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Sterling Soon Recovers From Brief Drop After CPI Edges Lower

10/20/2021 | 02:10am EST

Sterling Soon Recovers From Brief Falls After UK CPI Edges Lower

0731 GMT - Sterling steadies after briefly edging lower, following data that showed U.K. annual CPI slowed slightly to 3.1% in September from 3.2% in August. This fall shouldn't alter the likelihood that interest rates will rise soon, analysts say. "The bigger picture remains that inflation is causing the Bank of England a headache, especially coupled with no sign of an easing in the energy price surge," Richard Carter, head of fixed-interest research at Quilter Cheviot, says. It looks likely an interest rate increase will happen soon, although the BOE will avoid tightening too aggressively, he says. GBP/USD is last flat at 1.3792, having dropped to around 1.3774 after the data. EUR/GBP is flat at 0.8436. (jessica.fleetham@wsj.com)

 
Companies News: 

Segro Third-Quarter Rental Income Rose

Segro PLC said Wednesday that the rental income it contracted during the third quarter of 2021 rose 63%, and its vacancy rate declined further on the back of strong demand for space.

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Antofagasta Expects Copper Production to Fall in 2022

Antofagasta PLC on Wednesday forecast lower copper production for 2022, reflecting a lack of rainfall and lower grades at its Centinela Concentrates operation.

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Avast 3Q Revenue, Adjusted Ebitda Rose; Reaffirms FY Outlook

Avast PLC said Wednesday that its adjusted Ebitda and revenue for the third quarter of 2021 increased when compared with the year-earlier period, and reiterated its full-year outlook.

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Deliveroo 3Q Orders, Gross Transaction Value Rose; Raises Full-Year Transaction Value Guidance

Deliveroo PLC said Wednesday that it saw a rise in orders and gross transaction value in the third quarter of 2021, and raised its guidance for gross transaction value for the year.

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Burberry Appoints Versace's Jonathan Akeroyd as New CEO

Burberry Group PLC said Wednesday that it has appointed Jonathan Akeroyd, currently Gianni Versace SpA's chief executive, as its new CEO.

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Real Good Food Sees Positive 1H Ebitda as Revenue Returns to Pre-Pandemic Levels

Real Good Food PLC said Wednesday that it achieved profitability at the Ebitda level in the first half of the fiscal year, as revenue returned to pre-pandemic levels.

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Anglo American Says De Beers' Rough-Diamond Sales Fell

Anglo American PLC said Wednesday that rough-diamond sales by its majority-owned De Beers Group fell 6.1% in the eight sales cycle of 2021 compared with the previous cycle, but said sales were higher compared with the same cycle last year.

 
Market Talk: 

RBC Now Expects First UK Rate Rise in December

0753 GMT - Recent comments by Bank of England Governor Andrew Bailey warning that the central bank will have to act to curb inflation have prompted RBC Capital Markets to expect an interest-rate rise in December. The Canadian bank now expects a 25 basis-point rise in December, followed by 15 basis-point increase in February and another 25 basis-point rise in August. Given the BOE's recent sequencing review, it sees the move in the Bank Rate to 0.5% in February 2022 as triggering the reduction of the BOE's balance sheet via the cessation of Asset Purchase Facility reinvestments. RBC estimates the 10-year gilt yield at 1.20% by year-end, at 1.35% in 1Q22 and 1.45% at 2Q22. The 10-year gilt yield currently trades at 1.155%. (lorena.ruibal@wsj.com)

UK Inflation Pause Won't Last, Berenberg Says

0746 GMT - The temporary pause in U.K. inflation in September mostly reflects special factors, Berenberg says. It doesn't change the likely upward trend for the next few months or lower the chance of a rate hike by the Bank of England before year end, Berenberg's senior economist Kallum Pickering says. Pickering says the dip in the September annual rate is partly due to a base effect, arising from a rise in prices for hotels and restaurants a year earlier after August 2020's Eat Out to Help Out Scheme ended. "Surging producer prices driven by global supply shortages and robust demand growth, as well as local issues such as rising energy costs, haven't yet fully passed through into consumer prices," Pickering says, forecasting that U.K. inflation is set to rise. (maria.martinez@wsj.com)

UK 2031 Gilt Auction Likely to Attract Demand

0731 GMT - The U.K. Debt Management Office's planned sale of GBP2.25 billion the 0.25% July 2031 conventional gilt Wednesday should attract enough demand to ensure a smooth sale, says RBC Capital Markets. "We think this supply should get taken down well given that it's the final regular tap of the bond," analysts at the bank say. Factors further supporting the auction are gilt purchases of medium maturities by the Bank of England's Asset Purchase Facility and the fact that the bond has cheapened-up on most metrics recently, they say. (lorena.ruibal@wsj.com)

Contact: London NewsPlus, Dow Jones Newswires; Dow Jones Newswires; paul.larkins@wsj.com

(END) Dow Jones Newswires

10-20-21 0410ET

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