UK Gilt Yields Fall After Weaker-Than-Expected Retail Sales Data

UK Gilt Yields Fall After Weaker-Than-Expected Retail Sales Data

0736 GMT - Gilt yields drop after the U.K. retail sales data came in weaker than expected, potentially easing the pressure for more Bank of England interest-rate rises to tackle inflation. Retail sales fell 1.2% month-on-month in July, versus expectations for a 0.4% drop in a WSJ survey of economists. "We expect some retracement of the latest moves in gilts as a result of the report," says Mizuho rates strategist Evelyne Gomez-Liechti in a note. The U.K. 2-year gilt yield falls around 7 basis points to 5.202% while the 10-year gilt yield is down 4 basis points at 4.679%, Tradeweb data show. ([e-mail])

COMPANIES NEWS:

Severn Trent's Takeover of Andigestion Cleared by UK Competition Regulator

The U.K. competition regulator said it has decided not to refer the expected acquisition by U.K. water utility Severn Trent of waste-management company Andigestion to a Phase 2 investigation.

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Everyman Media Agrees New GBP35 Mln Line of Credit

Everyman Media Group said Friday that it has agreed a new three-year, 35 million pound ($44.6 million) line of credit with Barclays Bank and National Westminster Bank to ensure its financial structure is sound.

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Global Ports 1Q Revenue Rose as Passenger Recovery Continues

Global Ports Holding posted a rise in revenue and core earnings for the first quarter of fiscal 2024 as its passenger numbers jumped and its occupancy levels returned to prepandemic levels.

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Kingspan Group 1H Profit Rose on Lower Costs; Revenue Slipped Slightly

Kingspan Group said first-half pretax profit rose on lower cost-of-sales, despite a small revenue slip, and said it expects strategic momentum to persist throughout the rest of the year.

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Everyman Media Had Record July Due to Barbie, Oppenheimer Releases

Everyman Media Group said that it experienced record admissions in July due to the release of the Barbie and Oppenheimer films, and expects to meet full-year market expectations.

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Tribe Technology Plans to Raise Up to GBP4.9 Mln in London Float

Tribe Technology plans to float on London's AIM and raise around 4.9 million pounds ($6.2 million) with trading expected to start in early September.

MARKET TALK:

Global Ports' Strong 1Q Reflects Industry Recovery

0730 GMT - Global Ports Holding's first-quarter update was strong with passenger numbers tracking ahead of guidance, which reflects recovery across the global cruise industry, Shore Capital says in a note. "We see a combination of rising [like-for-like] passenger volume, cash generation and new port concessions driving material growth in profitability over the medium to longer term," analyst Greg Johnson writes. The company's current valuation doesn't fairly reflect the recovery and embedded growth of the industry as well as the long-term cash flow characteristics of its concessions model, he adds. Shore has the cruise-port operator as a house stock. Shares rise 2.1% at 240 pence. ([e-mail])

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UK Retail Sales to Weather July Rains as Household Expenditure Improves

0730 GMT - Declining U.K. retail sales were "probably just a weather-related blip", with rain the primary driver behind of the 2.6% fall in food-store sales, Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics, says in a note. The drop in overall sales would have been larger were it not for a 2.8% on-month increase in nonstore sales volumes, which probably was due to Amazon's Prime Day, he says. Nonfood store sales dropped 1.7% too, as the poor weather weighed on footfall, he says. However, as energy prices fall and the rate of inflation eases, in line with producer prices, households' real expenditure should be up around 1.5% on-year in 4Q, with retail sales following a similar trend, he says. ([e-mail])

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UK Retail Sales Dampened by Rain, But Interest-Rate Pain to Persist

0654 GMT - The 1.2% fall in U.K. retail sales will have had more to do with unusually wet weather than the effect of Bank of England interest rates on consumer spending, Ruth Gregory, deputy chief U.K. economist at Capital Economics, says in a note. But the hikes are still feeding through and consumer confidence is falling, suggesting a downbeat outlook for retail spending persisting this year, she says. Indeed, while the Office for National Statistics attributed some of the drop in food sales to the rainy weather, the weakness in July was broad-based, with household goods in particular having a poor month and falling by 3.8% on month, reflecting the weakness in housing market activity, she says. The rates drag will eventually generate a 0.5% peak to trough fall in real consumer spending, Gregory predicts. ([e-mail])

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(END) Dow Jones Newswires

08-18-23 0407ET