Wall Street muted and FTSE lower ahead of interest rate calls

• 

  Campaign for Fair Finance founder, Roger Gewolb, is demanding the immediate reduction of interest rates.

  “Bailey and his team should have gradually raised interest rates earlier instead of keeping them low and using quantitative easing (QE) to inject over a trillion dollars into the UK economy. The 14 consecutive interest rate rises have done absolutely nothing to combat our non-consumer-driven inflation and caused significant damage to the UK economy,” he said

  Economist Catherine McBride is also urging Threadneedle Street to reform its monetary policy, ethos and culture.

  She said: “Cutting interest rates will help companies that almost always borrow at a premium to the base rate. This is especially true of SMEs who don’t have access to shareholder funds but are the bedrock of the economy and are responsible for most employment”.

  The Bank of England will announce its decision on interest rates this Thursday at 12h00

• WH Smith’s boss has seen his pay surge by 78% over the past year after the retailer continued its travel-boosted resurgence.

  Carl Cowling, chief executive since 2019, received a total pay deal worth £2.91m for the year to August 31, according to the firm’s latest annual report.

  That compares to a £1.63m pay deal a year earlier.

  Around four-fifths of the larger pay deal was linked to performance-based bonuses after the company saw sales and profits jump.

  Mr Cowling got £2.25m as a result – £998,000 of annual bonus and £1.25m through the retailer’s long-term bonus scheme.

  The boss did not get any money through the long-term incentive scheme the previous year.

• 

  Bitcoin (BTC-USD) – Bitcoin reversed nearly a week of gains on Monday morning, briefly dropping below $41,000 (£32,663), with the dip resulting in around $270m of long positions to be liquidated.

  Macy’s (M) – Retail darling Macy’s stock was up almost 20% in premarket trade in the US after reports by WSJ and Yahoo Finance late Sunday that the chain received a $5.8bn buyout offer from real estate investor Arkhouse Management and asset manager Brigade Capital Management.

  Rolls-Royce (RR.L) – Engine-maker Rolls-Royce led the FTSE 100 on Monday morning, rising more than 2% off the back of an increased price target from broker Citi.

  Glencore (GLEN.L) – Elsewhere in the FTSE miners were leading declines, as base metal prices were pushed lower by the dollar on disappointing consumer price data coming from China.

  Read the full story here

• The FTSE 100 started the week on the back foot, dragged lower by the mining sector as figures from China over the weekend showed the economy swung deeper into deflation, AJ Bell investment director Russ Mould, said.

  “An indicator of depressed domestic demand and a very different story to the inflationary pressures faced in the rest of the world, the data inevitably hit the miners given the world’s second largest economy is such a rapacious consumer of commodities.

• Passenger numbers at Heathrow were just 2% below pre-pandemic levels last month, new figures show.

  Some 6.1 million passengers travelled through the terminals in November, the west London airport said.

  That is compared with 6.2 million during the same month in 2019.

  Demand for flights to North America peaked before Thanksgiving, with more than 50,000 passengers flying across the Atlantic from Heathrow on November 17, which was the last Friday before the holiday.

  Diwali celebrations also sparked a surge in travel to India.

• A ‘sharp contraction’ has been forecast for mortgage lending in 2024, as the cost of living continues to weigh on household incomes and affordability in the UK.

  According to a forecast by UK Finance, despite the fact that the outlook for 2024 is one of continuing challenges in the mortgage market, the main pressures on affordability look to have peaked.

  “With these pressures unlikely to ease significantly in the short term, we expect lending to remain weak in 2024, with a gradual improvement in affordability reflected in a modest increase in activity levels in 2025,” said James Tatch, head of analytics at UK Finance.

  For those looking to enter or move in the housing market, the higher cost-of-living and interest rate rises seen since the start of 2022 significantly raised the bar for consumers to pass affordability tests for mortgages. This led to a fall in lending for house purchase in 2023 of some 23%, to £130bn.

  Read the full story here

• 

  The average UK house price is expected to ease by 1% over the next year as mortgage rates continue to drop, giving some relief to those trying to jump on the housing ladder.

  Prices for properties hitting the market are expected to drop by an average of 1% in 2024, according to Rightmove.

  The pressure is on sellers to price under the competition to secure a buyer as affordability remains stretched, the property site said.

  “With mortgage rates more settled and on a slow downward trend, potential movers who have been biding their time and waiting for calmer market conditions may decide to act in the early part of next year,” said Tim Bannister, Rightmove’s director of property science.

  Read the full story here

• Begbies Traynor (BEG.L) said it has increased its staff numbers to deal with an influx of new insolvencies and it expects more to come.

  The insolvency practitioner said the number of corporate insolvencies in the UK increased by 17.3% in the year to the end of September, hitting 24,326.

  The rise helped the company grow revenue by 12.6% to £65.9m in the six months to the end of October. Begbies said it anticipates a “continued increase in insolvency activity”.

• Manufacturers have reported the first signs of business confidence after the global uncertainty and domestic political chaos of the last few years.

  Make UK said its research showed that export orders had surpassed domestic orders for the first time in four years, suggesting that companies are taking advantage of either faster growing or new markets, in contrast to the “anaemic” UK economy.

  Recruitment intentions have also rebounded, according to a survey of more than 300 companies.

• The UK’s tax level across the economy has increased to its highest rate on record, according to new data from the OECD.

  It came as separate figures showed the UK also now faces the highest level of property taxes across the developed world.

  The OECD’s (Organisation for Economic Co-operation and Development) annual revenues statistics update found the total tax-to-GDP ratio across the UK hit 35.3% for the 2022/23 financial year – the highest since OECD records began in 2000.

  It represents a 0.9 percentage point increase from the 34.3% record a year earlier.

  It ranks the UK as having the 16th highest rate of 38 OECD countries, and is 1.3 percentage points above the group’s average of 34%, in relation to tax competitiveness.

Show more