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HS2 construction to be delayed to save money as costs soar
Certain sections of the HS2 rail line will be delayed to save money, according to emerging reports.
BBC reported that sections from Manchester to Crewe and Birmingham to Crewe will be mainly affected.
a statement expected imminently outlining both the extent of budget overruns and more cost-cutting proposals as soaring inflation hammers the high-speed rail line’s construction.
Costs have spiralled from an estimated £33bn in 2010 to the latest estimation of £71bn, with at least £2bn more needed for the first London-Birmingham stretch alone since the last update in October 2022.
Last week, Mark Thurston, chief executive of the HS2 project, told the BBC that the impact of inflation had been "significant" on the price of timber, steel, labour, concrete and just about everything else required for the project.
Hugo Boss dragged lower, but DAX still outperforming European markets
Checking in on Frankfurt, Hugo Boss shares fell 3%, despite posting record profits in 2022, with currency-adjusted sales increasing 27% to €3.7bn.
Investors appear wary of the year ahead, with the group’s outlook pointing to a slower rate of sales growth in 2023.
DAX is broadly leading the European markets though, having lost 37 points against the FTSE 100’s 63 points. Paris is slightly behind Frankfurt at negative 39 points.
Aviva’s Amanda Blanc doing an ‘enviable job'
AJ Bell investment director Russ Mould noted this morning’s FTSE 100 bright spot in the shape of Aviva , where currency chief executive Amanda Blanc has done an “enviable job”.
“Streamlining operations and selling off underperforming businesses is a well-worn strategy, but one Blanc has executed well and that’s evident in the 2022 numbers which show a big increase in profit and dividends accompanied by a big share buyback.”
On New York-listed Domino’s, which is on the slide in Thursday’s early deals as weaker-than-expected financials revealed tough conditions for fast-food operators, Mould warned of a “very difficult year ahead” due to fierce competition and lower margins.
A £20 pizza is now off the menu for a lot of people, hence why it has been offering cheaper-priced deals. That puts pressure on the business to get customers to order more frequently, which is a tough ask in the current economic environment,” said Mould.
Domino’s shares are down 11% in pre-market trades.
FTSE 100 down 80 points, nudged lower by interest rate speculation
The FTSE 100 is down 0.85% morning, again nudged by Federal Reserve chairman Jerome Powell, who failed to spark confidence over US interest rate hikes in his second day of speaking to lawmakers.
In the UK, Harbour Energy, the North Sea’s biggest producer, laid into the government’s windfall tax on oil and gas firms, claiming the levy had all but wiped out it profits, which sat at US$2.5bn before tax, but just US$8mln after deductions.
Ladbrokes and Coral owner Entain reported a 13% rise in its 2022 underlying pre-tax profits to £993mln, meanwhile, adding it was confident in its long term strategic prospects.
Insurer Aviva also reported higher operating profit for the year, up 35% to £2.21bn, prompting it to kick off a £300mln share buyback programme.
And with the small caps, AFC Energy rose after announcing contracts for its hydrogen-powered generators to be used at construction sites for over 8,000 hours this year so far.
Miners a big drag on China data
London's bue-chip index is continuing to extend its losses, now down over 60 points or 0.76% to 7869.
Miners Endeavour and Rio Tinto are bottom of the list, down around 5% apiece, with Antofagasta and Anglo American also down over 2%.
Market analyst Victoria Scholar at Interactive Investor says the falls in the miners follows Chinese data and a drop in the Shanghai and the Hong Kong markets.
“European markets have opened lower with US futures pointing to a softer open as markets digest a slew of corporate news and the testimony from Fed Chair Jay Powell.
"China’s inflation rate fell to 1% in February from 2.1% in January, reaching the lowest reading since February 2022. Producer prices fell 1.4%, accelerating from a 0.8% drop in the previous month to mark the fifth straight monthly of deflation. Despite the release of pent-up demand post the unwind of Beijing’s strict anti-covid measures, the inflation reading suggests that the economic outlook remains uncertain.
"However, with price pressures under control, this could embolden the authorities to carry out further stimulus as a way to boost demand.”