Proactive Investors -
- FTSE 100 below session peak of 7,702.35
- Wall Street seen flat to higher ahead of Fed meeting
- Unilever (LON:ULVR) gains as rising prices support sales growth
Blame game
New research from BullionVault reveals that private investors blame both the government and central banks for inflation hitting and holding at near 4-decade highs. The government for borrowing and spending too much (28%), and central banks for keeping interest rates much too low for much too long (27%).
The results found some investors attribute high inflation to Russia’s invasion of Ukraine (8%) while only 2 people out of 1,442 respondents think high-wage demands have driven up the cost of living (0.1%).
BullionVault's customer survey found that, when asked about inflation running so high, more than 1-in-4 (29%) blame a combination of reasons, also including green energy policies, the ongoing impact of supply chain problems and shortages post-Covid pandemic, and also corporate bosses for raising prices to increase their profit margins. Each of those causes polled around 2% of responses as an individual answer.
Private investors also shared their views on the best way to reduce inflation. The majority (36%) believe the Government must cut its borrowing and spending, while 18% say central banks must hike interest rates and keep them high. One in eight (13%) say there isn’t a single action that offers the best way to reduce inflation – that it needs to run its course – while another 14% say it's already easing back and keeping interest rates too high risks a deep recession.
Adrian Ash, director of Research at BullionVault, commented: “It shouldn't be surprising that government borrowing and spending rank second behind central-bank policies among the causes of today's inflation, because it wasn't until massive fiscal stimulus was unleashed during the pandemic that low interest rates and QE money creation finally spurred a jump in the cost of living.
"Most interesting is the lack of party- or group-identity politics in apportioning blame, with corporate profit-seeking polling very low and wage demands barely registering as a cause of inflation among private investors answering BullionVault's latest survey."
"Investors seem unconvinced by political arguments either way, be it from the government in response to strikes for better wages or criticisms of corporate profiteering," Ash added.
Smart water
Thames Water has told regulator Ofwat it has yet to start a programme of smart meter installation despite a deadline of March 2025.
The embattled utility was allocated £71.9mln out of a total of £2.7bn for smart meters as part of the green economic recovery (GER) programme.
In a performance update, Thames Water said: “There has been no delivery on the programme in 2022/23, although £1.062m has been spent on preparatory work for meter installations.”
According to the Guardian, more than 200,000 pre-installation surveys have been carried out and 9,000 digs done to prepare for future meter fitting. More than 900,000 smart meters outside the GER scheme, said the report.
Thames Water has just emerged from a financing crisis that saw its chief executive depart and calls for the utility to be renationalised.
Some of the top risers and fallers on the junior market
Aferian PLC (LON:AFRNA) has pulled off a coup in the current risk-off capital markets, which has starved small-caps of access to much-needed investment. Not only has the video streaming business raised US$4mln in fresh cash (that is around £3.1m in the local currency), it has done so by issuing new shares at around 20% premium to their market price on Monday. The mildly surprising news drove the stock up 23% to 12.9p, valuing the business at £11mln.
Actual Experience PLC (LON:ACTA) jumped 10% after the analytics-as-a-service firm announced its second order for its Digital Workplace Management Platform (DWMP).
Yü Group PLC (LON:YU) shares jumped almost 6% higher on Tuesday morning as the smart meter installer revealed that it should exceed its full-year 2023 guidance on the back of strong first-half trading.
N4 Pharma PLC (LON:N4P) shares leapt 28% higher to 1.91p, up from a recent six-year low, on news of a new US patent and a change of chairman. Nuvec, the novel delivery system for cancer treatments and vaccines, has been granted a further patent application in the US.
Brighton Pier Group PLC (LON:PIER), the leisure and entertainment business that owns the iconic seaside attraction, saw its share price plummet by 26% after it provided a gloomy trading update for the first half of its financial year ending June 31, 2023. The company said it faces increasing economic pressure due to a decrease in disposable incomes and consumer confidence, which led to sales lagging behind 2022's numbers.
Fireangel Safety Technology Group PLC (LON:FA) shares slipped another 41% as it warned interim losses would be around £3.7mln, or some £2mln higher than expected previously, due largely to hedging losses.