European stocks were in the green on Friday morning, as regulator Ofgem reported it will increase the energy price cap in Great Britain, pushing up average household bills by 9.5% from October.
‘Just when temperatures begin to plummet and nights draw in, households will be faced with the exact scenario they’d hoped was behind them,’ warned AJ Bell’s Danni Hewson.
Meanwhile, eyes remained on the Jackson Hole symposium, where the market will hear from central bankers including US Federal Reserve Chair Jerome Powell.
The FTSE 100 index opened up 17.01 points, 0.2%, at 8,305.01. The FTSE 250 was up 7.85 points at 21,112.55, and the AIM All-Share was up 0.45 of a point, 0.1%, at 775.18.
The Cboe UK 100 was up 0.3% at 830.14, the Cboe UK 250 was down 0.1% at 18,531.76, and the Cboe Small Companies was up 0.1% at 17,004.60.
In European equities on Friday, the CAC 40 in Paris was up 0.4%, while the DAX 40 in Frankfurt was up 0.3%.
In the US on Thursday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.4%, the S&P 500 down 0.9% and the Nasdaq Composite down 1.7%.
‘US stock markets sold off yesterday, as investors trimmed their long positions walking into Federal Reserve (Fed) Chair Jerome Powell’s Jackson Hole speech due later today – where he is expected to douse the jumbo rate cut expectations because there is no reason for the Fed to start cutting the interest rates by big chunks in the absence of a severe economic slowdown, market stress, or a crisis,’ said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Investors will hoping Powell signals an interest rate cut will occur at the Fed’s next meeting in September. Bank of England Governor Andrew Bailey is also due to speak at the Jackson Hole annual summit.
Minutes from the last Fed meeting in July, released on Wednesday, showed the ‘vast majority’ of participants ‘observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting.’
In early economic news, the average household energy bill is to increase by 9.5% from October after Ofgem said it was increasing its price cap as households approach the winter months.
The regulator announced it is hiking its price cap from the current £1,568 a year for a typical household in England, Scotland and Wales to £1,717, adding around £12 a month to an average bill.
However, it is around £117 cheaper than the cap in October last year, which was set at £1,834.
Ofgem said rising prices in the international energy market, due to heightened political tensions and extreme weather events, was the main driver behind the decision.
Tim Bannister, Rightmove’s property expert, said: ‘The rising price of energy in recent years means that renters and homeowners are likely having to closely consider their total monthly outgoings when choosing their next home. We know that lower bills is one of the biggest motivators for people to go greener, so we expect over time people will increasingly seek out more energy efficient properties in order to keep bills down over the long-term.’
UK consumer confidence remained in steady this month, with expectations for personal finances improved as interest rates start to come down but with concern about the wider economy growing, survey results showed on Friday.
The GfK consumer confidence index registered a score of negative 13 points in August, the same as July. The index was compiled by research house GfK from a survey among 2,003 adults in the UK, with interviewing conducted between August 1 and 15.
Within the flat score, readings on personal financial situation increased both for the past 12 months and the coming 12 months. What’s more, the major purchase index also rose. However, the view on the general economic situation declined, both looking back and ahead.
The pound was quoted at $1.3119 early on Friday in London, higher compared to $1.3091 at the equities close on Thursday. The euro stood at $1.1129, up against $1.1110. Against the yen, the dollar was trading at JP¥145.53, lower compared to JP¥146.08.
In the FTSE 100, Melrose Industries took a hit, sinking 4.5% in early trade.
Miners registered some growth though. Glencore and Fresnillo were both 1.1% higher, whilst Antofagasta edged up 1.0%.
In the FTSE 250, Direct Line Insurance lost 2.2%, after it said a miscalculation has been found in its Solvency II capital ratio for 2023, which means it was lower than previously reported.
The London-based car and home insurer said the error arose particularly in the translation of the reinsurance debtors between IFRS and Solvency II own funds, and the error will not have an impact on the IFRS figures.
Amending the error, the company said its year-end solvency capital ratio was revised down to 188% from 197%. It noted this is still above its risk appetite range of 140% to 180%.
In Japan on Friday, the Nikkei 225 index in Tokyo was up 0.4%.
Japan’s consumer prices remained flat on-year in July, internal affairs ministry data showed Friday. The country’s consumer price inflation rate remained at 2.8% in July, unchanged from June.
Bank of Japan Governor Kazuo Ueda indicated Friday that officials could hike interest rates again if inflation and economy performed as expected, weeks after turmoil caused by a surprise increase earlier this month.
The key Nikkei 225 index surged more than 10% on August 6, a day after tanking more than 12% on concerns about a possible US recession and the stronger yen.
In China, the Shanghai Composite was up 0.2%, while the Hang Seng index in Hong Kong was down 0.2%. The S&P/ASX 200 in Sydney closed down marginally.
Brent oil was quoted at $77.20 a barrel early in London on Friday, down from $77.38 late Thursday.
Gold was quoted at $2,492.90 an ounce, up against $2,478.64.
Still to come on Friday’s economic calendar, there is US new home sales data out at 1500 BST.
Copyright 2024 Alliance News Ltd. All Rights Reserved.
