Share prices in London were lower at midday on Thursday, showing little response to UK Chancellor Jeremy Hunt’s autumn budget statement, which included £54 billion in spending cuts and tax hikes.
The FTSE 100 index was down 39.17 points, or 0.5%, at 7,311.81. The FTSE 250 was down 52.68 points, or 0.3%, at 19,059.70, and the AIM All-Share was down 3.55 points, 0.4%, at 836.33.
The Cboe UK 100 was down 0.6% at 731.20. The Cboe UK 250 was down 0.2% at 16,429.83. The Cboe Small Companies was down 0.6% at 12,842.18.
Hunt promised to ‘tackle the cost-of-living crisis’ and ‘rebuild our economy’ as he set out plans for tax rises and spending cuts.
Hunt said there will be a ‘shallower downturn’ as a result of his measures. He told members of Parliament that his three priorities were ‘stability, growth and public services’, as he delivered his autumn budget statement.
Hunt set out a package of £30 billion of spending cuts and £24 billion in tax rises over the next five years.
Among these measures, the threshold at which the 45p top rate of income tax is paid will be reduced from £150,000 to £125,140.
As well, the income tax personal allowance, higher rate threshold, main national insurance thresholds and the inheritance tax thresholds will be frozen until April 2028, something which will result in more people paying more tax as a result of ‘fiscal drag’ as wages increase.
‘The chancellor had an unenviable job of attempting to increase the public purse whilst also appeasing his party’s low-tax evangelists,’ commented Andrew Aldridge, a partner at Deepbridge Capital.
‘It is, therefore, no surprise that many personal allowances have been frozen for an extended period, which will mean inflation will likely push more individuals into higher rates of income tax, national insurance, and inheritance tax.’
The pound was quoted at $1.1862 on Thursday afternoon in London, slightly down from $1.1883 late Wednesday. Earlier in the morning, however, sterling traded above $1.19.
In London, Halma was down 3.4% despite saying it is on-track for the full-year, after reporting record revenue in the six months that ended September 30.
The safety equipment maker reported that in the half-year, revenue totalled £875.5 million, up from £737.2 million the previous year.
Pretax profit, however, dropped to £145.5 million from £167.5 million. Halma said this drop was due to a gain on disposal of £34.0 million in the first half of its last financial year, which wasn’t repeated. Excluding this gain, it noted, pretax profit was up 9%.
Spirax-Sarco Engineering was down 2.7%, as it pointed to predictions of weak industrial production growth globally. It said this is now forecasted to be 2.9% in 2022, lower than the 3.5% forecasted in July, although ‘still above pre-pandemic levels’. For 2023, the IP forecast has also been revised downwards to 1.0%, from 3.2% in July.
Burberry was up 1.7% after it reported a strong rise in interim profit and revenue and lifted its interim payout by 42%.
For the six months that ended on October 1, the London-based fashion retailer posted a pretax profit of £251 million, up 31% from £191 million in the six months to September 25 last year.
Revenue rose by 12% to £1.35 billion from £1.21 billion, with new product launches and seasonal collections performing ‘strongly’.
In the FTSE 250, Energean was down 4.1% though it reported increased earnings and revenue in the first nine months of the year.
In the nine months that ended September 30, adjusted earnings before interest, tax, depreciation, amortisation and exploration expense increased to $348.5 million from $141.3 million in the same period last year.
The London-based gas exploration and production company said revenue increased 57% to $550.2 million from $349.0 million last year.
Mitie was up 6.6%.
The Glasgow-based facilities management company reported that in the six months that ended September 30, profit fell to £43.1 million from £49.2 million year-on-year.
Revenue from continuing operations marginally increased to £1.92 million from £1.91 million, arguing new contract wins, acquisitions and price inflation offset the boost from short-term Covid-19-related contracts a year ago.
‘Although inflationary pressures will continue into the second half, historically our second half performance is stronger, with increased revenues from projects, seasonal winter work, and the ramp-up of margin enhancement savings coming through as the year unfolds. We therefore expect to deliver operating profit before other items of at least £145 million for the financial year 2023,’ Chief Executive Phil Bentley said.
On AIM, Crimson Tide was up 17% after it announced a new three-year contract with an existing retail client for its mpro5 smart app.
The software developer said the new deal is worth £1 million per year, more than double its current annual recurring revenue under the previous contract.
Stocks on the European continent were mixed. The CAC 40 index in Paris was down 0.6%, while the DAX 40 in Frankfurt was flat in the early afternoon. The euro traded at $1.0350 midday on Thursday, down from $1.0405 late Wednesday.
Stocks in New York were called lower on Thursday. The Dow Jones Industrial Average was called down 0.6%. The S&P 500 was called down 0.6% and the Nasdaq Composite down 0.5%.
Gold was priced at $1,765.26 an ounce midday Thursday, down sharply from $1,777.45 late Wednesday. Brent oil fetched $91.50 a barrel, down a bit from $91.89.
Against the yen, the dollar was quoted at JP¥139.85, up from JP¥139.43 on Wednesday.
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