This morning has seen the pound rise to its highest level against the US dollar since early October, with the market now not far from seeing a 1.28 handle again. The FTSE 100 is little changed on the day and remains range bound.
UK Retail sales continue to rise
According to figures from the British Retail Consortium (BRC), UK retail sales growth slowed in November, but there is still much to suggest that consumers are continuing their recent strong consumption habits which has been one of the brightest spots of the economy since Britain's EU referendum. Despite a 1.3% year-on-year increase in total spending being significantly lower than October's 2.4% equivalent rise, it still represents a reading that is stronger than the average for 2016 and part of the decline can be explained away by shoppers delaying purchases until the "Black Friday" sale which in itself offers big discounts and therefore could further reduce total spend.
Separate figures from Barclaycard which cover the four weeks to 19th November showed rapid growth in overall consumer spending, rising 5.1% on a year earlier and coming in at the second fastest growth rate since October 2011. The data from BRC also didn't include fuel, with prices at the pump rising to their highest of the year so far recently and potentially set for further increases in light of the surging oil price since OPEC finalised its production freeze deal.
UK stock indices broadly flat
The FTSE 100 is trading lower by 5 points this morning with HSBC and RBS (LON:RBS) topping a list of the gainers as banking shares continue their bright start to the week. Mining shares are the worst performing on the index with Anglo American (LON:AAL), BHP Billiton (LON:BLT) and Glencore (LON:GLEN) all seeing notable declines. The biggest movers on the day have come from the mid-caps with spread-betting firms IG Group and CMC Markets seeing their valuation plummet by more than a quarter after the FCA announced more stringent regulation in the sector. Measures such as reduced leverage for inexperienced retail clients - as defined by having less than 12 months experience in the market - and a ban on providers using any form of account opening offer have been announced, but it should be noted that a consultation on the plans remains open until March. The reaction in the stock price suggests this ruling has come as a major surprise but the increased offering of products such as binary bets which have characteristics more akin to gambling and the findings that 82% of clients have lost money suggests that more stringent regulation was inevitable.
Slip-up for Topps Tiles
Topps Tiles’ share price has slipped this morning after the firm admitted an error in last week's annual results. The stock had risen after the flooring retailer announced that like-for-like sales had increased by 0.8% in the first 8 weeks of its fiscal year, but yesterday the business was forced to backtrack and state that the widely viewed performance metric had in fact fallen 0.3%. Whilst the revision to this number isn't catastrophic in its nature and represents a mere adjustment in the grand scheme of things it will come as another unwanted piece of news to shareholders who have endured a torrid 12 months, which has seen almost half the firm's value wiped off.
News that money manager Blackrock (NYSE:BLK) (one of the biggest holders of shares in Topps Tiles) has offloaded over 3 million shares over the past week highlights a lack of confidence in the firm and whilst it maintains a core position of around 9% of the float the action suggests that they believe further downside could be in store. CEO Matthew Williams has moved swiftly to allay shareholders concerns in stating that the company is well placed for further progress in the coming year, and the early reaction in the stock price - with shares around 1.5% lower on the day - suggests the market has taken this latest development with mild disappointment rather than anything major that could cause panic-selling.