London pre-open: Stocks seen up as inflation falls more than expected

by | Jul 19, 2023

(Sharecast News) – London stocks were set to rise at the open on Wednesday following an upbeat session on Wall Street, as investors mulled a bigger-than-expected drop in UK inflation.
The FTSE 100 was called to open around 30 points higher.

Figures released earlier by the Office for National Statistics showed that consumer price inflation fell to 7.9% in the year to June from 8.7% in May. This was the lowest reading since March 2022 and below analysts’ expectations of 8.2%.

Meanwhile core inflation – which excludes energy, food, alcohol and tobacco – fell to 6.9% from 7.1%, versus expectations for it to remain unchanged.

Capital Economics said the falls in the CPI inflation rate and core inflation “are unlikely to be enough to prevent the Bank of England from raising interest rates in early August from 5.00%, although it may tilt the balance towards a 25bps hike rather than 50bps”.

“Even so, we think there is enough momentum in wage growth and services inflation to raise our forecast for the peak in Bank Rate from 5.25% to 5.50%.”

On the corporate front, National Grid has sold a further 20% of its UK National Gas transmission and metering business to the existing majority owners, a consortium of investors led by Macquarie Asset Management, along with an option to buy the rest of the company.

National Grid said it intended to use total proceeds of £700m towards general corporate purposes including repayment of debt.

The consortium has the option, exercisable between 1 May 2024 and 31 July 2024, to buy all or part of the remaining 20%.

Severn Trent said in an update that its financial performance is on track, and that it anticipated meeting current expectations, including a customer net reward of at least £50m.

The water utility said it had locked in 45% of its net energy exposure for the 2024-2025 period at lower rates, providing protection against price volatility. It added that it was efficiently managing its investment programme, with capital expenditure expected to be between £850m and £1bn this year in preparation for the AMP8 regulatory period.

Related articles

Latest Articles

Shore Capital hails impressive first half from JD Sports

Shore Capital hails impressive first half from JD Sports

(Sharecast News) - Shares in JD Sports Fashion surged on Thursday morning after the sportswear retailer beat forecasts with its interim results, with broker Shore Capital hailing "significant progress" as it reiterated its 'buy' rating on the stock. Pre-tax profit...

Time for Japan to act (II): State Street Global Markets

Time for Japan to act (II): State Street Global Markets

Written by Michael Metcalfe, Head of Macro Strategy, State Street Global Markets  Writing ahead of the September BoJ gathering in 2022, we argued in Time for Japan to act (first edition!) that the authorities should begin monetary tightening both through moving the...

Europe open: Shares slide on hawkish Fed as eyes turn to BoE

Europe open: Shares slide on hawkish Fed as eyes turn to BoE

(Sharecast News) - European stocks opened in the red on Thursday after hawkish comments from the US Federal Reserve on future rate rises dampened sentiment and investors turned their attention to the Bank of England's own policy meeting. The pan-European Stoxx 600...

Capita signs two new contracts worth £565m

Capita signs two new contracts worth £565m

(Sharecast News) - Outsourcing group Capita said it has signed two new contracts with the UK and Northern Ireland governments worth a combined £565m. Four months after Capita was selected as the preferred bidder, the group has now confirmed it has sealed the deal to...

Rise in UK borrowing limits Hunt’s scope for tax cuts

Rise in UK borrowing limits Hunt’s scope for tax cuts

(Sharecast News) - Britain's budget deficit in August was slightly higher than expected, according to official data published on Thursday, meaning Finance Minister Jeremy Hunt will have less scope for tax cuts ahead of the General Election. Public sector net borrowing...

Join our mailing list

Subscribe to our mailing list to receive regular updates!

No Fields Found.
x