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- FTSE 100 up 21 points
- UK car output down for fifth straight month
- Pub garden smoking ban reportedly on cards
Whitbread leads FTSE 100 higher
Whitbread PLC (LON:WTB) led the FTSE 100’s risers on Wednesday, following an upgrade by brokers at Bernstein.
Shares in the Premier Inn owner jumped 3.6% early on, after the analysts granted an “outperform” rating and upped its share price target to 3,300p.
JD Sports Fashion PLC (LON:JD) was also among early risers, while banks looked to regain ground after hefty falls on Wednesday on speculation over upcoming budget tax raids.
Barclays PLC (LON:BARC) climbed 1.2%, while Lloyds Banking Group PLC (LON:LLOY) and NatWest Group PLC (LON:NWG) gained 1% and 0.6% respectively.
Overall, the FTSE 100 added 21 points to reach 8,365.
5p fuel duty cut pointless as petrol prices inflated anyway, RAC says
Motor group RAC has said the government should scrap a 5p fuel duty cut in October’s upcoming budget since inflated prices by retailers mean drivers are not feeling any benefit.
Having said petrol prices were 6p higher than they currently should be at pumps on Wednesday, the group suggested there was no longer any point in the cut.
“We’d normally be against any increase in duty,” RAC policy head Simon Williams commented.
“But we’ve long been saying drivers haven’t been benefitting from the current discount due to much higher-than-average retailer margins.”
Fuel duty has been frozen in the UK since 2011, with the former government bringing in a temporary 5p cut in 2022 to last until this coming March.
RAC’s comments follow Keir Starmer’s warnings of a “painful” budget to come earlier this week as the government grapples with a £22 billion “black hole” in public finances.
Chancellor Rachel Reeves “knows the 5p discount is losing the Treasury £2bn a year,” Williams added.
Government drops legal defence over Rosebank, Jackdaw development
Legal challenges against development at two North Sea oil fields will not be defended by the government.
Brought by Greenpeace and Uplift, the cases surround development at Rosebank and Jackdaw, which are respectively west of Shetland and east of Aberdeen.
Ministers confirmed on Thursday that the challenges against licences granted under the former government would no longer be contested.
The licences have not been revoked, meaning Equinor and Shell can still face Greenpeace and Uplift’s claims.
“These permits should never have been granted without being properly assessed for their impact on the climate,” Greenpeace UK climate head Mel Evans commented.
“The two new fields combined would generate a vast amount of emissions while doing nothing to lower energy bills. The only real winners from giving them the green light would be multi-billion-pound oil giants.”
This comes after a Supreme Court ruling in June that emissions must be considered in planning applications for new fossil fuel projects, with Rosebank the last remaining major untapped oil field in the UK.
Shell PLC (LON:SHEL) dipped 0.5% on Thursday.
Gold back above $2,500
Gold held above the US$2,500 mark on Thursday, following a brief drop on Wednesday as traders appeared to reassess the economic picture in the US.
At US$2,516 per ounce on Thursday morning, gold was up 0.4% for the day.
This coincided with a 0.2% drop for the dollar against the pound to 0.7566p.
Gold had dipped as low as US$2,494 on Wednesday, with analysts noting traders were awaiting the latest set of US economic data, including personal consumption expenditures, home sales and another second quarter GDP estimate on Thursday.
Mounting speculation that US interest rates will be cut from September has buoyed gold in recent weeks, with markets now mulling over the depth of such reductions.
Little movement across Europe
Though Nvidia’s earnings caused quite a stir across the Atlantic overnight, seeing the chipmaker fall near 7% and plotting the S&P 500 and Nasdaq to fall on Thursday, markets in Europe were little changed.
The FTSE 100 added 11 points in early trading, while Germany’s DAX and France’s CAC were just above the mark.
Premier Inn owner Whitbread PLC led the early risers in London with a 1.7% gain, followed by Centrica PLC (LON:CNA) and JD Sports Fashion PLC.
BAT, Imperial Brands slip on reports of wider smoking ban
Britain’s new government is reportedly mulling a wider ban on smoking to include outdoor areas such as pub gardens.
According to The Sun, “secret Whitehall papers” show ministers are considering banning smoking at the likes of outdoor restaurants, sport venues, nightclubs and in small parks.
This would come after Labour laid out plans to resurrect a smoking ban proposed by Rishi Sunak’s former government, which would see the legal smoking age gradually increase.
“We are determined to protect children and non-smokers from the harms of second-hand smoking,” a Department of Health and Social Care spokesperson said.
“We're considering a range of measures to finally make Britain smoke-free.”
British American Tobacco PLC (LON:BATS) and Imperial Brands PLC (LON:IMB) fell early on following the news.
Speculation builds over budget tax raid
Keir Starmer’s warnings that October’s budget would be “painful” and should see those with the “broadest shoulders” bear the burden has prompted speculation over tax raids.
Fears this could see banks targeted led to the likes of NatWest Group PLC (LSE:NWG), Lloyds Banking Group PLC (LSE:LLOY) and Barclays PLC (LSE:BARC) slipping on Wednesday.
Left-leaning think tank the Institute for Public Policy Research has subsequently called on the government to target the wealthiest with such expected tax hikes.
“We under-tax income from wealth compared to income from work and this special treatment benefits people living in the richest parts of the country like London and the South East,” economist Marcus Johns said.
“This is not just unfair, it’s a handicap on our efforts to rebalance wealth and opportunity between the regions.”
Prime minister Starmer had alluded to tax hikes in the upcoming budget during a speech last Tuesday, noting the government was grappling with a £22 billion “black hole” in public finances.
Warren Buffet’s Berkshire Hathaway tops $1trn market value
Warren Buffet’s Berkshire Hathaway (NYSE:BRKa) became the first non-technology company to hit a US$1 trillion market capitalisation in the US on Wednesday.
Following a 28% rally over the year so far, an initial 1% gain on Wednesday took the conglomerate's share price above US$699,000 to temporarily top the US$1 trillion mark.
“It’s a tribute to Mr. Buffet and his management team, as ‘old economy’ businesses [...] are what built Berkshire,” TD Cowen analyst Andrew Kligerman said.
“Yet, these businesses trade at relatively much lower valuations, versus tech companies which are not a major part of Berkshire’s business mix.”