What to Watch: Pound under pressure, sales rise for Vimto and Mr Kipling makers, and gambling crackdown
Here are the top business, market and economic stories you should be watching today in the UK, Europe and abroad:
Pound under pressure
The pound fell below $1.24 against the dollar on Wednesday morning, amid continued fears about a no deal Brexit.
Sterling fell to a 27-month low against the dollar on Tuesday and fell another 0.1% in early trade to hit $1.23 (GBPUSD=X). It had recovered slightly to be flat at $1.24 by 8.30am UK time.
At the same time, the pound was flat against the euro at €1.10 (GBPEUR=X). This equalled a 6-month low.
“The rising perceived probability of a hard Brexit that remains the key driver of the pound,” said Petr Krpata, chief european foreign exchange strategist at ING.
“This was very evident yesterday, when comments from the Conservative party leadership contenders weighed on GBP, with the currency looking through the very solid wage data.”
Inflation data coming
UK inflation for June is due at 9.30am, with economists expecting it to remain steady at 2%.
“Inflation in the UK will most probably remain at 2%, in line with the Bank of England’s target rate supported by stronger-than-expected wage growth and somewhat negatively the weaker Pound, which is driving up input prices,” said Stephen Hubble, chief analyst at Centtrip.
“The BoE has been stuck in a wait-and-see mode for some time now as a result of the ongoing Brexit impasse, but if inflation lingers around the target, it may push the UK central bank into action.”
House price data from the Office for National Statistics will also be released alongside the inflation data.
Sales rises for Vimto and Bisto makers
Nichols (NICL.L), the company behind fizzy drink Vimto, and Bisto gravy-maker Premier Foods (PFD.L) have both posted rises in profits.
Nichols has posted a 2% rise in half-year pre-tax profits to £13.3 million for the six months to June 30. The group saw UK revenues rise 6.2% to £57.1 million, as sales of Vimto lifted 4%.
Meanwhile, Premier Foods, which also makes Mr Kipling cakes, said sales in the 13 weeks to June 29 were up by 1.1% compared with the same period a year ago.
Branded sales were up by 2.9%, helped by cooler spring and summer weather that led to a rise in sales of Bisto gravy and Paxo stuffing, as well as Ambrosia products.
Ladbrokes hit by gambling crackdown
High street betting shop earnings have plummeted for the owner of Ladbrokes and Coral in the UK, as the bookmaker has been hit hard by a clampdown on fixed-odds machines.
GVC (GVC.L) saw sales from games at its UK retail arm drop by 19% in the three months to 30 June, after the government slashed the maximum stake allowed on controversial fixed-odds betting terminals or ‘FOBTs’ from £100 to £2 a spin.
GVC’s sales from UK machines were down 39% on a like-for-like basis in its second quarter.
Rival William Hill blamed the clampdown as it announced thousands of jobs and hundreds of stores were at risk earlier this month.
TalkTalk boosted by streaming
The British public’s soaring appetite for online streaming services is boosting TalkTalk as its customers fork out for super-fast broadband, according to the company.
The telecoms giant’s (TALK.L) latest trading update shows 75% of its new customers in June chose faster, more reliable and more expensive fibre internet, which can handle more data than traditional copper cables.
The demand is pushing up the amount TalkTalk makes for every customer, with the average consumer now spending £24.72 a year, despite problems with customer service and a data breach scandal in recent years.
TalkTalk’s total sales are up 1.3% to £387m year-on-year in its first quarter up to 30 June, with its full-year outlook unchanged.
European markets
European markets were mostly flat on Wednesday, with little momentum around on a summer day in July.
Britain’s FTSE 100 (^FTSE) was down by 0.2%, while Germany’s DAX (^GDAXI), France’s CAC 40 (^FCHI), and the Euronext 100 (^N100) were all flat.
Asian markets were slightly lower overnight. Japan’s Nikkei (^N225) closed down by 0.3%, the Hong Kong Hang Seng (^HSI) was down by 0.1%, and China’s Shanghai Composite index (000001.SS) was down by 0.2%.
What to expect in the US
Futures were pointing to a quiet open later in the US. S&P500 futures (ES=F) and Dow Jones futures (YM=F) were both flat, and Nasdaq futures (NQ=F) were up by 0.1%.
Companies reporting later today in the US incldue:
