UK firms plan investment surge; Virgin Galactic falls on $500m share sale plan – as it happened

Graeme Wearden

from on 2021-07-12 16:22 (#5M3AJ)

Rolling coverage of the latest economic and financial news

After Branson flight, Virgin to raise $500m through share sale
OECD: growth continuing in advanced economies
Deloitte: CFOs' hiring and investment plans at seven-year high
Acquisitions now highest priority for 11 years
Covid-19, inflation and climate change top risks
UK wealth gap widens in pandemic as richest get 50,000 windfall

5.22pm BST

And finally, the UK's FTSE 100 index has ended the day behind the rest of Europe.

The Footsie closed 3.5 points higher at 7125, very slightly higher, held back by travel and hospitality stocks.

#cierre #Mercados #Indices #bolsas #bolsa #Ibex35 8.816,70 +0,46%#DAX30 15.790,51 +0,65%#estx50 4.093,38 +0,62%#CAC40 6.559,25 +0,46%#ftse100 7.125,10 +0,05%#ftsemib 25.276,50 +0,90%https://t.co/cKuieZREz4

UK markets were as miserable as the weather for most of the day. With no victory parade to look forward to and the prime minister's tone at least expected to dilute Freedom Day" aspirations, London markets simply slumped. Nothing quite as seismic as Thursday's falls, the mood seemed more resigned, an acknowledgement that companies will have to live with COVID and the difficulties that brings. Staff shortages, reconfigured offices and zoom meetings will remain fixtures of UK working life for the foreseeable future, even if politicians are trying to persuade more people to get back to offices. The travel, retail and hospitality sectors are all represented on today's list of FTSE 100 fallers.

It's not just in the UK investors are jittery. The oil price has been squeezed as questions are once again being raised about exactly how much demand will bounce back before the end of the year and which economies are expected to take another battering. Wall Street started with a familiar shuffle. Tech stocks up, value plays down but perhaps the scent of another mega earnings bonanza has lifted the mood, with banks among those leading the charge.

4.54pm BST

Ryanair is planning for life after the pandemic, by aiming to recruit another 2,000 pilots over the next three years.

The recruitment drive will help rebuild the airline's passenger numbers after the Covid-19 pandemic as it takes delivery of more than 200 Boeing 737 Max aircraft.

4.52pm BST

TikTok has opened its first pop-up venue in the UK, allowing fans to interact with influencers who have found success via the social media app and try to create their own mini-films.

The app, which allows users to create and share short videos soundtracked with music, has partnered with the Westfield shopping centre in west London to create the first TikTok For You House. The design of the pop-up venue, which will be open until 8 August, is inspired by TikTok's homepage, which highlights trending clips.

4.06pm BST

Large indoor venues in England will be urged to check the Covid status of their customers on entry this summer, while prevalence of the virus is high, the health secretary, Sajid Javid, has announced.

Speaking to MPs, the health secretary confirmed the government's plan on 19 July to lift almost all the remaining legal restrictions put in place during the pandemic, including those covering mask-wearing and the size of social gatherings.

3.48pm BST

Back in Europe, the Stoxx 600 index has hit a new record high, now up 0.7% today.

The rally comes after European Central Bank chief Christine Lagarde indicated yesterday that the ECB will change its guidance on the next policy steps at its next meeting to reflect its new strategy and show it is serious about reviving inflation.

Given the persistence that we need to demonstrate to deliver on our commitment, forward guidance will certainly be revisited....

My sense is that we will continue to be determined by maintaining favourable financing conditions in our economy."

ECB's Lagarde foresees July policy shift, 2022 transition'.

Read more: https://t.co/g9H5jnmNc4 pic.twitter.com/FYbCY7FC20

Lagarde policy shift at ECB, China growth fears, and progress on tax deal. Here's what is moving markets https://t.co/Ihc5H4JwUd pic.twitter.com/LXtEAPgRf9

It's going to be an important meeting.

Given the persistence that we need to demonstrate to deliver on our commitment, forward guidance will certainly be revisited."

The ECB President issued a coded rebuke to German hawks pushing for an early end to the central bank's 1.85tn pandemic stimulus programme, and hinted at an extension https://t.co/n0OZdaEZ34

3.09pm BST

A day after Sir Richard Branson flew to the edge of space and back, shares in Virgin Galactic have also fallen, with rather more of a bump.

Virgin Galactic emitira hasta $500 millones en acciones$SPCE pic.twitter.com/VmxzouxzcQ

Virgin Galactic files to sell up to $500M in stock. $SPCE now down 10%, after opening higher on Branson space flight hype

$SPCE is down -14.78% to $41,93 per share. #VirginGalactic

2.36pm BST

...while the Nasdaq Composite index has hit a new record high - it's up 37 points or 0.25% at 14,739.

Technical Alert: Nasdaq sets new all-time high at 9:33am $COMPQ https://t.co/aTVXbHNdza #sccalerts #stockcharts

2.35pm BST

In New York, the Dow Jones industrial average has opened a little lower, down 76 points or 0.2% at 34,793 points....

U.S. markets open slightly lower https://t.co/OfvlD5KGYW pic.twitter.com/gPsMKAnvH9

2.23pm BST

Back in the City, the FTSE 100 has shaken off some of its earlier losses - now down 0.3% or 19 points at 7102.

Travel stocks, miners and hospitality stocks are still the main fallers, though, reflecting some growth worries, with Rolls-Royce and IAG down around 3%, Antofagasta off 2.5%, and hotel group Whitbread 2.3% lower.

1.55pm BST

North Wales and Cumbria are the most popular destinations for Britons looking to holiday in the UK this summer, overtaking the coastal and rural charms of Devon and Cornwall for the first time.

Almost two-thirds (62%) of British people intend to spend their main summer break in the UK this year, up from 50% in 2019, according to an annual poll by Sykes Holiday Cottages.

1.16pm BST

Over in Brussels, US Treasury Secretary Janet Yellen has EU countries to sign on to a global deal to revamp corporate taxation, keep fiscal support through 2022 and consider more spending in the face of COVID-19 uncertainty, Reuters reports.

We need to put an end to corporations shifting capital income to low tax jurisdictions, and to accounting gimmicks that allow them to avoid paying their fair share."

12.44pm BST

The growth-cycle outlook is steadily increasing for the world's leading economies as vaccination progress allows lockdown measures to be gradually lifted, according to the OECD.

The Paris-based thinktank says its Composite leading indicators (CLIs), which track turning points in economic activity, continue to expand steadily in the OECD area as a whole, a sign that the recovery is continuing.

Among major OECD economies, the CLIs remain above trend and continue to expand at a steady pace in the United States, Japan and Canada as well as in the euro area as a whole, including Germany and Italy. The CLI for the United Kingdom is still expanding and has now reached above trend levels. In France, the CLI continues to grow steadily but remains below trend.

Among major emerging-market economies, the CLIs for Russia and China (industrial sector) point to steady increase. In India, the CLI now indicates stable growth whereas it continues to signal slowing growth in Brazil.

The growth-cycle outlook is steadily increasing for the world's leading economies, the OECD says https://t.co/3dJ6uy0AuF pic.twitter.com/pLH6zlJPEc

12.24pm BST

The online fashion retailer Asos has struck a deal with the US department store chain Nordstrom that will put Topshop clothing back in brick and mortar stores.

Partnering with Nordstrom will support our US strategy, allowing us to offer that to even more 20-somethings in North America."

12.14pm BST

Sweden's central bankers are aware that the Covid-19 pandemic is not over, despite the recovery in the global economy.

The minutes of the Riksbank executive board's latest meeting, released this morning, flag up the risks posed by new variants (such as Delta):

The pandemic's grip on the global economy has eased during the spring and early summer, and the recovery is well under way. More and more people have been vaccinated against COVID-19, the spread of infection has decreased and restrictions have begun to be phased out. But the members stressed that the pandemic is not over yet.

The recovery is proceeding at a different pace in different parts of the world and there are new variants of the virus that are causing uncertainty with the risk of setbacks.

The members noted that the economic outlook and inflation prospects look brighter. At the same time, they pointed out that inflation is being affected by large variations in energy prices as well as measurement problems and other effects that are deemed to be temporary. It is expected to take some time before inflation is close to 2 per cent more persistently.

Several members noted that inflation is expected to be somewhat above the inflation target at the end of the forecast period, but considered that this is not an argument for making monetary policy less expansionary at present.

11.45am BST

Anxiety over rising Covid-19 cases is weighing on the markets today, says analyst Raffi Boyadjian of XM:

It's pushed the US dollar up, while oil and equities are struggling.

Risk assets were struggling on Monday as signs that virus infections have started to creep higher globally put a dent in the improvement in sentiment that took hold from the middle of last week.

The US dollar ended its two-day slide to edge back up even as Treasury yields reversed lower again, underlining the recent breakdown of that relationship. The greenback typically tracks the moves in the benchmark 10-year Treasury yield but the positive correlation has switched into a negative one since late June when growth and virus jitters first resurfaced.

11.39am BST

The UK may be getting its 6th Centre Parc.

Exciting news! We've identified a site for a Center Parcs village in West Sussex. Read more here >>> https://t.co/6X77eb8cp2 pic.twitter.com/LwbfiHbX0x

It is really exciting to have identified a potential site for another Center Parcs village in the UK. The proposal we will be submitting will create a significant number of jobs and bring major benefits to the local and national economy.

Today's announcement marks the first step of a long journey and there is still a huge amount of work to be done before we can submit a planning application. As a business, we take our responsibility to the local community extremely seriously and look forward to sharing our plans as they progress."

Center Parcs is coming to Gareth Southgate's childhood home - in Crawley.
A sixth UK holiday village will be built on the edge of the West Sussex new town.
The England manager grew up in the Pound Hill area of Crawley, a mile from the new Center Parcs sitehttps://t.co/jZPZfuiJg7

10.28am BST

The London stock market is still lagging the rest of Europe this morning, dragged down by miners, travel companies, banks and energy stocks.

The blue-chip FTSE 100 is down 0.6%, while the smaller, more UK-focused FTSE 250 has slipped 0.3% (with cinema chain Cineworld the top faller, down 4.5%)

Investors should stay positioned for the global economic reopening. We prefer sectors that will benefit from reopening and recovery, such as energy and financials.

Volatility is likely to persist as negative headlines continue. So, we believe investors also need to consider how to stay protected against downside risks."

9.57am BST

Lord Rothermere is considering taking the Daily Mail private in a deal that could value the newspaper group at 810m.

The Rothermere family has put forward a potential offer that would involve buying about 70% of the Daily Mail & General Trust (DMGT) group that it does not already own. The move would give Rothermere, who is also chairman of the group, full control of DMGT and take the company off the stock exchange.

9.52am BST

Heathrow Airport is urging the government to relax travel restrictions on double-vaccinated European Union and US nationals at the end of this month.

Passenger traffic from Heathrow to the US is down by around 80%, whereas in the EU, which has reopened unilaterally with the US has seen traffic recover to only around 40% down. Britain's long held competitive advantage on transatlantic trade is at risk if borders remain closed.

While it's fantastic news that some double-vaccinated passengers will no longer need to quarantine from amber countries, Ministers need to extend this policy to US and EU nationals if they want to kickstart the economic recovery.

These changes will be critical for exporters who are losing out to EU rivals and families who have been separated from loved ones. We have all the tools to safely restart international travel, and now is the time for Global Britain to take off!"

9.04am BST

Britain's wealth gap has ballooned during the pandemic with the richest 10% gaining 50,000 on average, dwarfing increases for the poorest third of the population, according to a thinktank report.

The Resolution Foundation said wealth had increased during lockdown as a result of a lack of spending opportunities and rising house prices, but the benefits had been skewed to the richest by a ratio of more than 500 to 1.

9.03am BST

Car insurance group Admiral is sailing high, after lifting profit forecasts after a drop in car accident claims in the pandemic.

Admiral, who are up 3% this morning, told shareholders it expects a higher than expected group profit before tax for the first half of 2021.

The stronger result is due to unusually positive development in the cost of UK motor bodily injury claims from a number of prior underwriting years which has led to higher reserve releases and profit commission revenue."

$ADM Admiral splashes the dividend cash as accident claims stay low https://t.co/e0NJ2lxCKw #ADM #Katie_Proactive

UK stocks today #4 -

Admiral Group - 'anticipates a higher than expected Group profit before tax for the first half of 2021 in the range of 450-500m'.

They are liking progress pic.twitter.com/AKykmMR0jB

8.24am BST

The London stock market has dipped at the start of the new week.

The FTSE 100 blue-chip index has dropped by 32 points, or 0.45%, to around 7089 points.

7.58am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

With business confidence rising, UK companies are gearing up for a boom in investment and job creation, and eyeing up potential deals too.

We've seen a huge shift from the uncertainty caused by the pandemic to an appetite for acquisitions, investment and hiring. With the majority of finance leaders expecting a return to at least pre-pandemic levels of demand, the focus is now on innovating and creating new products and services.

The businesses that have successfully navigated this pandemic have been able to adapt quickly. Investing in digital technologies will be key to business agility and creating sustainable growth."

UK corporates rush to invest as economy reopens - Deloitte https://t.co/gfwqb9OSYV pic.twitter.com/nsSq9LErIK

With the economy reopening, CFOs' perceptions of external uncertainty have dropped below the average of the last five years and businesses have tacked away from the defensive strategies that helped them through the downturn.

The pandemic, like all major shocks, will reshape the economy and we are likely to see years of normal growth compressed into just a few months. Indeed, eight in ten CFOs believe that productivity will run higher in the wake of the pandemic. That offers the hope of a more comprehensive recovery than after the global financial crisis."

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