concern for retailers who have suffered two successive poor Christmases.
“The Scottish and UK governments need to urgently assess the costs they are adding to businesses and see where they could lighten the burden.
“Next month’s Scottish Budget provides a clear opportunity to do so through forestalling any inflation-matching uplift in the business rate.”
Sterling rose above $1.20 for the first time in almost three months yesterday amid growing optimism that inflation in the US has peaked.
American producer prices rose by 0.2% in October, half the rate economists had forecast and financial markets now believe the US Federal Reserve will take its foot off the interest rate accelerator.
US policymakers are now expected to raise interest rates by 50 basis points, as opposed to the 7