FTSE 100 Live: Index powers to new highs as inflation falls, defence in demand
View original at finance.yahoo.comFTSE 100 Live: Index powers to new highs as inflation falls, defence in demand FTSE 100 Live: Index powers to new highs as inflation falls, defence in demand Proactive uses images sourced from Shutterstock FTSE 100 climbs 92 points to 10,648 BAE Systems and Glencore lead risers after results Inflation eases to further…
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Services inflation is proving to be much stickier than headline inflation. A third rate cut later in the year is a downside risk rather than the base case, especially if the labour market remains weak.
80% confidenceBAE's order book now stands at a record £83.6bn, stretching years into the horizon, and it's why BAE shares have definitively outpaced the FTSE 100. With free cash flow set to top £6bn through 2026, that trajectory looks set to continue.
80% confidenceInflation fell markedly in January to its lowest annual rate since March last year, driven partly by a decrease in petrol prices. Airfares were another downward driver this month with prices dropping back following the increase in December. Lower food prices also helped push the rate down, particularly for bread & cereals and meat.
80% confidenceBAE is basking in the increasing heat of geopolitical tensions with a set of results which have comfortably blown past estimates.
80% confidenceThe cost of raw materials for businesses fell over the past year, driven by lower crude oil prices, while the increase in the cost of goods leaving factories slowed.
80% confidenceFor the Bank of England, the January inflation data nods strongly towards the MPC delivering another 25bp cut at the next meeting in March, especially after yesterday's employment data pointed to a further margin of labour market slack.
80% confidenceThe prodigious cash flow enabled net debt to be reduced by 22% to £3.84 billion, while the 10% dividend rise took the projected yield to 1.8% which may be pedestrian but maintained a payment which has been increased for more than 20 consecutive years.
80% confidenceIn recent weeks, swap rates have been reacting to volatile market conditions, effectively halting lenders' rate-cutting momentum and prompting many to reassess their margins and adjusting their pricing by increasing rates, which led to a small uptick in average rates.
80% confidenceAfter years of falling living standards millions of families are still struggling to make ends meet. With households squeezed there's less money being spent on the high street - holding back businesses and choking off growth.
80% confidenceThe Bank of England must now act with a series of quick fire interest rate cuts to put money back into people's pockets and give businesses the confidence to invest.
80% confidenceFirms want easing inflation to be matched by action to cut the cost of doing business such as business rates reform and support for exports. Only then will businesses be able to fully turbocharge economic growth.
80% confidenceThe real risk now is that of an inflation undershoot as the year progresses. Further cuts will follow beyond the March meeting to reduce the base rate to around 3% by the end of summer.
80% confidenceThis reflects the unfortunate sign of the times that defence stocks are squarely back in fashion, as governments around the world look to protect their interests and lands from growing tensions. For shareholders, however, this has resulted in significant rewards.
80% confidenceSwap rates hit 30-day lows following yesterday's unemployment stats, which means we may see lenders beginning to make rate cuts in the next few weeks.
80% confidence56% of firms cited inflation as a worry, with price pressures squeezing confidence, stalling investment and holding back recruitment.
80% confidenceBAE Systems doesn't manufacture optimism, it manufactures deterrence. And right now, deterrence is in high demand. A 12% rise in operating profit tells you governments aren't hesitating in reaching for their chequebooks.
80% confidenceThe drop in inflation all but nails on a rate cut next month, with today's drop expected to come before inflation's steep slide to 2% in April, setting the stage for another interest rate cut in the summer.
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