Market report

Bank of England rate setter calls for freeze

Bank of England
Bank of England rate setters are divided on policy

Bank of England monetary policy committee member Swati Dhingra said there was no need for further interest rate hikes, in contrast to the more hawkish tone being struck by the chairman of the US Federal Reserve.

The FTSE 100 staged a slow recovery to close 10.44 points higher at 7,929.92 after Ms Dhingra, an external member of the MPC, said this morning that “given little evidence of further cost-push inflation” further tightening of policy such as through another interest rate hike “is a bigger risk to output and the medium-term inflation target”.

Last week, BoE governor Andrew Bailey hinted that interest rate hikes will pause – but that “nothing is decided” – adding that he would “caution against suggesting either that we are done with increasing bank rate, or that we will inevitably need to do more”.

On Tuesday Fed chairman Jerome Powell kept the door open for higher interest rates. He said the Fed would likely crank up the pace of rate hikes from 25 basis points per meeting to 50bp.

His comments were more hawkish than expected as he defended the Fed’s decision to hike interest rates to a 16-year high in order to combat inflation — and said more aggressive monetary policy is on the table.

“We will stay the course until the job is done,” he said.

At the close, the Dow Jones Industrial Average closed 0.18% lower, while the S&P 500 was up 0.14%.

Sterling was quoted at $1.1825 early today, down from $1.1861 at the London equities close last night..

7am: The Restaurant Group

Wagamama, service, hospitality, restaurant

The owner of Wagamama and Franke & Benny’s said it had made a “very encouraging start to the trading year” after total sales for the year to 1 January came in at £883m (2021: £636.6m).

Adjusted profit before tax was up to £20.3m on a pre IFRS 16 basis (2021: £16.6m), while there was a statutory loss before tax of £86.8m on an IFRS 16 basis (2021: loss of £35.2m).

Andy Hornby, chief executive, said: “We’ve delivered a strong operating performance for the year in a market which has continued to pose a number of headwinds for casual dining operators.

“Current trading has been very encouraging to the great credit of our teams who continue to ensure our customers receive the best experience possible.  

“We have a clear plan to increase EBITDA margins over the next three years and deliver significant value for all our stakeholders.”

7am: AMTE Power plan

AMTE Power plans to scale up its purpose-built battery cell manufacturing facility in Thurso which has the second largest manufacturing capacity in the UK. Investment should begin this year.

Dundee remains the preferred site for the company’s megafactory, with the long-term objective of a gigafactory scale. Production of Ultra Safe and Ultra High Power cells should begin at the proposed Dundee facility in 2026, with Ultra Prime continuing to be manufactured at Thurso.

Full story here

7am: Royal London

Royal London, the UK’s largest mutual life, pensions and investment company and owner of brands such as Scottish Life, said its 2022 operating profit before tax increased 58% to £210 million.

It said adverse market impacts on its asset management revenues “were more than offset by the benefits from a continuing focus on cost control, growing the annuity portfolio, and consolidating and simplifying closed funds.”

Assets under management fell to £147 billion from £164bn “despite the net inflows, as falls in equity and bond markets impacted underlying asset values.”

Royal London employs more than 1,000 in Scotland and also also owns the Scottish Provident business.

CEO Barry O’Dwyer said: “In 2022 we concluded our programme to simplify our business.

“We have also successfully modernised many elements of our business, introducing more efficient digital services for over four million customers whose policies have been moved onto enhanced systems.”

7am: Breedon to list on main market

Breedon Group intends to move its shares from the Alternative Investment Market (AIM) to the main market of the London Stock Exchange.

“As an established business, with a track record for growth and cash generation, robust corporate governance and ambitions for further expansion, the directors believe the main market now offers the appropriate listing for a group of our scale and heritage,” it said in a statement.

Admission is expected to occur during the second quarter of this year.

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.