Boosted
by British American Tabacco, UK shares steadied on Friday after the company bid
for its US rival, Reynolds American. However, profit warnings from mid-sized
companies added a note of caution before earnings season picks up next week. The
blue chip FTSE 100 index was flat at 7,028.53 points by 0906 GMT, on course to
post a 0.2% gain in a week that saw some big fallers following disappointing
updates from Pearson and Burberry and a profit warning from Travis Perkins.
The
Office of National Statistics reported that borrowing rose by more than
expected to £10.6bn in September. For the financial year to date between April
and September, borrowing fell by £2.3bn to £45.5bn. The monthly figure had been
expected to shrink to £8.5bn and economists said it would set the tone for the
Autumn Statement on 23 November.
The
Guardian linked the rise in borrowing and in the public deficit to a collapse
in corporation tax receipts to the lowest level since 2009. They said a
slowdown in the growth of VAT receipts was also blamed for pushing the deficit
£1.3bn, or 14.5%, higher than September last year and higher than the £10.5bn
recorded in August.
Major
Lincolnshire company Smiffys has announced that it is moving its headquarters
to the Netherlands as a direct result of anxiety over the costs of a ‘hard
Brexit’, which would see the UK drifting away from cooperation with the rest of
the EU. Company director Elliott Peckett said 40% of the company’s sales go to
the EU, its largest trading partner, and that they need to act to protect what are
vital sales to the company.
A recent
report by the Sheffield Poltical Economy Research Institute, finds that Britain’s
manufacturing recovery from the financial crash is built on an expansion of
low-skilled jobs, somewhat denting the industry’s high-tech image. The report
shows that since 2011, far from being a new source of jobs in research and
development, the sector has suffered what is described as “fresh era of
decline” as it relies on an expansion of assembly line roles. The report also
found that output has “barely risen” in the past five years despite a 5%
increase in the number of jobs created.
EU
leaders arrived in Brussels for their latest summit on Thursday, with President
Donald Tusk saying that there would be no negotiations with the UK until the
British Government triggers Article 50. Meanwhile, sterling slipped back from
two consecutive days of gains as worries surrounding the kind of deal that the
UK may reach with the EU intensify. The pound was down 0.37% against the dollar
at $1.2241, and 0.13% against the euro at €1.118 at afternoon trading.
In Other News
· - Michael
Gove says criticising Mark Carney is seen as 'thought crime' - https://www.theguardian.com/business/2016/oct/21/mark-carney-michael-gove-criticism-thought-crime-bank-england
· - Nissan
to make Sunderland plant investment decision 'next month' - http://www.independent.co.uk/news/business/news/nissan-to-make-decision-investment-sunderland-plant-brexit-latest-a7373396.html
· - Microsoft
shares at new high as cloud focus pays off - http://www.bbc.co.uk/news/business-37724557
· - House
price growth in London hits two-year low after Brexit, but other cities bounce
back - http://www.independent.co.uk/news/business/news/house-price-growth-in-london-hits-two-year-low-after-brexit-a7372361.html
· - Mario
Draghi dismisses threats to central banks' independence - http://www.independent.co.uk/news/business/news/mario-draghi-dismisses-threats-to-central-banks-independence-a7371876.html
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Our next event will be at Indigo Blue on 9th November. We hope to see you there!
Our next event will be at Indigo Blue on 9th November. We hope to see you there!
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