Proactive Investors -
- FTSE 100 falls 11 points
- Supermarket price inflation eases
- Smith & Nephew (LON:SN) tops leaderboard after results
Banking shares are little moved as the City watchdog has launched a media campaign to encourage the public to shop around for better savings rates.
Backed by promotions online, on podcasts and radio, the Financial Conduct Authority (FCA) will promote a website where savers can calculate how much they could earn in higher paying savings accounts.
Research by the FCA has revealed just over half of savers (52%) had already switched or were considering switching their savings accounts to take advantage of better interest rates.
Over two-thirds (69%) of those surveyed said they would consider switching.
FCA consumers and competition chief Sheldon Mills said: “We know that people can be put off switching for a variety of reasons, but they could be making their money work harder.
"There are some great rates out there and it could take as little as 5 minutes to find a better deal.”
The FCA said there was a £13 billion reduction in the amount of cash held in bank and building society non-interest-bearing accounts in the second half of last year, while easy-access accounts, which typically have lower interest rates, saw a £9 billion fall.
Deposits held in fixed-term and notice accounts, which often come with higher rates of interest, increased by £24 billion.
Insurers in the red
Insurance companies are all in the red after the industry set out plans to reduce motor insurance premiums after they raised them 25% in 2023.
The Association of British Insurers has published a 10-point plan as it kicked off its annual conference, encompassing actions by industry, government and regulators, including enhancing consumer data access, implementing graduated drivers licensing, and reducing insurance premium taxes.
Insurers say the price rises have been driven by inflation in the cost of claims, with estimates from EY that in 2022 for every £1 paid in premiums, insurers incurred £1.11 in claims and expenses, rising to £1.14 in 2023.
Discussions are being held about premium finance with the FCA, which has launched an investigation, and the ABI said the industry is also considering how it can work with finance houses and brokers that are not members.
Shrugs all around the FTSE
Oil prices are little moved by reports of a potential Gaza ceasefire and cigarette giants BAT (LON:BATS) is also shrugging off talk of a possible new UK vaping tax, though sector peer Imperial Brands (LON:IMB) is down.
Brent crude is in fact up 0.2% at $82.66, while oil giants Shell (LON:RDSa) and BP (LON:BP) are both up around 0.1%.
Market analyst Susannah Streeter at Hargreaves Lansdown (LON:HRGV) said disruption to shipping in the Red Sea is keeping "supply concerns bubbling".
She added: "There are some hopes that a temporary ceasefire in Gaza could be reached soon, with President Joe Biden confirming that Israel has agreed to halt attacks during Ramadan, although Hamas is still assessing the draft proposals."
Meanwhile, there are reports that Chancellor Jeremy Hunt could announce a new tax on vapes at next Wednesday's spring Budget.
Vaping products are subject to VAT but not the same levy as is applied to cigarettes.
Tobacco duty could also increase at the Budget, to ensure that vaping remains cheaper, sources told the Times.
Last month, plans were announced for UK-wide restrictions on disposable vapes, to tackle the rise in youth vaping.
"Although the industry is jostling for position in the vaping market, given the volumes declines in tobacco, these products are still a relatively small part of the picture," Streeter said.
"Investors had also been expecting greater regulation in the sector, so a potential increase in tax isn’t a wild surprise and given they are global companies a change in UK fiscal policy won't move the dial too much."
IPO boost for London?
Some potential good news for London and the City has emerged, with speculation that Chinese online retail rising star Shein might consider a UK stock market listing.
The e-commerce group is looking at the LSE for an IPO after concluding that a US application is not likely to be accepted by the SEC, according to a report by Bloomberg.
London is now seen as a frontrunner, as well as Hong Kong or Singapore.
“Having one of the most disruptive names in retail float in the UK would certainly do wonders to help fix the London Stock Exchange’s damaged reputation as a listing venue," said analyst Danni Hewson at AJ Bell.
“Investor interest could be huge, which bodes well for attracting other names to list in the UK after a patchy spell that has seen a growing number of big stocks turn to the US as their main stock location.
Meanwhile, the FTSE has climbed out of its hole and is up 7 points at just over 7,691.
The dollar skidded to its lowest in five days, noted Markets.com analyst Neil Wilson, who said riskier assets "caught a bid" (ie were proving more attractive) at the European open.
This saw Germany's DAX leaving its peers behind to notch another record high, while Bitcoin rallied to a two-year high and there were "mild gains across the piece" following a tepid day for Wall Street.
Looking forward to a New Zealand central bank decision tonight where a rate hike is a "real possibility" for the first time since May 2023, Wilson said: "There are two questions we should ask ourselves: what is the likelihood the RBNZ sees fit to raise rates and, secondly, what might this mean for the Fed and market expectations more widely?
"Does it matter what the Fed does next? Financial conditions are already loose and the market is at an all-time high…how does the Fed cut into this?
"The risks for investors are maybe growing – the top 10% of stocks in the S&P 500 account for 75% of the market – the greatest concentration since 1929…while the risks grow so perhaps do the rewards for the bravest … that seems to have been how things have played out until now anyway," he concluded.