FTSE 100 Live: Shares close down 0.8% as oil price surges near $95 a barrel, S4 plunges

 (Evening Standard)
(Evening Standard)

London’s FTSE 100 lost some ground ahead of this week’s potentially pivotal interest rate decision from the Bank of England, with higher oil prices helping energy majors rise. The main UK stock index slipped by 33 points to 7677.73, after striding over 230 points higher last week.

The fate of the index, which started the week near four-month highs, could well depend on events at Threadneedle Street on Thursday, when the Bank of England takes back the rates spotlight. City experts are ready for another quarter-point increase, to 5.5%, along with similar signals that peak rates have arrived.

There have already been 14 consecutive Bank of England hikes since December 2021 in a long fight against inflation, which was intensified by Russia’s invasion of Ukraine, which sent wholesale energy prices soaring.

And rising oil prices were back in focus today, with the price of Brent crude trading toward $95 a barrel, a level it last held in November.

The move on commodities markets was no doubt being eyed carefully at the BoE into its set-piece rate call. It also helped the FTSE 100’s heavily weighted oil majors make gains. BP rose 2p to 525p. Shell was 1.5p higher at 2581p.

Commodities trade and miner Glencore was up 3p to 460p. With interest rates back in focus, there was a renewed air of caution over some stocks that were at the forefront of last week’s gains.

Housebuilders eased back, with Persimmon down 24p at 1055p. Online estate agency Rightmove was over 7p weaker at 554p. Developer Berkeley fell 51p to 4473p.

How BT Business CEO Bas Burger’s preparing for the next tech revolution: How to be a CEO podcast

Monday 18 September 2023 17:11 , Daniel O'Boyle

When BT Business was officially launched in April this year, Bas Burger was the man entrusted to take the reigns. He’s in charge of 24,000 people, and a multi-billion pound strategy to make the UK’s broadband infrastructure fit for the future.

Listen here

End-of-day market snapshot

Monday 18 September 2023 17:04 , Daniel O'Boyle

Take a look at today’s closing market snapshot as the FTSE lost almost 60 points after last week’s rally.

FTSE closes down 0.8%

Monday 18 September 2023 16:48 , Daniel O'Boyle

The FTSE 100 finished the day at 7,652.94, down 0.8%, as rising oil prices stoked new inflation fears.

The index started the day flat, but shares fell as the day went on, as the price of a barrel of brent crude oil came close to $95 a barrel.

Big fallers included RS Group and Entain,

Pubs in England and Wales are closing at the rate of two a day

Monday 18 September 2023 16:11 , Daniel O'Boyle

About 230 pubs closed in the second quarter of this year, according to official statistics.

The data showed that pubs are closing at the rate of two per day across England and Wales, and the number of closures has risen by 50 per cent from 153 during three months prior.

The costs of running a pub have soared alongside consumers finding themselves with limited disposable income and unable to afford a pint.

Read more here

Online spending ticks down in August

Monday 18 September 2023 15:45 , Daniel O'Boyle

Customers spent £9.43 billion online in August, and racked up the most buy-now-pay-later debt of any month this year, according to the Adobe Digital Economy Index.

The amount spent online during August was down slightly from July, but online sales in both months have been strong as shoppers shunned the high street amid bad weather.

There was good news on inflation, with online prices falling by 6.2% year-on-year, the biggest year-on-year fall since March 2022. The online price of essential items continued to increase, but more slowly than past months.

Sales of back-to-school items surged in the month, as parents left it late to buy school supplies, while barbecue sales got a boost towards the end of the month as good weather finally arrived.

Little movement on Wall Street to start week

Monday 18 September 2023 15:27 , Daniel O'Boyle

Wall Street shares are little changed this morning, with the S&P 500 slightly down and the Nasdaq slightly up, as markets prepare for the Federal Reserve’s latest interest rates decision on Wednesday. The Fed is widely expected to keep interest rates where they are.

Want to be happy in London? Just earn £79,524 a year, claims new research

Monday 18 September 2023 15:21 , Daniel O'Boyle

If you want to be as happy as possible in London, you’ll need to earn £79,524 a year — that’s according to new research based on an influential study into the relationship between money and happiness.

New research from currency exchange platform S Money built upon on Purdue University’s oft-cited “Happiness Premium” study, which found that happiness increases with earnings up to a certain point, above which making more money no longer has a significant impact. By adjusting the findings of the study for regional currency and cost-of-living differences, S Money now claims to have worked out the happiness premium for a number of major cities, including London.

It found that the point where happiness plateaus in London is just short of the £80,000 a year mark.

Read more here

Market snapshot as FTSE dips further

Monday 18 September 2023 14:44 , Daniel O'Boyle

The FTSE 100 has declined further, with RS Group, Rightmove and Entain among the biggest fallers.

CMA warns on danger of AI adoption on consumer trust

Monday 18 September 2023 14:30 , Simon Hunt

Consumers are at risk of being exposed to a fresh wave of scams, misinformation and manipulation through new AI tools, a report by the UK competition regulator has warned.

The Competition and Markets Authority (CMA) has said the evolution of large language models (LLMs) and other machine learning techniques exacerbate existing online harms and risk undermining consumer trust in businesses who use them.

Fake reviews on e-commerce websites will become much easier for bad actors to create at scale using the technologies, according to the report, while scam phishing emails are set to become more personalised and convincing, and users could also be manipulated by information shared with them from LLM chatbots.

Chatbot ‘hallucinations,’ in which a LLM unwittingly creates false information that appears plausible, is also likely to increase the circulation of misinformation, the CMA warned, citing examples of a chatbot fabricating medical notes and making false allegations against individuals.

read more here

Can a merger of the CBI and Make UK work?

Monday 18 September 2023 13:51 , Daniel O'Boyle

Ahead of the Confederation of British Industry (CBI)’s annual meeting this Wednesday, the group is reportedly now seeking £3 million from members to avoid financial collapse. At the same time, it seemingly remains in discussions with manufacturing trade group Make UK around future collaboration - including a potential merger.

This all comes after a challenging year for the CBI, including allegations of sexual misconduct, and a toxic workplace environment, by current and former employees.

The potential Make UK tie-up raises interesting questions around managing reputational risks in corporate transactions, especially where brand and name recognition represent an important part of the attraction to prospective partners or purchasers.

Read more here

Liz Truss hits out at economists and civil servants as she defends mini-budget

Monday 18 September 2023 13:11 , Daniel O'Boyle

Liz Truss has hit out at economists and supposed “institutional bureaucracy” as she defended her mini-budget a year on.

The former prime minister used a speech at the Institute for Government think tank on Monday to justify decisions made during her brief spell in Number 10, calling it unfair to say she had pursued unfunded tax cuts.

Ms Truss was forced out of office last October after the budget of £45 billion of tax cuts outlined by her chancellor Kwasi Kwarteng sparked an economic crisis.

Read more here

Inflation rate set to rise again as Bank of England decision on interest rates looms

Monday 18 September 2023 12:57 , Daniel O'Boyle

The rate of inflation is expected to tick back up after months of slowing, in what could be a pivotal reading as the Bank of England considers whether to hike interest rates to the highest level since 2008 or pause them for the first time in 15 meetings.

The ONS will publish August inflation figures on Wednesdsay, with polls of economists suggesting price rises might be gathering pace again.

A surge in the price of oil, as top exporting countries Russia and Saudi Arabia both announced they would cut production, sent the price of many forms of energy and fuel back up during August. That is expected to bring headline inflation above the 7% mark again, with economists projecting a rate of 7.1%, up from 6.8%. If the projections turn out to be accurate, that would be the first time inflation has risen since February.

Read more here

Market snapshot as shares sink

Monday 18 September 2023 12:45 , Daniel O'Boyle

The FTSE 100 has dipped after starting the day flat. Take a look at today’s market snapshot.

Entrepreneurs: Duo make room for AI to crack £700bn homewares market

Monday 18 September 2023 12:17 , Daniel O'Boyle

Home interiors marketplace Fy! sounds like somewhere tech buzzwords go to breed: it gobbles up social content and uses that, alongside machine learning and a vast vault of data, to give shoppers a personalised experience that lures them to spend more money.

An AI art gizmo on the site lets you make your own home prints, while its “rooms” feature sees users snap their room and upload it to Fy!’s generative AI tool to see their home transformed into, say, Barbiecore or boho — “like an interior designer in their pocket,” and then buy the products.

Some 250,000 rooms have been generated on the site since its launch three months ago. Fy!’s co-founder Tom Beverley has been running a “very data, and machine-learning-led business” since its launch in 2017.

Read more here

City Comment: The City doesn’t need out of work MPs

Monday 18 September 2023 11:50 , Simon English

The Royal family is in a position to do the nation a great favour, one that could boost business, save the economy and help all of us along the way.

It could remind even Royal sceptics what duty looks like, what it truly means to serve.

The Prince and Princess of Wales are seeking to hire a CEO, someone who can “bring a track record of strategic and cultural leadership in complex, fast-paced settings, and the ability to demonstrate core values of discretion, integrity and diplomacy”.

By complete coincidence, Liz Truss is probably looking for a job.

It is not just her. So far, more than 70s sitting MPs have said they will be standing down at the end of the current parliament.

This is because they really want the chance to give something back. And they think they are going to lose.

The FT reports that head-hunters have been offering up some of the departing 70 for jobs in the City of London, the assumption being that banks are just desperate to have former ministers on their board.

Some present ministers do look like perfectly good City fodder. Rishi Sunak should be available before long. Chancellor Jeremy Hunt built a business before and seems to be competent.

As for many of the rest, well, they look like folk who think they match the job description to help out Kate and William, despite all evidence to the contrary.

The soon-to-be available candidates included admitted bullies whose transferable skills set is merely having failed across several different government departments.

Moreover, if the Tories do get whacked at the election, their claims to understand the inner workings of government will be even more hollow than they are now.

In others words, they look like a ragtag bunch of the sorts of people the City of London desperately doesn’t need.

The Telegraph notes: “The House of Windsor has never attempted an appointment like this before.”

Indeed not. Perhaps they could hire all 70 of them.

Fines for big-four accountancy firms lead spike in payouts to regulators

Monday 18 September 2023 11:20 , Michael Hunter

Accountants have paid more fines this year for failings over audits, with the spike in payments to regulators led by the industry’s biggest names.

According to fresh research from Thomson Reuters, the value of fines imposed is up by almost 30% to £27 million for the year to the end of August. There were 19 fines issued in the 2022/23 period, up from 14 a year earlier.

The Financial Reporting Council is making more use of fines in a bid to lift the quality of audits. It has also beefed up its enforcement team, which employed 64 people in 2022, up from 31 two years earlier.

During the period covered by the research, the biggest fine, £14 million, was levied on KPMG for its audits of Carillion, the failed outsourcer, and Regenersis, an IT company.

Thomson Reuters’ research also found that the accountancy industry is turning to technology to lift standards.

John Hiller, vice president, product management at Thomson Reuters, said: “Audit firms are facing increased pressure with larger regulatory enforcement teams and the threat of large fines.

“Ensuring high audit compliance levels is now vital to preserve the reputation and protect the bottom line of audit companies. Technology can efficiently improve audit quality and enhance compliance levels through data analytics and automated processes, decreasing the time required for complex audits.”

Mondi to leave Russia after agreeing to sell biggest Russian paper mill

Monday 18 September 2023 11:08 , Daniel O'Boyle

UK paper and packaging giant Mondi has agreed to sell its largest Russian plant for around 775 million euros (£668 million) to a Moscow-based property development group.

Mondi’s share price jumped by nearly 5% on Monday morning after it unveiled the deal involving Syktyvkar, its last remaining plant in Russia and the country’s biggest paper producer.

The sale to Sezar Invest, a division of property development firm Sezar Group, will involve six monthly payments in Russian rubles.

Read more here

S4 shares crash

Monday 18 September 2023 10:15 , Simon English

SIR Martin Sorrell sent a chill through the advertising market today when he warned that revenues and profit margins at his S4 business are tumbling after a weak summer.

S4, which the world’s best-known ad-man set up after an acrimonious departure from WPP, boomed at first.

Lately it has faced accounting issues and has now cut sales forecasts for the second time in three months.

The shares crashed 25% to 71p leaving the company valued at a relatively meagre £415 million. The stock was 245p at the start of the year.

Read more here

Savers pour money into Phoenix pensions amid rising interest rates

Monday 18 September 2023 09:41 , Daniel O'Boyle

Savers hoping to benefit from higher interest rates poured money into funds at pensions giant Phoenix in the first half of this year, as flows into the FTSE 100 firm’s open funds soared by 72% to £3.1 billion.

That means Phoenix now expects to see flows into these funds exceed the amount paid out by its “heritage” arm, a group of more than 100 legacy pensions that are no longer actively marketed to customers, next year.

With the Bank of England having hiked interest rates at each of its last 14 meetings, pensions have seen much stronger returns, encouraging savers to up their contributions.

Phoenix shares are up 6.4p, or 1.2%, to 544.4p.

Super rich demand for whisky casks helps boost sales at Artisanal Spirits

Monday 18 September 2023 09:17 , Simon Hunt

A super-rich penchant for personalised whisky helped lift sales at Scotch Malt Whisky Society owner Artisanal Spirits, after the firm said it had seen an uptick in orders for entire casks worth of bottles.

High net worth clients are bulk-buying the bespoke whisky casks because they “always love the personal touch” and “want a private experience for them or for family and friends,” according to CEO Andrew Dane.

Artisanal Spirits sales rose 3% to £10.2 million in the first six months of the year, as Society membership grew 9% to top 38,000.

Pre-tax losses widened to £3.5 million, as Dane complained of “challenging macroeconomic headwinds” and “cost of living pressures”.  But he said the business remained on track to hit its earnings guidance.

Shares fell 5.8% to 65p.

 (Peter Sandground)
(Peter Sandground)

Market snapshot as oil surges

Monday 18 September 2023 09:05 , Daniel O'Boyle

Take a look at today’s market snapshot as shares held steady but the price of oil approached $95 a barrel.

FTSE 100 holds its ground into looming Bank of England Rate call

Monday 18 September 2023 08:11 , Michael Hunter

London’s main share index is holding its ground at the start of a week likely to be dominated by a decision on interest rates at high noon on Thursday.

The FTSE 100 slipped just 2 points in opening trade to 7708.93 in opening trade, keeping it around the highest levels in a month reached in a rally of over 230 points last week. That advance came amid hopes that the run of rate rises at major central banks could be at or around its end, after the eurozone authorities signalled their hikes may be over after a hike from the ECB took their deposit rate to 4%.

After 14 consecutive rate rises, the Bank of England’s base rate is at 5.25%. City experts are eyeing a potential quarter-point rise this week to 5.5%, but will be on watch for similar signals that peak rates are here.

In the meantime, oil majors were making gains, with the price of Brent crude oil prices on the brink of $95 a barrel, up 0.7% at $94.59. BP rose 3p to 526p. Shell gained 3p to 2583p

S4 cuts profit expectations again

Monday 18 September 2023 07:28 , Daniel O'Boyle

Sir Martin Sorrell’s marketing giant S4 Capital cut its guidance for the second time in a matter of months, as it said “fears of recession” were leading to lower client spend.

The firm’s shares plunged in July as it warned tech clients were spending less. Now, it says  that has continued into August, meaning it expects revenue to now be below last year,, having previously expected 2% growth, and profit margins to also fall.

“We had a very mixed first half of the year reflecting challenging global macroeconomic conditions and consequent fears of recession, which resulted in client caution to commit and extended sales cycles, particularly for larger projects,” Sorrel said.

Pendragon to sell UK car dealerships, focus on tech

Monday 18 September 2023 07:21 , Daniel O'Boyle

Car dealership business Pendragon will sell its UK motor business, including dealerships such as CarStore and Stratsone, as it focuses on rolling out its dealership management technology across the Atlantic.

US firm Lithia will buy Pendragon’s dealerships for £250 million, of  which £240 million will be returned to shareholders.

Pendragon will then change its name to Pinewood, the name of its dealer management software business, and start a joint venture with Lithia to roll out Pinewood across the “highly attractive” North American market.

A person walks past the window of Stratstone’s Aston Martin Mayfair dealership on Park Lane, London, whose parent company, Pendragon, has seen its suitor granted an extension over a possible takeover (Stefan Rousseau/PA) (PA Archive)
A person walks past the window of Stratstone’s Aston Martin Mayfair dealership on Park Lane, London, whose parent company, Pendragon, has seen its suitor granted an extension over a possible takeover (Stefan Rousseau/PA) (PA Archive)

Pendragon CEO Bill Berman said: “Pendragon has built one of the UK’s leading automotive retailing businesses, underpinned by a market leading dealer management system, the quality of our people, long-standing relationships with OEMs and excellent execution for customers.

“The Pendragon Board considers Lithia to be perfectly placed to build on this progress. The launch of Pinewood as a standalone company is a unique and exciting opportunity to create a best-in-class product for customers, which we can market globally and drive substantial value for our shareholders and in Lithia we have the perfect partner to help accelerate Pinewood’s push into the hugely attractive North American DMS market.”

Steady start expected for FTSE 100 after 230-point rally last week

Monday 18 September 2023 07:20 , Michael Hunter

London’s FTSE 100 is expected to make a steady start to Monday trade, holding the ground it gained last week in a rally of over 230 points.

The rally faces a test this week from an interest rate call at the Bank of England, after 14 consecutive hikes have taken the base cost of borrowing to 5.25%, a 15-year high. Last week’ s advance, in part, tracked hopes that the rate-tightening cycle at global central banks was nearing its peak, after the ECB lifted eurozone rates but signalled it could be the last hike for now.

Futures trade pointed to a rise of around 5 points in opening trade, enough to take the FTSE 100 to 7768 points.

The index gained on four of its five trading days last week.

Recap: Friday’s top stories

Sunday 17 September 2023 20:32 , Simon Hunt

Good morning. Here’s a summary of our top headlines from Friday: