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FTSE 100 hits new threshold
The FTSE 100 index breached the 8,000 level for the first time in buoyant late afternoon trading, hitting a new all-time intra-day high of 8,003.65, thanks in part to a weaker pound.
It closed 43.98 points higher at 7,997.83.
A weaker pound tends to benefit the FTSE 100 as around 70% of its constituents derive most of their earnings from overseas.
The bigger-than-expected drop in headline CPI helped to lift housebuilders and retailers amid hopes the Bank of England could be close to the end of its current rate-hiking cycle.
UK inflation dipped to 10.1% last month from 10.5% in December, a sharper fall than the 10.3% expected by analysts.
It means price rises in the UK have slowed for a third month in a row, easing pressure on the Bank of England for interest rate rises.
UK inflation remains near a 40-year high although it is lower than in 14 EU states.
Chancellor Jeremy Hunt said: “While any fall in inflation is welcome, the fight is far from over.
“High inflation strangles growth and causes pain for families and businesses – that’s why we must stick to the plan halve inflation this year, reduce debt and grow the economy.”
Alpesh Paleja, CBI Lead Economist, said: “Another fall in inflation over January suggests that the tide is turning on price pressures. But with inflation and pipeline cost pressures set to remain high this year, households and businesses are likely to feel the pain for a while yet.”
January sales helped to sustain the Scottish retail sector’s “fragile recovery” but customers remain cautious, according to new data.
The Scottish Retail Consortium (SRC)’s latest retail sales monitor, produced with KPMG, found total retail sales last month rose by 8.9% on January 2022. Accounting for inflation there was only 1% growth.
SRC deputy head Ewan MacDonald Russell said: “There is a clear sense any retail recovery is deeply fragile. Consumers continue to be cautious with their spending, and any increase in their costs is likely to be felt in reduced shop takings.”
8.05am: FTSE 100 lower
The FTSE 100 was trading 14 points lower at 7,939.53.
7am: Barclays profits slump
Barclays Bank said annual profits slumped 14% as it accounted for debt impairments amid the weakening economy and costs from an administrative blunder that saw it oversell securities in the United States.
The bank posted a pre-tax profit of £7bn for 2022, against £8.2bn a year earlier and short of expectation of £7.2bn.
Credit impairment charges were £1.22bn. However, it raised the recommended full-year dividend to 7.25p a share from 6p and announced a £500m share buyback.
7am: Hargreaves Lansdown
Investment platform Hargreaves Lansdown posted a 31% jump in its half-year profit before tax as an increase in the number of its active clients overshadowed a drop in the assets managed by the company.
Profit before tax came in at £197.6 million for the half year, compared with £151.2m a year ago. But its active clients increased by 31,000 in the period.
The company reported assets under administration of £127.1 billion for the six months ended 31 December, down from £141.2bn as compared with last year. Net new business fell 30% to £1.6bn.
Chief executive Chris Hill said: “Challenging external conditions and low investor confidence impacted asset values and stockbroking volumes in the period,”
7am: Glencore’s record profit
Mining group Glencore posted record profitability, driven by “unprecedented developments in global energy markets”.
Group adjusted EBITDA rose $12.8 billion to $34.1bn. It announced a payout of $7.1bn to investors, including a new $1.5bn share buyback programme
Chief executive Gary Nagle said: “The strength of our diversified business model across industrial and marketing, focusing on metals and energy, has proved itself adept in a range of market conditions, giving us a solid foundation to successfully navigate shorter-term challenges that may arise, as well as meet the resource needs of the future.”
7am: BP in South Korea deal
BP and Deep Wind Offshore have formed a joint venture to develop offshore wind opportunities in South Korea.
As part of the agreement BP has acquired a 55% stake in Deep Wind Offshore’s early-stage offshore wind portfolio, which includes four projects across the Korean peninsula with a potential generating capacity of up to 6GW.
Traders yesterday pushed the FTSE 100 within a whisker of the 8,000 threshold before it fell back on higher than expected US inflation figures.
Wall Street gave a mixed response to the data which suggests further interest rate rises at least until May. At the close, the Dow Jones Industrial Average was down 0.46%, the S&P 500 lost 0.03%, while the Nasdaq Composite managed a 0.57% gain.
In Asia, the Nikkei 225 index was down 0.4%. In China, the Shanghai Composite also was down 0.4%, while the Hang Seng index in Hong Kong was down 1.5%.