The Bank of England today doubled down on its emergency bond buying scheme, saying it would purchase up to £10 billion a day and the Treasury brought forward the date of its next tax plan announcement -- to Halloween.

The BOE’s increase from £5 billion comes as the scheme, which was put in place after the government’s “mini budget” alarmed investors about the UK’s financial stability, enters its final week. City experts described the developments from Threadneedle Street and Whitehall as a “two pronged strategy” to reassure markets.

New York Markets were expected to fall further after Friday’s strong jobs report in the United States boosted expectations for further big interest rate hikes.

FTSE 100 Live Monday

• Bank of England ups bond buying to £10 billion a day

• Cap speculation hits shares in generators

• Joules mulls creditor arrangement option

FTSE finishes lower after markets spooked by Halloween tax plans

Monday 10 October 2022 17:40 , Simon Hunt

The FTSE 100 closed 32 points down today to 6,959 after the Treasury announced it would bring forward the publication of its medium-term tax and spending plans to October 31.

Packaging firm DS Smith wrapped up the day as the index’s biggest winner, with shares up 12%, while consumer healthcare business Haleon was the biggest loser, down about 3%. 30-year gilt yields rose after the Bank of England said it was doubling down on its bond-buying programme, taking it to £10 billion a day.

Danni Hewson, AJ Bell financial analyst, said: “Headline writers must be rubbing their hands together with glee at the incredibly bad timing of the Chancellor’s next economic update. His last ‘budget’ created an horrific market meltdown so the prospect of his mid-term fiscal plan being delivered on Halloween is just too ironic. But will there be tricks or treats in store for cash-strapped households and spooked investors?

“Beyond the gags, there’s good reason to bring forward the event which will come complete with an independent assessment of the state of the UK economy by the OBR. It will land days before the Bank of England is set to deliver its next interest rate decision and at the moment markets are split on which way things will go with slightly higher odds being given to a 1% hike over a 1.25% hike. Whether the ‘fiscal event’ does anything to alter that trajectory seems unlikely, but a glut of economic data beginning with tomorrow’s jobs figures will undoubtedly play into the decision-making process.”

Wall Street opens steadily as investors brace for earnings season amid rate outlook unease

Monday 10 October 2022 14:48 , Michael Hunter

New York’s S&P 500 was little changed in opening trade, with investors waiting for a sense of direction from the looming earnings season amid concern that the Federal Reserve has room to stick with its aggressive rate hiking policy after a run of robust economic data.

The broad Wall Street stock index was flat at 3640.70 in early trade at the start of a week when a run of quarterly earnings reports gets underway, not least in the banking sector. The tech-heavy Nasdaq Composite slipped overall, with microchip makers underpressure from new rules covering exports to China. It eased by 0.4% to 10609.49, a loss of 0.4%.

US bond markets were closed for Columbus Day, a government holiday on which stock exchanges stay open.

Government names James Bowler as new top Treasury official

Monday 10 October 2022 13:53 , Michael Hunter

James Bowler has been named as the new top official at the Treasury as the series of announcements out of Whitehall continues.

Bowler will become Permanent Secretary in Chancellor Kwasi Kwarteng’s department, moving over from the same role at the Department for International Trade.

It will not be the first time Bowler has worked in the Treasury -- he has spent much of his Civil Service career there, including in the post of Director General for Public Spending and Director General for Tax and Welfare.

That gives him direct experience of tax and spending policy as the government prepare to announce its medium term plans for it, after its previous so-called “mini-Budget” sparked a sell off across UK financial assets and a £65 billion intervention in the government debt market by the Bank of England, which is still ongoing and runs until Friday.

Bowler’s appointment follows the sacking of his predecessor, Tom Scholar, in one of his first actions taken by the new government of Prime Minister Liz Truss.

James Bowler said:

“I am delighted to be returning to HM Treasury. Having spent over 20 years at the Department, I know first-hand the excellence of its people. I plan to bring my wider experience back to the Department to help navigate the opportunities and challenges of the global economy that lie ahead. I look forward to working with the Chancellor as part of a strong team.”

Kwarteng brought forward the announcement today of his medium-term tax and spending plans to October 31, from November 2, when there will be also a set of forecasts from the independent Office for Budget Responsibility. The lack of OBR scrutiny was one of the main reasons the market lost faith with Kwarteng’s last set of fiscal plans.

New York stocks on course for further falls as rate outlook sets the pace

Monday 10 October 2022 13:36 , Michael Hunter

Wall Street’s S&P 500 was expected to fall further in opening trade, with investors fixated on the outlook for further aggressive rate hikes from the Federal Reserve after strong jobs data at the end of last week.

Futures trade pointed to an opening fall of 0.3% for the broad New York stock index, taking it to 3644.25 points. The prediction followed similar declines in Asia and Europe, on general unease about the implications for shares markets of tighter monetary policy around the world.

Pound under pressure as government brings forward tax announcement and OBR forecasts to Halloween

Monday 10 October 2022 13:15 , Michael Hunter

Sterling was trading around $1.10, down by about 0.2% on the day, after the Treasury announced it would bring forward the publication of its medium-term tax and spending plans to October 31.

The government will also publish economic forecasts from the Office of Budget Responsibility on Halloween. The lack of oversight of its last set of fiscal policies was one of the main reasons they were followed by a sharp sell-off in UK financial assets that prompted an intervention in the sovereign debt market by the Bank of England after a slump in prices sent yields heading up to nearer 5% than 4% on a range of bonds over different durations

Yields on 30-year UK government bonds headed back toward 5% on Monday, althoug they came off day-highs over 4.6% when the BoE said it was doubling down on its intervention, spending £10 billion to buy long-dated debt.

Halloween announcement set for next round of tax and spending plans and independent OBR forecasts

Monday 10 October 2022 12:28 , Michael Hunter

After giving the markets a fright with its so-called “mini-Budget”, the government has chosen October 31 as the publication date for its next set of tax and spending plans and economic forecasts from the Office of Budget Responsibility.

Chancellor Kwasi Kwarteng will outline his medium-term fiscal strategy on Halloween. There will also be an OBR forecast alongisde the plans. His previous set of measures lacked oversight from the independent tax and spending watchdog, one of the main reasons behind the dizzying sell-off in UK assets that followed the September 23 announcements.

The confirmation of the next set of updates from the Treasury brings them forward slightly from November 23, after pressure for detail from investors and and the markets alike.

News of the earlier date came on the same day as the Bank of England announced it increased its spending to support the UK government debt market, which came in response to the mini-Budget sell-off, to £10 billion.

At a glance: Today’s trading action in long-dated UK government debt as BoE doubles down

Monday 10 October 2022 11:11 , Michael Hunter

Here’s a look at today’s moves in the market at the centre of the Bank of England’s dramatic intervention to soothe rising yields on government debt.

The returns investors were demanding to lend to the UK for 30 years were heading back toward the 5% line, peaking at just over 4.6%, with the BoE doubling down on its buying, taking it to £10 billion, the yield eases.

The Bank of England’s intervention, originally seen at £5 billion a day, is due to end on Friday. It followed a collapse in the price of government debt after the government’s mini-budget, which unnerved markets in UK assets due to the impact of unfunded tax cuts on the country’s finances, and sent yields sharply higher.

That set off a wave of concern about the impact on pension funds, who need to sell gilts to meet a series of complex financial obligations, and prompted the BoE’s action. Officials pledged on Monday that “in the final week of operations, the Bank is announcing additional measures to support an orderly end of its purchase scheme.”

Read more here

Cap fears hit power stocks, FTSE 100 down 1%

Monday 10 October 2022 10:12 , Graeme Evans

Price cap fears have caused investors to dump power stocks, with Centrica down 4% and renewables giant SSE 2% lower.

The Financial Times reported a level of £50-£60 per megawatt hour as the starting point in government negotiations for a temporary revenues cap similar to one already introduced in the EU.

Discussions with the industry are ongoing but the report said the cap could be imposed through energy legislation set to be published as early as this week.

Analysts at Jefferies said a cap at the price mentioned would imply a realised forward curve for generators similar to levels seen in the first half of 2021, even though EU and UK power markets have changed significantly since then.

It warned the cap would be punitive for the sector and may distort investment incentives. The bank added: “A price cap at this level would be a much harsher outcome as it lowers revenues without providing any long-term certainty.

“Further, it may distort market signals ahead of what will be a challenging winter to navigate, given underlying supply shortages across the European region.”

Shares in power generators are down sharply over the past month, having surrendered most of the gains built on higher prices. SSE lost another 27p to 1472p today, although the renewables giant had been as low as 1442p earlier in the session.

Centrica shares were 4% or 2.6p cheaper at 68.4p and biomass generator Drax fell 28.5p to 531.5p. Greencoat UK Wind and NextEnergy Solar Fund also lost 6%.

The power sell-off came during another downbeat session for markets after Wall Street’s Friday slide on expectations for more big interest rate hikes.

The FTSE 100 index dropped by 1% or 68 points to 6923.09 and FTSE 250 by 182.24 points to 17,171.04, with airline stocks IAG, easyJet and Wizz Air among heavy fallers.

CMA clears path for Morrisons takeover

Monday 10 October 2022 10:11 , Simon Hunt

The Competition and Markets Authority has cleared a path for Morrisons to buy McColl’s after the supermarket said it would sell 28 McColl’s stores to address the regulator’s competition concerns.

The CMA said it was now consulting on proposals for the sale of the stores. Morrisons made a £190 million offer for the company in May this year.

Sorcha O’Carroll, CMA Senior Director of Mergers, said: “Our preliminary view is that the sale of these stores will preserve competition in these local areas and prevent consumers from losing out due to this deal, at a time when shoppers are already facing rising prices.

“If, after reviewing the responses to our consultation, we conclude that the competition issues have been addressed, the deal will be cleared.”

Womenswear retailer Quiz warns of uncertain times ahead despite revenue boost

Monday 10 October 2022 09:37 , Mark Banham

Women’s fashion retailer Quiz has warned of “uncertain” times ahead for retail as cost of living pressures hit consumer disposable income in the run up to the key festive period.

The group, that has more than 60 stores in the UK, delivered a 37.2% rise in revenues for the six months to September said that the Christmas period was “expected to be in line with market expectation” despite the potential future outlook.

Sales during the period jumped to £49.4 million on the back of a hike in both UK and international business.

The chain said that the boost was “marginally ahead” of board expectations and reflected the “appeal of the Quiz brand” and its strong reputation amongst its customers for “dressy and occasion wear”.

Quiz added that online sales had also leaped by 28.8% to £16.1 million during the period, and said it was “pleased” with the financial contribution generated from UK stores, which had continued “to benefit” from the lower cost base negotiated as part of the Group’s store restructuring during 2020.

Unite tests its plan to expand from student market with £71 million Stratford property deal

Monday 10 October 2022 09:15 , Michael Hunter

Unite Students, the college-years landlord, has extended its extensive portfolio of property in East London near the Olympic park and taken a strategic step to keep its customers after they graduate.

The FTSE 100 real estate investment trust has bought 180 Stratford for £71 million in a deal that takes it into the build-to-rent market for “young professionals”. Situated about 5 minutes away from Stratford station on foot, the development has around 178 homes of between one and three beds.

The move is part of the Bristol-founded company’s pilot strategy to retain customers as they move on from full-time education. Its new property has 178 homes and has been open since 2013. The purchase adds to the 1,700 student beds UInite already has in the area, with two further developments on the way.

Richard Smith, chief executive, said the property was in “the ideal location to trial the extension of our Home for Success offer into young professional living,” adding that it “benefits from Stratford’s growth as a major student, employment and leisure hub, as well as our significant local presence.”

Shares in Unite rose 24p to 818p, a rise of 3%.

Shares in AIM’s Ashtead powered by upbeat profit forecasts

Monday 10 October 2022 08:41 , Michael Hunter

Ashtead Technology, the AIM-listed company which rents out equipment used to install and maintain offshore wind farms, said it would beat its full-year profit forecasts today, helped by favourable exchange rate movements.

The Aberdeen-based company operates out of a range of locations around the world, from Houston, Texas to Abu Dhabi in the United Arab Emirates. Its equipment is also used to maintain oil and gas fields. It was set up in 1985 offering services to the energy industry in the North Sea.

The renewable energy sector now provides much of Ashtead’s growth, including demand for its undersea robotic survey equipment. It reported adjusted profit before tax of almost £8 million for its half-year to June 30 back in early September.

The weak pound benefits companies that earn revenue in foreign currency and book profits in sterling.  Shares in Ashtead rose by 26p to 272p, a gain of over 10%

High-end retailer Joules could seek creditor arrangement

Monday 10 October 2022 08:31 , Mark Banham

Troubled high-end retailer and reported favourite of William and Kate the Prince and Princess of Wales Joules has admitted that it could be forced to enter into a creditor agreement that could cause it to suspend operations.

The retailer, that has more than 130 stores across the UK and Ireland and 1,300 employees has now said that administration or a company voluntary arrangement (CVA) could be a possibility in order to pay debts to its creditors.

Until last month, when talks collapsed, the business was in advanced negotiations regarding a sale of 25% of the business to high street rival Next for £15 million to bail it out of liquidity problems.

Joules said that it “continues to make good progress in developing its turnaround plan”.

The group’s plan up until now has focused on driving higher profitability including through better pricing and promotional strategy and focusing on more profitable product categories with “shorter time to market”.

Joules also said it continued to make good progress on its “simplification agenda” and “cost management process”.

FTSE 100 lower, airline stocks under pressure

Monday 10 October 2022 08:27 , Graeme Evans

The FTSE 100 index is 31.32 points lower at 6959.43, with power firms Centrica and SSE among the stocks under pressure.

British Airways owner IAG also lost 2% in early dealings, while Lloyds Banking Group and NatWest fell 1%.

Packaging firm DS Smith was the star blue-chip performer after its better-than-expected trading update sent shares surging 9% or 22.5p to 264.3p.

FTSE 100-listed student accommodation property firm Unite also rose 12.5p to 808p as it revealed that 99% of beds had been sold for the 2022/23 academic year.

The FTSE 250 index fell 112.92 points to 17,240.36, led by a 5% fall for shares in Wizz Air. Low-cost rival easyJet also declined 3% or 8.3p to 286.1p.

Bank doubles down on bond deals

Monday 10 October 2022 07:51 , Simon Hunt

THE Bank of England doubled down on its emergency bond buying scheme today, saying it would purchase up to £10 billion a day.

That’s up from £5 billion previously and comes as the scheme enters its final week.

Some in the market fear the gilts market will collapse threatening pension funds once the Bank withdraws its support altogether.

The Bank felt obliged to support the market after the UK government’s so-called “mini budget” alarmed investors about the UK’s financial stability, and in turn the value of 20 and 30-year dated bonds.

The pension funds were exposed to this market via leverage in ways few understood, it emerged.

The Bank said today: “As previously announced, the Bank plans to end these operations and cease all bond purchases on Friday 14 October.

In the final week of operations, the Bank is announcing additional measures to support an orderly end of its purchase scheme.”

read more here

Bonhill Group mulls sale after revenues drop

Monday 10 October 2022 07:29 , Rhiannon Curry

Media company Bonhill Group is lining up a potential sale of the business after announcing that it now expects to make a £350,000 loss this year.

The company, which produces financial news magazines and events aimed at financial advisors and fund managers, said its board has decided to undertake a strategic review which may or may not result in the sale of the group as a whole, or a sale of some of the group’s parts.

In a trading update, Bonhill said that having expected revenue of around £15.5 million and EBITDA of £300,00 for the year ending 31 December 202, it now expects to make £15 million of revenue and an EBITDA loss of approximately £350,000.

It blamed “market turbulence”, which it said had led to a weakening in traditional media projects, as clients held off on “discretionary marketing spend”.

FTSE 100 set to open lower, focus on US inflation

Monday 10 October 2022 07:26 , Graeme Evans

Wall Street’s struggles on Friday have set a downbeat tone for this week after the Hang Seng lost over 2% in Hong Kong and traders at IG Index forecast a fall of 0.6% for the FTSE 100 index.

The S&P 500 tumbled 2.8% and the Nasdaq Composite lost 3.8% on Friday after the latest strong US jobs report dashed hopes that the Federal Reserve might be close to shifting its approach to tightening monetary policy.

Traders will now be looking to Thursday’s US inflation release for further clues on the pace of interest rate rises.

Economists at Deutsche Bank expect that lower gas prices will mean a decline in the headline CPI figure to 8.1%, but that the core rate should strengthen to 6.5%.

Sentiment this week will also be tested by minutes from the Federal Reserve’s most recent meeting and the first batch of corporate earnings, with numbers due from heavyweights including JP Morgan, Morgan Stanley, PepsiCo and Domino's Pizza.

Expectations for more big interest rate hikes in the US have boosted the dollar, with sterling now back below $1.11.

Hollywood Bowl beats investor expectations

Monday 10 October 2022 07:17 , Simon Hunt

Hollywood Bowl surged past its pre-pandemic performance with earnings ahead of market expectations it hailed its success in delivering affordable nights out.

The UK’s biggest ten-pin bowling operator posted revenues of £185 million for the year to 30 September, up 42% on pre-pandemic levels, with earnings up 40% to £38 million.

The firm will open two new sites early next year and has plans for a further 10 before the end of 2025.

Hollwood Bowl boss Stephen Burns said: “Although our customers are undoubtedly facing a number of challenges, I firmly believe that our great value for money offer will remain very attractive to families looking for high quality, affordable leisure experiences to enjoy together.

“We continue to invest in our customer experience and delivering the excellent value for money for which we are known.”