The FTSE started the day almost flat while European indices nudged higher as the market took a breather amid a lack of unfavourable trade news.
The focus in the US later today will be on domestic job growth numbers with the key non-farm payroll data due out at 12.30. The US labour market is widely expected to show signs of strengthening with unemployment rates declining despite the trade frictions between the US and its key trade partners including Canada and the EU.
British Airways card data hacked
Shares in British Airways parent International Consolidated Airlines group (LON:ICAG) are under pressure this morning, down almost 3%, as the company grapples with the aftermath of a cyber-attack in which hackers took off with data on 360,000 credit cards. The attack was spread over two weeks between 21 August and 5 September and is affecting only customers who bought their tickets during that period. BA said that the attack was a sophisticated breach of its security system but this is the last in a series of IT problems the company has had this year including IT issues which caused flights in and out of Heathrow airport to be cancelled only six weeks ago.
Pound holds as UK employment market firm
The pound is holding its ground against the greenback this morning with the background of some positive economic news. Sterling is trading up 0.08% against the dollar but has nudged down 0.05% against the euro as data showed that British employers hired permanent staff at the fastest rate in five months in August. Starting salaries for permanent staff also ticked up and increased at the second-fastest pace in more than three years.
The tightening of the labour market is a reflection of the looming Brexit as companies find it harder and harder to get hold of a sufficient number of workers.
Burberry shares dip as firm commits to stop burning unsold goods
UK’s largest luxury goods retailer Burberry (LON:BRBY) has been riding the wave of the fast expanding global luxury goods market to see its share price grow by nearly 40% over the last five years. In the UK alone the value of this market segment expanded from €34 billion in 2013 to €54 billion only five years later.
But the company has drawn widespread ire from the media and from a younger generation of shareholders who frequently ask is a company socially responsible before committing to buying shares? It has emerged that Burberry destroyed £28 million worth of unsold goods including perfume last year to preserve the exclusivity of its brand for its high paying customers. In an act that evokes pictures of Nero playing the violin while Rome was burning Burberry burned its unsold goods including fur. But yesterday as the clock ticks down to the start of this year’s London Fashion Week, the company made a U-turn saying it would immediately stop destroying unsalable products and would instead expand its efforts to reuse, repair, donate or recycle unsold goods. It also plans to stop using real fur on its items of clothing.
Burberry’s chief executive Marco Gobbetti said the firm was “committed to applying the same creativity to all parts of Burberry as we do to our products”.
Shares dipped on the news to trade 2,096, down 134 on the day, but the size of the decline was in line with the slide in the broader market with the FTSE 100 declining 0.25% during the day. However, this is not making a serious dent in the share price - demand for the company’s luxury items including its signature trench coats has propelled the share price this year by almost 20%. Also, in the wake of the news HSBC (LON:HSBA) increased its price forecast for the group’s share price this year although the consensus forecast for the next 12 months is still at about 6% below the current company share price.
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