Proactive Investors -
- FTSE 100 climbs 35 points to 8182
- HSBC (LON:HSBA) profits beat forecasts, CEO announces retirement
- Premier Inn owner Whitbread (LON:WTB) plans 1,500 job cuts
Redbird flies away from Telegraph
An attempt to purchase of the Daily Telegraph by UAE-backed investor RedBird IMI (LON:IMI) is being called offer, Bloomberg reports.
IMI is withdrawing and will look to sell on its rights to the newspaper and Spectator British outlets.
The auction for the options over the media assets begins Tuesday and bidders have already approached the group with expressions of interest, RedBird IMI said in a statement on Tuesday. RedBird IMI said it would focus on securing the best possible value for the assets, “which remain highly attractive.”
European inflation and GDP
Looking across the Channel, there has been strong GDP data and HICP inflation data was unchanged.
The euro-zone came out of its technical recession in the first quarter with gross domestic product rising by a slightly higher-than-forecast 0.3%, largely thanks to increases of 0.2% in Germany and France, 0.3% in Italy and 0.7% in Spain.
Flash HICP data showed that headline inflation remained at 2.4% in April which was in line with the consensus.
Core inflation, which excludes energy, food, alcohol and tobacco, came down from 2.9% to 2.7% which not as low as the consensus 2.6%.
What economists said was most important for the European Central Bank, services inflation fell to 3.7% from 4.0%, where it had been stuck for five successive months.
"This will encourage policymakers to press on with their planned 25bp rate cut in June," said Andrew Kenningham at Capital Economics.
"Today’s stronger-than-expected Q1 GDP data means the euro-zone has come out of recession but, with core and services inflation both declining in April, this will not prevent the ECB from starting its easing cycle in June."
Bank of England mortgage and money stats
The latest mortgage approval numbers from the Bank of England show an improvement on the previous month to a 19-month high.
Net mortgage approvals for house purchases rose to 61,300 in March, the highest number of net approvals since September 2022, the stats show, up from 60,500 in February. This compared to consensus forecasts of 61,500 and 60,000 depending on who you ask.
Remortgage approvals, which only capture remortgaging with a different lender, fell to 34,200 from 37,700 in the month.
Gross mortgage lending rose from £18.6 billion in February to £20.1 billion in March, its highest amount since February last year.
The BoE said the ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased by 17 basis points, to 4.73% in March.
Net consumer credit improved to £1.6 billion in March from £1.4 billion, better than the £1.5 billion expected.
Inflation thoughts
While the FTSE maintains its early gains so far, one of the few European markets in the green, let's have some thoughts on that BRC-NIQ inflation data from earlier.
As a reminder, the BRC shop price index fell 0.8% for April year-on-year, down from 1.3% in March.
Analyst Kathleen Brooks at XTB says the data provides "further signs that the disinflation trend continues to take hold" and that the deflation in non-food prices to their lowest level since 2021 is the "big news" in this report.
With prices rising at a slower pace across the board, Brooks said, "Overall, this report supports the BOE’s view that inflation will fall sharply this month, and it could pave the way for the BOE to cut interest rates. The market is expecting the first UK rate cut in July, this report is supportive of that assessment."
Retail sector analyst Clive Black at Shore Capital noted that non-food prices inflation compared to the modestly positive 0.2% score for March and a three-month rolling average of 0.3%.
"The dip partially reflects the spring 2023 peak of the overall UK retail inflationary cycle, especially in clothing & footwear where a mild autumn persisted into a prolonged wet, windy, grey, and largely dispiriting winter/spring, doing little to encourage seasonal expenditure."
On food, he said, "disinflation persisted, a message that the CEOs of both Sainsbury and Tesco (LON:TSCO) have spoken to at their respective recent preliminary results, the key caveat being that they do not anticipate in the near-term deflation."
Looking across to Europe, headline inflation in France fell fractionally in April, to 2.2% from 2.3% the month before, a touch above the consensus 2.1%. The HICP rate was stable at 2.4%, also above the consensus, 2.2%.
Eurozone inflation is due at 10am London time.