FTSE 100 Live 08 May: Shares rise again to another record, Boohoo losses grow, Wetherspoons sales up

LIVE – Updated at 09:00

A fresh record for the FTSE 100 index and trading updates by JD Wetherspoon and Informa today provided more cheer for investors.

Loss-making fashion chain Boohoo and the insurer Direct Line fared less well in the City, having also reported this morning.

The Bank of England’s two-day policy meeting is underway, with Sweden’s central bank today cutting interest rates.

FTSE 100 Live Wednesday

• FTSE 100 sets another new high
• Wetherspoon upbeat as sales boom
• Direct Line motor volumes fall

Market snapshot with FTSE at another record

09:00 , Daniel O’Boyle

Take a look at the latest snapshot as the FTSE rises above the 8350 mark

Direct Line hit by £33 million in weather claims but stands by cost savings target

08:40 , Michael Hunter

Direct Line revealed that adverse weather led to payouts of £33 million in the first quarter, but said it was “confident” it would reach its £100 million cost savings target.

The plan was put in place as the Bromley-based firm fended off a £3.1 billion bid from Belgium’s Ageas.

The approach followed a turbulent 2023 for Direct Line, which issued a profit warning and axed its dividend in January that year. It led to the sudden departure of its chief executive, Penny James.

Her permanent replacement, Adam Winslow, said today:

“I am confident that with the new leadership team in place, we can deliver run-rate annualised cost savings of at least £100 million by the end of 2025 and a net insurance margin, normalised for weather, of 13% in 2026.”

Gross written premiums were up 15% year-on-year, with what the FTSE 250 company called “strong growth in Motor, Home and Commercial” lines.

Its Motor volumes were lower due to “continued repricing” of its book in that part of the business.

Rising costs of car repairs and delays in supply chains have hit the industry over the last couple of years and contributed to Direct Line’s 2023 turbulence.

Sweden’s central bank cut rates

08:34 , Daniel O’Boyle

Sweden’s Riksbank has become the latest western central bank to cut interest rates, as it reduced its base rate to 3.75%.

It says it expects to cut twice more this year.

Economists believed a cut was more likely than not, but far from certain.

The move follows the Swiss National Bank, which in March became the first to cut after the 2022-23 cycle of tightening. The reductions will boost hopes that the European Central Bank and Bank of England can cut rates soon.

Informa leads way as FTSE 100 sets new record, Centrica upgraded

08:34 , Graeme Evans

The FTSE 100 index set a fresh record of 8350 in early dealings today, extending the run that’s lifted London’s top flight by about 8% this year.

Top performers in today’s session included the business information group Informa, which rose 3% or 25.6p to 857p after upping its buyback programme alongside improved guidance for annual results.

British Gas firm Centrica also put on 2p to 133.1p after UBS analysts switched to a “Buy” recommendation with 170p target price.

BP shares remain under pressure, slipping another 10.1p to 493.5p after yesterday’s first quarter results and a further drop in oil prices.

Miners Rio Tinto and Glencore also retreated but their performances failed to prevent the FTSE 100 index settling 35.27 points higher at 8348.94.

The FTSE 250 index held firm, up 17.25 points at 20,430.33, amid positive reactions to updates by financial services business OSB Group and the pub chain JD Wetherspoon.

Direct Line Insurance fell 2.8p to 185.9p on the back of its quarterly results.

Pubs boom in post pandemic outbreak of “breakdancing” says Wetherspoon’s boss

07:41 , Simon English

The Great British Pub is back, says no less an authority than the founder and chairman of JD Wetherspoon.

Tim Martin, now Sir Tim, says sales have recovered from the gloomy pandemic days and that profits for the year will be at the top of City expectations.

In a statement to the City today he said: “ Traditional ales, which were very slow in the aftermath of the lockdowns, are increasing momentum, with Abbot Ale, Ruddles Bitter and Doom Bar showing good growth, as indeed are ales from the many small and micro brewers with which we trade. The gods of fashion have smiled upon Guinness, previously consumed by blokes my age, but now widely adopted by younger generations.”

The ebullient Martin added: “Sales of Lavazza coffee are also increasing. Free refills are thought to be responsible for spontaneous exhibitions of breakdancing among retired customers.”

His remarks come days after Heineken said it would spend nearly £40 million on re-opening 62 pubs and sprucing up other “tired” locals. The lager maker owns 2400 pubs through its Star pubs arm.

Boohoo losses grow amid ‘difficult macro-economic environment”

07:31 , Daniel O’Boyle

Losses at fast fashion retailer Boohoo swelled to £160 million in the year to 29 February, but the business says it is making progress in getting back to profitability.

Revenue was down 17% to £1.46 billion, which the business said came “as group performance continued to be impacted by a difficult macro-economic environment”.

Boohoo has been making efforts to increase its gross margins, which rose by 1.2 percentage points to 51.8%. However, a number of exceptional items, which Boohoo said were “, reflective of the action taken as part of the group’s cost reduction programme”, meant losses increased by almost 70% to £160 million.

Boohoo shares closed at 35.2p yesterday, down 5.8% for the year to date, and down more than 90% from their 2020 peak.

(PrettyLittleThing)

FTSE 100 seen higher as earnings dent Nikkei 225, Brent crude at $82

07:20 , Graeme Evans

The strong run by the FTSE 100 index is set to continue after London’s top flight jumped 100 points or 1.2% to a record close of 8313.67 last night.

Futures trading is pointing to a rise of about 15 points at today’s opening bell, a performance aided by another robust showing for US markets.

The S&P 500 index improved for a fourth session in a row as the recent fall in oil prices continues to support global hopes that inflation is being tamed.

Brent Crude was this morning trading 1% lower at $82.61 a barrel, down from $92 when Middle East tensions were at their height in mid-April.

Stock markets in Shanghai and Hong Kong were slightly lower this morning, while the Nikkei 225 fell 1.5% amid disappointment at the earnings updates of major companies including Nintendo.

Recap: Yesterday’s top stories

06:40 , Simon Hunt

Good morning from the Standard City desk.

Pressure is mounting on the Bank of England for the first interest rate cut of the post-pandemic era.  But City experts are betting that the wait for action in Threadneedle Street will continue this week – at least for now.

Millions of mortgage holders, house hunters, borrowers and savers will be watching closely, on Thursday at noon, when the next interest rate announcement is due.

The BOE’s official base rate has been at a 15-year high of 5.25% since last August, when its Monetary Policy Committee ended a run of 14 consecutive hikes in its fight against runaway inflation.

Now the consumer price index is heading towards the BOE’s 2% target – it fell to 3.2% in March – the days of double-digit rises seen in the aftermath of Vladimir Putin’s invasion of Ukraine are moving further back.

And with economy struggling to grow, calls for a cut have been getting louder. But at the same time, there have been signs of stubbornly sticky aspects to inflation, not least in pay data. That has led the BOE to repeat its signals that its base rate will stay higher for longer.

In turn, City traders have pared back their bets on the timing of the BOE’s first cut. There is some speculation that it could come in June, but consensus forecasts are for September.

It is seen as unlikely that this week will be the turning point, as MPC members, led by BOE Governor Andrew Bailey, seek to avoid revving up inflation again as they loosen monetary policy to kickstart the economy.

But some are urging for an immediate rate cut and have warned of the danger of delay.

Here’s a summary of our top stories from yesterday:

• FRC issues £9 million fines to PwC and Ernst & Young over audits of failed investment firm London Capital & Finance which is still being investigated for fraud
• Flats back in fashion after four years says Halifax as high mortgage rate force first time buyers to favour smaller properties