- Blue chips up 9 points to 7,920
- Gold reaches new all-time high
- Miners climb as retailers take a hit
10.47am: New John Lewis chair has the “knowhow”
John Lewis will appoint Jason Tarry, the former Tesco UK boss, as its chairman when Sharon White departs at the end of her tenure next year.
Tarry, who will earn the same £1.1 million as White at John Lewis, will join with the target of helping the retailer reach the end of its turnaround plan.
John Lewis’ woes have led to the group scrapping annual bonuses, cutting staff and even leaving White mulling cancelling its 100% employee-owned model.
Yet, analysts are confident Tarry could be the right person for the job.
Zoe Mills, lead retail analyst at GlobalData, said: “Jason Tarry was at the helm of Tesco during the crucial development of its Clubcard loyalty scheme, taking the discounters head-on and creating a retail model that its competitors have emulated since.
“He certainly has the experience and knowhow to rejuvenate the John Lewis Partnership.”
10.28am: BoE undermined as homeowners switch to fixed mortgages, IMF finds
The Bank of England’s monetary policy is being undermined as a horde of homeowners switch to fixed-rate mortgages, the International Monetary Fund believes.
research found the UK saw some of the highest percentage of people switch to fixed mortgage rates out of the entire globe.
In 2011, around a third of mortgage holders were on fixed-rate deals, usually for periods of two to five years. However, by the end of 2022 this figure reached 90%.
More recent findings from the Financial Conduct Authority found this share has remained stable since 2022.
“Central banks have raised interest rates significantly over the past two years to combat post-pandemic inflation,” the IMF said.
“Many thought this would lead to a slowdown in economic activity. Yet, global growth has held broadly steady, with deceleration only materialising in some countries.”
10.01am: Vet group CVS suffers cyber-attack
While the FTSE 100 continues to hold flat, in small caps, vetinary group CVS revealed its IT systems were hit by a cyber attack, which is still affecting some operations at its practices.
The company said it has informed the Information Commissioner’s Office “due to the risk of malicious access to personal information”.
While it “intercepted” the unauthorised external access to a number of its IT systems, there was “considerable operational disruption” in the past week at its 500-plus vet practices.
IT systems were temporarily put offline as part of a response plan.
Vet Collection, the chain owned by CVS, said on its website: “We are having issues with our online forms and emails, please call your practice for appointments and queries.”
9.40am: Retail insolvencies soar as high interest rates wreak havoc
Retailers like Marks and Spencer and Sainsbury’s are some of the top fallers on Monday after new research highlighted the soaring rate of insolvencies in the industry.
There have been almost 20% more insolvencies in the last twelve months, Mazars data showed, as the effect of higher interest rates hits high streets.
Some 2,200 retailers went into administration in the twelve months to the end of January, up against 1,843 recorded a year earlier.
As the Bank of England continued to hold interest rates at 5.25% since August, the burden on debt-laden businesses has been found to have devastating effects.
Rebecca Dacre, a partner at Mazars, said: “We are unlikely to see the retail sector trading comfortably until interest rates start to fall.”
9.14am: Microsoft to open AI hub in London
Microsoft is opening a new AI hub in London in another boost as the capital returns to business.
The artificial intelligence lab will be focused on developing the technology for consumers and will be led by Jordan Hoffman, a former scientist at Google’s DeepMind.
It comes after both OpenAI and Anthropic also announced they would be opening offices in London as they look to expand their workforce with European AI experts.
Mustafa Suleyman, the DeepMind co-founder and newly appointed boss of Microsoft’s AI consumer division, said: “There is an enormous pool of AI talent and expertise in the U.K., and Microsoft AI plans to make a significant, long-term investment in the region as we begin hiring the best AI scientists and engineers into this new AI hub.
“In the coming weeks and months, we will be posting job openings and actively hiring exceptional individuals who want to work on the most interesting and challenging AI questions of our time.
“We’re looking for new team members who are driven by impact at scale, and who are passionate innovators eager to contribute to a team culture where continuous learning is the norm.”
8.53am: The morning so far
With company news sparse and a barren macroeconomic calendar, attention turned to gold prices this Monday.
Prices for the precious metal hit a fresh all-time high of $2,350 an ounce after swinging $27 higher during Monday’s Asia trading window.
Analysts pointed to high central bank purchasing as a key driver, with UBS stating: “At a stretch one could question whether the dollar’s failure to advance has something to do with de-dollarisation trends.
“We note that gold is still pushing ahead strongly, and recent data shows that the People’s Bank of China has been a consistent buyer of gold.” India’s central bank has also been on a buying spree.
Miners Rio Tinto plc, Anglo American PLC (LSE:AAL) and Fresnillo PLC (LSE:FRES) were among the top FTSE 100 risers.
Other top risers among the blue chips include easyJet plc (up 3.5%), Entain PLC (LSE:ENT) (up 2.8%) and Diploma PLC (LSE:DPLM) (up 1.9%).
Digital gold (aka bitcoin) was also seen higher, adding a little over a percentage point to approach $70,200.
Elsewhere on the news front, Banco Santander (LSE:BNC) is quitting the Lending Standards Body, according to a Sky News report.
The UK’s fifth-largest lender cited confusion with other regulatory standards, chiefly the Financial Conduct Authority’s Consumer Duty and new fraud reimbursement rules.
These new regulations “supersede the existing voluntary industry standards that are set out in the current LSB codes”, Santander is reported to have said. “This inevitably leads to duplicative regulation and can create confusion among staff and customers about which standards apply.”
The FTSE 100 was last seen 11 points higher at 7,922, having started the day in the red.
8.34am: Bitcoin gains against dollar
Digital gold, aka bitcoin (BTC), is also up today, with the BTC/USD pair adding 1.1% in early exchanges.
It marks the third green candlestick in a row for the world’s largest cryptocurrency, though unlike physical gold, it is off its all-time high seen in mid-March.
At the time of writing, bitcoin was swapping for $70,161, or around half a percentage point higher week on week.
Back to stocks, the FTSE 100 is currently down 12 points to 7,898, adding to last Friday’s steep losses.
8.16am: Rents through the roof
The Resolution Foundation has allayed private landlords of blame for rising rent prices, instead pointing the finger at earnings growth and “post-pandemic readjustment”.
A report titled ‘Through the Roof’ showed that private rent prices have risen by 15% since January 2022 and are rising at their fastest pace on record.
Pushing back against “popular theories about the rise”, the foundation suggest that the private rental sector (PRS) has seen only a modest decrease in size, suggesting that landlords leaving the market en masse are not driving up rents significantly.
Rising costs for Buy-to-Let mortgages have been suggested as a factor for the rent hikes, but this doesn’t fully explain the trend as 38% of landlords have no debt, the report said.
The report stated: “Some have been keen to pin the blame for recent rent rises on the rising costs of servicing Buy-to-Let mortgages, which landlords have passed on to tenants.
“Many landlords will have wanted to recoup those higher costs (although it should be noted that 38 per cent of landlords hold no debt), but it’s just not the case that the UK’s landlords can unilaterally set prices: although there are clear power imbalances in landlord-tenant relationships, the ability of landlords as a whole to increase prices is constrained by the wider rental market.
“If this weren’t the case, then landlords would have been increasing rents long before the recent rise in interest rates.”
7.55am: Gold hits new record high
Gold prices have hit a fresh all-time high of $2,350 an ounce after swinging $27 higher during Monday’s Asia trading window.
Analysts have pointed to high central bank purchasing as a key driver.
“Touching on a theme we introduced last week, at a stretch one could question whether the dollar’s failure to advance has something to do with de-dollarisation trends,” said UBS in a Monday research note.
“We note that gold is still pushing ahead strongly, and recent data shows that the People’s Bank of China has been a consistent buyer of gold.
Traders are also likely to be turning to gold as a safe haven amid ongoing Middle East conflict.
7.29am: Santander reportedly quitting Lending Standards Body
Banco Santander (LSE:BNC) is quitting the Lending Standards Body according to a Sky News report.
The UK’s fifth-largest lender cited confusion with other regulatory standards, chiefly the Financial Conduct Authority’s Consumer Duty and new fraud reimbursement rules.
These new regulations “supersede the existing voluntary industry standards that are set out in the current LSB codes”, Santander is reported to have said. “This inevitably leads to duplicative regulation and can create confusion among staff and customers about which standards apply.”
The LSB is a self-regulating body established to promote fair and transparent banking practices among its members, focusing on improving customer outcomes in the UK banking and financial services sector.
It sets the standards for the industry through its Lending Code, which provides guidelines on responsible lending and borrowing.
It was created in 2009 in the wake of the Global Financial Crisis.
7.11am: Blue chips to open higher
The FTSE 100 index is tipped to open the week 10 points higher at 7,913 when markets open on Monday after suffering a 73-point slide on Friday after weak retail and housing data impacted market sentiment.
There’s not a lot scheduled on today’s UK financial calendar, barring a trading update from Ferrexpo PLC (LSE:FXPO) and final results from Bango PLC (AIM:BGO, OTCQX:BGOPF).
Overnight, it was learned that US airline regulators have launched an investigation into Boeing after yet another incident, this time involving an engine cowling on a 737-800 aircraft falling off during take-off and striking a wing flap.
Later this week, the European Central Bank will convene for its latest interest rate decision on Thursday, with markets expecting policymakers to hold at 4.5%
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
