While more serious cracks have appeared in the UK economy – new OBR forecasts GDP growth will come in just 1.4% by 2022 – Chancellor Philip Hammond appears to have won party support for his Budget. There was little inside it to rock the Government boat yesterday though the fresh economic downgrades are bad news for productivity.
"Productivity is the issue,” Mike Amey of Pimco told Wake Up to Money this morning, “if people can't make more stuff per hour then you can't pay them more, that's the basic problem, and there wasn't actually a lot in the Budget on that."
Hammond’s Budget also leads to £50bn of additional borrowing. “On balance we believe that the relaxation of previous fiscal forecasts is positive news for the economy,” Barclays’ Fabrice Montagne said this morning.
Overnight the pound was slightly lower at 1.3316, down -0.02%, though a bull run to 1.34 now looks possible as a fresh UK GDP update approaches this morning. However yesterday’s dollar sell off was more connected to general greenback weakness including fresh US inflation and Fed rate concern.
In Asia trading was quiet thanks to a holiday in Japan and US Thanksgiving. New sanctions against North Korea added to the mood sobriety.
- UK FTSE 100 7,419.02 +0.10%
- Dow 23,526.18 -0.27%
- S&P 500 2,597.08 -0.08%
- Nasdaq 6,867.36 +0.07%
- Nikkei 225 22,523.15 +0.48%
- DAX 13,015.04 -1.16%
- CAC 40 5,352.76 -0.25%
- Gold 1,294.00 -0.22%
- Oil WTI 57.91 -0.21%
Mitchells & Butlers profits slip but like-for-like sales up
First, pubs operator Mitchells & Butlers. Full year adjusted operating profits arrive at £314m, down -3.1% while adjusted earnings per share falls -1.4% to 34.9p. Cost headwinds have hit margins “but we continue to work hard to mitigate as much of these as possible through our focus on efficiency and profitable sales growth”.