The economic storm facing Chancellor Rachel Reeves showed few signs of easing today after the pound lost further ground against the dollar.
The gilt market sell-off also extended into a second week to leave long-term borrowing costs near a post-2008 high.
Higher oil prices have added to the inflation outlook, with Brent Crude above $81 a barrel this morning.
FTSE 100 Live Monday
- GSK unveils $1bn deal
- Entain shares jump
- Serco boss steps down
Market update: Oil price weighs on IAG, Oxford Nanopore jumps 15%
10:09 , Graeme EvansThe highest oil price since August today stoked the City’s inflation fears during another poor session for sterling and the UK’s long-term borrowing costs.
Brent Crude topped $81 a barrel and is up more than 8% this year after the US announced new sanctions against Russia’s energy industry.
America’s non-farm payroll figures, which were released on Friday, gave a further boost to the oil price after coming in much higher than expected.
Expectations that US interest rates will stay higher for longer reinforced the dollar to leave sterling down another 0.8% at just above $1.21 this morning.
The pound was last week’s worst-performing G10 currency, a period when the 10-year gilt yield also climbed to its highest level since 2008 at 4.9%. It remained near this level today as inflation fears weigh on the UK interest rate outlook.
In the FTSE 100 index, the prospect of higher fuel costs cooled some of the recent momentum for British Airways and Iberia owner IAG.
The shares dropped 4% or 11.6p to 304.3p, although they are still double their value of a year ago after a 2024 in which the airline operator reported a strong performance on transatlantic and other key routes.
Those favourable trends were highlighted earlier today when Heathrow said a record 83.9 million passengers travelled through the airport’s terminals in 2024.
Alongside IAG, low-cost rival easyJet fell 13.2p to 494.6p and Rolls-Royce dipped 17.2p to 562.8p near the top of the FTSE 100 fallers board.
BP and Shell moved the other way, rising 5.7p to 430.8p and 34.5p to 2659.5p respectively, in a session when energy stocks Centrica and SSE also put on 2%.
Their support failed to prevent the FTSE 100 index from falling 28.26 points to 8220.23, a decline of 0.3% on top of the 0.9% reverse seen on Friday.
Entain shares were the best performing after it said customer-friendly NFL results had not derailed earnings guidance for US joint venture BetMGM.
The Ladbrokes and Sportingbet owner put on 2% or 14.4p to 638.6p, down from an initial bounce of 9% after it also said group earnings will be toward the top end of forecasts.
The FTSE 250 index fell 34.02 points to 19,699.92, led by Page Group after the recruitment firm’s year-end update highlighted the further worsening of trading conditions in its biggest markets of France and Germany.
Shares fell 4% or 13.4p to 298p, leaving them a third lower over the past year.
The best performing stock in FTSE 250 was Oxford Nanopore, which surged 15% or 20.2p to 151.2p after the gene sequencing firm reported “strong and accelerating” second half momentum.
Record year for Heathrow passenger traffic
09:01 , Graeme EvansHeathrow has reported its busiest ever year after 83.9 million passengers travelled through the airport’s terminals in 2024.
The total is 4.7 million more than in 2023 and three million more than the previous annual record, set in 2019.
It follows a record Christmas and New Year period after December’s figure for Heathrow passengers topped seven million..
New York, Los Angeles, Dublin and Madrid were among the top destinations in 2024.
FTSE 100 lower despite oil support, Page down 5% in FTSE 250
08:32 , Graeme EvansBP and Shell shares are up 6.05p to 431.15p and 32.5p to 2657.5p respectively after the price of Brent Crude rose above $80 a barrel.
The support of the oil giants and the progress of gambling group Entain, which rose 9%, failed to prevent the FTSE 100 index falling 33.82 points to 8214.67.
Blue-chip fallers included Rolls-Royce, Melrose Industries and British Airways owner IAG, with all three down by 1.5%. GSK fell 11p to 1338.5p after announcing a major acquisition in the United States.
The FTSE 250 index was broadly unchanged at 19,735.34, despite weakness in the recruitment sector.
Page Group fell 5% or 14.4p to 297p after forecasting profits towards the lower end of expectations and rival Hays dipped 0.85p to 70.1p.
Entain guidance helps shares rally
08:20 , Graeme EvansA reassuring update by Entain, the company behind Ladbrokes, Coral and US joint venture BetMGM, today helped its shares jump 9% or 55p to 679.2p.
The statement followed the warning by Flutter Entertainment that customer-friendly NFL results had impacted its performance towards the end of 2024.
Despite these trends in October and December, Entain expects BetMGM to meet previous 2024 earnings guidance of approximately $250 million.
And with the support of operator friendly sports results for the core business, it adds that Entain underlying earnings should be at the top end of the £1.04 billion to £1.09 billion guidance range.
Serco CEO steps down after two years
07:57 , Graeme EvansSerco chief executive Mark Irwin is to step down after two years in the role.
The outsourcing company, which employs 50,000 people, said that Anthony Kirby will step up from his current role running Serco’s largest division of UK and Europe to take on the £845,000-a-year CEO job from 1 March.
Serco chair John Rishton said: “Since we attracted Anthony from Compass Group, he has been part of our internal succession planning.
“During this time he has held a number of critical roles at Serco, including being group chief operating officer and successfully leading the UK & Europe business.
“The board is confident that Anthony has the skills, determination and leadership attributes to deliver against our strategy."
Irwin has worked for Serco since 2013, running the UK and Europe division from 2020 until his promotion in January 2023.
There is no change to financial guidance for 2024 results or trading in 2025.
GSK unveils $1 billion deal for IDRx
07:44 , Graeme EvansGSK is to buy the US-based biopharmaceuticals company IDRx in a deal worth an initial $1 billion.
The move announced today adds to GSK’s portfolio targeting the significant medical need in gastrointestinal cancers.
The acquisition includes lead molecule, IDRX-42, which is being developed as a first and second-line therapy for the treatment of gastrointestinal stromal tumours.
GSK said the acquisition is consistent with the company’s approach of focusing on areas of clear unmet medical need.
Tim Clackson, chief executive of Boston-based IDRx, added: "We are looking forward to working with GSK to advance IDRX-42 for patients with GIST given there have been no major advances to the standard of care for almost 20 years.
“Combining our experience to date with GSK's expertise in GI cancers, global clinical development capability, and strong commercial presence in oncology will help to accelerate the development of this novel medicine for patients."
Page hit by weak European job market
07:17 , Graeme EvansRecruitment firm Page Group expects 2024 operating profit towards the lower end of the current market consensus range of £49 million to £58.5 million.
Chief executive Nicholas Kirk said conditions remained challenging in the company’s fourth quarter, with most markets sequentially stable,
However, there was a further worsening in Page’s two largest markets of France and Germany.
Kirk said: “The conversion of interviews to accepted offers remains the most significant area of challenge as the ongoing macro-economic uncertainty continues to impact candidate and client confidence, also extending the time-to-hire.”
Gross profit fell 17.2% to £196.7 million in the three months, with the largest division of Europe, Middle East and Africa down 19.1%. The UK division, which accounts for 12% of group business, fell 13.6% on a year earlier.
Sterling dips below $1.22, Brent Crude above $80 a barrel
07:05 , Graeme EvansSterling remains under pressure, standing at a fresh one-year low of $1.2146 after Friday’s strong jobs report gave a further lift to the US dollar.
The non-farm payrolls figure of 256,000 meant a further blow to the outlook for lower interest rates, resulting in a poor finish to Wall Street trading last week.
The Dow Jones Industrial Average, S&P 500 index and Nasdaq Composite all lost in the region of 1.5%, while there was a further upward move in long-term bond yields.
Asia markets are in the red while the FTSE 100 index is forecast to open 22 points lower at 8226, having fallen by 0.9% or 71 points on Friday.
Meanwhile, Brent Crude is back above $80 a barrel for the first time in four months.
