Soaring Inflation, Tight Labor Market Support BOE Rate Rise

Soaring Inflation, Tight Labor Market Support BOE Rate Rise

0909 GMT - The combination of rampant U.K. inflation and an overheating labor market is likely to prompt the Bank of England to raise its base rate by 25 basis points to 1% on Thursday, Katharine Neiss, chief European economist at PGIM Fixed Income says in a note. The BOE will take the bank rate to "its highest level in well over a decade and satisfy a necessary precondition for the central bank to begin active sales of U.K. government bonds to shrink its balance sheet," she says. However, a series of recent negative supply shocks, including Brexit, the pandemic, and the ongoing trade shock due to higher energy prices may limit further rate rises, she says. ([e-mail])

 
Companies News: 

Direct Line's 1Q Gross Written Premiums Fell on Higher Inflation

Direct Line Insurance Group PLC said Wednesday that gross written premiums for the first quarter fell on higher inflation, but reiterated its 2022 guidance.

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Smiths News 1H 2022 Pretax Profit Fell on Higher Costs

Smiths News PLC said Wednesday that pretax profit for the first half of fiscal 2022 fell after booking higher costs, and that its underlying performance for the year to date was in line with market expectations.

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Aston Martin Lagonda CEO Tobias Moers to Leave, Replaced by Amedeo Felisa

Aston Martin Lagonda Global Holdings PLC said Wednesday that Chief Executive Officer Tobias Moers will step down from his role with immediate effect, and be replaced by former Ferrari CEO Amedeo Felisa.

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Aston Martin Lagonda 1Q Loss Widened; Maintains 2022 Guidance

Aston Martin Lagonda Global Holdings PLC said Wednesday that its pretax loss for the first quarter widened, and maintained its guidance for the full year.

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Cineworld Approaches Former Regal Shareholders to Discuss Payment Reschedule

Cineworld Group PLC said Wednesday that it has approached former dissenting shareholders of Regal Entertainment Group to discuss a further rescheduling of its payment obligations, under a previously made agreement.

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JD Wetherspoon Returned to 3Q Profit as Covid-19 Restrictions Eased

J.D. Wetherspoon PLC said Wednesday that it returned to profit in the third quarter following the easing of Covid-19 restrictions and that it expects to break even this year.

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Boohoo FY 2022 Profit Fell on Higher Costs; Expects Headwinds to Continue

Boohoo Group PLC said Wednesday that pretax profit for fiscal 2022 fell after booking higher costs, and that it expects the trends which hurt its performance in the second half to continue into the first half of fiscal 2023.

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Oilex Stabilizes Gas Production, Sales From India Site; Completes GBP2.5M Fundraise

Oilex Ltd. said Wednesday that gas production and sales have been stabilized from one well at its Cambay field in India and that it has completed a 2.5 million-pound ($3.1 million) fundraise, with the proceeds to be used at the site.

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Johnson Service Group's 1Q Revenue Was Up 3%; To Reinstate Dividends

Johnson Service Group PLC said Wednesday that like-for-like revenue for the first quarter rose 3%, and that it intends to restart dividend payments later in the year as workwear volumes continue to improve.

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Minoan Group Shares Fall on Heavily Discounted Share Issues

Shares of Minoan Group PLC fell as much as 18% in early trade Wednesday after the company said late Tuesday that it had issued shares at a heavy discount.

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Joules Group Shares Fall After Profit Warning, Plan for CEO to Step Down

Joules Group PLC shares fell Wednesday after it said it is cautious about its near-term guidance as profit recently missed board expectations due to reduced demand, and that its chief executive will step down.

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Luceco 1Q Revenue Decreased, Sees 2022 Results Slipping on Tough Comparables; Shares Fall

Shares in Luceco PLC dropped Wednesday after the company said revenue for the first quarter fell and that it expects results for 2022 to be lower on year due to the market normalizing after a strong prior year.

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Kodal Minerals to Raise GBP3 Mln for Lithium Project in Mali

Kodal Minerals PLC said Wednesday that it will raise 3 million pounds ($3.75 million) via an oversubscribed discounted placing and a subscription.

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OSB Group's 1Q Underlying Net Loans Rose on Strong Demand

OSB Group PLC said Wednesday that underlying net loans rose in the first quarter as it benefited from a continued robust financial and operational performance.

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Wynnstay Group Sees FY 2022 Beating Market Views on High Fertilizer Prices

Wynnstay Group PLC said Wednesday that it now expects pretax profit for fiscal 2022 to exceed market expectations and for revenue to significantly rise, as fertilizer commodity prices remain abnormally high amid the Ukraine war.

 
Market Talk: 

Flutter Entertainment Seen With a Number of Catalysts

0939 GMT - Flutter Entertainment has several catalysts, Jefferies analysts say in a research note after the FTSE 100 gambling group's first-quarter update. Regulatory clarity in the U.K. should be a boost to the company as a review of the gambling act in the country is set to be published imminently, analysts at the U.S. bank say. A listing of a minority stake in FanDuel in the U.S. is also in the cards, but market conditions aren't currently suitable, and an agreement with Fox on strategic alignment, also in the U.S., could have material positive implications, it says. Jefferies has a buy rating on the stock with a price target of 15,500 pence. Shares trade up 5% at 8,706 pence.([e-mail])

J.D. Wetherspoon Could Benefit From Cost-Of-Living Pressures

0930 GMT - J.D. Wetherspoon's ambition to break even in 2022 amid cost pressures seems laudable, AJ Bell investment director Russ Mould says in a note. He highlights that Wetherspoons could thrive as one of the pandemic survivors while many competitors have been forced out of the market, if the pub operator manages to control its prices. "While cost-of-living pressures are acute, people are likely to still want the escape of a trip to the pub and, assuming Wetherspoons can keep its prices keen despite inflationary pressures, it could benefit from people trading down," Mould adds. Shares are down 2.6% at 721.5 pence. ([e-mail])

Direct Line Insurance's 1Q Shows FCA New Pricing Reforms Are Already Weighing

0925 GMT - Direct Line Insurance Group's first-quarter performance shows that the Financial Conduct Authority's new pricing reform can already be felt by the sector, Peel Hunt analyst Andreas van Embden says in a research note. The gross written premium in Direct Line's home business fell 10% while in the motor division it slipped 5.4% after the new reform came into effect at the beginning of 2022, the analyst says. Peel Hunt forecasts the FCA's reforms will have an impact of around 1% on the company's combined operating ratio for 2022 and expects it to be at the top end of the unchanged guidance range of 93%-95%. Shares are down 6.7% at 238.4 pence. ([e-mail])

Contact: London NewsPlus; [e-mail]

(END) Dow Jones Newswires

05-04-22 0557ET