AM 1 update: UK rate move imminent, Trump to name new Fed boss, Nikkei up

Two big news items today: the Bank of England will likely hike interest rates and Donald Trump is expected to nominate Jerome Powell as his next central bank chairman. If the Bank of England bites the bullet – finally – it means the first rate boost since July 2007. 

Watch for tone and nuance about future rate moves. While a rate climb today is already priced in the UK's Brexit visibility, or lack of it, plus stagnant wage growth, could still provide Bank of England governor Mark Carney with an emergency brake lane exit from what markets expect.

A rate lift would likely hit 3.7m Brit households on tracker or variable standard rate mortgages. Deutsche Bank is not optimistic on the UK economy; it predicts GDP growth will be clipped from +1.6% to +1% next year.  

If Donald Trump meanwhile offers Jerome Powell the Fed chair job it will likely be seen as a job continuity project. In other words, keeping to the slow-but-steady rate rise program current incumbent Janet Yellen commenced. Powell has been largely pro-regulation since the 2008 financial crisis though Yellen is viewed as more aggressive on this front. 

Overnight stocks in Asia saw the Japanese Nikkei climb half a per-cent to 22,539 while Chinese stocks were all down with the Shanghai composite falling almost -0.40%. Currency-wise the pound dipped -0.04% overnight against the euro to 1.1393 but climbed +0.21 against the dollar to 1.3282. 

• UK FTSE 100 7,487.96 -0.07%
• Dow 23,435.01 +0.25%
• S&P 500 2,579.36 +0.16%
• Nasdaq 6,716.53 -0.17%
• Nikkei 225 22,539.12 +0.53%
• DAX 13,465.51 +1.78%
• CAC 40 5,514.29 +0.20%
• Gold 1,279.20 +0.15%
• Oil WTI 54.30 0.00%

Morrisons like-for-like sales up

Morrisons claims a +2.5% like-for-like sales rise for the 13 weeks to 29 October. Including fuel, group like-for-like sales growth was up +3.4%. Morrisons says it has worked hard to soften the impact of a lower sterling on imported food prices.

“We are growing,” it says, “our Best premium own label range to almost a thousand items, and will have double last year's offer in time for Christmas. In addition, we are extending our store pick home delivery catchment area in North East England.”

However all four big supermarkets – Sainsbury’s, Tesco, Morrisons and Asda – continue to lose ground to discounters Aldi and Lidl overall: in the third quarter Kantar Worldpanel claims the German discounters added an extra £390m in sales – half of the market’s overall growth for this duration. Morrisons shares are -2.91% down year-to-date.  

Morrisons sales growth up but competition is relentless: Shutterstock

Tate & Lyle boosted by better first-half numbers

Tate & Lyle released half-year numbers earlier. Pre-tax profits climb +26% to £161m while net debt sinks from £452m to £371m. The dividend per share rises from 8.2p to 8.4p. New products, says the sugar giant, “delivered double digit sales growth as customers continue to seek innovative solutions to reduce sugar, calories and fat in food and drink.”

Tate & Lyle now anticipates full year underlying adjusted profit before tax to be modestly higher than originally thought driven by the strong first half performance.

Breaking news: Third quarter Shell net profits climb, up +47%. Production climbs +2% to 3.7m barrels a day. BT says pre-tax profits have dropped -1% to £666m but BT is still maintaining its full-year outlook. Print publisher Johnston Press claims total group revenues came in flat for the third quarter though there is a +16% climb in digital revenue growth.