LIVE: FTSE and Wall Street climb as UK factory production falls
A look at how the major markets are performing on Tuesday
European stock markets pushed higher on Tuesday as UK factory output fell at the fastest rate since September 2020 and public sector borrowing slowed in July
In London, the FTSE 100 (^FTSE) rose 0.2% on the day, breaking its seven-day losing streak, while the CAC (^FCHI) gained 0.6% in Paris and the Frankfurt DAX (^GDAXI) was also 0.6% higher.
Stock gains were also driven by cyclical sectors, including construction and materials, precious metal miners and defence, while defensive, pharmaceutical, and personal care sector indexes were among the decliners.
UK manufacturers saw the sharpest fall in factory production since September 2020, according to the latest figures from the CBI.
The data showed that output volumes were at their worst, with declines driven lower by a range of sectors.
The CBI said 15 out of the 17 manufacturing sub-sectors suffered a drop in output, although the car industry and mechanical engineering were the worst performers, as well as paper, printing and media, and chemicals sub-sectors.
However, output volumes are expected to stabilise in the next three months.
Across the pond, the S&P 500 (^GSPC) was up marginally 0.04% by the time of the European close and the tech-heavy Nasdaq (^IXIC) was 0.4% higher. The Dow Jones (^DJI) was just 0.3% down at the time of publish.
Earlier this morning, new data from the Office for National Statistics (ONS) showed that UK government borrowing came in below official forecasts in the first four months of the fiscal year.
The budget deficit between April and July was £56.6bn, some £11.3bn less than the Office for Budget Responsibility (OBR) forecast in March.
Read more: Trending tickers: Arm l Microsoft l BHP l Nvidia
The deficit in July alone came in at £4.3bn, below the £5bn forecast by economists. It was the fifth-highest July borrowing since monthly records began in 1993.
"As inflation slows, it’s vital that we don’t alter our course and continue to act responsibly with the public finances," chancellor Jeremy Hunt said. “Only by sticking to our plan will we halve inflation, grow the economy and reduce debt.”
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Blog close and recap
Well that's all we have time for today but be sure to join us again tomorrow for more market and economic news.
Here's a quick recap of the top stories for today...
UK borrows less than expected in July
FTSE bosses get 16% average pay rise
Microsoft makes fresh Activision Blizzard deal
SoftBank’s Arm files for 2023's biggest IPO
UK factory production falls at fastest rate since September 2020
Self-assessment tax receipts rise by £2.5bn
Getir to slash 2,500 jobs
Thanks for following along, see you bright and early tomorrow!
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Getir to slash 2,500 jobs
![The layoffs will affect couriers, pickers, and office employees.]()
The layoffs will affect couriers, pickers, and office employees. Grocery delivery start-up Getir has announced plans to axe 10% of its staff as part of a global restructuring.
The Turkey-based company will cut 2,500 people from its workforce, but will continue to operate in the UK, the United States, Turkey, Germany and the Netherlands, it said.
The layoffs will affect couriers, pickers, and office employees.
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Microsoft Activision deal: Why is the CMA reopening an investigation?
My colleague Angela Barnes writes...
Under the new deal proposed, Microsoft (MSFT) will no longer buy the rights to Activision’s games stored in the cloud.
Instead, Activision’s games, such as Candy Crush and Call of Duty, will be sold to games publisher Ubisoft (UBI.PA) who will supply the content to Microsoft and its competitors.
That means Microsoft won’t be able to release Activision Blizzard’s games exclusively on its own cloud streaming service, Xbox Cloud Gaming, opening up this offering to the wider market.
The CMA said the new investigation will be carried out in line with its “usual Phase 1 processes” and the statutory deadline for a decision is 18 October 2023.
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Aldi and Lidl gain almost 800,000 extra shoppers
Aldi and Lidl have gained an extra 800,000 shoppers, it has been revealed.
According to new figures from NIQ, almost two-thirds of UK consumers bought goods from the two German discounters in the past four weeks.
The data showed that total till sales at UK supermarkets slowed to 7.2% in the four weeks to August 12, down from 12.4% in June. It was the lowest rate of growth since January.
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Gold rebounds slightly but remains under pressure
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Wael Makarem, senior market strategist, MENA at Exness, said:
Gold prices rebounded to a certain extent after a series of losses after the impact of rising yields in US treasuries. Investors turn their attention at the moment to the Federal Reserve’s president, Jerome Powell, speech on Friday. Despite the rebound, gold prices could remain under pressure as they stay below key resistance levels and record lower lows.
Jerome Powell’s intervention could create some volatility as traders monitor any hints over the developments in monetary policy in particular after the release of the Federal Reserve’s minutes created some uncertainty. Subsequent economic data on the US job market and on inflation could determine the next steps in monetary policy and could affect gold’s performance.
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What is pensions dashboard?
The pensions dashboard is designed to bring all your pension information into one place.
This means you won’t have to remember every pension scheme you have as they will automatically feed into the dashboard - providing clear information about how much each pot is worth, as well as the state pension.
This is particularly helpful since auto-enrolment means we may have a number of smaller pensions out there that we have forgotten about.
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Wall Street set to open higher
With just over an hour to go before the opening bell in New York, here's a quick look at how US stocks are set to trade today...
S&P 500 futures (ES=F) are up 0.5%, Dow futures (YM=F) have gained 0.2%, and Nasdaq futures (NQ=F) are also 0.7% higher, after the tech-heavy index surged 1.7% on Monday.
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Energy bills: 13 million keep heating switched off
![energy bills BURTON ON TRENT, ENGLAND - OCTOBER 11: An electricity sub station pylon stands next to a home on October 11, 2022 in Burton On Trent, England. The British utility company, National Grid, said this week that UK households may face power cuts this winter for up to three hours at a time, if gas supplies run low. The UK relies heavily on gas to produce electricity, and gas supplies to Europe have been severely disrupted by the fallout from Russia's invasion of Ukraine. (Photo by Christopher Furlong/Getty Images)]()
energy bills BURTON ON TRENT, ENGLAND - OCTOBER 11: An electricity sub station pylon stands next to a home on October 11, 2022 in Burton On Trent, England. The British utility company, National Grid, said this week that UK households may face power cuts this winter for up to three hours at a time, if gas supplies run low. The UK relies heavily on gas to produce electricity, and gas supplies to Europe have been severely disrupted by the fallout from Russia's invasion of Ukraine. (Photo by Christopher Furlong/Getty Images) Millions of households across the UK are so worried about the state of their energy bills ahead of the energy price cap lifting that they would avoid turning the heating on in the cold, according to new research by consumer group Which?.
The survey of 4,000 people found high energy bills have put financial, physical and emotional strains on consumers — with nearly nine in 10 (85%) households trying to cut back on their energy usage.
Almost half (46%) said they did not not turn their heating on when it was cold last winter. This equates to an estimated 13 million households nationwide.
Meanwhile, four in 10 (37%) of those surveyed are worried that their ability to recover from illness is worse now than before the cost of living crisis began.
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Mortgage costs continue to fall
Here's the latest mortgage rates from Rightmove:
The average five-year fixed mortgage rate is now 5.79%, up from 3.89% a year ago, down from 5.86% last week.
The average two-year fixed mortgage rate is now 6.40%, up from 3.77% a year ago, down from 6.46% last week.
The average monthly mortgage payment on a typical first-time buyer type property when taking out an average five-year fixed, 85% LTV mortgage, is now £1,204 per month, up from £992 per month a year ago but down from £1,226 last week.
Matt Smith, Rightmove’s mortgage expert, said:
The positive direction for rates continues this week albeit a little more slowly, with five-year rates edging down slightly more than two-year equivalent products.
Swap rates are broadly flat week-on-week in response to a range of economic indicators published last week, but we should get more sense of any impact in the coming days.
We are likely to see a continued period of stability for home-movers at least for now, and while the market remains sensitive to any surprises, it appears that lenders will continue to price competitively where they can.
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UK factory production falls at fastest rate since September 2020
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UK manufacturers saw the sharpest fall in factory production since September 2020, according to the latest figures from the Confederation of British Industry (CBI).
The data showed that output volumes were at their worst, with declines driven lower by a range of sectors.
The CBI said 15 out of the 17 manufacturing sub-sectors suffered a drop in output, although the car industry and mechanical engineering were the worst performers, as well as paper, printing and media, and chemicals sub-sectors.
However, output volumes are expected to stabilise in the next three months.
Martin Sartorius, CBI economist, said:
With output volumes contracting at their fastest pace since the Covid-19 pandemic, and order books deteriorating, this survey makes for gloomy reading.
However, easing price pressures will bring some relief to many manufacturing firms and the broader economy.
Watch: How does inflation affect interest rates?
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