The taxpayer’s NatWest stake is this morning down to 22.5% after the banking group bought back Government shares worth £1.2 billion.
Nationwide is also in focus today after the competition watchdog announced an inquiry into the takeover of Virgin Money.
Meanwhile, the building society’s latest house market survey has revealed average prices rose 0.4% in May.
FTSE 100 Live Friday
Fed’s favourite inflation measure cools a little
15:11 , Daniel O’Boyle
US Core PCE inflation – considered the Fed’s favourite measure – came in at 2.8%, as expected.
However, month-on-month PCE was slower than expected, at 0.2%.
The figures are unlikely to move the needle much in terms of when the Fed will cut interest rates, with Autumn still appearing most likely.
Regulators urged to launch probe into greenwashing by UK’s major banks
13:52 , Daniel O’Boyle
Financial and advertising regulators are facing calls to launch an investigation into greenwashing by the UK’s five biggest high street banks.
Campaigners wrote to the Financial Conduct Authority (FCA), Competition and Markets Authority (CMA) and the Advertising Standards Authority (ASA) on Friday as a new anti-greenwashing rule came into force.
The Make My Money Matter campaign – which advocates for sustainable pension investments – said the regulators should review sustainability claims and communications at Barclays, HSBC, Santander, Natwest and Lloyds.
Nationwide faces competition inquiry over Virgin Money deal
12:48 , Daniel O’Boyle
Nationwide Building Society’s controversial £2.9 billion takeover of Virgin Money hit a potentially serious hiccup today when the Competition and Markets Authority launched a probe into the deal.
The takeover has faced opposition from some of the group’s 16 million members.
Nationwide believes it is getting VM assets on the cheap and will create a new powerful savings and loans giant.
City Comment: Is Rachel Reeves thinking about an ISA tax raid?
12:11 , Daniel O’Boyle
Ah, so that’s where all the money went.
Latest figures from the Bank of England today show that households squirrelled away £11.7billion into tax-free ISAs in April, almost certainly mostly in the frenzy up to midnight on April 5, the highest for any month since records began in 1999.
Could that explain why consumer spending was mediocre? Last week the official retail sales figures showed an unexpectedly large drop of 2.3% in April, which was largely blamed at the time on soggy weather keeping shoppers at home. I am sure that was part of the story, but today’s Bank numbers put a slightly different complexion on it.
EU inflation picks back up
10:33 , Daniel O’Boyle
Inflation in the Eurozone rose more quickly than expected in May, but it’s unlikely to be enough to prevent the European Central Bank from cutting interest rates next week.
the rate of inflation in the currency union came to 2.6%, ahead of April’s 2.4% and the expected figure of 2.5%.
It comes ahead of the European Central Bank’s meeting on 6 June, where it is expected to become the first of the three major western central banks to cut rates.
A cut is still expected, but future reductions beyond that are now seen as less likely. Traders see a 93% chance of a June rate cut, but are pricing in only two cuts for this year.
FTSE 100 in robust performance, AB Foods lower after £262m stake sale
10:31 , Graeme Evans
Flutter Entertainment shares are down 6% in their first session outside the FTSE 100 index, having switched to a primary New York listing.
The Betfair and Paddy Power firm, which now trades in London through a standard listing, dropped 837.5p to 14,137.5p at the end of a poor week for the wider gambling sector.
A weak handover from Wall Street failed to upset the wider London market today as the FTSE 100 index rose 28.04 points to 8259.09.
Centrica rose by 4% or 5.1p to 144.25p after RBC analysts gave the British Gas owner an “outperform” recommendation and target price of 170p.
Primark owner Associated British Foods fell 96p to 2564p as the investment vehicle of the Weston family raised £262 million by placing 10.3 million shares with institutions.
The disposal, representing a stake of about 1.4%, took place at a price of 2550p and cut the holding of Wittington Investments to 56.1%.
The FTSE 250 index weakened 18.48 points to 20,652.39, despite gains of 2% for Aston Martin Lagonda and Wizz Air.
Revolution Bars warns it could go into administration without urgent funding
09:50 , Simon Hunt
Revolution Bars has warned it could enter administration as soon as August if it does not get urgent funding after the struggling hospitality group rejected a merger proposal from rival Nightcap.
The firm has urged shareholders to approve a restructuring plan that aims to keep the company afloat.
Without the plan in place, Revolution said it “is forecasting an immediate £0.7 million funding requirement in the week ending 24 August 2024 with an estimated peak funding requirement of £8.1 million in the week ending 7 September 2024.”
“In those circumstances, it is expected the directors of the Plan Company and certain other Group entities would file for administration to comply with their directors’ duties obligations and to protect the interests of creditors.”
Mortgage approvals flat in April
09:45 , Daniel O’Boyle
Mortgage approvals in the UK were steady in April, at 61,100, figures from the Bank of England show, in a sign the market is stabilising but at a level well below the pre-pandemic housing market.
The figure was almost exactly flat when compared to March, but lower than in most of the 2010s.
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages increased was also close to flat at 4.74% in April. The rate on the total stock of mortgages, including existing ones, increased by 7 basis points, to 3.57%.
Centrica up 4% after upgrade, Flutter down 15% after FTSE 100 exit
08:45 , Graeme Evans
European markets have overcome a weak handover from Wall Street, with the FTSE 100 index up 10.47 points to 8241.52.
Centrica is the best performing stock, up by 4% or 5.35p to 144.5p after RBC analysts gave the British Gas owner an “outperform” recommendation and target price of 170p.
On the results front, JD Sports Fashion shares have fallen 10p to 123.95p after the retailer reported lower annual profits of £917 million.
Primark owner Associated British Foods also fell 80p to 2580p after majority shareholder Wittington Investments raised £262 million by selling a 1.4% stake at a price of 2550p.
Paddy Power firm Flutter Entertainment dropped 15% or 2215p to 12,760p, having completed its switch to a primary New York listing in a move that has resulted in the loss of FTSE 100 status.
Shopper footfall remains down on last year despite bank holidays and sun
08:43 , Daniel O’Boyle
Retail footfall across the UK remains well down on last year as bank holidays and improving weather failed to lure customers away from online shopping, figures show.
Total footfall was down 3.6% on a year ago but an improvement on April’s 7.2% drop, according to BRC (British Retail Consortium)-Sensormatic IQ data.
Government sells another £1.24bn of NatWest
08:01 , Daniel O’Boyle
The Treasury has sold down its stake in NatWest further, days after it was revealed the election would delay the highly anticipated retail sale of the bank.
After selling more shares the business back to the bank for £1.24 billion in an off-market deal, the Treasury’s stake in the bank is down 22.5%. The shares were sold for 316.2p each.
NatWest will cancel a little over half of the shares and sell the rest.
The Government bailed out the bank after the Global Financial Crisis, and has been selling down its stake since. That selling accelerated in the past year, after the controversy over politican Nigel Farage’s account with NatWest-owned Coutts.
NatWest shares closed yesterday at 314.75p, valuing the business at £27.45 billion.
JD sees profits tumble after tough year
07:47 , Simon English
JD Sports today bounced back from a January profit warning with sales growth in both Europe and the US. But profits for the year missed the £1 billion earlier hoped for by some way at £917 million. That was down on £991 million a year ago.
Régis Schultz, Chief Executive Officer, said: “We made important strategic progress: putting the JD Brand First through opening over 200 new JD stores; strengthening our Complementary Concepts through the proposed acquisitions of Courir and, announced after the period end, Hibbett.”
He admits this has been a “challenging market” for the year to February.
The profit warning in January saw it drop guidance for profits from above £1 billion to between £915 million and £935 million.
Nationwide faces competition probe over Virgin Money deal
07:44 , Simon English
Nationwide Building Society’s controversial £2.9 billion takeover of Virgin Money hit a potentially serious hiccup today when the Competition and Markets Authority launched a probe into the deal.
The takeover has faced opposition from some of the group’s 16 million members.
Nationwide believes it is getting VM assets on the cheap and will create a new powerful savings and lendings giant.
The CMA said it will look at “whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services”.
Written representations on the issue are invited to [email protected].
Frasers boosts stake in Hugo Boss to around £305 million
07:43 , Michael Hunter
Frasers, the retail group set up by tycoon Mike Ashely, has boosted its stake in fashion brand Hugo Boss.
The owner of Sports Direct said today that it now owns almost 2.5% of Hugo’s total share capital and has options covering around 14%.
Frasers said its holding in Hugo Boss is now valued at around £305 million.
Nationwide said house prices picked up in May on strong wages growth
07:40 , Jonathan Prynn
Falling inflation and rising wages appear to have given a small Spring boost to the “resilient” housing market, according to latest figures from lender Nationwide.
The lender said the average price of a home in the UK rose 0.4% in May to £264,249, following a 0.4% dip in April. That increased the annual rate of increase from 0.6% to 1.3%.
Nationwide’s chief economist Robert Gardner, said: “The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer term interest rates in recent months. Consumer confidence has improved noticeably over the last few months (see chart below), supported by solid wage gains and lower inflation.”
FTSE 100 seen higher despite poor US session, Brent Crude weakens
07:19 , Graeme Evans
Brent Crude this morning stood at $81.85 a barrel, having been sent lower by demand uncertainty caused by yesterday’s weak US GDP reading of 1.3%.
The decline from Wednesday’s price near $84.50 comes ahead of this weekend’s OPEC+ meeting, when ministers are likely to extend supply cuts.
Yesterday’s first quarter GDP reading compared with an initial estimate of 1.6%, ensuring that Wall Street benchmarks spent another session in the red.
The Dow Jones Industrial Average fell 0.9%, the S&P 500 index lost 0.6% and the Nasdaq declined 1.1%.
The weak performance was also driven by jitters ahead of today’s personal consumption expenditures index, which is the Federal Reserve’s favoured inflation measure.
FTSE 100 futures are pointing to a rise of about 0.15% after London’s top flight rebounded 47.98 points to 8231.05 in yesterday’s session.
Recap: yesterday’s top headlines
06:52 , Simon Hunt
Good morning from the Standard City desk.
London’s FTSE 100 has clawed back some of its losses from a downbeat week, with European investors in generally better spirits.
The UK’s top share index was up 47.98 points, or 0.59%, to 8,231.05.
Auto Trader was the biggest riser of the day, with shares soaring by 15% after the online marketplace revealed higher yearly profits.
The firm said that it was benefiting from strong levels of demand across both new and used car markets, with second-hand cars continuing to sell faster than before the pandemic.
It helped lift the FTSE 100 higher on Thursday, with retailers Frasers Group, JD Sports and Burberry also making gains.
Elsewhere for top indices in Europe, Germany’s Dax moved 0.13% higher and France’s Cac rose by 0.55%.
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Here’s a summary of our top headlines from yesterday.
