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FTSE 100 seen lower, Royal Mail provided emergency support to pension scheme

Published 07/10/2022, 07:02
Updated 07/10/2022, 07:40
© Reuters.  FTSE 100 seen lower, Royal Mail provided emergency support to pension scheme
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  • FTSE 100 expected to open slighly lower
  • Retail sales growth slowed in September - BDO
  • Royal Mail provided emergency liquidity to its pension scheme

7.28am: Royal Mail provided emergency liquidity to pension fund - Telegraph

Royal Mail rushed forward the monthly payment into its pension scheme to help prevent a cash crunch, according to a report in The Telegraph, after the mini-budget sent crucial money markets into a tailspin.

The company responded to a request from the trustees of the Royal Mail Pension Plan to provide emergency liquidity, amid fears across the City that a run on pension funds driven by products known as Liability-Driven Investments (LDIs) would leave major funds insolvent.

The Royal Mail scheme has 124,000 members and liabilities of £11bn.

7.25am: Retail sales growth dipped in September - BDO

Retail sales grew at their slowest pace in September since shops reopened after COVID due to a combination of inflation, cost of living pressures and an unexpected bank holiday.

Figures from the BDO’s High Street Sales Tracker showed in-store and online sales increased by just 2.8% in September on last year.

It comes after a similar poor set of results in August, which was the previous lowest post-COVID performance for retail sales.

The month began with sales up 3.9% and peaked in the second week at 4.9%, before falling to 2.8% and 1.3% in the third and fourth weeks respectively, the report said.

The fourth week saw a bank holiday to mark the Queen's funeral.

Fashion sales were up just 6.7% on last September, when retailers would normally expect shoppers to be spending on their autumn and winter wardrobes.

Lifestyle sales were up a meagre 1.2%, but homewares sales fell by 6.3%.

Sophie Michael, head of retail and wholesale at BDO, said: "While the overall like-for-like is not quite going backwards across all discretionary spending categories, it's clear that it's trending downwards.

"The one bright spot is that with the pound's weakness, the UK becomes an attractive destination for overseas tourists doing their Christmas shopping.”

“However, this is unlikely to provide much of a boost to retailers beyond flagship stores in major cities.”

7.00am: FTSE 100 expected to open lower

FTSE 100 is expected to make a weak start on Friday with investors nervously awaiting the US non-farm payrolls numbers due later today.

Spread betting companies are calling the lead index down by around 14 points.

In Asian trading sterling was quoted at $1.1168, lower than $1.1191 at the London equities close yesterday.

In the US markets closed lower on Thursday with investors nervously awaiting today's non-farm payrolls numbers to see if the Fed’s aggressive interest rate moves are finally denting the jobs market.

By the close the Dow Jones Industrial Average was down 347 points, or 1.15%, to 29,926.47, the S&P 500 fell 39 points, or 1.03%, to 3,744.40, and the Nasdaq Composite slipped 75 points to 11,073.

Read more on Proactive Investors UK

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