China’s credit growth is perilously overheated the International Monetary Fund (IMF) has warned. The Washington-based international trade organisation says consumer debt levels look unsustainable, particularly the housing market. The IMF has called for less short-term economic growth – this year 7.5% – targets.
Overnight the euro was more or less flat against the US dollar, rising slightly to $1.1740 while the pound dipped slightly to $1.2863. The Australian dollar though was up 0.22% to 0.7837 supported by higher oil prices and wage price growth.
Later this morning the Office of National Statistics reports on UK employment growth. It’s likely unemployment will remain at its current 40-year low of 4.5% but UK monthly wage inflation remains stubbornly low, much to the Bank of England’s frustration: how can interest rates rise when wages fail to lift meaningfully?
This evening (6pm) the US Federal Open Market Committee Minutes arrive. Expect to read plenty about slowing inflation. A US rate hike is not expected till December – current consensus.
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Balfour Beatty profits climb on turnaround efforts
Let’s start with Balfour Beatty half-year numbers. Despite a rash of profit warnings – eight – underlying profit from operations surges from £11m this time last year to £39m. Underlying revenues are up 8% to £4.2bn. Balfour’s interim dividend increases 33% to 1.2p per share.
“Profitability is rising,” says chief exec Leo Quinn, “backed by positive cash flow from operations, and the Group had average net cash during the period; all achieved without any material investment disposals.” Quinn claims Group remains on track for industry-standard margins by the second half of 2018.
Balfour has had a struggle to keep its independence and profit levels. The last two years has been simplifying much of its existing structure. This morning's profit news is the first for four years.
Admiral turnover rises but profits flat
Next, Admiral Group. Pre-tax profits comes for the first half of the year arrive at £195m, up 1% while earnings per share rises 3% to 57.3p. Group turnover climbs 15% to £1.45bn.
The group's UK insurance business – private car, household and van – is up 11% to £1.14bn (H1 2016 £1.03 bn); customer numbers increased 11% to 4.3m.
“We are happy to report a marginal increase in profitability and to deliver a more material increase in the underlying dividend,” said Admiral this morning.
Breaking news: uSwitch claims energy billing errors cost UK consumers more than £102m last year. uSwitch has called on Ofgem for a crackdown.