- FTSE 100 nurses heavy losses at the open down over 100 points
- Chancellor summons bank leaders for talks - Sky
- UK house prices rise in August, annual growth slows - Halifax
UK house prices rose in August, reversing July’s fall, according to the latest Halifax House Price Index..
According to the report house prices increased by 0.4% last month, compared to fall of 0.1% in July although the annual pace of growth slowed to 11.5% from 11.8%.
A typical house now costs an average of £294,260, a fresh record.
Kim Kinnaird, director at Halifax Mortgages, called August’s increase "relatively modest", noting that monthly house price inflation has averaged at around 0.9% over the last year.
She continued: "While house prices have so far proved resilient in the face of growing economic uncertainty, industry surveys point towards cooling expectations across the majority of UK regions, as buyer demand eases, and other forward-looking indicators also imply a likely slowdown in market activity."
8.10am: FTSE 100 heads south at the open
The FTSE 100 opened sharply lower on Wednesday reflecting falls in US and Asian equity markets and disappointing Chinese trade data.
At 8.10am the lead index was down 58.08 points at 7,242.36 with the broader FTSE 250 down 70.62 points to 18,750.22.
Shares in Barratt Developments PLC (LON:BDEV) fell 1% after the housebuilder reported annual profits tumbled by 21% as the rising cost of remedial cladding repairs bit into margins at the UK housebuilder.
Revenues rose by almost 10% to £5.2bn in the year to end June 2022, as the number of housing completions rose by almost 4% to 17,908.
Profits, however, dropped by 21% to £642mln as Barratt took a £396.4mln charge to meet its commitment to the government’s building safety repairs pledge.
That was brought in on properties over 11 metres in the wake of the Grenfell Tower disaster.
Without the cladding charge, adjusted profits rose by 15% to £1.06bn and the company raised its annual dividend by 26% to 36.9p and also announced a £200mln share buyback.
WH Smith (LON:SMWH) also slipped back in early trading with shares down 2% despite saying it expects full year results to be in line with expectations.
The group said it had continued to see a "strong performance" from its travel unit in the second half, with group revenue coming in "comfortably in excess" of pre-Covid levels.
7.50am: Insolvencies to soar without Government support
Tens of thousands of businesses are at risk of going under without government support because of soaring energy bills, according to insolvency experts.
Red Flag Alert told the BBC previously profitable companies are experiencing significant losses.
Among those that survive, many will be forced to make workers redundant, the consultancy said.
Businesses are not covered by the cap, however, and Red Flag is warning that more than 75,000 larger firms that are high energy users are at risk of insolvency or are likely to lay off staff without government support.
According to Red Flag Alert, there are 355,000 companies with a turnover higher than £1mln that are designated as high energy users and of those, the company estimates 75,972 are at risk of insolvency, and they estimate 26,720 of them could fail because of energy costs.
"That is a colossal number of people whose businesses will fail, without a large scale support package from the government", said chief economist Nicola Headlam "That's more than during the pandemic, and more than in any other recession," she said.
7.25am: Chancellor summons bank leaders for talks
The bosses of Britain's biggest banks will hold talks with the new chancellor on Wednesday as he tries to exert a grip on the stalling UK economy, according to Sky News.
According to Sky, Kwasi Kwarteng convened a meeting with the chief executives of lenders including Barclays (LON:BARC), Lloyds Banking Group (LON:LLOY) and NatWest (LON:NWG) Group just hours after being appointed to the post.
City sources said the meeting was to set out the government's approach to the economy as Liz Truss's administration attempts to respond to the crisis triggered by soaring global inflation.
Britain's biggest banks have been told by the City regulator to outline how they plan to support their customers through the cost of living crisis, and the new chancellor is likely to impress upon them the importance of doing so, according to one insider.
7.15am: Chinese trade figures disappoint
London markets look set to follow the US and Asia lower this morning with disappointing Chinese trade figures weighing on the market.
Michael Hewson chief market analyst at CMC Markets UK said “Last night’s weak US close looks set to translate into a lower European open, although today’s weak Asia session has also played a part after some disappointing China trade data.”
“It’s becoming increasingly difficult to feel optimistic about the outlook for the Chinese economy as we head into the winter months.”
“With 21.5m people already locked down in Chengdu, and new restrictions being imposed in places like Guiyang, in Guizhou province, as well as Shenzhen, it’s hard to see a scenario for a significant economic pickup much before next year.”
“This morning’s latest trade numbers for August merely serve to underscore how weak domestic demand still is, and how far away that end of year GDP target of 5.5% is.”
“Today’s August numbers suggest a continued lack of confidence in the part of the Chinese consumer as well as a lack of demand, slowing to a weaker 0.3%, well below expectations of 1.1%,” Hewson said with exports “slightly more resilient recovering to 18% in July, and beating expectations after a weak quarter two.”
6.55am: FTSE 100 set for heavy falls at the open
The FTSE 100 is expected to open sharply lower today following falls in the US on Tuesday and in Asia overnight.
Spread betting companies are calling the lead index down by around 60 points.
In the US the Dow closed Tuesday down 174 points, 0.5%, at 31,148, the Nasdaq Composite slipped 86 points, 0.7%, to 11,545 and the S&P 500 shed 16 points, 0.4%, to close at 3,909. The indices swung positive around midday, but the rally was short lived.
The strong ISM services survey for August served to heighten the prospect that the Federal Reserve could go for another 75bps rate hike when it meets in two weeks.
In Asia, markets slipped back after disappointing Chinese trade data.
In London, results are due from WH Smith and Barratt Developments while Halfords is set to provide a trading update.