21st Aug 2025 07:51
(Alliance News) - Stocks were called to open slightly higher on Thursday, with eyes mainly on the Jackson Hole symposium and particularly its forthcoming speech by US Fed Chair Jerome Powell.
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 6.0 points, 0.1% at 9,294.14
GBP: lower at USD1.3453 (USD1.3468 at previous London equities close)
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ECONOMICS
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UK public sector net borrowing fell to around GBP1 billion in July, the Office for National Statistics reported. Net borrowing, the difference between total public sector spending and income, was GBP1.05 billion in July, below the FXStreet-cited market consensus estimate of GBP1.9 billion. The July figure was "GBP2.3 billion less than in July 2024 and the lowest July borrowing for three years," the ONS noted. It was significantly below June net borrowing of GBP22.56 billion, which was revised upwards from GBP20.68 billion. Borrowing in the financial year from April to July was GBP60.0 billion, the ONS reported, GBP6.7 billion more than in the same four month in 2024 "and the third-highest April to July borrowing since monthly records began, after those of 2020 and 2021". The year to date current budget deficit was GBP42.8 billion, up by GBP5.4 billion on-year.
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BROKER RATINGS
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RBC raises ConvaTec to 'outperform' (sector perform) - price target 315 (320) pence
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Peel Hunt cuts Lancashire Holdings to 'hold' (add) - price target 645 (630) pence
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Berenberg raises Costain group price target to 175 (150) pence - 'buy'
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COMPANIES - FTSE 100
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United Utilities announced a "landmark agreement" to refurbish the Haweswater aqueduct, which supplies water to "nearly 5 per of England's population", namely customers across Cumbria, Lancashire and Greater Manchester. The firm said the contract is part of a programme to upgrade and improve the region's strategic water network, and "paves the way for one of the largest water infrastructure programmes across the UK, creating hundreds of jobs in the region". It estimates construction will cost around GBP3 billion, and will commence in 2026.
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COMPANIES - FTSE 250
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Hays released its preliminary results for the financial year ended June 30. Pretax profit dropped 90% to GBP1.5 million from GBP14.7 million. Net fees fell 13% to GBP972.4 million from GBP1.11 billion, while turnover decreased to GBP6.61 billion from GBP6.95 billion. Hays also declared a total dividend of 1.24 pence, down 59% from 3.00p. "Market conditions remained challenging during the year, with economic and political uncertainty weighing on confidence, increasing 'time-to-hire' and reducing placement volumes," said Chief Executive Dirk Hahn. Despite making significant strategic and operational progress towards our long-term ambitions, our overall financial performance was impacted by these headwinds." Hays said July and August trading has been in line with expectations, but added: "September is the key trading month in our first quarter, and it is too early to assess trends."
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WH Smith announced that a financial review, in preparation for its results from the year ending August 31, has uncovered an overstatement of around GBP30 million in expected headline trading profit for North America. "This overstatement is largely due to the accelerated recognition of supplier income in the North America division," the retailer said. It now expects North America headline trading profit to be around GBP25 million, compared with previous market guidance of about GBP55 million. It expects headline "profit before tax and non-underlying items" to be approximately GBP110 million. "The board has instructed Deloitte to undertake an independent and comprehensive review," WH Smith added.
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Premier Foods has agreed to acquire "premium, healthy, convenient meals brand" Merchant Gourmet, which it said has a market-leading position in pulses and grains; a strong track record of profitable sales growth; and a broad consumer base with very strong repeat rates and a track record for new category expansion. It will buy 100% of the business for a GBP48.0 million enterprise value, and expects to complete the deal on September 1 with Merchant Gourmet forecast to be earnings accretive within the first full year of ownership. "We're very pleased to have agreed the acquisition of Merchant Gourmet, which meets the growing demand for premium, healthy and convenient meal options," said Chief Executive Alex Whitehouse. "Replicating the success of our previous two acquisitions, The Spice Tailor and FUEL10K, we will be deploying our proven branded growth model; expanding retailer distribution, accelerating new product development, and increasing marketing investment to unlock further profitable growth for the brand."
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OTHER COMPANIES
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Global Opportunities Trust reported results for the first half of 2025. Net asset value per share was 378.9p as of June 30, up 1.3% from 374.0p at December 31. The NAV total return was positive 4.0%, surpassing the FTSE All-World Index which delivered what Chair Cahal Dowds described as "a fairly anaemic" positive 1.0%, although Dowds reiterated that the trust "has no stated benchmark against which it seeks to outperform". "In many ways it has been a tumultuous period, with the stance of the new US administration appearing to change on a regular basis," Dowds noted. "This has been most noticeable on trade tariffs...Markets have remained relatively sanguine through the period, given the potential for severe economic distress." Looking ahead, Dowds continued: "The key point for markets is that it takes time for economic impacts to work their way through the system...To the extent that it is negative we have seen the likely response. Either the messenger will be blamed, or the Federal Reserve will serve as the scapegoat. In the meantime, there have been no meaningful attempts to address the debt overhang facing the world’s developed economies. As before, this leaves us with a continued risk averse approach."
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By Emma Curzon, Alliance News reporter
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Related Shares:
ConvaTecLancashire HoldingsCostainUnited UtilitiesHaysPremier FoodsWh SmithGotech Group