FTSE 100 finishes softly after stubborn UK inflation figures

• FTSE 100 closes 10 points lower
• US stocks lower as Fed chair delivers testimony
• UK inflation unchanged at 8.7% in May

4.35pm: FTSE 100 quiet

At the close, the FTSE 100 had recovered some of its earlier losses but still finished slightly below opening levels at 7,559 points.

Equities slipped further into the red signaling a disappointed reaction to Fed chair Powell’s testimony to Congress, said Chris Beauchamp, chief market analyst at online trading platform IG.

“Today’s Powell testimony has been overshadowed by the UK’s strong inflation data, which has reminded investors that central banks generally aren’t done hiking rates. While investors seemed to doubt the Fed’s commitment last week, they are less sure of themselves today, and stocks continue to push lower. For now the market has run out of reasons to rally, and no other catalysts are yet in sight.”

3.55pm: All eyes on the Old Lady

With around half an hour of trading to go in London, the FTSE 100 was weaker but off session lows, as investors focus ahead to Thursday’s Bank of England monetary policy decision following data showing inflation remained unmoved at 8.7% in May.

Michael Hewson, chief market analyst at CMC Markets UK noted: ”The Bank of England is expected to pull the trigger on another rate hike tomorrow, with some suggesting that we might see a 50bps hike, instead of the 25bps that is currently expected.”

He noted: “The FTSE100 has struggled, with house builders feeling the heat from today’s UK inflation numbers, along with a sharp rise in gilt yields, as concerns about a housing market slowdown gather pace, which in turn is acting as a drag on Barratt Developments and Taylor Wimpey.

“The banks are also under pressure after a note from Exane Paribas warning that UK banks could face a perfect storm of higher rates hurting, rather than helping, when it comes to the outlook for loans and deposits. Downgrades to NatWest Group and Lloyds Banking Group has seen the shares of both drop with NatWest shares falling to their lowest levels since November 2022.

“Weakness in packaging stocks Smurfit Kappa and DS Smith appears to be because of a negative read across from disappointing H1 sales numbers from Austria’s Mayr-Melnof.”    

3.35pm: Woe for homeowners

UK house prices may yet fall by a quarter in a worst-case scenario, according to analysts at Capital Economics, after recent turmoil in mortgage markets.

The average two-year mortgage rate recently surpassed 6% for the first time since 2007 and the analysts believe this “guarantees a renewed slump in mortgage lending and a further leg down in house prices”.

“Were mortgage rates to be sustained at that level for several years, a 25% drop in house prices would be likely. But our forecast that inflation will ease should allow interest rates to be cut from mid-2024, limiting the total fall in house prices to around 12%.

“The impact of higher mortgage rates will be most severe for those reaching the end of a fixed-rate deal this year, who will endure a similar increase in mortgage payments as borrowers did in the late 1980s,” the Capital Economics analysts noted.

They believe rates will be robust enough to bring inflation back to 2% next year, allowing the Bank of England to take its foot off the monetary policy brake pedal.

“In our view bank rate of over 5% and mortgage rates of 6% will be sufficient to bring inflation back to target next year. As a result, we think that bank rate will begin to be cut in Q3 2024 bringing mortgage rates down to around 4% by 2025. That suggests our current forecast that house prices will fall by 12% is reasonable. They have declined by 4% so far. Note that in real terms that is a 20% correction, comparable with the downturn in 2008-10,” the analysts added.

Capital Economics predicts bank rate to peak at 5.25% later this year, though the analysts noted investors see it at a loftier 5.75% to 6.00%.

3.10pm: Manufacturing cautious

UK manufacturers expect to raise prices by the smallest amount since February 2021 over the next three months although price increases will still be much faster than their long-run average, according to a Confederation of British Industry (CBI) survey.

The CBI monthly index of manufacturers’ average selling price expectations slowed to +19 in June from +21 in May, its lowest in more than two years but well above its long-run average of +7.

The CBI’s monthly order book balance rose to a six-month high of -15 from -17 in May and were back close to their average levels, but the export order balance fell again to -29 from -26, the weakest since February 2021.

CBI deputy chief economist Anna Leach said manufacturing activity was likely to have shrunk a little during the second quarter due to weak demand.

“Total order books have improved a touch in recent months, but they remain fairly soft. And although output expectations have turned positive again, growth is expected to be quite weak in the three months to September,” she noted.

The CBI’s measure of output over the next three months improved to +4 from -5.

2.45pm: Powell talk eyed

The FTSE 100 remained weak, but held off session lows mid-afternoon, weighed by stubborn UK inflation and as US stocks started lower as investors eye the first day of Federal Reserve chair Jerome Powell’s semi-annual report to Congress.

Around 15 minutes after the New York open, the Dow Jones Industrial Average was down 145 points, or 0.4% at 33,908, while the broader S&P 500 index and the Nasdaq Composite also both lost 0.4%.

Powell intends to tell lawmakers that nearly all members of the Federal Open Market Committee (FOMC) expect to raise interest rates further in their bid to return inflation to their 2% target. 

“Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year,” he said in his prepared remarks. “But at last week’s meeting, considering how far and how fast we have moved, we judged it prudent to hold the target range steady to allow the Committee to assess additional information and its implications for monetary policy.”

Powell is also expected to address the state of the US banking sector.

“The recent bank failures, including the failure of Silicon Valley Bank, and the resulting banking stress have highlighted the importance of ensuring we have the appropriate rules and supervisory practices for banks of this size,” he said in his remarks. “We are committed to addressing these vulnerabilities to make for a stronger and more resilient banking system.”

2.25pm: Reiss wanted

Activist investor Elliott Advisors has emerged as a potential suitor for fashion brand Reiss, according to a Sky News report.

The private equity firm – which owns booksellers Foyles and Waterstones – is one of a number of suitors assessing a possible bid for the retailer, Sky News said.

Reiss is currently owned by high street bellwether Next and Warburg Pincus, the US private equity firm.

The report said that “at least” three parties were thought to be involved in the auction, although there was no guarantee a sale will go ahead. It is thought that Reiss, which was founded in 1971, could be valued at around £500mln.

Next bought an initial 25% stake in Reiss from Warburg Pincus in 2021. It then exercised an option to acquire a majority holding last summer and acquired a further 26% in the chain. Warburg Pincus bought the business, which has more than 60 UK shops, from founder David Reiss in 2016.

2.10pm: Hospitality flagging

Sales at hospitality venues in May flagged inflation despite three bank holidays during the month, with UK pubs, restaurants and bars seeing a year-on-year sales increase of 5.6% last month, according to data from the CGA.

Warm weather and the crowning of King Charles drove pub sales by 8.8% annually, ten basis points higher than the headline CPI figure released on Wednesday.

Bars and restaurants weren’t so lucky. For bars, sales dropped by 6.6% year-on-year, while restaurants only rose by 2.7%.

Rail strikes and “fragile consumer confidence” were considered driving forces for dampened trading, the data firm said.

Karl Chessell, a director at CGA, remains hopeful about the industry despite it facing several headwinds.

He said: “Eight positive months in a row have shown that demand for eating and drinking out remains strong, especially around holidays and big national occasions.

“As inflation falls and discretionary spending stabilises, we can be cautiously optimistic about a return to real-terms growth in the second half of 2023.”

1.30pm: A look at some of today’s movers

Risers

i-nexus Global – up 24% to 4.65p: Cloud-based software company i-nexus Global rallied on Wednesday following news of a proposal to raise £500,000 through a debt issuance to shareholders. Net proceeds will be applied entirely toward meeting the company’s ongoing working capital requirements.

Avacta – up 8% to 114p: Shares jumped 8% as the AIM-listed life sciences firm reported the successful completion of the fifth dose escalation in its AVA6000 clinical trial. Data continues to show “a very favourable safety profile for the tumour-targeted chemotherapy,” Avacta said.

THG – up 6% to 77.2p: The online retailer announced that its founder and boss, Matt Moulding, has given up his much-criticised right to veto hostile bid approaches. That in turn put the business, which recently was in bid talks with private equity group Apollo, firmly in play.

Halfords – up 5% to 201p: The UK’s leading retailer of motoring and cycling products saw its shares rise by 5% on Wednesday following its projection of a modest 3% profit growth in the current financial year, even as consumers grapple with a cost-of-living crisis.

Chill Brands – up 6% to 8.8p: Shares surged higher as the company announced the expansion of its Chill.com product marketplace with a new agreement. The CBD group said it has signed a deal with Valet Seller, an e-commerce accelerator supporting over 500 direct-to-consumer brands. The partnership is intended to make it easier to add many more brands to the Chill.com website.

Fallers

Haydale Graphene – down 5% to 1p: Haydale Graphene saw its shares fall after the advanced materials company cautioned that project delays will impact its results for the year to 30 June 2023. The company said a number of projects which had been expected to start this month have been delayed until the first quarter next year.

1.05pm: US stocks expected to open lower

US stocks are expected to open moderately lower on Wednesday as investors keep to the sidelines ahead of the first day of Federal Reserve chair Jerome Powell’s semi-annual report to Congress on the state of US monetary policy.

Futures for the Dow Jones Industrial Average (DJIA) fell 0.1% in pre-market trading, while those for the broader S&P 500 index also declined by 0.1% and contracts for the Nasdaq-100 were down 0.2%.

The main US indexes also closed down on Tuesday ahead of Powell’s testimony to a House of Representatives Committee when he is likely to be questioned on the Fed’s ‘dot plot’ projections which currently indicate expectations of 50 basis points of additional hikes in the second half of the year.

That’s after last week’s decision to pause rate hikes after 10 consecutive increases.

The DJIA ended 0.7% lower at 34,054, the Nasdaq Composite fell 0.2% to 16,667 and the S&P 500 declined 0.5% to 4,389. The small-cap Russell 2000 index slid 0.5% to 1,887.

“It’s likely that Powell will stick to his main themes from the press conference. But it’ll be interesting to see how he frames the Fed’s decision last week, as the decision to pause rate hikes came alongside upgrades to their inflation and growth forecasts, as well as a signal in the dot plot that two further hikes were expected by December,” commented Deutsche Bank’s Jim Reid.

“Powell himself has said that he expects July to be a ‘live’ meeting, and futures are pricing in a 74% chance that the Fed will deliver a hike next month. But there remains scepticism in markets that the Fed will be able to follow through on that second hike, with current terminal pricing only pointing to 23bps more hikes, rather than the 50bps indicated by the dot plot,” Reid added.

12.42pm: Disinflation in the pipeline?

Berenberg predicts headline inflation to fall sharply in the coming months with “disinflation in the pipeline.”

The fall in energy prices is set to be sparked by falling energy prices, moderating food prices and stabilising non-energy goods prices.

Services and core inflation is also expected to turn the corner soon, leading to headline inflation close to around 2% by this time next year.

However, Berenberg warned that the Bank of England may go too far in reacting to inflation figures, hiking interest rates to almost 6% by the turn of the year.

“Due to the shift away from floating-rate mortgages towards fixed-interest products over the past decade, the pass-through of monetary policy to consumption via the housing market takes longer than in the past,” the analysts said.

“This highlights the risk that, if the BoE overreacts to near-term inflation surprises, it may set the stage for an inflation undershoot once the full effects of its prior policy decisions play out.”

12.24pm: Sunak defends mortgage help

Prime Minister Rishi Sunak said “global macroeconomics” was to blame for sky-high inflation which is triggering more mortgage mayhem.

Speaking at the PM’s Questions in the Commons Chamber, Sunak said the government has taken several measures to help with mortgages in response to a grilling from opposition leader Keir Starmer.

Measures include moving people to interest-only mortgages and cost of living help.

Sunak then attacks Labour’s plans to borrow £28bn a year, ban new oil and gas licences and “give in to unions’ unaffordable pay demands.”

On oil and gas, Sunak was told by Conservative MP Philip Davie to commit to new oil and gas production in the UK, calling Vladimir Putin’s stranglehold on oil and gas “weaponization of energy” and that the government has launched “new licencing rounds for the North Sea.

12.03pm: Southend airport for sale

Esken, the debt-ridden owner of Southend airport, confirmed the site has been put up for sale after sounding the alarm on its finances.

Southend Airport was put up for sale alongside its renewables business.

Shares in Esken plummeted 25% to 2.79p, with the stock down 67% over the past year.

Esken purchased the airport in 2008 for £21mln when it went under the name Stobart Group.

A string of airlines pulled operations from the site during Covid, including Ryanair and Wizzair, with EasyJet the only one returning, sparking whispers the budget airline could be the favourite to purchase the airport.

11.32am: Traders exit housebuilders

Traders are rushing to exit housebuilders with the deepening mortgage crisis showing no signs of abating.

Shares in housebuilders Barratt and Persimmon were among the largest fallers on the FTSE 100, both down roughly 3%.

Rival housebuilders Taylor Wimpey and Berkeley also shed around 2.7%.

An exodus of housebuilders comes after inflation stagnated in May at 8.7%, ahead of the consensus of 8.4%.

Markets are now anticipating the Bank of England to raise rates tomorrow to 4.75% from 4.5%, with the expectation rates will hit 6% by the end of the year.

11.16am: M&S blasted for not paying minimum wage

Some of the UK’s largest retailers were blasted for not paying staff the minimum wage, the government announced.

Some £5mln was kept from 63,000 workers’ pockets by 202 companies between 2017 and 2019, including WH Smith, M&S, Argos and Lloyds Pharmacy.

“Paying the legal minimum wage is non-negotiable and all businesses […] should know better than to short-change hard-working staff,” enterprise minister Kevin Hollinrake said.

WH Smith was the worst offender, failing to pay staff £1.08mln, while Lloyds and M&S fell short by £903,307 and £578,391 respectively.

Sainsbury’s owned Argos did not pay £480,094 meanwhile, with over 40,000 workers being affected across the four businesses.

10.48am: Markets across Europe

A quick glance at how markets across Europe are reacting.

CAC 40 in France is down 0.05%, while the DAX in German has added 0.13%.

IBEX 35 in Spain is up 0.12%, while the FTSE 100 is off lows and now in positive territory, up 0.036%, or 2 points, to 7,572.

10.13am: House prices rise

ONS figures on house prices suggested a 0.4% increase between March and April.

Average house prices were up 3.5% in the year to April, down from 4.1% a month earlier, with the average house costing £286,000, £7,000 lower than September’s peak.

London house prices hit £534,000 but saw the lowest annual growth – up just 2.4% in a year.

“However, mortgage market movements in the past few weeks could usher in a new era that brings an abrupt conclusion to these halcyon days,” said Sarah Coles, head of personal finance at Hargreaves Lansdown.

“Despite price rises in April, there were already some warning signs, with buyer demand falling with each passing month, and sales at rock bottom. The fall of mortgage approvals didn’t bode brilliantly for the months ahead either.”

With more bad news on inflation, which remained unchanged in May at 8.7%, this is likely to fuel rate expectations even further and see mortgage rates climb either.

One positive in the market is the labour market, with unemployment at low levels.

However, further rate hikes will increase the chances of recession, which could mean more jobs could become insecure.

9.52am: Energy support scheme drives government borrowing

More on government borrowing, which amounted to £20bn in May 2023, down from £22.8bn in April, which saw the debt-to-GDP ratio exceed 100% for the first time since 1962.

Among the largest expenditure for the government was the rise in inflation-linked benefits as well as means-tested cost-of-living payments, according to the Centre for Economics and Business Research (CEBR).

Energy support schemes also led to borrowing rising year-on-year, with the extension of the energy price guarantee for households until July.

On the revenue side, central government receipts rose by £2.3bn in May 2023 compared to a year earlier, which helped offset some of the impact of the rise in government expenditure on borrowing. 

One driver of the increase in receipts was the rise in PAYE income tax receipts, which were £1.6 bn higher than the year before, supported by the freezing of income tax thresholds amidst a high wage growth environment. 

“Today’s net borrowing figures show that while the government has introduced new measures to tighten the fiscal purse and manage finances, spending commitments providing support for households and businesses, as well as recent spending changes including inflation-uprated benefit payments and one-off pay deals to public sector staff, have in turn led to elevated borrowing levels,” said Pushpin Singh, an economist at CEBR.

9.32am: Public sector borrowing double GDP

More bleak news and Britain’s public sector net debt surpassed 100% of gross domestic product in May as borrowing came in higher than expected.

The Office of National Statistics said public sector net debt, excluding that of state-controlled banks, hit £2.5tn, equivalent to 100.1% of GDP.

This represented the first time that debt stood above 100% of GDP since 1961.

9.22am: 10-year gilt edges to 4.5%

The yield on the UK 10-year gilt-edged higher to approach 4.5% after a hot inflation print prompted bets of higher borrowing costs.

The headline inflation rate in the UK was unchanged at 8.7% last month, compared to forecasts it would slow to 8.4%, and coming above expectations for a fourth month.

Also, the core rate continued to march higher. The Bank of England is expected to raise rates by at least 25bps on Thursday, with traders now seeing a 45% chance it will deliver a bigger 50bps hike.

Also, investors now see the base rate to reach 6% by December, which would mean another 150 basis points of increases this year.

9.00am: FTSE in red as markets digest CPI

FTSE 100 opened lower as CPI figures dominate headlines this morning.

Inflation came in hotter than expected, unchanged in May at 8.7%, sparking the 95% chance of interest rates being raised by 50bps to 5% tomorrow.

“Markets had been erring on the side of caution when it came to pricing in how quickly UK inflation is falling, but the news that there’s been no change in the headline CPI rate will send something of shiver through even the hardiest spectator,” said Danni Hewson, head of financial analysis at AJ Bell.

Among the blue chips, housebuilders Berkeley, Barratt, Persimmon and Taylor Wimpey were dragging the index, down 2.9%, 2.8%, 2.7% and 2.2%.

While there will likely be some read across from Berkeley, which highlighted some of the industry issues, including increased regulation, it is likely inflation has played a part in the negative view on the FTSE 100 housebuilders.

Rising inflation means rising interest rates, with the BoE expected to hike rates tomorrow to potentially as high as 5%, meaning mortgage repayments will go up, deterring buyers.

Elsewhere among the blue chips, NatWest was down 1.75% and Lloyds 1.6% on the back of rising gilt yields.

At the other end, Shell and BP were both among the leading risers, up 0.5% and 0.8% respectively, with prices in Crude and Brent Crude gaining in the last 24 hours.

FTSE 100 was off initial lows, now down only 19 points to 7,549.

8.43am: THG boss relinquishes veto

Some more corporate news, away from the doom and gloom of today’s CPI figures, and outspoken THG boss Matt Moulding has given up his much-criticised right to veto hostile bid approaches.

That in turn put the business, which recently was in bid talks with private equity group Apollo, firmly in play.

In the same announcement, released ahead of the company’s annual meeting, investors were told THG’s second-quarter operational and financial performance had been strong.

Adjusted earnings (EBITDA) are expected to be £44m to £47m for the first half. Guidance for the year remained unchanged. The nutrition business had a ‘particularly strong’ start to the year, investors were told.

The shares opened 3% higher at 75p.

FTSE 100 was off earlier lows, down 29 points to 7,539.

8.31am: Bad news for mortgages

Bad news for anyone with a mortgage following today’s hotter-than-expected inflation reading.

“For anyone with a variable mortgage, the likelihood of another rate rise tomorrow means yet more pain,” said Sarah Coles, head of personal finance at Hargreaves Lansdown.

“Plenty of those who moved onto a variable deal when their fixed rate expired had expected rates to have started to ease by now, so there’s a growing risk of rises that people hadn’t expected and cannot afford.”

“For anyone looking for a fixed rate, the picture is even bleaker. It has already been a torrid few weeks, as mortgage rates have shot up. The market is pricing in several hikes over the coming months.”

Chancellor Jeremy Hunt delivered further pain, stating that the government will not intervene to help with mortgages.

UK Chancellor Jeremy Hunt says the government will “stick to its guns” after hotter-than-expected inflation data

“Rises in interest rates do bring down inflation over time,” he adds pic.twitter.com/wGuNWeeoQS

— Bloomberg UK (@BloombergUK) June 21, 2023

While rising rates have been hell for borrowers, they have certainly been welcomed by savers.

“We have seen an awful lot of this priced in, with the most competitive rates on easy access accounts over 4%, and fixed rates over 5%. Today’s news means we may see rates inch up again as the market prices in higher rates for longer,” Coles added.

8.15am: FTSE 100 in the red

FTSE 100 didn’t respond well to today’s inflation figures, with London’s blue chips opening 40 points lower, or 0.54%, at 7,528.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said the unchanged inflation figure will have “spooked” the markets.

NatWest and Lloyds were among the blue-chips’ largest fallers, down 2.9% to 238p and 2.8% to 43.5p respectively on the back of inflation and rising gilt yields.

Berkeley Group also shed 1.7% to 3,843p.

Despite posting an increase in full-year profits, investors are still seemingly concerned with the plethora of obstacles in the house builder’s way, including inflation and increasing regulation.

Fellow property developers Barratt, Persimmon and Taylor Wimpey all also posted a 2% decrease in share price

7.59am: Pound remains high despite inflation

Following the CPI data, the British pound held firm around $1.28, staying close to its peak of $1.2848 recorded on June 16.

Hotter-than-expected inflation numbers raised anticipation among investors that the Bank of England would respond to the persistent inflationary pressures by implementing further interest rate hikes.

7.44am: Inflation above 5% ‘on the table’

Markets are now factoring in a 95% chance of a 50bps hike by the Bank of England tomorrow.

Prior to today’s inflation, which remains unchanged at 8.7%, the consensus was for a 25bps hike to 4.75%.

A 50bps would mean interest rates rise to 5%, its highest level since early 2008.

Markets price 95% chance of 50bp BoE hike as the OIS market opens

— Michael Brown (@MrMBrown) June 21, 2023

Oliver Rust, head of product at Truflation, said today’s inflation stats leave the “Bank of England with its back against the wall as it fights to tame the inflation beast, and the latest figures could tip the scales towards a 0.5% increase at tomorrow’s meeting.”

“In fact, the market is now expecting rates to reach 5.75% by December,” he added.

“While this may be overkill, a rise above 5% by the end of year is now firmly on the table.”

7.38am: Berkeley posts profit increase

Stepping aside from inflation for a moment, and house builder Berkeley said it is well placed to serve its stakeholders despite ongoing volatility as it posted an increase in full-year profits.

The FTSE 100 firm said pre-tax profits in the year to 30 April jumped by 9.5% to £604mln, while earnings per share also grew by 2.1% to 426.8p.

“This is a very strong performance by our sales and construction teams, given market conditions and changing building regulations, and reflects the resilience of Berkeley’s business model with its focus on the country’s most undersupplied markets,” said chief executive Rob Perrins.

Berkeley was also confident in reiterating guidance, expected to deliver at least £1.05bn in profit over the next two financial years.

Pricing for sales also remains firm, with build cost inflation beginning to moderate, it said, although the near-term outlook for the market remains “uncertain.”

Berkeley has forward sales at a “healthy” £2.1bn, although the value of reservations is around 15% lower than the comparative financial year.

“Looking forward, we are well placed to meet our guidance for the next two financial years and continue investing in our existing regeneration sites, but will remain cautious in committing to new investment until the conditions for growth are in place,” Perrins added.

7.23am: More on inflation

More on the UK’s surprise inflation figures, which came in above expectations of 8.4% and significantly higher than the Bank of England’s target of 2%.

Pressure will now be on policymakers to further raise interest rates to tame sticky inflation, with the BoE decision taking place tomorrow.

Interest rates are currently at 4.5%, although it is forecasted the bank will raise it by 25bps to 4.75%.

“There’s no way to sugar coat this, 8.7% is a bad number,” said George Lagarias, chief economist of audit and accounting firm Mazars.

“This number will compel policymakers, the Government and the Bank of England, to further clamp down on consumption, in order to break the wage-price spiral.”

“We expect that growth will further decelerate, possibly even pushing the economy past the recession threshold, even as early as the Autumn.”

7.15am: Inflation at 8.7%, FTSE 100 expected to open low

The Consumer Price Index (CPI) rose by 8.7% in the 12 months to May 2023, unchanged from April.

On a monthly basis, CPI rose by 0.7% in May, compared with a rise of 0.7% in May 2022.

Rising prices for air travel, recreational and cultural goods and services, and second-hand cars resulted in the largest upward contributions to the monthly change in both the CPIH and CPI annual rates.

Falling prices for motor fuel led to the largest downward contribution to the monthly change in CPIH and CPI annual rates, while prices for food and non-alcoholic beverages rose in May 2023 but by less than in May 2022, also leading to an easing in the annual rates.

“The UK’s CPI data has brought no good news,  the number is far away from a heartwarming event as the data shows that inflation is still immensely sticky and the Bank of England has little to no options but to continue to do what they need to do no matter the cost,” said Naeem Aslam, chief investment officer at Zaye Capital Markets.

Elsewhere, the FTSE 100 is expected to open 18 points lower.