16th Sep 2026 07:59
(Alliance News) - UK inflation accelerates to 3.1% in August as higher fuel costs drive prices higher. Barratt Redrow reports a rise in annual pretax profit but lowers its home completions guidance, while Babcock says trading is in line with expectations and leaves its outlook unchanged.
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 0.3% at 10,692.43
GBP: lower at USD1.3479 (USD1.3485 at previous London equities close)
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ECONOMICS
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UK consumer price inflation accelerates to 3.1% year-on-year in August from 2.9% in July, in line with market expectations cited by FXStreet, according to the Office for National Statistics. The increase is driven by higher transport costs, particularly motor fuels, as rising oil prices feed through to consumers. On a monthly basis, consumer prices rise 0.5% in August, compared with a 0.3% increase in the same month a year earlier. Core CPI, which excludes energy, food, alcohol and tobacco, rises 2.6% annually in August, unchanged from July and also matching market expectations. Goods inflation accelerates to 2.7% from 2.2%, while services inflation remains at 3.4%, suggesting underlying domestic price pressures are broadly steady despite the rise in the headline rate. Meanwhile, the consumer prices index including owner-occupiers' housing costs, or CPIH, increases 3.3% annually in August, accelerating from 3.1% in July. Core CPIH inflation remains unchanged at 2.9%.
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UK producer price inflation accelerates in August as higher oil prices continue to raise costs for manufacturers, according to the Office for National Statistics. Producer input prices rise 6.1% year-on-year, accelerating from a revised 5.8% in July and exceeding the 5.4% increase expected by markets, according to FXStreet. Input prices rise 0.3% month-on-month following a revised 0.8% decline in July. Crude oil prices surge 27% annually and make the largest upward contribution to input inflation. Factory gate prices increase 3.7% year-on-year, accelerating from a revised 3.3% in July, and rise 0.7% month-on-month. Prices for coke and refined petroleum products jump 49% annually and 8.6% monthly, providing the largest upward contribution to output inflation. The ONS says the US-Iran war continues to push up producer prices, particularly through crude oil and refined petroleum products.
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BROKER RATINGS
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Deutsche Bank Research raises AstraZeneca to 'hold' (sell) - price target 11,700 (11,500) pence
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berenberg raises GSK to 'buy' (hold) - price target 2,200 (2,000) pence
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COMPANIES - FTSE 100
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Barratt Redrow reports pretax profit of GBP363.5 million for the 52 weeks ended June 28, up 48% from GBP245.3 million on an aggregated basis a year earlier, as revenue rises 6.6% to GBP6.06 billion from GBP5.68 billion. Adjusted pretax profit before purchase price allocation adjustments falls 7.1% to GBP572.8 million from GBP616.5 million. Total home completions increase 5.0% to 17,667 from 16,826. The housebuilder lowers its financial 2027 completions guidance to between 17,500 and 17,900 homes from 17,700 to 18,200, citing continued planning delays. However, its net private weekly reservation rate improves to 0.62 from 0.55 between June 29 and September 6, while forward sales rise to 11,200 homes from 10,593. Barratt Redrow plans a GBP400 million capital return in financial 2027, including around GBP386 million of share buybacks, and from financial 2028 intends to return 50% of adjusted net income alongside an annual GBP100 million buyback.
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Babcock International says trading in the first five months of financial 2027 is in line with expectations, with good momentum and strong performances in its Nuclear and Aviation businesses amid robust demand across core defence markets. The defence contractor leaves its full-year outlook and medium-term guidance unchanged. Babcock highlights recent contract wins, including a CAD1.2 billion, around GBP600 million, six-year extension to support Canada's Victoria Class submarines, and its selection as preferred bidder for an eight-year French Air Force combat training contract. The group also notes the GBP26 billion UK Royal Oak naval infrastructure programme, saying it is well placed to benefit.
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Daiichi Sankyo and AstraZeneca say Enhertu and Datroway have been approved in Japan for two new first-line indications in patients with metastatic breast cancer. Enhertu, in combination with pertuzumab, is approved for adults with HER2-positive unresectable or recurrent breast cancer, while Datroway is approved for adults with hormone receptor-negative and HER2-negative unresectable or recurrent breast cancer, commonly known as triple-negative breast cancer.
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COMPANIES - FTSE 250
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Peel Pepper Ltd raises its cash offer for Harworth Group to 177.5 pence per share from 172.5p, valuing the property regeneration company at around GBP599.8 million. The revised offer represents a 2.9% increase on the original bid and a 40% premium to Harworth's three-month volume-weighted average share price before the offer period, but just a 0.4% premium to Tuesday's closing price of 176.8p. Peel Pepper, which is indirectly wholly owned by Peel Holdings Group Ltd, says the offer will be funded entirely from its own cash resources and argues Harworth faces operational and financial challenges, including declining net asset value and rising debt. Harworth shareholders have until October 25 to accept the revised offer, while those who have already accepted the original proposal will automatically be deemed to have accepted the higher bid.
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Moonpig says trading since the start of its financial year on May 1 is in line with expectations and leaves its financial 2027 outlook unchanged. Revenue growth at its Moonpig business is being driven by higher orders and average order value, supported by an expanding active customer base, product upselling and a modest increase in gift attachment rates. Greetz continues to deliver modest year-on-year growth. At Experiences, online gross transaction value continues to grow, although reported revenue remains lower year-on-year following the managed exit from some third-party retail partnerships and reinvestment in its customer proposition. Moonpig expects Experiences revenue to return to year-on-year growth in the second half. The group maintains its targets for mid-to-high single-digit annual revenue growth, a 25% to 27% adjusted Ebitda margin and double-digit adjusted EPS growth, alongside further share buybacks. Chief Executive Officer Catherine Faiers says: "I am pleased with the progress we have made in the year to date and the disciplined execution of our strategy across the group. Customers continue to choose us to help them recognise life's important moments, reflecting the ongoing relevance of Moonpig's proposition. We are focused on investing in our platform, brands and customer experience while delivering sustainable, profitable growth."
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WH Smith expects full-year headline group pretax profit before non-underlying items of around GBP75 million, saying solid peak summer trading and initial benefits from its transformation programme leave profits in line with expectations. Full-year group revenue is estimated to rise 5%, with like-for-like revenue up 2%. The retailer expects net debt of around GBP325 million at August 31 and leverage of about 2.0 times. Fourth-quarter group revenue rises 4%, with like-for-like revenue up 2%. UK revenue grows 7% and 4% like-for-like, while North America revenue increases 5% but falls 3% like-for-like amid lower passenger volumes and softer consumer demand. WH Smith says its profit outlook reflects lower trading margins due to increased promotional activity, reduced brand marketing and inflationary pressures, partly offset by central cost reductions and lower interest costs.
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OTHER COMPANIES
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System1 Group unanimously rejects Brave Bison Group's fourth takeover offer, saying it "materially undervalues" the company and does not provide a premium for control. Brave Bison's latest proposal offers 2.394 new Brave Bison shares plus 135 pence in cash for each System1 share. Based on Brave Bison's Tuesday closing price, System1 says the offer is worth around 328.9p per share, a 1.8% discount to System1's 335.0p closing price. System1 says it remains unconvinced by Brave Bison's strategic rationale and describes the approach as "opportunistic", arguing it is disrupting the business and creating unnecessary costs. It says shareholders representing around 23% of its issued share capital have indicated they do not intend to accept the offer, including Lord Ashcroft, who is also Brave Bison's largest shareholder.
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By Eva Castanedo, Alliance News senior economics reporter
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Related Shares:
Barratt RedrowBabcockHarworth GpMoonpig GrWh SmithSystem1 GroupBrave BisonAstrazenecaGlaxosmithkline