- FTSE 100 up 17 points to 8,212
- Inflation rises
- Kingfisher exits Romania
11.01am: EU inflation comes in lower than expected
Across the channel, eurozone inflation in November reached an annual rate of 2.2%, a slight increase from October’s flat 2% but falling short of the preliminary estimate of 2.3%.
The rise was attributed to base effects following last year’s significant drop in energy prices.
Non-energy industrial goods showed a modest price increase of 0.6%, slightly less than the 0.7% anticipated.
Meanwhile, inflation eased for services, standing at 3.9%, and food, alcohol, and tobacco at 2.7%.
10.24am: Deutsche Bank on UK inflation
Today’s inflation print, which revealed that consumer prices increased by 2.6% year on year in November, “will only reinforce the MPC (Monetary Policy Committee)’s message of patience and gradualism”, reckon Deutsche Bank analysts.
There was some good news to be gleaned from the data, said the bank.
Specifically, core inflation, which excludes volatile food and energy prices, was slightly better than expected at 3.5% against the Bank of England’s 3.6% forecast.
But Deutsche noted that price pressures are starting to resurface following Labour’s first Budget.
Chancellor Rachel Reeves’ decision to increase employers’ National Insurance Contributions (NICs) means employers will “likely” start ramping up goods prices from next year, said the bank’s analysts.
“Put bluntly, the MPC is some way away from declaring victory on inflation,” they said.
9.47am: Lloyds rapped by advertising watchdog
The Advertising Standards Authority (ASA) has partially upheld a complaint against Lloyds Banking Group PLC (LSE:LLOY)‘s sustainability advertising, deeming one of four investigated advertisements misleading.
The complaint focused on a LinkedIn post highlighting Lloyds’ commitment to reducing fossil fuel reliance and financing renewable energy projects.
The ASA concluded the ad omitted material information about Lloyds’ significant financing of high-emission industries, potentially misleading consumers about the bank’s environmental impact.
Lloyds defended the ad, stating it provided clear and accurate information, backed by its 2023 Sustainability Report.
The report noted Lloyds’ total financed emissions at 32.8 million tonnes of carbon dioxide equivalent in 2022.
The bank argued that its efforts, such as halving energy consumption by 2030 and exiting thermal coal financing, demonstrated a genuine commitment to sustainability.
But the ASA determined the advertisement failed to adequately qualify its claims about Lloyds’ role in the energy transition.
Lloyds shares bounced 1.6% higher to 55.1p each today.
9.33am: Bitcoin pares gains
On the cryptocurrency markets, bitcoin (BTC) has climbed down from yesterday’s all-time high of more than $108,000.
At the time of writing, the BTC/USD pair was trading closer to $104,000, which is still an impressive price for an asset that opened the year a little over $40,000.
Bitcoin has soared to unprecedented levels since the US elections in early-November, when president-elect Donald Trump promised to usher in a raft of pro-crypto policies and staff appointments.
Bitcoin currently has a market capitalisation of more than $2 trillion, while the entire cryptocurrency markets have a market cap of $3.65 trillion.
Back to the stock market, the FTSE 100 blue-chip index is at an intraday high of 8,226, or around 31 points higher from yesterday’s close.
9.17am: FirstGroup’s Avanti workers vote to strike on NYE
Train managers on FirstGroup PLC (LSE:FGP)’s Avanti West Coast mainline have voted to strike on New Year’s Eve and every Sunday from 12 January to 25 May.
Planned strike action during the Christmas period was initially postponed after Avanti made a new offer to workers, but this has now been rejected.
The RMT union stated that “sustained strike action” is “the only way to focus management’s minds on reaching a negotiated settlement”.
Avanti West Coast, operated as a joint venture between FirstGroup and Trenitalia, warned of “significant disruption” for passengers using the service from London to Glasgow.
According to RMT, 83% of members involved in the dispute, which relates to payments for rest days, voted against the revised offer.
Avanti said it was “disappointed” by the vote and remained “open to working with the RMT to resolve the dispute.”
Shares in FirstGroup are up 0.40% to 165.2p.
9am: The morning so far
Hopes for an interest rate cut from the Bank of England tomorrow were delivered a death blow this morning as UK inflation increased to 2.6% in November.
Office for National Statistics chief economist Grant Fitzner attributed the rise to motor fuel and clothing prices.
On the bright side, core inflation came in at 3.5%, slightly lower than the 3.6% forecast.
On the company news front, B&Q owner Kingfisher plc agreed to sell its Brico Dépôt Romania business for €70 million (£58 million).
Chief executive Thierry Garnier said the sale aligns with a strategy to prioritise higher-growth markets.
Brico Dépôt Romania posted sales of £269 million but recorded an £18 million loss last year. Kingfisher shares jumped around a percentage point on the news.
National Grid PLC (LSE:NG.) published a £35 billion, five-year investment plan, including £11 billion for upgrades and £24 billion for expanding capacity.
Chief executive John Pettigrew said the plan would nearly double Britain’s energy capacity.
Under the plans, National Grid intends to upgrade 3,500 kilometres of overhead lines and aims to connect 35GW of new generation and storage capacity. Shares were generally unbudged, dipping 0.1% to 935.6p.
From telecoms to tabletops, Games Workshop plc gifted shareholders with an 80p-per-share dividend, bringing its year-to-date payout to 265p, up from 195p in 2023.
The increase reflects a recent profit upgrade driven by licencing sales of its Warhammer IP and Games Workshop’s addition to the FTSE 100. Shares dropped 0.125% to 13,530p.
At the time of writing, the FTSE 100 index was trading at 8,217, up 22 points from yesterday’s close.
8.43am: Games Workshop ups dividend
Games Workshop Group PLC (LSE:GAW) has announced an 80p-per-share dividend, bringing year-to-date returns to 265p, a substantial increase from the 195p paid out in the same period in 2023.
It comes amid a promising time for the owner of the Warhammer intellectual property.
Earlier this month, Games Workshop delivered a profit upgrade on the back of surging licencing sales.
Licencing is shaping up to be an even bigger part of the Games Workshop story after agreeing on creative terms with Amazon for a Henry Cavill-linked live-action Warhammer adaptation.
The company is also celebrating its addition to the FTSE 100 blue-chip index for the first time.
Shares dipped 0.2% to 13,521p each this morning.
8.22am: Footsie ticks higher
The FTSE 100 climbed 10 points higher to 8,206 this morning despite yearly inflation running higher in November.
B&Q owner Kingfisher plc is leading the risers with a 1.6% gain on news of its Romanian exit.
British Airways owner IAG and Ashtead Group PLC (LSE:AHT) are also more than 1% higher in opening exchanges.
8.05am: Shoe Zone to shut shops amid ‘very challenging trading conditions’
Looking in on the small-cap space, Shoe Zone PLC (AIM:SHOE) said it intends to close an undetermined number of stores that have become “unviable” amid “very challenging trading conditions”.
Weakening consumer confidence has slashed Shoe Zone’s revenues and profits this year, the company said in a Wednesday trading update.
Higher national insurance and National Living Wage costs under the Labour Budget have compounded these issues, said the group.
As a result, profit before tax for the year ahead is expected to be half of what was previously estimated.
To keep a stable cash position, Shoe Zone will not be paying a dividend.
Unsurprisingly, Shoe Zone shares collapsed more than 40% in opening Wednesday trades.
7.50am: National Grid announces £35bn investment plan
National Grid PLC (LSE:NG.) has released its ‘RIIO-T3 Business Plan’ detailing investments of up to £35 billion over a five-year period from April 2026.
The investment includes £11 billion for maintaining and upgrading existing networks and initial Accelerated Strategic Transmission Investment (ASTI) projects.
A further £24 billion is earmarked for increasing network capacity and addressing future projects triggered by the UK government’s evolving energy priorities.
National Grid intends to upgrade 3,500 kilometres of overhead lines and aims to connect 35GW of new generation and storage capacity.
John Pettigrew, chief executive of National Grid PLC (LSE:NG.), called it “the most significant step forward in the electricity network that we’ve seen in a generation”.
He said the investment will nearly double Britain’s energy capacity.
7.30am: Kingfisher exits Romania
B&Q owner Kingfisher plc has announced the sale of its Brico Dépôt Romania business to Altex Romania for an enterprise value of €70 million (£58 million).
The transaction includes 31 stores in 24 cities, along with distribution operations and the head office in Bucharest.
Kingfisher’s chief executive, Thierry Garnier, said the decision was part of a strategy to focus on markets with stronger growth potential.
Brico Dépôt Romania reported sales of £269 million, around 2.1% of Kingfisher’s total sales, in the last financial year.
It delivered a loss of £18 million.
7.20am: Stocks to gain
Futures prices have the FTSE 100 ticking 13 points higher to 8,212 when trading commences this Wednesday.
It follows a dour Tuesday session in which the blue-chip index was smashed more than 60 points lower as hot wage data dealt a blow to interest rate cut hopes.
Today’s inflation data, though it matched expectations, did nothing to raise these hopes.
7.12am: UK inflation pushes higher in blow to interest rate cut hopes
Year-on-year inflation in the UK increased to 2.6% in November from 2.3% in the previous month.
Core inflation came in at 3.5%, slightly lower than the 3.6% forecast.
The print from the Office of National Statistics matched forecasts, but it nonetheless marked another blow to those hoping for an interest rate cut from the Bank of England on Thursday.
Office for National Statistics chief economist Grant Fitzner said: “Inflation rose again this month as prices of motor fuel and clothing increased this year but fell a year ago.
This was partially offset by airfares, which traditionally dip at this time of year, but saw their largest drop in November since records began at the start of the century.”
5am: Preview
Wednesday brings UK inflation and the latest interest rate call from across the Atlantic as a packed week on the macroeconomic front comes to a head.
Expectations are for the Federal Reserve to cut interest once again and UK inflation to have accelerated last month… Read more
Announcements due:
Finals: Integrafin Holdings PLC
US earnings: Birkenstock Holding PLC, General Mills Inc, Micron Technology Inc
AGMs: Beacon Energy, Beeks Financial Cloud Group, dotDigital Group, Greatland Gold, Karelian Diamond Resources, Ovoca Bio, Wildcat Petroleum
Economic news: Inflation (UK), Interest Rate Decision (US), Building Permits (US), Housing Starts (US), Current Account (US), Harmonised Index of Consumer Prices (EU)