Sterling underwhelmed by PM's Brussels dash

Sterling so far remains unimpressed by Theresa May’s dash to Brussels yesterday. A statement released post-dinner last night with Michel Barnier and Jean-Claude Juncker claimed future talks should be “accelerated” – but there was scant detail on key issues; a general lack of substance.

The pound was selling -0.26% down at $1.3253 at 7am meanwhile the euro was at $1.1771, down -0.33%.  Last night US shares were at record levels with the Dow Jones just 50 points below 23,000. JP Morgan shares were up +2.1% while Netflix shares soared +1.6% following solid results. 

UK inflation could hit +3.1% – a five year high – this morning. If so it means governor Mark Carney would need to pen a note to chancellor Philip Hammond with an explanation. Either way the new inflation numbers means (almost) a likely Bank of England rate rise.

Even if inflation doesn’t hit +3.1% inflation it is still likely to be higher than September’s +2.9% (used to calculate pension increases next year). Meanwhile wage inflation for many British workers is non-existent and many wages are falling in real terms, part-due to pressure on the pound and cost of living expenses.

• UK FTSE 100 7,526.97 -0.11%
• Dow 22,956.96 +0.37%
• S&P 500 2,557.64 +0.18%
• Nasdaq 6,624.00 +0.28%
• Nikkei 225 21,323.89 +0.33%
• DAX 13,003.70 +0.09%
• CAC 40 5,362.88 +0.21%
• Gold 1,294.50 -0.65%
• Oil WTI 51.42 +1.62%

Merlin Entertainments recruits Peppa Pig to lift profits

We start with a trading update from Merlin Entertainments, which manages Legoland. Group revenue growth is up +12.4% though like-for-like revenue performance is flat on 2016 due to “difficult summer trading in Midway London and European theme parks as a result of the series of terror attacks and unfavourable weather”. 

Merlin shares are trading at 449p currently and have risen just +0.2% in the last year against a substantial rally in the FTSE 100.

However investors may be cheered by two new partnerships – Bear Grylls and Peppa Pig. “These agreements will support Merlin's roll out programme, further diversifying our business by brand, customer type and geography, and extend our reach into the adventure-seeking and pre-school markets.”

Multi-territory agreement with Peppa Pig may buoy Merlin: Shutterstock

Bellway profits up +16.2%

Bellway earlier revealed strong preliminary full-year numbers up to 31 July.  Revenues climbed +14.2% to £3,240.7m while gross profits came in at £661.6m up +15.1%. Operating profits climbed +16.2% to £571.6m. Earnings per share rise +12.7% to 370.6p.

The order book has grown +17.4% to £1,361.5m (2 October 2016 - £1,159.3m) comprising 5,034 homes (2 October 2016 - 4,701 homes) says Bellway.

“The outlook remains positive and the Board expects the Group to grow volume by at least 5% and the overall average selling price to increase to around £280,000 in the current financial year.” Bellway shares at 3,502p are more than +52% up on the year so far. 

Breaking news: Online retailer ASOS sees revenues lift +34% higher while pre-tax profits soar +145%. Boeing claims the new Airbus-Bombardier deal will avoid import duties. "This looks like a questionable deal between two heavily state-subsidised competitors to skirt the recent findings of the U.S. government," a Boeing spokesman told the BBC.