Bank of England policymakers are in the spotlight on the day of their latest Interest rate decision.
They are expected to keep the base rate at 4%, with December seen as the most likely date for the next quarter point cut.
BT Group, Diageo and Sainsbury’s have posted updates, while the FTSE 100 index remains near to record territory.
FTSE 100 Live Thursday
- Diageo lowers guidance
- BT backs full-year targets
- Sainsbury's hails strong trading
1pm update
12:57 , Neil HunterShortly before 1pm the FTSE stood at 9,761.50 , down 15.58 (-0.16%) today
Market update: BT and IMI earnings cheer, Smith & Nephew down 9%
10:04 , Graeme EvansA 5% rise for BT Group shares and strong trading updates by AstraZeneca and Sainsbury’s today failed to inspire the FTSE 100 index to fresh highs.
London’s top flight drifted 13.97 points to 9763.11, having last night posted a record close on the back of improved Wall Street trading.
In a busy session for blue-chip updates, BT shares returned to form after the telecoms firm’s second quarter earnings came in slightly ahead of City forecasts.
The shares, which peaked at 223p in the summer, surged 8.9p to 188.85p as investors also welcomed the company’s unchanged full-year guidance.
IMI led the top flight, up 6% or 154p to 2556p after the industrial products firm reported forecast-beating sales growth of 12% in the third quarter.
Banking stocks were also higher after the Financial Times reported that Chancellor Rachel Reeves has no plans to target the sector for additional taxes.
The pre-Budget speculation helped Lloyds to rise by 2p to 91.5p, while NatWest lifted 2% or 13p to 601.4p and Barclays added 5.6p to 411.35p.
HSBC improved 9.8p to 1095.6p, despite its shares being marked ex-dividend.
Elsewhere on the results front, Sainsbury’s rose 3.6p to 340.8p after the grocer improved full-year earnings guidance on the back of strong summer trading.
It also said that total cash returns to shareholders in 2025/26 were now expected to exceed £800 million.
AstraZeneca slipped 42p to 12,408p, even though third quarter sales and profit came in slightly ahead of forecast as the drugs giant reiterated guidance for the year.
The shares are up 10% since the start of October.
Diageo investors suffered another setback, with shares down another 3% or 51.5p to 1746p after the Guinness and Smirnoff maker trimmed full-year profit guidance.
The downgrade, which has been driven by weaker spirits demand in China and the United States, leaves the shares 31% lower so far this year.
At the bottom of the FTSE 100, Smith & Nephew slid 9% or 126p to 1267.5p after third quarter organic sales growth of 5% came in below City expectations of 6.3%.
City firm downgrades UK growth forecast
08:56 , Graeme EvansA City research firm has slashed its UK growth forecast for next year from 1.5% to just 0.5%.
US owned Morningstar made the downgrade because of the impact of a likely income tax bombshell hitting pay packets next April.
Rachel Reeves is widely expected to announce an income tax hike of up to 2p on the basic rate in her Budget speech on November 26.
She needs to raise an estimated £30 to £40 billion to meet her “iron clad” fiscal rules and give herself a more comfortable headroom buffer against future economic setbacks.
FTSE 100 steady as banking stocks rally, BT higher
08:28 , Graeme EvansBanking stocks are higher after the Financial Times reported that Chancellor Rachel Reeves has no plans to target the sector for additional taxes.
The pre-Budget speculation helped Lloyds to rise by 2% or 1.8p to 91.4p, while NatWest added 2% or 14p to 602.4p and Barclays lifted 5.2p to 411p.
Elsewhere, Sainsbury’s rose 3p to 340.2p and BT Group improved by 4.3p to 184.25p following the release of their half-year figures.
Diageo, whose shares have fallen by 30% this year, dropped 2% or 38.5p to 1759p after it trimmed its full year guidance.
AstraZeneca shares rose 82p to 12,532p, while the FTSE 100 index was broadly unchanged in record territory at 9771.
Sainsbury's lifts profit target after strong summer trading
08:11 , Graeme EvansSainsbury’s is set for annual earnings of more than £1 billion after the supermarket upped its outlook on the back of better-than-expected half-year results.
The UK’s second largest grocer, which also owns the Argos chain, reported an underlying operating profit of £504 million for the 28 weeks to September 13, up slightly on last year’s £503 million and better than the group had forecast.
Sainsbury’s had previously said that retail earnings would remain flat over the full year, at around £1 billion, due to intensifying competition from rivals on price and a surge in costs.
Chief executive Simon Roberts said: “We planned for a strong summer and we really delivered, with leading product innovation, and outstanding fresh food availability when demand was highest throughout the hot weather.
“At Argos we delivered a good seasonal performance, grew market share and improved profitability. ”
BT backs targets, lifts dividend
07:56 , Graeme EvansBT Group today reiterated forecasts as it said its Openreach full fibre broadband roll-out had reached more than 20 million homes and businesses.
Chief executive Allison Kirkby said: "BT is delivering on its strategy in competitive markets. We're building the UK's digital backbone, connecting the country like no one else and accelerating our transformation.”
BT continues to forecast full-year revenues of £20 billion, UK service revenues of £15.3-£15.6 billion and underlying earnings of £8.2-£8.3 billion.
The company also reiterated medium-term guidance, including free cash flow of £3 billion by the end of the decade.
Half-year results today showed a 3% fall in revenues to £9.8 billion, reflecting lower mobile handset trading volumes and declines in its international division.
The number of Openreach broadband customers fell by 242,000 over the second quarter of the financial year. This was driven by losses to competitors and a weaker broadband market.
Reported profit before tax of £862 million fell 11%. The interim dividend has been increased 2% to 2.45p a share.
Diageo lowers forecasts amid weak US consumer trends
07:29 , Graeme EvansDrinks giant Diageo today scaled back guidance amid weakness in the Chinese white spirits market and a softer US consumer environment.
The Guinness and Smirnoff maker now expects net sales for the year to June to be flat or slightly down and operating profit growth to be low to mid-single digit.
The company’s previous guidance had been for an unchanged sales performance and mid-single digit profit growth.
Net sales were flat in the quarter to the end of September, despite growth in Europe, Latin America and Africa.
Interim boss Nik Jhangiani said: “We are not satisfied with our current performance and are focused on what we can manage and control; acting with speed to drive efficiencies, prioritising investment and adapting more quickly to an evolving consumer environment.”
Bank of England interest rate set to stay at 4%
07:05 , Graeme EvansInterest rates are widely expected to be kept at 4% when the Bank of England’s monetary policy committee announces its latest decision at noon.
A split vote is forecast, with the majority of members believing it is better to wait for details of this month’s Budget and further evidence that inflation is cooling.
December’s meeting is seen as the more likely date for a reduction to 3.75%.
FTSE 100 set to consolidate gains, Asia markets higher
07:00 , Graeme EvansThe FTSE 100 index is set to consolidate its position at a record high, having closed last night 62.12 points or 0.6% higher at 9777.08.
The expectations for an unchanged start follow a rebound on Wall Street after the Dow Jones Industrial Average rose 0.5% and the S&P 500 lifted 0.4%.
The tech-focused Nasdaq Composite rallied 0.7% after the 2% decline of the previous session.
Asia markets are higher, with the Nikkei 225 up 1.3% and the Hang Seng index 1.8% stronger.
