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FTSE 100 live: Blue-chip index tumbles 2% to lowest close of year, City sees 6.5% rates
The FTSE 100 lost more than 2% today to close at 7280.50, the lowest end-of-day figure in eight months.
Today’s sell-off meant the FTSE had its sharpest decline since March, when markets feared a banking sector crisis.
The FTSE 250 closed down 2.3% to 17,969.35.
Key Points
FTSE loses 100 points amid rates worries
No dividend at Currys after Nordic woes
Tech slowdown hits Robert Walters
Lowest FTSE close since November
Thursday 6 July 2023 16:57 , Daniel O'Boyle
The FTSE 100 lost more than 2% today to close at 7280.50, the lowest end-of-day figure in eight months.
Today’s sell-off meant the FTSE had its sharpest decline since March, when markets feared a banking sector crisis.
Fears about interest rates both in the UK and elsewhere led stocks to slide, with the index of top London-listed companies falling below the closing figure for 17 March.
Of the 100 stocks on the index, 97 fell today. United Utilities, Tesco and Severn Trent were the only companies on the risers’ board, with the latter two both only ticking up by less than 0.25%.
A decline was expected as Wall Streetshares fell following the release of the US Federal Reserve’s minutes, which prompted fears that the US central bank would keep its rates higher for longer.
However, shares continued to tumble as investors sold UK bonds, sending gilt yields soaring, as expectations for the Bank of England’s peak interest rate rose. The 10-year gilt yield, widely seen as a proxy for markets’ faith in the general economic strength of the UK, hit a 15-year high today.
Markets see a roughly 50/50 chance that rates peak at 6.75% and expect rates to remain above 6% into 2025.
Shares then fell further this afternoon after statistics from ADP said the US added a huge 498,000 jobs in June, crushing expectations. The surprising figure led to even more fears of Federal Reserve rate hikes.
The FTSE did reach a lower point while markets were open in mid-March, but hasn’t closed below 7300 since early November.
The FTSE 250 closed down 2.3% to 17,969.35.
Market snapshot as FTSE closes at lowest level of 2023
Thursday 6 July 2023 16:46 , Daniel O'Boyle
Take a look at all the key market data
Meta’s new app Threads has 10 million join in seven hours
Thursday 6 July 2023 16:07 , Daniel O'Boyle
A new app billed as a rival to Twitter has seen 10 million people sign up in its first seven hours.
Threads, created by Facebook and Instagram owners Meta, went live in the UK at midnight on Thursday.
Linked to Instagram, it allows users to post up to 500 characters of text and up to five minutes of video and links, as well as pictures.
We are not rip-off retailers, says Sainsbury’s
Thursday 6 July 2023 15:58 , Daniel O'Boyle
Bosses at Sainsbury’s have said they are “not rip-off retailer” or “profiteers” as they defended the profit made by the retailer amid scrutiny related to food inflation over the past year.
The company also defended increased pay packages for its senior executives at its annual general meeting in London, despite the continued cost-of-living crisis.
It comes two days after the UK’s second largest chain reported a 9.8% jump in sales for the latest quarter and highlighted that food inflation is “starting to fall”.
HMRC to write to people who may be owed additional state pension money
Thursday 6 July 2023 15:52 , Daniel O'Boyle
HM Revenue & Customs (HMRC) will write to people, many of them older women, to find out if they have information missing from their national insurance (NI) records which could affect their state pension.
Some people may have home responsibilities protection (HRP) missing from their NI records.
HRP was a scheme to help protect parents’ and carers’ entitlement to the state pension and NI credits replaced HRP from April 6 2010.
Coffee prices to stay high until 2024 says Lavazza as it warns over earnings
Thursday 6 July 2023 15:47 , Daniel O'Boyle
Lavazza has warned over a double-digit drop in earnings this year amid surging coffee bean costs and said its prices are not set to come down for consumers until 2024.
The Italian coffee giant said it is braced for a hefty drop in underlying earnings over 2023 as it looks to limit price hikes.
It raised its prices by 6.2% in 2022, but saw its costs jump to 550 million euros – almost double its underlying earnings last year.
US market snapshot
Thursday 6 July 2023 15:41 , Daniel O'Boyle
Take a look at the key Wall Street data
Key market data as FTSE loses 2.2%
Thursday 6 July 2023 15:37 , Daniel O'Boyle
Take a look at all of our key market data as the FTSE 100 appears set for its lowest close since Autumn of 2022
FTSE 100 down 2%
Thursday 6 July 2023 15:16 , Daniel O'Boyle
The FTSE 100 is down 2% today, and appears set for the lowest close of the year.
The index of London blue-chips has lost 150 points to just 7292 in a dire day on the markets.
Gambling group Flutter is the biggest faller, down more than 6%, while miner Antofagasta, housebuilder Persimmon and retailer JD Sports are also among the biggest losers.
Of the 100 firms in the index, 97 are currently down for the day. Only United Utilies, up by 1.4%, gained more than a quarter of a percent.
10-year gilts at highest since 2008
Thursday 6 July 2023 15:10 , Daniel O'Boyle
The yield on a 10-year gilt — seen as a key benchmark for risk-free lending and for the strength of the UK economy as a whole — soared to the highest level since 2008 today.
As of Thursday afternoon, the 10-year gilt is yielding 4.66%, higher even than the levels reached during the mini-Budget crisis.
Shorter-dated gilts had reached the highest level since 2008 in recent weeks on the back of stickier-than-expected inflation data, which has led to concerns that the Bank of England will keep interest rates higher for longer.
Anne McElvoy: Why is dawn breaking in America, while economic gloom gathers in Britain?
Thursday 6 July 2023 14:46
“If Britain reported a ‘misery index’ — the US term for a collection of data that made voters feel depressed — the results would make unsunny reading for the Prime Minister,” Anne McElvoy writes.
“A number of events in the past week have crystallised unease as bad news pelts the PM.
“Inflation, he told a Commons committee yesterday, has proved “more persistent than people anticipated”, which is a politician’s way of saying he had expected faster progress. A plethora of other miseries prevails, from another court roadblock to the Rwanda plan to relocate large numbers of asylum seekers for processing, to the struggles of privatised Thames Water to stay afloat.
“The economy skirts recession (just) while mortgage holders and renters alike, especially in London and the surrounding counties, feel added pain because repayments in the South represent a relatively high proportion of income — and renters are at the mercy of added costs passed on by landords.
“Rishi Sunak, a natural Atlanticist who spent his early career in the US, must look enviously across the pond to where the national holiday of July 4 this week has marked a benign turn for Joe Biden’s presidency.”
Strong US jobs data sends Wall Street shares further down
Thursday 6 July 2023 14:37 , Daniel O'Boyle
ADP’s monthly jobs report says the US added another 498,,000 jobs in June, demolishing expectations.
This comes a day before official data from the Bureau of labour Statistics, and is the latest sign of continued strength in the US jobs market.
However, the reading has been bad news for US equities, as fears of more interest rate hikes sent stocks down upon opening.
Shopping channel Ideal World goes bust with ‘majority’ of 275 staff to be laid off
Thursday 6 July 2023 14:10 , Daniel O'Boyle
Shopping television channel Ideal World has gone bust, with the majority of its 275 staff to be laid off, two days after it suddenly went off-air.
Administrators at Kroll have taken over the business, which operates a shopping TV channel as well as online shopping services.
Michael Lennon, managing director of Restructuring at Kroll, said the collapse was down to a change in consumer habits away from television shopping.
UK faces ‘chronic lack of housing’, experts warn, as building falls at fastest rate since pandemic
Thursday 6 July 2023 13:47 , Daniel O'Boyle
Experts warned the UK faces a “chronic lack of supply” for housing today after new data showed housebuilding fell at a rate only seen on the onset of the Covid-19 pandemic and the late 2000s global financial crisis.
The S&P Global / CIPS UK Construction PMI for residential work was just 39.6 in June, with any figure below 50 representing a decline. That was even lower than May’s figure, which was itself the lowest since the spring of 2020, and the lowest for a month not affected by Covid-19 since 2009.
“Aside from the lockdown-related fall in house building, the rate of contraction was the fastest since April 2009,” the report said. “Survey respondents widely commented on weaker demand due to rising borrowing costs and a subdued outlook for the housing market.”
Expect high electricity prices until 2030, says leading expert Cornwall Insight
Thursday 6 July 2023 13:24 , Daniel O'Boyle
UK electricity prices will stay high until late in the next decade, one of the City’s leading experts on power markets warned today.
Cornwall Insight’s prediction will send a chill through hard-pressed households across London and will make unwelcome reading at the Bank of England, where officials are locked in a bitter fight with inflation, having already raised interest rates 13 times in a row.
The influential consultancy’s prediction will resonate in Threadneedle Street and across Westminster, where it could test pledges and plans to reduce inflation.
Convictions of ex-trader jailed for Libor rigging referred to Court of Appeal
Thursday 6 July 2023 12:29 , Daniel O'Boyle
A former City trader jailed for rigging the benchmark Libor rate has had his convictions referred to the Court of Appeal.
In 2015, former Citigroup and UBS trader Tom Hayes was convicted of multiple counts of conspiracy to defraud over manipulating the rate previously used to set millions of pounds worth of financial deals, including car loans and mortgages.
In his trial, Hayes was described by prosecution counsel as the “ringmaster” at the centre of an enormous fraud to manipulate the benchmark interest rates and boost his own six-figure earnings.
FTSE 100 loses 100 points for the session as four-day decline gathers pace
Thursday 6 July 2023 11:54 , Michael Hunter
The FTSE 100 is down by over 100 point in late-morning trade, as worries about the impact of rising interest rates hit multinational resource stocks and UK-centric consumer companies alike.
London’s main stock index fell 103 points to 7339.27, a drop of 1.4%. Data from the construction sector pointed to a contraction, adding to worries about the existing impact of 13 successive rate hikes from the Bank of England, with more to come.
The Purchasing Managers’ Index for the sector failed to cross back above 50, the line that shows growth, coming in at 48.9, shy of the 51 expected.
That hit housebuilders. Tauloy Wimpey fell 3p to 99p and Persimmon fell 26p to 990p.
London’s multinationals we also under pressure. Fears that the most influential central bank in the world – the US Federal Reserve – will resume its programme of rate hikes hit mining giants on worries about the impact of higher borrowing costs on global growth. The worries followed minutes from the Fed’s last monetary policy meeting out overnight, which showed its decision not to lift rates last time was only a pause.
Glencore, the global miner and commodities trader, was one of the biggest fallers in London, down 15p or over 3% to 443p. Chilean copper giant Antofagasta fell 46p to 1424p. BHP was down 64p to 2287p.
But there were also other worries about the outlook for the impact of higher interest rates closer to home.
Jet2, the airline and package holiday firm, pointed to the impact of the cost-of-living crisis on demand and revealed that the proportion of seats sold in flights as it scaled its operations up had slipped. Costs were also rising faster than the rebound in sales, even if the overall outlook for the upcoming summer getaway looked sunny.
But the company’s sense of caution chimed with wider unease at the prospect of rate hikes, and fellow travel stocks and shares other companies that depend on discretionary spending for income faltered.
Next, the fashion house, fell 222p to 6732p. EasyJet was down 15p at 485p. Tui, the tour operator, was down 16p at 583p.
The mid-cap FTSE 250, home to more names from the UK high street, tumbled 250 points to 18,143.40
City voices: Scrap the tourist tax to reinstate London as a global culture capital
Thursday 6 July 2023 11:27 , Ros Morgan
As London’s Deputy Mayor for Culture and the Creative Industries, Justine Simons, has said, “culture is the heartbeat of our capital, with our world-class offer bringing in visitors from across the globe and playing a vital role in the UK’s economic recovery”.
During May’s Coronation weekend, footfall in the West End was up almost 70% compared to last year, demonstrating London’s enduring national and global appeal.
But visitor figures for some of our most important cultural institutions have not yet returned to pre-pandemic levels, with some up to 40% below where they were in 2019. A crucial reason for this is the abolition of tax-free shopping, whereby visitors from overseas are refunded the VAT on purchases made in the UK.
Shares crash at Currys as profits dive with no dividend
Thursday 6 July 2023 10:42 , Daniel O'Boyle
Currys shares crashed 13% today as the City took fright at an ongoing tough environment for consumers and noted the lack of a dividend to investors.
Squeezed UK consumers are still splashing out on high end electrical goods, but are favouring “green” appliances they hope will cut bills in the longer term, rather than fancy TVs and music speakers.
That trend led to a “mixed year” at Currys; the business that is left of the once mighty Dixons and Carphone Warehouse empire.
Let-up in mortgage pain?
Thursday 6 July 2023 10:18 , Daniel O'Boyle
There was a slight let-up for those set to agree new mortgage rates today, as data from Moneyfacts showed rates were effectively flat.
The average two-year rate ticked up slightly to 6.52%, while the average five-year rate remained at 6.02%.
However, the let-up may be short-lived, as gilt yields rose further today and the number of products on the market dipped slightly.
Construction falls at fastest pace since 2020
Thursday 6 July 2023 09:47 , Daniel O'Boyle
UK residential construction fell at the fastest rate since 2020, as overall construction work declined for the first time in five months.
The S&P Global / CIPS UK Construction PMI for residential work was just 39.6, with any figure below 50 representing a decline.
“Aside from the lockdown-related fall in house building, the rate of contraction was the fastest since April 2009,” the report said. “Survey respondents widely commented on weaker demand due to rising borrowing costs and a subdued outlook for the housing market.”
Tim Moore, Economics Director at S&P Global Market Intelligence, which compiles the survey said: “Weaker housing market conditions in the wake of higher borrowing costs acted as a major constraint on UK construction output in June.”
Input costs, meanwhile, declined for the first time since 2010.
Market snapshot as FTSE tumbles
Thursday 6 July 2023 09:23 , Daniel O'Boyle
The FTSE is down by more than 1% today amid ever-growing interest rate fears.
Take a look at our market snapshot for all the key data.
Currys axes divi in “mixed” year
Thursday 6 July 2023 09:20 , Simon English
SQUEZZED UK consumers are still splashing out on high end electrical goods, but are favouring “green” appliances that they hope will cut bills in the longer term, rather than fancy TVs and music speakers.
That trend led to a “mixed year” at Currys; the business that is left of the once mighty Dixons and Carphone Warehouse empire.
Profits for the year fell 38% to £119 million, though that was still at the top end of City expectations. There is no dividend to shareholders given wider uncertainty.
There has also been a rise in customers buying goods on credit to 17.7% of all sales. The company claims that is “important for society”.
Rivals AO World also offered some causes for optimism this week with decent results suggesting higher levels of consumer resilience than other economic indicators have shown.
An overall loss of £450 million was down to a previously announced impairment charge linked to the merger of Dixons and Carphone in 2014.
Chief executive of the business Alex Baldock said it is trading in a tough environment as it battles “depressed demand, high inflation and unforgiving competition”
Jocelyn Paulley at Gowling WLG, said:
“Customers are still being cautious when shopping due to the increase in cost of living and this will continue to cause issues during the economic uncertainty.
"The focus on building its online presence could prove crucial to future success and the appointment of Pamela Puncher as the new head of delivery in this area is a smart move to help prevent other solely e-commerce retailers from poaching potential sales."
The retailer said sales fell by 6% to £9.5 billion over the year to April, with an 8% decline in its UK and Ireland operation.
The UK and Irish arms are doing far better than the Nordics business which has endured a “very challenging year”. Across al markets there has been a “normalisation of spend on technology” after an unusual boost during the pandemic as people locked at home upgraded their appliances. Currys shares fell 7p to 46p, which leaves the business valued at £523 million
Strife in tech sector hits Robert Walters
Thursday 6 July 2023 09:19 , Simon English
Jet2 chairman Philip Meeson to step down – he bought the business in 1983 when it was a small cargo airline
SIGNS of trouble in the jobs market loomed today when recruiter Robert Walters said candidates and clients lack confidence.
A profit warning last time was followed by 10% fall in second quarter sales to £99.9 million. Most of Robert Walters’ business is international, so there isn’t a direct read across to UK employment, but the signs are still not good.
UK fees fell 21% to £16 million. Lay-offs in the technology sector and volatility in banking contributed to the malaise. Candidates demand for hybrid working and other flexible arrangements have also made life harder for some employers.
The French, Dutch and Spanish regions are “solid”.
Chief executive Toby Fowlston said: "As reported in our June trading update, candidate confidence and time to hire are not yet showing the anticipated signs of sustained improvement. Structural recruitment market fundamentals including job vacancy levels, salary inflation and candidate shortages are still holding strong which continues to suggest that when market confidence recovers there will likely be an increase in demand and candidate movement across all areas of recruitment.”
Robert Walters shares fell 4p to 421p. They are down 22% in the last six months.
Travel and retail stocks take FTSE 100 further south as spending fears return
Thursday 6 July 2023 08:43 , Michael Hunter
Airlines and retailers made some of the biggest losses on the FTSE 100 this morning as the main London stock index set course for its fourth consecutive session of declines, amid fears about the outlook for consumer spending.
Package holiday operator and budget airline Jet2 revealed that the proportion of seats being sold as it scaled up operations into the summer getaway had slipped. It stood by the outlook for a strong summer overall, but the decline in so-called “load-factor” on its flights sounded some alarm bells. Previously, getaway-season spending had showing little signs of pressure since the pandemic.
Jet 2 also sounded cautious on the potential future impact of the cost-of-living crisis, saying: “We are cognisant of how quickly the macro-economic environment is evolving and how this may affect consumers’ future spending.”
The parent of British Airways, IAG, was one of the biggest fallers on the FTSE 100, down over 5p, or 3.2% to 157p.
Tui, the 100 package holiday firm was down 21p to 578p, a loss of 3.5%.
Jet2’s own stock fell 162p to 1107p. EasyJet, also on the FTSE 100 was down 15p, or 3% at 485p.
Retail stocks were caught in the wider move south for shares which depend on discretionary spending. Ocado, the up-market online grocer, fell 25p to 548p. Next, the fashion chain, dropped 204p to 6750p.
Overall, the FTSE 100 shed 76 points to 7,365.78, a drop of 1%.
Gilt yields keep climbing
Thursday 6 July 2023 08:23 , Daniel O'Boyle
Two–year and five-year gilts are both at new 15-year highs again, as fears over interest rates continue to increase.
The two-year gilt is now yielding 5.41%,getting close to exceeding the highest levels reached in 2008. The five-year gilt is now yielding 4.83%. Longer yields continued to climb as well.
That comes as markets now expect interest rates to peak at 6.5%, with a serious chance of rates hitting 7%.
STV to buy London production company investor Greenbird
Thursday 6 July 2023 08:11 , Daniel O'Boyle
Scottish broadcaster STV is set to acquire London-based television production investor Greenbird Media for £21.4 million.
Greenbird owns majority stakes in two of the UK’s biggest producers of unscripted television, with companies in its portfolio making programmes such as Lego Masters, Animal Casualty 24/7 and Late Night Lycett.
STV said it hopes the deal will help it achieve its goal of making half of its revenue from sources other than linear broadcasting. The deal will more than triple the number of television shows made by STV Studios.
Simon Pitts, STV CEO said: “Growing STV Studios into the UK’s #1 nations and regions production company is one of our core strategic objectives.
“This transformative acquisition represents a major step towards that goal, adding significant scale and creative firepower to the group and immediately accelerating STV’s overall diversification in terms of both revenue and profit. We’re delighted to be partnering with Greenbird and to welcome their incredibly talented network of creative leaders to the STV family as we jointly aim to grow our production base in the UK and internationally.”
Jet2’s chairman to step down
Thursday 6 July 2023 07:49 , Michael Hunter
The chairman of Jet2, the low-fare and package holiday airline, is stepping down from the company he helped transform.
Philip Meeson bought the business in 1983 when it was a cargo airline serving the Channel Islands. He took it to a stock market listing in 1988 and it went on to grow into the UK airline with the third-biggest schedule of flights, behind BA and easyJet.
He said today: “I am extremely proud of the business I and colleagues have developed over the past 40 years ... but I am conscious of my age and the need to plan an orderly succession. I remain committed to Jet2 and will support my successor and the management in any way I can.”
Jet2 also reported a return to annual profit today, of £394 million, from a loss of £324 million last year, from revenue of £5 billion, up 40%.
It also pointed to signs of a strong upcoming summer getaway season. Jet2 has sold 15.3 million tickets for the period, up 7.5%, although the “load factor”, or proportion of seats sold, has slipped as capacity has risen.
Young’s expects rugby boost this Autumn
Thursday 6 July 2023 07:39 , Daniel O'Boyle
The chair of pub group Young’s says he’s optimistic the Rugby World Cup will boost sales over the coming months, after revenue was up by 8.3% in the first three months of the year.
He said the business had benefited from investments made last year, and hopes to see more sales after improvements in pubs such as the Marquess of Anglesey at Covent Garden.
Chair Stephen Goodyear said: “I am pleased to report that we have had a good start to the current financial year. In the first thirteen weeks of 2023, revenue was up 8.3% in total and up 6.8% on a like-for-like basis against 2022.
“The Board is optimistic for the year ahead, looking forward to the Rugby World Cup this autumn and the warmup fixtures over the summer.
“We will continue to invest in the future growth of the business, sticking to our strategy of running premium, differentiated and well-invested pubs and rooms. The strength of our balance sheet leaves us well-placed to make further investments and continue to generate good returns for shareholders over the long term.”
FTSE 100 on course for fourth straight fall
Thursday 6 July 2023 07:32 , Michael Hunter
London’s main stock index is expected to fall further in opening trade, with the outlook for further rate hikes from global central banks highlighted by minutes from the US Federal Reserve.
They revealed that policymakers were eyeing more rate rises even as they paused the process last month on worries about its impact on economic growth.
The FTSE 100 will open around 30 points lower at 7412 according to predictions from spread betting companies, adding to its drop of 78 points over the previous session. That came after weak economic data from China, that pointed to a slowdown in manufacturing, which led to selling of the London-listed metals miners that supply the country’s industry.
Michael Hewson at CMC Markets said: “European markets have fallen every day this week, although yesterday’s losses were by far the worst, and look set to continue again today. US markets also struggled yesterday, although their losses have been much more modest.”
Job vacancy data from the US due today and numbers German factory orders are on today’s agenda.
Yesterday’s top stories
Thursday 6 July 2023 07:07 , Daniel O'Boyle
Good morning, here is a selection of yesterday’s top stories:
A number of leading high street lenders, including Halifax, Santander and Lloyds, raised their mortgage rates again, with brokers warning of “absolute carnage”
West End companies and institutions such as the Royal Opera House have signed a new charter to cut emissions
City bank Numis has warned of a further slowdown in dealmaking this year
