22nd Jul 2026 07:59
(Alliance News) - Stocks were called higher on Wednesday morning, while sterling was flat, following news of surprise deflation in UK input producer prices last month, while annual consumer price inflation sped up unexpectedly.
In corporate news, Reach slashes its half-year dividend and swings to a statutory loss, while JD Wetherspoon issues a profit warning.
Here is what you need to know before the London market open:
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MARKETS
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FTSE 100: called up 26.5 points, 0.3% at 1,0612.41
GBP: flat at USD1.3375 (USD1.3375 at previous London equities close)
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ECONOMICS
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The UK input producer price index posted a 2.0% decline in June, compared with a 0.6% rise in May and missing FXStreet-cited consensus for a 0.2% increase. May's inflation was revised up from 0.2%. Annually, input prices have jumped 7.3%, slowed from the previous month's 9.3% leap, which was upwardly revised from 8.7%. The core producer price output index, which excludes volatile items such as food and energy, showed prices rising 0.5% on a monthly basis in June, compared with 0.7% in May, revised from 0.8%. Annual core output producer inflation was 2.6% for June, against 2.3% in May. Monthly non-core output PPI was flat at 0%, slowing from a 0.3% increase which was revised from 0.5%. FXStreet-cited consensus was for a 0.4% increase. On an annual basis, prices rose 3.5%, slowed from 3.7% which was revised from 4%.
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The core UK consumer price index showed a 2.6% year-on-year increase in June, unchanged from the prior month but surpassing consensus for a 2.5% rise. Non-core annual CPI showed prices rose 2.6% in June, slowed from 2.8% in May and below consensus for a 2.7% increase. Notably, the annual inflation rate for food and non-alcoholic beverages decelerated to 1.7% in June from 2.2% in May. Monthly, consumer prices for food and non-alcoholic beverages fell 0.2% in June. On a monthly basis, consumer prices in the UK increased 0.1% as expected, slowing from 0.2%.
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The UK retail prices index showed 0.3% monthly inflation, accelerating from 0.2%. Annual RPI came in at 3%, as forecast, and slowing from 3.1%.
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Single bus fares across England will be capped at GBP2 from January, Prime Minister Andy Burnham has announced. The nationwide cap is currently set at GBP3 until the end of March 2027 although some areas – including London and Greater Manchester, where Burnham set a GBP2 limit as mayor – have lower top rates for single tickets. The measure is backed by GBP454 million of funding – including money to allow devolved governments to take similar action. Some GBP400 million of that funding will come from switching investment in international climate finance to loans, with the rest from savings in the Department for Energy Security & Net Zero budget. The total cost of the scheme is expected to be more than GBP500 million, with the rest coming from Department for Transport funding already allocated to buses.
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BROKER RATINGS
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Jefferies raises Reckitt Benckiser to 'buy' (hold) - price target 5,900 (5,600) pence
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Peel Hunt cuts Rotork to 'hold' (buy) - price target 503 (425) pence
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Bernstein starts Kerry Group with 'outperform' - price target 100 EUR
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COMPANIES - FTSE 100
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Norges Bank Investment Management has urged warehouse landlord Segro to engage with Prologis, Segro having rebuffed multiple takeover proposals from its San Francisco, California-based rival. Norges, which has a 1.3% holding in Prologis and an 8.3% holding in Segro, says it "understands the strategic rationale for a combination". "We believe the proposal merits consideration, and we encourage the boards of both Segro and Prologis to enter into constructive discussions to explore whether a transaction can be agreed on mutually beneficial terms for both companies and their shareholders," it says.
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Fresnillo says its 2026 outlook is in line with previous guidance, with Chief Executive Officer Octavio Alvidrez saying that "our operational plans are tracking in line with expectations" for the second half. "We have delivered a solid operational performance in the second quarter, driven by consistent execution across our asset portfolio," Alvidrez said. "Our focus remains firmly on operational discipline, and we remain on track to meet our full-year production guidance." For the second quarter, Fresnillo reports attributable silver production of 10.9 million ounces, down 1.7% from the first quarter and down 13% annually. Gold production increases 14% on-quarter to 154,800 ounces, but decreases 1.9% on-year. By-product lead and zinc production increase 13% and 5.9% on-quarter, respectively. Fresnillo's production outlooks for 2027 and 2028 also remain unchanged.
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COMPANIES - FTSE 250
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JD Wetherspoon Chair Tim Martin says the pub operator's full-year profit is "likely to be below market expectations, with marginally lower sales than anticipated in the final quarter, combined with higher costs in the areas of food, labour, repairs, energy and business rates." Wetherspoon expects to report year-end net debt of GBP720 million, in line with one year prior, and says that in the year to date it has opened eight pubs and sold nine, with 15 franchised pubs also opening. For the 12 weeks ended July 19, it says sales increased 4.0% like-for-like annually, with year-to-date LFL sales up 4.2%.
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Bloomsbury Publishing announces that the US District Court has formally approved a USD1.5 billion settlement in a class action lawsuit against Anthropic, which accused the AI firm of training its models on content it had not paid for. Bloomsbury confirms that it is among the beneficiaries and will receive several payments with the first expected in its financial second half-year, 14,087 Bloomsbury titles having been listed in the settlement by the court. Says the proposed settlement is approximately USD3,000 for each work, before expenses. Company notes that its net cash totals GBP29.2 million as of February 28.
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Invesco Asia Dragon Trust reports a net asset value total return of plus 39.6% for the financial year ended April 30, although it underperformed against a plus 45.7% return from the MSCI AC Asia ex Japan index. The latter was "dominated by the stellar performance of the three largest constituents," namely Taiwan Semiconductor Manufacturing, Samsung Electronics and SK Hynix. The latter's stock price more than tripled while the first two more than doubled, "making it a very difficult year to beat the index." The trust's NAV per share was 479.67 pence as of April 30, up 35% from 356.31p one year prior. It has paid four 3.95p per share interim dividends for the period, bringing the total dividend up 1.3% on-year to 15.80p from 15.60p. "The outlook remains positive for strong corporate earnings growth across many markets led by Taiwan and South Korea and with Asia Pacific equities continuing to trade at a meaningful valuation discount to US equities," Chair Neil Rogan says, adding that "from the relatively stagnant UK and European standpoint it is all too easy to overlook what is happening in Asia."
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OTHER COMPANIES
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Reach, which owns The Daily Mirror, declares an interim dividend of 1.44p for the first half of 2026, cut from 2.88p the year before. Reports revenue of GBP232.9 million for the period, down 9.0% on-year from GBP256.0 million. Swings to an operating loss of GBP43.5 million from a GBP29.7 million profit, and to a pretax loss of GBP45.3 million from a GBP27.0 million profit. Adjusted pretax profit falls 5.0% to GBP40.3 million from GBP42.4 million. Notes that digital revenue has fallen to GBP54.2 million from GBP1.1 million as it continues "to be impacted by lower referral volumes, mainly from Google."
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By Emma Curzon, Alliance News reporter
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Related Shares:
ReckittRotorkFresnilloWetherspoon (J.D)BloomsburyInvesco AsiaReach PlcSegro