London midday: Stocks little changed as BoE holds steady on rates

by | Sep 23, 2021

London stocks were little changed by midday on Thursday as investors digested the latest policy announcement from the Bank of England.
The FTSE 100 was up 0.1% at 7,091.78, having already pared gains before the BoE announcement, while sterling was 0.5% higher against the dollar at 1.3696.

The Bank voted unanimously to keep interest rates on hold at a record low of 0.1%. It also voted to leave the bond-buying programme unchanged at £895bn, although two policymakers – Dave Ramsden and external member Michael Saunders – voted in favour of tapering.

Meanwhile, a survey out earlier showed the UK economy stuttered in September as cost pressures mounted and demand eased.

The flash reading for September’s IHS Markit CIPS UK manufacturing purchasing managers index was 56.3, down on August’s final reading of 60.3 and a seven-month low. It also missed consensus expectations of 59.0. The output index was lower at 51.8 compared to 54.1 a month earlier.

IHS Markit attributed the slowdown to “severe” supply chain disruption and signs that demand was softening.

Combined with a reading of 54.6 for the services business activity index – against 55.0 in August – the flash UK composite output index slipped to a seven-month low of 54.1, against August’s final reading of 54.8. Economists had been expecting a reading of around 54.6.

The composite new orders index – a key measures of demand – declined to 53.8 from 55.9 in August.

The rate of input cost inflation accelerated, meanwhile, which respondents attributed to a number of factors, including rising wages, the impact of supply chain disruptions on raw material prices and higher transportation costs.

IHS Markit said the data signalled “a further loss of growth momentum” for the private sector.

Chris Williamson, chief business economist at IHS Markit, said: “The September PMI data will add to worries that the UK economy is heading towards a bout of stagflation, with growth continuing to trend lower while prices surge ever higher.

“While there are clear signs that demand is cooling since peaking in the second quarter, the survey also points to business activity being increasingly constrained by shortages of materials and labour, most notably in the manufacturing sector but also in some services firms.

“Shortages are driving up prices at unprecedented rates as firms pass on higher supply charges and increases in staff pay.”

In equity markets, Investec rallied as the wealth manager and banking group raised its earnings outlook driven by strong revenue growth and lower impairments.

Royal Mail was steady after saying it expects group first-half adjusted operating profit to be between £395m and £400m, as it reported an 8.2% rise in revenue for the five months to August.

Harbour Energy slumped after its first-half revenues missed market expectations.

Elsewhere, Hargreaves Lansdown, IG Group, Redrow and Crest Nicholson were all weaker as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 7,091.78 0.12%
FTSE 250 (MCX) 23,837.19 0.22%
techMARK (TASX) 4,764.66 0.21%

FTSE 100 – Risers

Rolls-Royce Holdings (RR.) 125.62p 2.82%
Scottish Mortgage Inv Trust (SMT) 1,454.00p 2.00%
Halma (HLMA) 3,172.00p 1.99%
3i Group (III) 1,339.50p 1.63%
Ferguson (FERG) 10,700.00p 1.37%
Auto Trader Group (AUTO) 623.40p 1.30%
JD Sports Fashion (JD.) 1,138.50p 1.24%
Antofagasta (ANTO) 1,437.00p 1.16%
Ocado Group (OCDO) 1,772.50p 1.14%
Rightmove (RMV) 745.60p 1.11%

FTSE 100 – Fallers

Entain (ENT) 2,311.00p -2.78%
International Consolidated Airlines Group SA (CDI) (IAG) 170.60p -2.23%
Hargreaves Lansdown (HL.) 1,409.00p -2.12%
Prudential (PRU) 1,401.00p -1.41%
BP (BP.) 313.55p -1.01%
Polymetal International (POLY) 1,334.50p -0.85%
British American Tobacco (BATS) 2,672.00p -0.78%
Reckitt Benckiser Group (RKT) 5,831.00p -0.75%
Whitbread (WTB) 3,320.00p -0.75%
Avast (AVST) 569.00p -0.52%

FTSE 250 – Risers

Darktrace (DARK) 971.50p 6.00%
Telecom Plus (TEP) 1,150.00p 4.55%
Cineworld Group (CINE) 68.66p 3.25%
Convatec Group (CTEC) 229.70p 2.96%
Bytes Technology Group (BYIT) 536.50p 2.78%
Chemring Group (CHG) 316.50p 2.59%
Hilton Food Group (HFG) 1,142.00p 1.96%
Draper Esprit (GROW) 1,158.00p 1.94%
JTC (JTC) 760.00p 1.88%
Centrica (CNA) 54.74p 1.86%

FTSE 250 – Fallers

TI Fluid Systems (TIFS) 247.50p -7.48%
Harbour Energy (HBR) 363.60p -5.11%
SSP Group (SSPG) 263.00p -3.20%
888 Holdings (888) 462.80p -3.18%
IG Group Holdings (IGG) 832.00p -2.63%
Redrow (RDW) 699.00p -2.62%
easyJet (EZJ) 645.80p -2.33%
Wizz Air Holdings (WIZZ) 5,072.00p -2.31%
Homeserve (HSV) 964.50p -2.03%
Moonpig Group (MOON) 367.00p -1.87%

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