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- FTSE 100 down 16 points
- Water firms warn of failure over bill cap
- Gold price retreats
Thames Water asks to up bills by £228 a year
Thames Water has requested to raise consumer bills by over 50% and well above Ofwat’s proposed cap on hikes, arguing extra money is needed for infrastructure upgrades.
The privately owned utility submitted a proposal to lift average water bills to £666.50 per customer per year by 2030 on Wednesday, marking a 52% increase from £433 currently.
Thames, which supplies 16 million people in and around London, said Ofwat’s proposals to cap its bill hikes by £94 annually over the next five years would leave upgrade plans “neither financeable nor investible”.
This comes after a report from industry body Water UK on Wednesday warned capping bill hikes for firms could result in failures, with Thames itself already on the brink of renationalisation... Read more
Gold scales back as traders reasses
Gold prices scaled back on Wednesday, falling below the US$2,500 mark as traders appeared to take a breath following a rally in recent weeks.
By Wednesday afternoon, gold was down near 0.6% for the day at US$2,498 per ounce, having sat as high as US$2,529 early in the morning.
SP Angel analysts noted investors were likely reassessing the strength of the US economy ahead of personal consumption expenditures data later this week.
This comes after expectations for a Federal Reserve rate cut in September surged with comments from chair Jerome Powell last week, sending the dollar down and gold up.
SP Angel added traders were continuing to weigh up whether such a cut could be by a dramatic 50 basis points, which in turn would spell further positive news for gold prices.
Wednesday’s blip coincided with an uptick in the dollar, by 0.44% to 0.7574p, after the pound had hit a two-year high against the green-back on Tuesday.
Ted Baker to return to UK online
Ted Baker (LON:TED) will relaunch online in the UK after the brand's last shops across the country were shut for good.
US-based owner Authentic Brand Group said on Wednesday that a deal had been struck with a new European partner which will see the Ted Baker brand return online.
This comes after the last 31 physical Ted Baker shops in the UK shut their doors last week, following previous manager No Ordinary Designer Label’s collapse into administration earlier in the year.
United Legwear & Apparel Co will now manage Ted Baker’s e-commerce operations in the UK, following similar agreements with Authentic in the US and Canada... Read more
Wall Street set for cautious start ahead of Nvidia (NASDAQ:NVDA) earnings
Futures had the Nasdaq, Dow Jones and S&P 500 just off the mark ahead of Wednesday’s opening bell and much-anticipated results from Nvidia Corp later.
Nvidia is due to report after the market closes on Wednesday, with expectations “sky-high” for its latest in a string of earnings beats, according to Swissquote Bank analyst Ipek Ozkardeskaya.
“Nvidia has a weight of around 6% in the S&P 500 and it accounted for a third if its gains of the index this year,” she said.
“So the company’s earnings announcement day is naturally a big day for the market.”
The S&P 500 was seen just in the red ahead of the market's open, while futures showed the Dow Jones and Nasdaq off 4 and 2 points respectively.
Ozkardeskaya noted post-market volatility could be on the cards after Nvidia’s update, with the company forecasting second-quarter sales of US$28 billion, but the market anticipating this to climb as high as US$32 billion.
“Based on options pricing, the stock could move around 10% up and down after the results,” she said.
Water firms slated over warnings on bill hike cap
Water firms’ have been slated after warning on Wednesday that a proposed cap on bill hikes to 2030 could lead to failures.
Gary Carter, national officer at GMB union, attacked the claims, arguing water firms had previously failed to deliver upgrades anyway.
“Water companies have had the money, failed to invest in plugging leaks and preventing sewage spills and now want more money to do what they failed to do,” he said.
“It’s absolute balderdash and Ofwat must say enough is enough.”
Industry body Water UK had warned Ofwat’s draft cap, which would equate to a £19 a year ceiling on bill hikes between 2025 and 2030, created a “material risk” to efforts in securing funding for infrastructure upgrades, which will also be a regulatory requirement.
“If they want investment, water companies must be fundamentally reformed,” Carter added.
“They have failed bill payers and their employees who have faced increased assaults and abuse because of the tarnished reputations of their employers.
“It’s time the shareholders paid for the investment the water companies promised but haven’t delivered.”
Banks, miners drag FTSE 100 lower
The FTSE 100 headed towards mid-day in negative territory on Wednesday, dragged lower by miners and banks.
Come late morning, London’s blue-chip index was down 8 points at 8,336.
Banks and miners primarily weighed down the index, with Antofagasta PLC (LSE:LON:ANTO) falling almost 5% and Natwest (LON:NWG) Group PLC down 3.9% to lead the day’s losers.
Fresnillo PLC (LON:FRES), Barclays PLC (LON:BARC), Lloyds Banking Group PLC (LON:LLOY), Anglo American (JO:AGLJ), Glencore PLC (LON:GLEN) and Rio Tinto (LON:RIO) also fell throughout the morning.
For miners, declines came after the likes of copper receded from gains earlier in the week as fears over Chinese demand looked to persist.
Banks appeared to take a hit on news the FCA would launch a probe into the pure protection market, which encapsulates life insurance, meanwhile.
The FCA said it wanted to gauge consumers’ understanding of such products and assess if they reflected fair value for customers, with commissions said to raise concerns.
This comes as part of the FCA’s Consumer Duty push, with reports equating concerns in the probe to those seen in the payment protection insurance scandal, which saw tens of billions of pounds paid out in compensation after policies were missold between 1990 and 2010.