November UK inflation came in at +3.1% at 9.30am, modestly above a 3% consensus estimate, thanks to higher air fares and the cost of computer games. However the ONS said there was evidence of falling prices in travel goods and financial services.
While the headline 3.1% inflation figure looks modest historically, as long as it is outpacing wage growth it is bad news at the wrong time of year – Christmas. Labour market figures due tomorrow are expected to show a jump in pay growth to +2.5% predicts Hargreaves Lansdown senior economist Ben Brettell.
“Inflation should fall back next year as the currency effect eventually works its way through the figures, though today’s numbers showed factories are still under pressure from higher global oil prices. But with wage growth picking up we should see an end to falling real pay in due course.”
At a bit after 4pm sterling was trading -0.16% lower against the dollar at 1.3325 while the pound was +0.27% higher against the euro at 1.1357. On the company front Facebook says it’s looking at booking fewer revenues through Ireland which in the past has helped it reduce its tax bill, a practice many companies follow.
“We believe that moving to a local selling structure will provide more transparency to governments and policymakers around the world who have called for greater visibility,” Facebook says.
At close of business the FTSE 100 was up 46 points to 7,500 with Experian and Admiral Group up more than +2.5%. However bad news for supermarkets Sainsbury's and Morrisons, both down more than -4% on market share anxiety, see more below.
- UK FTSE 100 7,500.41 +0.63%
- DAX 13,150.06 +0.20%
- CAC 40 5,415.18 +0.53%
- Dow 24,489.70 +0.42%
- S&P 500 2,663.53 +0.13%
- Nasdaq 6,870.06 -0.07%
- Nikkei 225 22,866.17 -0.32%
- Gold 1,241.30 -0.45%
- Oil WTI 57.79 -0.36%
Morrisons and Sainsbury's shares slip on market share stress
Supermarket shares wobbled earlier as the latest Kantar Worldpanel data figures emerged. Kantar claims the big four grocers – Tesco, Morrisons, Sainsbury’s and Asda – saw collective growth of +1.9% in the past 12 weeks. Tesco saw sales climb +2.5% and was the fastest growing of the four.
But while Sainsbury’s grew sales +2% year on year, its market share fell to 16.3%. “Meanwhile Morrisons’ market share fell to 10.6%, despite a sales boost of +1.4% year on year,” Kantar said. Sales grew at Asda – up +1.2% – with market share down by 0.3 percentage points.
Sainsbury’s and Morrisons shares were both down more than -4% while Tesco shares slipped -0.34% at the market's close tonight. Kantar says Aldi reclaimed its crown as Britain’s fastest growing grocer in the latest quarter, with sales up +15.1% year-on-year. "This performance places the retailer marginally ahead of Lidl, which grew sales by +14.5% during the past 12 weeks."
easyJet gets EU Berlin approval
Earlier in the day EU approval came through for easyJet to snap up Air Berlin’s Tegel Airport operations. "EasyJet's plans to buy certain Air Berlin assets will not reduce competition and we have approved it today," EU Competition Commissioner Margrethe Vestager said.
So easyJet can expand its Berlin presence making it Berlin’s biggest carrier. The EU nod appears unconditional. However it’s a rather different picture for Lufthansa who will have to give up routes and slots if it wants to buy Air Berlin’s low-cost Austrian Niki arm.
easyJet recently announced a range of new domestic routes across Germany – a direct challenge to the dominance (up to now) of Lufthansa.