Mortgage rates rise again as lenders put products back on market
Mortgage rates have risen further, as two-year deals get closer to 7%, following a week of easing.
Increases in rates had largely stopped over the past week, following long-awaited good news on inflation. However, rates appeared to be on their way back up today..
That coes despite HSBC yesterday being the first major lender to lower its mortgage rates.
The average 2-year fixed residential mortgage rate is now 6.86%, up from 6.83% yesterday.
The average 5-year fixed residential mortgage rate today is 6.36%, up from 6.34%.
The increase comes thanks to a flood of products being brought back onto the market, with 250 more products available today than yesterday.
Sun shines on Marstons as sales grow 11%
The boss of Marstons has said that Brits are increasingly looking to the premium end of the menu when they do out for a drink.
Like-for-like sales rose 10.9% in the 16 weeks to 22 July compared to the previous year, spurred by warm June weather helping pack beer gardens, a trend which trailed off heading into a cooler, wetter July.
Marston’s boss Andrew Andrea said: “The key thing that’s surprising us is that when people go out they want a good experience and they are not trading down to the cheapest options.
“The sunshine lagers like San Miguel and Birra Moretti continue to perform very well and we are seeing a bit more trading up into the premium burgers.”
Marstons shares rose 3.2% to 33p.
(Carlsberg Marston’s Brewing Company/PA)
/ PA MediaTottenham owner Joe Lewis indicted in the US over alleged insider trading
Tottenham owner Joe Lewis has been indicted in the US for “orchestrating a brazen insider training scheme”.
US Attorney Damian Williams announced the charges late on Tuesday night via a video posted on Twitter.
The Southern District of New York have indicted Lewis and accused the 86-year-old billionaire of “classic corporate corruption”.
Rolls-Royce shares surge, NatWest down 3%
Rolls-Royce shares have jumped 24%, up 36.5p to 189.1p, after a huge upgrade to City forecasts. The stock was 66p last October.
GSK also increased 2023 guidance but the reaction in the City was measured as shares in the drugs giant only rose 1% or 16.2p to 1409.2p.
In the banking sector, Lloyds Banking Group dropped 2% or 1.25p to 44.8p after its results and NatWest fell 3% or 7.4p to 243.8p following last night’s departure of CEO Alison Rose.
The FTSE 100 index dipped 10.63 points to 7681.17, with Rio Tinto down 2% after its interim results. Among other companies reporting today, British American Tobacco rose 42.5p to 26767.5p but Reckitt Benckiser dropped 140p to 5802p.
The FTSE 250 index lifted 8.33 points at 19,158.21, with Aston Martin Lagonda up another 6% or 20.4p to 360.6p after half-year results.
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City AM set to announce new buyer today
City AM is set to announce a sale today to an unnamed UK-based group, with new buyers coming in just in time to fend off administration for the London freesheet, managing director Lawson Muncaster confirmed to the Standard today.
According to Sky News, the new buyer could be ecommerce business THG, whose founder Matthew Moulding has been openly critical of press coverage of his business in the past.
Reports emerged last night that the newspaper - distributed across the City and Canary Wharf, as well as major transport hubs - was preparing to appoint BDO as administrator, weeks after putting itself up for sale.
But managing director and co-founder Lawson Muncaster told the Standard that a buyer was found in time to prevent administration. The new group is UK-based and not a direct part of the media sector, but does already have some involvement in the space.
Rio Tinto earning down by a quarter to $12 billion in the first half
Global mining giant Rio Tinto – closely watched for the insight it can offer into the health of the global economy through the metals it produced – reported a sharp drop in earnings today, as metal prices stayed lower year-on-year.
Earnings fell 25% to almost £12 billion for the first half of the year, as higher iron ore volumes offset a 14% fall in average average monthly prices.
It also reported weaker demand for aluminium, which was “partly offset” by “a recovery in demand in China”.
Copper output also fell, and revenue from the metal dropped 2% to just under $3.5 billion.
New Rolls-Royce boss hikes profit guidance
The rebuilding of Rolls-Royce under new boss Tufan Erginbilgic is making faster than expected progress after the engines giant delivered a big boost to profit guidance today.
It said first-half underlying operating profit will be between £660 million and £680 million, much higher than the City’s consensus estimate of £328 million. This includes a return to profit in civil aerospace, with a surplus in the region of £400 million.
The company’s key metric of free cash flow is due to be £340 million to £360 million, much better than the £50 million forecast. Rolls said this reflected continued growth in its end-markets and a focus on commercial optimisation and cost efficiencies.
Full year guidance has been raised, with Rolls now expecting an operating profit of £1.2 billion to £1.4 billion compared with the consensus £934 million. Free cash flow will be as much as £1 billion.
Erginbilgic said the early impact of the transformation programme had been seen in all divisions, despite a challenging external environment and supply chain constraints.
He added: “Better profit and cash generation reflects greater productivity, efficiency and improved commercial outcomes."
Reckitt Benckiser revenue nears £8 billion as it passes on increased costs
The maker of a range of big-name products from Cillit Bang cleaner to Dettol disinfectant said it has been able to pass higher costs onto consumers today, helping revenue and profit rise.
Reckitt Benckiser reported revenue of almost £7.5 billion in the first half of 2023, up over 8%, generating operating profit of £1.8 billion, up 0.5%. Higher costs did hit its overall perating profit margin, which fell by 170 basis points to 23.6%.
But it also said that its gross profit margin rose, by 130 basis points, “with high single digit inflation more than offset by carry over pricing, mix benefits and further productivity efficiencies.”
Nicandro Durante, serving as interim chief executive officer, called the results “strong” saying it “gives us confidence in our full year targets, despite some tough comparatives”.
Kris Licht will take over running the Slough-based multinational at the end of the year, succeeding Durante and Laxman Narasimhan, a former PepsiCo executive, who was poached from Reckitt by Starbucks to run the global coffee chain.
GSK ups guidance after strong HIV drug sales
Pharmaceuticals giant GSK has upped its guidance for the year, thanks to the success of HIV treatment and prevention drugs such as Apretude, which was approved in EU earlier this week.
The group now sees profit this year growing by 11-13% from last year’s £6.4 billion, after bringing in £2.1 billion in profit for the first half of the year.
It noted that its HIV treatment and prevention products had performed especially well, with revenue from prevention drugs up by more than 150%. It said most of the jump was due to patients switching from products made by other companies..
GSK CEO Emma Walmsley said: “We have delivered another excellent quarter of performance, with strong sales and earnings growth, notably in HIV and Vaccines, and continued strengthening of the R&D pipeline and product portfolio.
“Our momentum supports the upgrade we have made to our financial guidance for 2023 and further increases our confidence in delivering longer-term profitable growth for shareholders.”
US traders bet on one last rate hike, Microsoft shares fall
US markets are showing few signs of nerves ahead of tonight’s US interest rates decision, with the tech-focused Nasdaq Composite up by 0.6% at yesterday’s close.
Traders fully expect the Federal Reserve to increase rates by 0.25% to a target range of 5.25% and 5.5%, the highest level since 2001.
The bigger issue is whether Fed chair Jerome Powell signals the need for further interest rate hikes later in the year. Deutsche Bank said futures markets are currently pricing a 44% chance of a further hike after today’s.
Strategist Henry Allen said: “In other words, the central expectation is that this will be the last hike of the current cycle.
“But it’s worth remembering that we’ve been here before. In fact, after the two most recent hikes in March and May, market pricing by the close that day was that the Fed was most likely done hiking.”
Ahead of the meeting, the S&P 500 index closed last night at a 15-month high while the Dow Jones Industrial Average extended its best run since 2017 by finishing in positive territory for the 12th session in a row.
After the closing bell, updates from Microsoft and Alphabet drew a mixed response despite both beating earnings estimates. Microsoft shares fell 4% on worries over slowing growth in cloud computing, but Alphabet rose 6% on the strength of Google search revenues.
The FTSE 100 index, which closed 13 points higher at 7692 last night, is expected by CMC Markets to open 10 points lower at 7681.
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2023-07-26 08:19:57Z
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