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BOE Will Likely Need to Choose Between Sticky Inflation or Mortgage Crisis

BOE Will Likely Need to Choose Between Sticky Inflation or Mortgage Crisis

0705 GMT - The Bank of England is expected to accelerate its interest-rate hiking cycle as financial markets have lost confidence in the U.K.'s macro policy regime, Pantheon Macroeconomics' chief U.K. economist Samuel Tombs says in a note. Raising interest rates to near 6%--the level markets are currently pricing in--would crush inflation but lead to a sharp increase in mortgage defaults, he says. Hiking more slowly would weigh on sterling and boost imported inflation, allowing it to stay above target for longer, Tombs says. This option is one that the BOE is likely to see as the lesser of two evils, though a recession is unavoidable as many households and businesses will cut spending immediately knowing that higher interest rates and further price increases are in the pipeline, Tombs says. (xavier.fontdegloria@wsj.com)

 
Companies News: 

SSE PLC Sees 1H Adjusted Earnings Per Share Rising; Backs Guidance

SSE PLC said Tuesday that it expects higher adjusted earnings per share for the first half of the fiscal year, and backed its full-year guidance.

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United Utilities Sees Lower 1H Revenue Amid Inflation, Higher Power Prices

United Utilities Group PLC said Tuesday that revenue for both the first half and the full fiscal year ending March 31 are expected to be lower on year amid the inflationary environment and higher power prices.

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UK Regulator to Examine Acquisition of National Grid Stake by Consortium

The U.K. competition regulator said Tuesday that it is considering whether the acquisition of a 60% shareholding in National Grid PLC by Macquarie Infrastructure and Real Assets (Europe) Ltd. and British Columbia Investment Management Corp. could lessen competition.

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Weir Group Backs 2022 Views, Targets Operating-Margin Growth

Weir Group PLC said Tuesday that is taking initiatives to increase operating margins beyond 2023, and backed its guidance for the full year.

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Saga Swung to 1H Pretax Loss; Lowers Full-Year Profit Guidance

Saga PLC said Tuesday that it swung to a first-half pretax loss despite higher revenue on a one-off impairment of assets, and that it cut full-year expectations.

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SSP to Report Around GBP2.17Bln in Sales for FY 2022 as Passenger Numbers Recover

SSP Group PLC said Tuesday that it expects to report sales of around 2.17 billion pounds ($2.32 billion) for fiscal 2022 as passenger numbers continue to recover, and that it remains confident in the continuing resilience of its business model.

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Biffa Agrees to GBP1.3 Bln Offer by ECP, Lower than Previously Indicated

Biffa PLC said Tuesday that it has agreed to a 1.3 billion-pound ($1.39 billion) takeover by Bears Bidco Ltd., a new company formed and controlled by ECP V, LLC, slightly lower than the price indicated on June 7.

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Card Factory Swung to 1H Pretax Profit as Customer Spending Normalized

Card Factory PLC reported on Tuesday a swing to pretax profit in the first half of fiscal 2023, driven by a return to normal customer spending after the lifting of coronavirus measures.

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Domino's Pizza Group Appoints Elias Diaz Sese as Interim CEO

Domino's Pizza Group PLC said Tuesday that it has appointed Elias Diaz Sese as interim chief executive officer, succeeding Dominic Paul, who is leaving to join FTSE 100-listed hotel-and-restaurant company Whitbread PLC.

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Close Brothers FY 2022 Net Profit Fell on Higher Costs; Raises Dividend

Close Brothers Group PLC said Tuesday that profit for fiscal 2022 fell on higher expenses, but increased its dividend payout.

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AG Barr Warns of Economic Challenges Ahead Despite Good 1H Performance

A.G. Barr PLC said Tuesday that it expects the current economic environment to hurt consumers' purchasing behavior as it reported a rise in pretax profit for the first half of fiscal 2023 on a rise in revenue across all of its core brands.

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First Property Funds Under Management Fell in Early Fiscal 2023

First Property Group PLC said Tuesday that its total funds under management have decreased in fiscal 2023 to date following the sale of several properties.

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Mortgage Advice Bureau 1H Pretax Profit Fell Amid Difficult Macro Environment

Mortgage Advice Bureau (Holdings) PLC said Tuesday that pretax profit for the first half fell amid an increasingly difficult macro environment.

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S&U 1H Pretax Profit Rose; Raises Dividend

S&U PLC said Tuesday that pretax profit for the first half of fiscal 2023 rose on increased revenue and it declared a dividend payout.

 
Market Talk: 

SSE PLC's 1H Update Lacked Energy but Long-term Outlook Better

0701 GMT - SSE PLC's update ahead of its first-half results looks slightly negative in the short-term, given the weak renewables output and slight delays at the Keadby 2 project, RBC Capital Markets says. However, the energy company's full-year guidance of at least 120 pence in adjusted earnings per share has been maintained and this should be the focus for longer-term investors, RBC analysts say in a research note. "Clearly, despite hedging, there remains significant uncertainty in the outlook given volatile commodities, weather over winter and potential political interventions into wholesale markets," the Canadian bank says, though adding it sees increasing value in the stock. RBC retains its sector perform rating and 1,825 pence price target on the stock. Shares closed Monday at 1,671.0 pence. (joseph.hoppe@wsj.com)

 

Contact: London NewsPlus; paul.larkins@wsj.com

(END) Dow Jones Newswires

September 27, 2022 03:37 ET (07:37 GMT)

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