Proactive Investors -
- FTSE 100 in fine fettle, up 29 points
- IMF sees rates returning to pre-Covid levels
- Boss of the CBI, Tony Danker, sacked
Spirax-Sarco slips after UBS downgrade
Bucking the firmer market trend are shares in Spirax-Sarco Engineering PLC (LON:SPX) which fell 1.4% after UBS downgraded the stock to neutral from buy.
The Swiss bank sees a less favourable risk/reward in the near-term.
"To meet our lowered FY23 forecasts short-cycle high-margin BioPharma orders need to recover in 2H, but visibility on destocking is limited," analysts at the bank wrote.
The broker continues to like the long-term opportunities to drive above-IP growth and margin expansion across the group, but sees limited upside risk against a heightened downside risk near-term.
UBS also cut its 12-month price target to 12,470p from 13,700p.
Overall, equities remain in a more buoyant frame of mind, with the FTSE 100 up 29 points and the FTSE 250 up 145 points. The gains have extended to the AIM- All-Share index which has risen 0.6%.
CBI boss Tony Danker fired over misconduct claims
Tony Danker, the head of the CBI, one of the UK's leading business organisations, has been dismissed with immediate effect following an investigation into specific complaints of workplace misconduct against him.
He will be replaced by Rain Newton-Smith, a former CBI chief economist.
The CBI's board said in a statement: "The Board wishes to make clear he is not the subject of any of the more recent allegations in The Guardian but has determined that his own conduct fell short of that expected of the Director General."
The CBI added that three other CBI employees are now suspended pending further investigation into a number of ongoing allegations.
Boss of UK business group CBI Tony Danker sacked after complaints of his misconduct at work and three other people suspended https://t.co/1eIx4bL76f— BBC Breaking News (@BBCBreaking) April 11, 2023
Danker stepped aside as CBI chief in early March, after the Guardian approached the CBI about a formal complaint that was made in January.
Further allegations have since been made against other members of CBI management while a number of leading UK companies called for urgent action at the business lobbying group.
IMF predicts rates will fall back sharply
Interest rates are set to fall back to levels seen before the outbreak of Covid-19 once inflation has been tamed, according to the International Monetary Fund.
Ahead of its Spring meeting economists at the think tank have looked at the ‘natural rate of interest’ and concluded the recent increases in real interest rates are “likely to be temporary”, due to factors such as sluggish productivity growth and ageing populations.
They predict the natural rates in advanced economies “will likely remain low”, while those in emerging markets are likely to drop towards those levels.
The recent uptick in interest rates is likely to be temporary. Our latest World Economic Outlook blog explains why. https://t.co/6wzvAgnamL #WEO pic.twitter.com/Oxup4Q72cW— IMF (@IMFNews) April 10, 2023
That would mean interest rates would fall towards the lows seen in the pandemic.
The IMF said: “When inflation is brought back under control, advanced economies’ central banks are likely to ease monetary policy and bring real interest rates back towards pre-pandemic levels.”
“How close to those levels will depend on whether alternative scenarios involving persistently higher government debt and deficits, or financial fragmentation materialize.”
Meanwhile the FTSE 100 is holding steady, now up 30 points.