FTSE 100 Live 10 September: Wage growth eases and jobless rate falls, Centamin backs £1.9bn takeover
Grocery inflation slips as Oasis-crazed Brits turn to chips, but not gravy
10:13 , Michael Hunter
Oasis tickets were not the only 90s throwback on shoppers’ minds last month according to the latest insight from one of the high street’s most closely watched spending trackers.
Kantar revealed that Brits were buying more of a favourite freezer food as they were also scrambling to get into the Gallagher brother’s first concerts together in 15 years.
“We’re buying more oven chips now than the same four-week period back in 2009, [when Oasis last toured] with a supersonic sales jump of 44% by volume, while take-home beer and lager sales have nudged up by 12%”, said Fraser McKevitt, head of retail and consumer insight at the research group.
“Gravy sales have dipped slightly though, with the proportion of people buying gravy over the month dropping by 8% in comparison to the same month in 2009,” he added.
Overall, the firm’s influential survey for August found that the rate of grocery inflation was at 1.7%. That is under the 2% target for the official consumer price index that is the mainstay of the Bank of England’s remit for interest rates.
Kantar said Ocado kept its crown as the fastest growing grocer for the seventh straight month, with sales up almost 13%. The total online grocery market grew 4.4%.
Tesco kept top spot for market share, at just over 27%. Sainsbury’s is in second at just over 15%, with the last podium position going to Asda at almost 13%.
FTSE 100 gives up gains, China imports slow more than expected
08:23 , Graeme Evans
The FTSE 100 index has given up a slice of yesterday’s 1.1% improvement, with London’s top flight down 49 points to 8221.84.
Mining stocks were among the fallers after China’s August trade figures offered a mixed picture on activity.
Imports growth slowed to 0.5% compared with the 2.5% forecast, although the exports figure of 8.7% topped expectations for a 6.6% improvement.
Rio Tinto lost 21.5p to 4555.5p and Anglo American shed 6.5p to 2023p.
Among the Asia-facing stocks, HSBC fell 0.4p to 660.7p but Prudential added 1.8p to 615.4p.
The FTSE 250 index rose 10.77 points to 20,661.65, with gold miner Centamin up 27.9p to 147.4p after its board backed a 163p cash and shares offer by AngloGold Ashanti worth £1.9 billion.
Wickes shows improvement after profits fall
08:02 , Graeme Evans
DIY retailer and kitchen projects firm Wickes, which operates from 229 stores, today reported a 25% drop in half-year adjusted profits to £23.4 million.
The decline came as its Design and Installation division saw a 18.3% drop in like-for-like sales due to soft consumer appetite for larger ticket purchases
The retail division’s revenues rose 1% to £633.2 million thanks to a record market share, fuelled by gains in the categories of decor, garden and tiles & flooring.
Trading in the third quarter has seen an improved trend following a stronger like-for-like sales performance in retail and signs of stabilisation in Design.
Chief executive David Wood said: “We are on track for the remainder of the year and have been encouraged by trading at the start of the second half.”
Interest rate cut in September looks less likely after jobs and wages numbers
07:47
The next rate cut from the Bank of England is looking less. likely to come this month after today’s drop in average earnings and the unemployment rate.
Both sets of numbers look to give monetary policymakers in Threadneedle Street more time to act in taking the base cost of borrowing down. City experts still expect more action this year, with another quarter-point cut taking rates to 4.75%.
But it is now expected in November rather than later this month. There is no Monetary Policy Committee meeting scheduled for October.
Mahmoud Alkudsi, Senior Market Analyst at ADSS, said: “With unemployment dropping, hints of disappointment might enter the market given that the Bank of England will be less inclined to cut interest rates for the second consecutive month.
“Current pricing in the market suggests a Bank Rate of 3.75% at the end of 2025, so we can still expect to see cuts in gradual increments over the rest of the year.”
UK wage rises ease and unemployment rate down
07:34 , Michael Hunter
Official figures out this morning show that wage rises slowed in the three months to July, while the unemployment rate also eased.
The average earnings index fell to 4.0%, down from 4.6%, and under the 4.1% expected in City forecasts.
The unemployment rate dropped to 4.1%, down from 4.2% and in line with forecasts. There were 23,700 more people claiming unemployment benefits in the three months to the end of July, down from more than 102,000.
The numbers, from the Office for National Statistics, are out as the Bank of England considers the pace of its interest rate cuts.
At least one more quarter-point reduction in the benchmark cost of borrowing is expected this year. That would take the interest rate that sets the cost of millions of variable rate loans and mortgages to 4.75%
Centamin backs £1.9bn takeover approach
07:31 , Graeme Evans
FTSE 250-listed gold miner Centamin today said it had backed a £1.9 billion takeover approach by AngloGold Ashanti.
Centamin's flagship asset is Sukari, Egypt's largest and first modern gold mine.
It is one of the world's largest producing gold mines, having delivered over 5.9 million ounces since 2009.
The cash and shares takeover approach values Centamin at 163p share, representing a 37% premium to last night’s closing price.
The proposed deal, which has been backed by the Centamin board, will leave shareholders holding 16.4% of the combined business.
New York-listed AngloGold Ashanti was formed in 1998 out of the gold mining interests of Anglo American. In April 2004, it merged with Ashanti Goldfields.