11th Jun 2025 07:49
(Alliance News) - London's FTSE 100 is called to open slightly lower on Wednesday, ahead of a US consumer price inflation reading and an announcement on UK government spending plans.
Focus is also on developments in trade talks between the US and China, which saw a "framework" being agreed.
The agreement will need to be approved by leaders in Washington and Beijing, officials said after a full day of talks at the UK capital's historic Lancaster House.
"Cable slipped under 1.35 ahead of UK Chancellor Rachel Reeves' budget announcements," Swissquote analyst Ipek Ozkardeskaya commented.
"The UK jobs data released yesterday was grim: more than 250,000 jobs have been lost since October's budget announcement. Higher taxes are weighing on employment and sustaining inflationary pressure, complicating the Bank of England's policy outlook. Still, markets are increasingly pricing in rate cuts amid signs of further weakness."
In early UK corporate news, there was a host of M&A updates. Assura and Ricardo agreed to offers, though bids for Craneware and GlobalData will be not be forthcoming, their respective suitors announced.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 0.1% at 8,841.28
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Hang Seng: up 1.1% at 24,415.46
Nikkei 225: up 0.4% at 38,367.92
S&P/ASX 200: up 0.1% at 8,592.10
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DJIA: closed up 105.11 points, 0.3%, at 42,866.87
S&P 500: closed up 0.6% at 6,038.81
Nasdaq Composite: closed up 0.6% at 19,714.99
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US 10-year Treasury yield: 4.49% (4.48%)
US 30-year Treasury yield: 4.95% (4.95%)
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EUR: flat at USD1.1414 (USD1.1418)
GBP: lower at USD1.3478 (USD1.3509)
USD: higher at JPY145.14 (JPY144.93)
GOLD: higher at USD3,336.71 per ounce (USD3,325.36)
(Brent): lower at USD66.75 a barrel (USD67.82)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
12:30 BST UK spending review
13:30 BST US CPI
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UK Chancellor Rachel Reeves will unveil her spending review on Wednesday, arguing that her priorities are "the priorities of working people". The chancellor is expected to focus on "Britain's renewal" as she sets out her spending plans for the coming years, with big increases for the NHS, defence and schools. Arguing that the government is "renewing Britain", she will acknowledge that "too many people in too many parts of the country are yet to feel it". She will say: "This government's task – my task – and the purpose of this spending review is to change that, to ensure that renewal is felt in people's everyday lives, their jobs, their communities." Among the main announcements is expected to be a GBP30 billion increase in NHS funding, a rise of around 2.8% in real terms, along with an extra GBP4.5 billion for schools and a rise in defence spending to 2.5% of GDP. But Wednesday could present a tough prospect for other government as the chancellor seeks to balance Labour's commitments on spending with her fiscal rules. The Institute for Fiscal Studies has already warned that any increase in NHS funding above 2.5% is likely to mean real-terms cuts for other departments, or further tax rises to come in the budget this autumn. This could mean a budgetary squeeze for areas such as local government, the justice system and the Home Office, despite reports that policing would receive an above-inflation settlement.
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UK Prime Minister Keir Starmer has met the US commerce secretary as the UK government continues to push for its US trade deal to come into force. The prime minister dropped in on a meeting between Howard Lutnick and Business Secretary Jonathan Reynolds in Downing Street on Tuesday. Lutnick was in London for talks with China on resolving the trade war between Washington and Beijing, and Reynolds took the opportunity to meet him in person to push for the UK-US trade deal announced last month to be implemented as soon as possible. The meeting follows talks between the business secretary and US trade representative Jamieson Greer in Paris last week. Under the terms of the agreement announced by Starmer and President Donald Trump, the US will implement import quotas that will effectively eliminate tariffs on UK steel and cut the levy on vehicles to 10%. But the deal has yet to be implemented and tariffs on both steel and cars remain at 25%, although the UK has been spared the increase on steel duties to 50% that Trump imposed on the rest of the world last week. In a post on social media, Reynolds said he had discussed "progress on our trade deal – including UK autos and steel" with Lutnick.
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BROKER RATING CHANGES
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Barclays cuts Grainger to 'equal weight' (overweight) - price target 225 (270) pence
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COMPANIES - FTSE 250
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Assura agreed to a sweetened takeover offer from a private equity consortium, which values the healthcare facilities investor at GBP1.70 billion. The increased cash bid will see the consortium, made up of Kohlberg Kravis Roberts & Co and funds advised by Stonepeak Partners, pay 50.42 pence per Assura share. In addition, Assura shareholders will retain a quarterly interim dividend of 0.84p each, due to be paid next month, in addition to a dividend of the same amount paid in April. Inclusive of the declared dividends, the offer values Assura's issued and to be issued share capital at around GBP1.70 billion. The consortium back in April offered to buy Assura for GBP1.61 billion, or 49.4 pence per share. Assura's board had recommended that bid, after rejecting a rival offer from Primary Health, a London-based healthcare property investor. Primary Health's offer valued Assura at 46.2p per share and GBP1.5 billion in total. Primary Health in May responded with a fresh proposal of 12.5p and 0.3769 of a new Primary Health share for each Assura share, valuing Assura at 51.7p per share and GBP1.68 billion in total. Assura as a result adjourned meetings scheduled earlier this month would have seen shareholders vote on the GBP1.61 billion consortium offer. The latest consortium offer has been recommended by Assura, according to the statement on Wednesday.
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Building products supplier Ibstock said a "more competitive market backdrop" has meant it has struggled to pass on the impact of cost inflation to customers. Ibstock said "average selling prices have been adversely impacted by sales mix". "This, combined with a more competitive market backdrop, has made passing on the full impact of cost inflation more challenging. Overall, based on both sales mix and absolute pricing levels, we expect sales prices in both clay and concrete in the first half of 2025 to be broadly in line with the comparative period," it said. It now expects its 2025 adjusted earnings before interest, tax, depreciation and amortisation to be in the range of GBP77 million to GBP82 million, between a 2.5% fall and a 3.8% rise from GBP79 million in 2024. Ibstock expects first half sales volumes in its core business "to be materially above the prior year level". Chief Executive Officer Joe Hudson said: "Despite ongoing uncertainty, we are encouraged by signs of recovery in the UK housing market. As such, we remain committed to taking steps to ensure we are well placed to support customers and benefit from the recovery as it gathers pace. Notwithstanding the margin headwinds encountered in 2025, we remain confident that our recent actions alongside our strategic investments leave us well positioned as activity levels continue to pick up."
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OTHER COMPANIES
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GlobalData said it "remains highly confident" in its future prospects, after ICG Europe Fund IX confirmed it will not make a takeover offer for the analytics company. GlobalData in April said it had received a preliminary, conditional cash proposal from funds managed and/or advised by ICG Europe Fund. "GlobalData announces today that it has terminated discussions with ICG regarding the proposal," the AIM listing said Wednesday. "The board remains highly confident in the future prospects of GlobalData, including through the implementation of the three-year growth transformation plan and the target for annualised revenues of GBP500 million by the end of 2026." Last month, one-time suitor KKR also pulled out of the running.
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Craneware will not receive a firm takeover offer from Bain Capital, the private equity firm announced. Bain confirmed "that it does not intend to make a firm offer" for the software solutions provider. Back in April, Bain had said that it was assessing a possible offer to "acquire the issued and to be issued share capital of Craneware". "This evaluation is highly preliminary in nature, and has not to date involved any approach to the board of Craneware," it said at the time. Craneware shares have risen some 30% since that announcement. It has a market capitalisation of GBP714.2 million.
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Ricardo agreed to a GBP281 million cash buyout from consultancy firm WSP Global. WSP will pay 430p per share in cash, a 28% premium the environmental and engineering consultancy's 335p closing price on Tuesday. "The WSP Group recognises the value of Ricardo's Automotive & Industrial and Performance Products businesses and its long history and respected brand in the specialist and automotive design and manufacturing sector and will work with Ricardo's management team to complete their strategic review of these business units," a statement on Wednesday said. Ricardo's directors deem the bid to be "fair and reasonable". The offer also has the backing of Ricardo shareholder Science Group. Science Group, which has a 22% stake in Ricardo, said cash proceeds from the sale of its shares in the company will amount to GBP53.5 million. "Science Group supports the WSP offer. The offer price is a 102% premium relative to the Ricardo share price of 213 pence shortly before Science Group initiated its share purchases and corporate action. All Ricardo shareholders have benefitted from the Science Group investment," Science Group said. Science Group noted it purchased 13.5 million shares in Ricardo, at an average price of 239p each, between February and May.
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By Eric Cunha, Alliance News news editor
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Related Shares:
Grainger plcAssuraCranewarePrimary HealthIbstockGlobalDataRicardoScience Group