- FTSE 100 seesaws
- Inflation rises
- Dow Jones breaks losing streak
4pm: Blue chips wobble in home stretch
The FTSE 100 lacked a sense of direction today, with stocks rising in early trades before dipping in the afternoon.
The index looks set to close near where it started off, trading nine points higher at 8,203 in the final 30 minutes.
Aerospace group Melrose Industries (LON:MRON) PLC (LSE:MRO, OTC:MLSPF) put in a decent showing with a 2.4% gain after Labour leader Keir Starmer reaffirmed defence spending commitments.
There were no major FTSE 100 fallers throughout the day, although water firms Severn Trent PLC (LSE:LON:SVT) and United Utilities (LON:UU) dipped in the low single digits ahead of tomorrow’s regulatory ruling on price rise allowances.
National Grid PLC (LSE:LON:NG.) is also in the red in the final stretch after pledging £35 billion for infrastructure developments.
3.40pm: Serco to report on Thursday
Prison and immigration outsourcer Serco Group (LON:SRP) has yet to recover from the loss of its Australian immigration contract in November, which it accompanied with a warning it faces £20 million of additional costs due to the Budget.
If the Australian contract had been retained, Serco added it would have contributed around £165 million of revenue in 2025 and £18 million of underlying operating profit.
How the outsourcer is going to replace that lost business will be the key point of interest in tomorrow’s full pre-close update, but with the shares currently at a yearly low point, the market is suggesting it’s not going to be easy.
2.45pm: Nvidia bolsters Dow Jones in mixed US market open
The Dow Jones looks on course to end its worst run since 1978 in a mixed start on Wall Street that saw the S&P 500 and Nasdaq both head lower.
Dow ticked up 0.1% as trading got underway, following nine consecutive daily declines as a wide-spanning post-election rally fizzled out.
Aiding its gain was recent Dow Jones entrant Nvidia Corp (NASDAQ:NVDA) with a 2.4% jump. The chipmaking titan had dragged the index in recent days.
The Nasdaq and S&P 500, meanwhile, both opened below the mark as attention turns to today’s Federal Reserve interest rate call.
The expectation is for the Fed to cut the central bank rate by 0.25%.
2.22pm: Melrose tops footsie leagues after Starmer restates defence spending plans
Aerospace manufacturing company Melrose Industries PLC (LSE:MRO, OTC:MLSPF) has shot to the top of the FTSE 100 risers list with a 2.5% share price gain.
It comes after Labour prime minister Keir Starmer restated his pledge to increase defence spending to 2.5% of gross domestic product.
In an interview with LBC radio, Starmer was asked if Britain would consider increasing defence spending to 3% of GDP.
"The commitment we've made is to set out a path to 2.5%," he replied.
The question was in reference to NATO Secretary General Mark Rutte’s warning of threats posed by Russia in the coming years.
Rutte urged NATO members to rethink their defence spending pledges.
Incoming president Donald Trump has routinely criticised NATO members for failing to pay their fair share into the NATO defence budget.
He has taken particular aim at European countries and has suggested that the US will not come to NATO members’ aid if they are delinquent in their payments.
Melrose shares were swapping for 552.12p at the time of writing.
2.04pm: Fed rates preview
The US Federal Reserve is expected to cut the cash rate by a quarter of a percentage point when policy makers convene today.
It would mark the third consecutive cut this year, bringing borrowing costs down to the 4.25%-4.50% range.
US inflation remains an issue despite the anticipated rate cut, with annual inflation rising for the second consecutive month in November.
Jobs data also remains strong. Additionally, incoming US president Donald Trump’s protectionist economic policies risk compounding the country’s inflation risks, according to some analysts.
Dan Coatsworth, investment analyst at AJ Bell (LON:AJBA), said: “In the US, stronger-than-expected retail sales imply the economy is ticking over nicely and the Federal Reserve might need to slow down the pace of monetary policy easing.
“Markets still think we’ll get a rate cut… but more important will be commentary on what the Fed might do next. There are now growing expectations that the Fed will pause further cuts early in the new year.”
1.50pm: Water stocks dip as pivotal rates decision looms
Tomorrow, users of national water infrastructure will learn how much their bills will increase over the next five years when regulator Ofwat releases its final determination.
Ofwats has signalled a 21% rise in rates, although the water companies were hoping for nearly double this amount in order to upgrade infrastructure (and perhaps to increase shareholder dividends).
Thames Water, which faces insolvency if it cannot solve its £16 billion debt crisis, wanted a more than 50% increase in bills.
Thames Water secured the first step to finding a market-based solution to its debt crisis yesterday when High Court Judge William Trower approved the company's application to convene creditors.
A £3 billion debt extension will be voted on by these creditors in January before being sanctioned at another hearing in early February.
FTSE 100-listed water firms were among the biggest fallers today, with Severn Trent (NS:TREN) PLC (LSE:SVT) off 1.3% and United Utilities Group PLC (OTC:UUGRY) (LSE:UU.) off 0.75%.
The broader FTSE 100 is currently flat at 8,197.
1.10pm: Footsie sheds gains
The FTSE 100 has entered the red zone as afternoon trades get underway, albeit by only a handful of points.
The blue-chip index spent the morning in good spirits thanks to well-bid banking stocks and B&Q owner Kingfisher (LON:KGF) plc shares.
Footsie’s move lower comes ahead of the US market’s open, when the S&P 500, Nasdaq and Dow Jones are all tipped to rise.
At the time of writing, the FTSE 100 was trading at 8,193.
12.27pm: Dow to turn around nine-day losing streak ahead of Fed rate call
Wall Street appeared in a positive mood ahead of Wednesday’s Federal Reserve rate call, placing the Dow Jones on course to end a nine-day losing streak.
Futures had the Dow Jones up 0.3% before the bell, raising hopes that the index could end its worst run since 1978.
Following a broad post-election rally, attention has appeared to turn to big technology firms once again, buoying the S&P 500 and Nasdaq but hampering the 30-company strong Dow.
Though it does include four of the so-called Magnificent Seven, declines for the likes of UnitedHealth Group Inc (NYSE:NYSE:UNH, ETR:UNH), Sherwin-Williams Co (NYSE:NYSE:SHW), Goldman Sachs Group Inc (NYSE:NYSE:GS, ETR:GOS) have weighed.
“One of the concerns with the Dow is just how narrow it is,” CS McKee chief investment officer at CS McKee Brian Allen commented.
Making matters worse has been a downturn in heavyweight Nvidia Corp after recent years of hefty gains look to finally be setting the artificial intelligence giant on a correction course.
Elsewhere, the S&P 500 and Nasdaq were both seen gaining 0.3% ahead of Wednesday’s open, with focus widely on the Fed’s rate call later in the day and expectations for a 25 basis point cut.
“While the Fed is largely anticipated to cut interest rates [...] the focus is on its outlook for the upcoming year, especially in light of Donald Trump's proposed initiatives that could potentially trigger inflation,” Tickmill Group partner Patrick Munnelly said.
12.05pm: Rent prices soar
Coinciding with record high house prices (see below), private rents across the UK surged by 9.1% in the 12 months to November, according to the latest Price Index of Private Rents (PIPR).
This was a sizable increase from the 8.7% rise recorded in October, reflecting tight competition for rentals in the UK.
England saw a 9.3% rise in private rents, setting a new record with average monthly rents reaching £1,362.
London experienced the sharpest regional inflation, with rents climbing 11.6% over the year, pushing average monthly costs to £2,206.
In contrast, Yorkshire and The Humber had the lowest annual increase among English regions, with rents rising by 5.7%.
Across Great Britain, the highest average rent was recorded in Kensington and Chelsea, London, at £3,520 per month, whereas the North East reported the lowest at £700.
11.45am: House prices hit record
Halifax’s housing market report for 2024 has revealed that property prices rose by 4.8% in the year, which, according to Halifax’s head of mortgages Amanda Bryden, “once again defied expectations”.
The average house price reached a record £298,083, driven by easing financial pressures and robust wage growth.
Transaction (JO:TCPJ) volumes also rebounded to pre-pandemic levels after being subdued at the start of the year, said Halifax
The market remained largely flat until the summer, with most of that growth concentrated in the second half of the year," noted Bryden.
Mortgage rates, which dropped up to 160 basis points below their 2022-2023 peaks, helped to boost buyer confidence throughout the year.
Mortgage demand climbed to its highest level in two years, further supporting price growth.
In the year ahead, Halifax forecasts modest house price growth of up to 3%, alongside a small increase in transaction volumes.
11.30am: Wetherspoon (LON:JDW) boss Martin wants a word with Guinness supplier Diageo (LON:DGE)
Diageo PLC (LSE:DGE), the FTSE 100-listed Guinness supplier, made headlines yesterday when pub landlords warned of Christman rationing of the black stuff.
Diageo previously warned that it is considering managing supplies in the holiday period after a recent spike in demand, partially brought on by the rise of online ‘Guinnfluencers’.
But JD Wetherspoon PLC (LSE:JDW) boss Tim Martin hasn’t let Diageo off the hook.
In comments to the Financial Times, Martin said: "I'm going to be having a stern word with them and say: 'What's happened to your crystal ball?'”
“I think someone at Guinness has made a mistake," he added, though he endeavoured to strike a conciliatory tone.
Broadly speaking, Diageo has been a “very reliable supplier”, said Martin. “Since we’ve worked with them for so long, we intend to forgive them. But they better get brewing.”
Diageo has had a bit of a mare in 2024, with shares down more than 10% following another 0.4% dip today.
‘Spoons shares added 0.3% today, though year to date, the stock is down 25%.
11.01am: EU inflation comes in lower than expected
Across the channel, eurozone inflation in November reached an annual rate of 2.2%, a slight increase from October’s flat 2% but falling short of the preliminary estimate of 2.3%.
The rise was attributed to base effects following last year’s significant drop in energy prices.
Non-energy industrial goods showed a modest price increase of 0.6%, slightly less than the 0.7% anticipated.
Meanwhile, inflation eased for services, standing at 3.9%, and food, alcohol, and tobacco at 2.7%.
10.24am: Deutsche Bank (ETR:DBKGn) on UK inflation
Today’s inflation print, which revealed that consumer prices increased by 2.6% year on year in November, “will only reinforce the MPC (Monetary Policy Committee)’s message of patience and gradualism”, reckon Deutsche Bank analysts.
There was some good news to be gleaned from the data, said the bank.
Specifically, core inflation, which excludes volatile food and energy prices, was slightly better than expected at 3.5% against the Bank of England’s 3.6% forecast.
But Deutsche noted that price pressures are starting to resurface following Labour’s first Budget.
Chancellor Rachel Reeves’ decision to increase employers’ National Insurance Contributions (NICs) means employers will “likely” start ramping up goods prices from next year, said the bank’s analysts.
“Put bluntly, the MPC is some way away from declaring victory on inflation,” they said.
9.47am: Lloyds rapped by advertising watchdog
The Advertising Standards Authority (ASA) has partially upheld a complaint against Lloyds Banking Group PLC (LSE:LON:LLOY)'s sustainability advertising, deeming one of four investigated advertisements misleading.
The complaint focused on a LinkedIn post highlighting Lloyds’ commitment to reducing fossil fuel reliance and financing renewable energy projects.
The ASA concluded the ad omitted material information about Lloyds’ significant financing of high-emission industries, potentially misleading consumers about the bank's environmental impact.
Lloyds defended the ad, stating it provided clear and accurate information, backed by its 2023 Sustainability Report.
The report noted Lloyds’ total financed emissions at 32.8 million tonnes of carbon dioxide equivalent in 2022.
The bank argued that its efforts, such as halving energy consumption by 2030 and exiting thermal coal financing, demonstrated a genuine commitment to sustainability.
But the ASA determined the advertisement failed to adequately qualify its claims about Lloyds' role in the energy transition.
Lloyds shares bounced 1.6% higher to 55.1p each today.
9.33am: Bitcoin pares gains
On the cryptocurrency markets, bitcoin (BTC) has climbed down from yesterday’s all-time high of more than $108,000.
At the time of writing, the BTC/USD pair was trading closer to $104,000, which is still an impressive price for an asset that opened the year a little over $40,000.
Bitcoin has soared to unprecedented levels since the US elections in early-November, when president-elect Donald Trump promised to usher in a raft of pro-crypto policies and staff appointments.
Bitcoin currently has a market capitalisation of more than $2 trillion, while the entire cryptocurrency markets have a market cap of $3.65 trillion.
Back to the stock market, the FTSE 100 blue-chip index is at an intraday high of 8,226, or around 31 points higher from yesterday’s close.
9.17am: FirstGroup’s Avanti workers vote to strike on NYE
Train managers on FirstGroup PLC (LSE:LON:FGP)’s Avanti West Coast mainline have voted to strike on New Year’s Eve and every Sunday from 12 January to 25 May.
Planned strike action during the Christmas period was initially postponed after Avanti made a new offer to workers, but this has now been rejected.
The RMT union stated that "sustained strike action" is "the only way to focus management's minds on reaching a negotiated settlement”.
Avanti West Coast, operated as a joint venture between FirstGroup and Trenitalia, warned of "significant disruption" for passengers using the service from London to Glasgow.
According to RMT, 83% of members involved in the dispute, which relates to payments for rest days, voted against the revised offer.
Avanti said it was "disappointed" by the vote and remained "open to working with the RMT to resolve the dispute."
Shares in FirstGroup are up 0.40% to 165.2p.
9am: The morning so far
Hopes for an interest rate cut from the Bank of England tomorrow were delivered a death blow this morning as UK inflation increased to 2.6% in November.
Office for National Statistics chief economist Grant Fitzner attributed the rise to motor fuel and clothing prices.
On the bright side, core inflation came in at 3.5%, slightly lower than the 3.6% forecast.
On the company news front, B&Q owner Kingfisher plc agreed to sell its Brico Dépôt Romania business for €70 million (£58 million).
Chief executive Thierry Garnier said the sale aligns with a strategy to prioritise higher-growth markets.
Brico Dépôt Romania posted sales of £269 million but recorded an £18 million loss last year. Kingfisher shares jumped around a percentage point on the news.
National Grid PLC (LSE:NG.) published a £35 billion, five-year investment plan, including £11 billion for upgrades and £24 billion for expanding capacity.
Chief executive John Pettigrew said the plan would nearly double Britain’s energy capacity.
Under the plans, National Grid intends to upgrade 3,500 kilometres of overhead lines and aims to connect 35GW of new generation and storage capacity. Shares were generally unbudged, dipping 0.1% to 935.6p.
From telecoms to tabletops, Games Workshop plc gifted shareholders with an 80p-per-share dividend, bringing its year-to-date payout to 265p, up from 195p in 2023.
The increase reflects a recent profit upgrade driven by licencing sales of its Warhammer IP and Games Workshop’s addition to the FTSE 100. Shares dropped 0.125% to 13,530p.
At the time of writing, the FTSE 100 index was trading at 8,217, up 22 points from yesterday’s close.
8.43am: Games Workshop ups dividend
Games Workshop Group PLC (LSE:LON:GAW) has announced an 80p-per-share dividend, bringing year-to-date returns to 265p, a substantial increase from the 195p paid out in the same period in 2023.
It comes amid a promising time for the owner of the Warhammer intellectual property.
Earlier this month, Games Workshop delivered a profit upgrade on the back of surging licencing sales.
Licencing is shaping up to be an even bigger part of the Games Workshop story after agreeing on creative terms with Amazon (NASDAQ:AMZN) for a Henry Cavill-linked live-action Warhammer adaptation.
The company is also celebrating its addition to the FTSE 100 blue-chip index for the first time.
Shares dipped 0.2% to 13,521p each this morning.
8.22am: Footsie ticks higher
The FTSE 100 climbed 10 points higher to 8,206 this morning despite yearly inflation running higher in November.
B&Q owner Kingfisher plc is leading the risers with a 1.6% gain on news of its Romanian exit.
British Airways (LON:ICAG) owner IAG and Ashtead Group PLC (LSE:LON:AHT) are also more than 1% higher in opening exchanges.
8.05am: Shoe Zone to shut shops amid ‘very challenging trading conditions’
Looking in on the small-cap space, Shoe Zone PLC (AIM:LON:SHOE) said it intends to close an undetermined number of stores that have become “unviable” amid “very challenging trading conditions”.
Weakening consumer confidence has slashed Shoe Zone’s revenues and profits this year, the company said in a Wednesday trading update.
Higher national insurance and National Living Wage costs under the Labour Budget have compounded these issues, said the group.
As a result, profit before tax for the year ahead is expected to be half of what was previously estimated.
To keep a stable cash position, Shoe Zone will not be paying a dividend.
Unsurprisingly, Shoe Zone shares collapsed more than 40% in opening Wednesday trades.
7.50am: National Grid announces £35bn investment plan
National Grid PLC (LSE:NG.) has released its ‘RIIO-T3 Business Plan’ detailing investments of up to £35 billion over a five-year period from April 2026.
The investment includes £11 billion for maintaining and upgrading existing networks and initial Accelerated Strategic Transmission Investment (ASTI) projects.
A further £24 billion is earmarked for increasing network capacity and addressing future projects triggered by the UK government’s evolving energy priorities.
National Grid intends to upgrade 3,500 kilometres of overhead lines and aims to connect 35GW of new generation and storage capacity.
John Pettigrew, chief executive of National Grid PLC (LSE:NG.), called it “the most significant step forward in the electricity network that we've seen in a generation”.
He said the investment will nearly double Britain’s energy capacity.
7.30am: Kingfisher exits Romania
B&Q owner Kingfisher plc has announced the sale of its Brico Dépôt Romania business to Altex Romania for an enterprise value of €70 million (£58 million).
The transaction includes 31 stores in 24 cities, along with distribution operations and the head office in Bucharest.
Kingfisher’s chief executive, Thierry Garnier, said the decision was part of a strategy to focus on markets with stronger growth potential.
Brico Dépôt Romania reported sales of £269 million, around 2.1% of Kingfisher’s total sales, in the last financial year.
It delivered a loss of £18 million.
7.20am: Stocks to gain
Futures prices have the FTSE 100 ticking 13 points higher to 8,212 when trading commences this Wednesday.
It follows a dour Tuesday session in which the blue-chip index was smashed more than 60 points lower as hot wage data dealt a blow to interest rate cut hopes.
Today’s inflation data, though it matched expectations, did nothing to raise these hopes.
7.12am: UK inflation pushes higher in blow to interest rate cut hopes
Year-on-year inflation in the UK increased to 2.6% in November from 2.3% in the previous month.
Core inflation came in at 3.5%, slightly lower than the 3.6% forecast.
The print from the Office of National Statistics matched forecasts, but it nonetheless marked another blow to those hoping for an interest rate cut from the Bank of England on Thursday.
Office for National Statistics chief economist Grant Fitzner said: “Inflation rose again this month as prices of motor fuel and clothing increased this year but fell a year ago.
This was partially offset by airfares, which traditionally dip at this time of year, but saw their largest drop in November since records began at the start of the century.”
5am: Preview
Wednesday brings UK inflation and the latest interest rate call from across the Atlantic as a packed week on the macroeconomic front comes to a head.
Expectations are for the Federal Reserve to cut interest once again and UK inflation to have accelerated last month... Read more
Announcements due:
Finals: Integrafin Holdings PLC
US earnings: Birkenstock (NYSE:BIRK) Holding PLC, General Mills Inc (NYSE:GIS), Micron Technology Inc (NASDAQ:MU)
AGMs: Beacon Energy, Beeks Financial Cloud Group, dotDigital Group, Greatland Gold, Karelian Diamond Resources, Ovoca Bio, Wildcat Petroleum
Economic news: Inflation (UK), Interest Rate Decision (US), Building Permits (US), Housing Starts (US), Current Account (US), Harmonised Index of Consumer Prices (EU)