- FTSE 100 expected to open higher
- Chancellor mulls scrapping cap on bankers' bonuses - FT
- Shell (LON:RDSa) CEO, Ben van Beurden, steps down
Chancellor Kwasi Kwarteng is reportedly considering a plan to scrap caps on bankers' bonuses as part of a post-Brexit bid to boost the City's competitiveness and the UK economy.
He argues the cap, which was introduced under EU rules in 2014 following the 2008 financial crisis and subsequent eurozone debt crisis, would make London a more attractive destination for top global talent according to the Financial Times.
The measure was always opposed by the UK on the grounds that it would damage London's standing as a global financial hub.
But the idea of ditching the cap was dropped by Boris Johnson's government on the grounds it would be politically difficult to support wealthy bankers at a time of a cost of living crisis.
7.25am: Shell CEO steps down
Oil and gas giant Shell PLC (LSE:SHEL, NYSE:SHEL) has confirmed recent speculation that chief executive Ben van Beurden will step down from the role at the end of 2022 following a 39 year career with the company.
Van Beurden will be succeeded by Wael Sawan on January 1, 2023, but will remain with the group until June 30, 2023, acting as an advisor to the board, in order to ensure a smooth transition.
Chairman Andrew Mackenzie said: "Ben can look back with great pride on an extraordinary 39-year Shell career, culminating in nine years as an exceptional CEO.”
“He leaves a financially strong and profitable company with a robust balance sheet, very strong cash generation capability and a compelling set of options for growth.”
"Wael Sawan is an exceptional leader, with all the qualities needed to drive Shell safely and profitably through its next phase of transition and growth.”
7.15am: London seen higher ahead of US retail sales numbers
UK markets are expected to open higher today, recouping some of the losses of the past two days but Michael Hewson chief market analyst at CMC Markets UK said the US inflation surprise earlier this week continued to hang over European markets like “a black cloud.”
Hewson said “The only question now remains over whether we might see a 75bps move, or something more substantive in the form of a 100bps move” by the Federal Reserve.
“It still seems unlikely that the Fed will go by more than 75bps at this point despite the collective freakout of the past couple of days, with the positive finish in the US last night expected to see European markets open slightly higher later this morning.”
Another gauge of the state of the US economy will come today with US retail sales numbers due which could reinforce this hawkish narrative if there is another strong number.
“The resilience of the US consumer in the face of shrinking disposable incomes has been fairly notable this year, despite high food and energy prices which appear to have had little effect on the US consumer’s willingness to go out and spend money” Hewson said.
“US retail sales have been positive every single month this year, apart from a modest -0.1 fall in May” he added.
“Expectations for today’s August numbers have been revised lower in the past few days from a rise of 0.3%, and is now expected to come in at -0.1%” Hewson said.
6.55am: FTSE 100 seen higher
FTSE 100 expected to make a bright start to the day following gains in the US overnight with another important set of US economic data later with retail sales due to be announced.
In London, spread betting companies are calling the lead index up by around 30 points.
US markets ended a roller coaster session in positive territory, but Tuesday’s market rout continued to weigh heavily as investors speculated just how aggressive the Federal Reserve would be with its next rate rise.
At the close the Dow Jones Industrial Average was 30 points higher, or 0.1%, at 31,135, The S&P 500 gained 13 points, or 0.34%, to 3,946, while the Nasdaq Composite rose 86 points, or 0.74%, to 11,720.
In London, IG Group PLC is set to issue a trading statement while results are due from DFS Furniture amongst others.