The Bank of England has made the historic decision to deliver the first back to back interest rate increase since 2004.
The Monetary Policy Committee (MPC) voted unanimously in favour of raising the benchmark interest rate by 25 basis points to 0.5%. The decision had been expected by the market.
The benchmark FTSE 100 and the mid-cap FTSE 250 indexes traded 0.3% and 0.6% lower on the news at 7,556.60 and 22,103.17 respectively, with contract caterer Compass (CPG) and telco BT (BT.A) top and tailing the blue-chip leaders and losers.
Sterling strengthened on the news trading 0.45% higher against the dollar at 1.3625.
The recent surge in the oil price has added to inflationary pressures within the economy, and this has exacerbated the pressure on the monetary policy committee to increase interest rates.
BT’S SPORTS SPLITS
BT shed 4.9% at 185.6p after the telecoms giant lowered full-year revenue guidance for the year to 31 March 2022. The company also abandoned plans to sell its sports broadcasting arm and instead is setting up a 50/50 joint venture with Eurosport-owner Discovery. BT’s existing major sports broadcast rights include Premier League and Champions League matches.
A lukewarm reception was given to the fiscal third-quarter update from oil major Shell (RDSA), with the shares rising drifting 1.2% to 1895p after the company announced a new share repurchase programme.
The best performing blue-chip this morning, however, is Compass, the contract caterer. Its’ stock jumped almost 8.5% to £17.93 after reporting a continued improvement in trading across all parts of its business.
‘The structural outlook for new business wins and market share growth is compelling,’ said analyst at Liberum. But the broker retained some caution given uncertainties over short-term volume and margin recovery given challenging market conditions, Liberum said in a note.
Gambling software maker Playtech (PTEC) rallied 11% to 649p after TTB Partners sought its release from takeover rules that prevent the shareholder from making a fresh offer for the UK company after the Aristocrat deal collapsed.
Measurement technology firm Renishaw (RSW) saw interim revenue increase 27% to £325.2 million and pre-tax profit almost double to £84.2 million as it recovers from the effects of the pandemic.
The company also unveiled a 16p per share dividend and pointed to further recovery ahead, guiding for adjusted pre-tax profit of between £157 million and £181 million on full year revenue in the range of £650 million to £690 million.
That saw Renishaw shares rally 6.5% on Thursday to £48.94.
ELSEWHERE ON THE MARKETS
The Independent Directors of ads agency M&C Saatchi (SAA) have rejected another takeover approach from AdvancedAdvT (ADVT), the buyout vehicle of IT entrepreneur and M&C non-executive director Vin Murria.
The UK Takeover Panel has agreed to extend the deadline for AdvancedAdvT to 3 March 2022, by when it must either announce a firm intention to make an offer for M&C Saatchi or walk away.
M&C stock rose 4.5% to 185p. AdvancedAvdT shares remain suspended.
Virgin Wines (VINO:AIM) plunged 24% to 152p after reporting a ‘material slowdown’ in sales in the second quarter. The company reported half-year revenue flat year-on-year, implying Q2 declines of somewhere between 10% and 15% on Q1 13% growth.
Sausages firm Cranswick (CWK) nudged 1.8% higher to £37.88 after reporting robust trading through the Christmas period, although the company’s full year expectations remain unchanged.
