Lloyds Banking Group shares today rose during a record-breaking session for the FTSE 100 index.
The Black Horse lender rallied amid relief over the Financial Conduct Authority's proposed motor finance redress scheme.
Meanwhile, the gold price continues to advance after topping $4000 an ounce in dealings last night.
FTSE 100 Live Wednesday
- Lenders rise on FCA redress plan
- Gold price tops $4000
- Vertu flags JLR showroom impact
Market update: FTSE 100 at record as Lloyds shares rise, Marston's up 9%
10:09 , Graeme EvansThe FTSE 100 index today set a new record as investors piled into Lloyds Banking Group and miners with exposure to $4000 an ounce gold.
London’s top flight reached a new intraday peak of 9521.66 before settling 0.3% or 32.05 points higher at 9515.63.
Lloyds led the risers board, lifting 3% or 2.2p to a new multiyear high of 85.5p after the City watchdog cut the likely cost of a motor finance mis-selling redress scheme.
The £11 billion central case scenario comprises £8.2 billion of compensation payments and £2.8 billion of operational costs, versus a £9 billion-£18 billion range previously estimated.
Lloyds, which has set aside £1.2 billion in relation to the matter, said it was assessing the implications and impact of the FCA’s 360 page consultation document. The watchdog’s redress plan is due to be finalised early next year.
City bank Jefferies said: “The design of redress makes it hard to translate this to bank-specific figures, but we think it implies a £1.5 billion cost for Lloyds (compared to our prior £1-2bn range).”
In the FTSE 250, the shares of Close Brothers rose 2% or 9p to 506p. Elsewhere in the sector, NatWest added 1.4% or 7.6p to 546.2p and Standard Chartered lifted 20p to 1463.5p.
Other stronger stocks in the FTSE 100 included West Africa-focused Endeavour Mining, which lifted 3% or 82p to 3242p after the price of gold rose another 1.4% to $4039 an ounce.
Antofagasta, which produces copper concentrate containing gold and silver, rose 74p to 2754p and silver miner Fresnillo added 36p to 2336p.
Anglo American improved 29p to 2838p even though merger partner Teck Resources cut its production forecast for a flagship copper mine in Chile.
The shares benefited from an upgrade by City bank Berenberg, which moved to a Buy recommendation and 3000p target price. Glencore shares were flat at 356.7p after the same firm downgraded to a Hold stance.
In the FTSE 250 index, a strong update by convenience foods producer Greencore helped to lift the shares of its takeover target Bakkavor by 5% or 9.5p to 217.5p.
Greencore, which said adjusted operating profit will be above previous guidance at about £125 million, faded after a strong start to stand unchanged at 232p.
In the FTSE All-Share, Marston’s shares were in demand after the pubs chain reported a 1.6% rise in like-for-like sales and a second consecutive year of significant profit growth. Shares jumped 9% or 3.45p to 42.2p.
Motor finance bill seen at £11bn, Lloyds and Close Bros shares rise
09:21 , Graeme EvansThe Financial Conduct Authority’s 360-page consultation paper into UK motor finance commission redress points to an industry-wide cost of about £11 billion.
The central case scenario is made up of £8.2 billion of redress costs and £2.8 billion of operational costs, versus the £9 billion-£18 billion range previously estimated.
Shore Capital said: “While this implies a £2.5 billion improvement in the FCA’s central case it still compares unfavourably to the about £2 billion of combined total provisions that we estimate the motor finance industry has set aside to date, suggesting significant further provisions may be required."
The non-banking industry is likely to bear a large proportion of the bill, with lenders Lloyds and Close Brothers have previously stated that they are comfortable with the level of provisioning they have already made.
Lloyds shares today rose 2.1p to 85.4p and FTSE 250-listed Close Bros added 8p to 505p.
Analysts at City bank Jefferies added: “The design of redress makes it hard to translate this to bank-specific figures, but we think it implies a £1.5 billion cost for Lloyds (compared to our prior £1-2bn range).
“Certain aspects may be challenged, though, so this might not be the final (360-page) chapter of the story.”
Vertu Motors flags showroom impact of JLR disruption
09:07 , Graeme EvansVertu Motors today warned annual profits faced a hit of up to £5.5 million after its Jaguar Land Rover showrooms were impacted by the carmaker’s cyber attack.
It said the September trading result was knocked by £2 million due to the JLR disruption in the key plate change month.
Vertu, which holds insurance for third-party system outages, reported a progressive easing of the disruption in recent days.
The group said September trading profit was ahead of the prior year, excluding the JLR impact. It has a network of 191 sales and aftersales outlets across the UK.
Shares were broadly flat at 60p following today’s update and half-year results.
FTSE 100 at new record, Lloyds shares rise
08:09 , Graeme EvansLloyds Banking Group today opened 2% higher, up 1.7p to 85p after the Financial Conduct Authority published details of its motor finance redress scheme.
The FTSE 100 index lifted 0.3% or 31.82 points to a record 9515.40, with Endeavour Mining up another 60p to 3220p after the price of gold topped $4000 an ounce.
Outside the top flight, Greencore shares rose 6% and Marston’s lifted 10% after the pair upgraded guidance in their year-end updates
Bloomsbury author signs Disney film deal
07:56 , Graeme EvansA British children’s book writer hailed as “the next JK Rowling” has landed a multi-film deal with Walt Disney Studios.
Disney has bought the rights to Katherine Rundell’s best selling fantasy series “Impossible Creatures”, publisher Bloomsbury announced today.
The first two books have already sold over one million copies across 34 territories, and Rundell is in discussions to further expand the franchise beyond the five-novel series.
Bloomsbury holds the print, ebook and audio rights exclusively in the UK, Europe and the Commonwealth.
Greencore and Marston's ahead of expectations
07:53 , Graeme EvansConvenience food producer Greencore today said demand in food-to-go categories such as sandwiches and sushi drove a strong finish to its financial year.
The FTSE 250-listed group, which supplies all the major supermarkets in the UK, said adjusted operating profit will be above previous guidance at about £125 million.
Revenues rose 8% in the quarter and across the financial year.
Greencore launched 130 new products in the quarter, including food-to-go products for a new store format, an “elevated” mac and cheese range and premium cooking sauces.
Meanwhile, pub chain Marston’s said underlying profit for the year to 27 September is likely to be ahead of market expectations.
This marks a second consecutive year of significant profit growth following the 65% uplift delivered in 2024.
Like-for-like sales for the full year grew 1.6%, while the group reported a step-change in profitability underpinned by sustained margin expansion.
Ramsdens profit gets gold price lift, pawnbroking loan book up 8%
07:36 , Graeme EvansOne of the beneficiaries of the gold price rise has been Ramsdens Holdings, which today said annual profits will be slightly ahead of the City’s £15.4 million forecast.
The Middlesbrough-based business operates four divisions spanning currency exchange, pawnbroking loans, precious metals buying and the selling and retailing of second hand and new jewellery.
It said the metals segment continued to perform very strongly in the second half of the financial year to 30 September, with gross profit up 50% year on year.
This was supported by a stronger gold price and the launch of a dedicated gold buying website to drive awareness, which together resulted in a 15% year on year increase in the weight of gold purchased.
The company, which operates from 169 sites, said its pawnbroking loan book grew by 8% year-on-year to £11.5 million.
Chief executive Peter Kenyon said: “Whilst we have benefited from the sustained high gold price within our purchase of precious metals segment, we've also continued to make good progress across our other income streams.”
Gold up 52% in a year after topping $4000
07:27 , Graeme EvansGold’s $4000 landmark means the precious metal has risen 52% this year, leaving it on course for the biggest annual increase since 1979.
Geopolitics, higher government debts, persistent inflation and the outlook for lower US interest rates have boosted the appeal of the non-yielding asset.
Chris Weston, Pepperstone UK head of research, said: “Gold, silver, and platinum are all articulating a powerful macro message, and it’s one that deserves respect.
“My own view is that funds and global reserve managers want a hedge — against fiscal recklessness, currency debasement, and unpredictable government policy — and gold sits squarely at the heart of that movement.”
The increase means the notional cost to the public purse of selling almost half of Britain’s gold reserves 25 years ago is now $47 billion, the Times reported today.
It said the 395 tonnes of bullion sold between 1999 and 2002 generated proceeds of $3.5 billion at the time, but that same quantity of gold would today be worth $50.6 billion.
Gold advance continues, Lloyds issues update on motor finance
07:02 , Graeme EvansGold futures today traded at $4,030 an ounce after the precious metal broke through the $4000 milestone in New York dealings last night.
Wall Street stock markets fell yesterday, with weakness in the tech sector resulting in declines of 0.7% for the Nasdaq Composite and 0.4% for the S&P 500 index.
The FTSE 100 index is seen opening about 0.2% higher, having added 4.44 points to 9483.58 in yesterday’s session.
Lloyds Banking Group shares will be in the spotlight after the Financial Conduct Authority estimated its motor finance redress scheme could cost lenders £8.2 billion in compensation.
The total bill, including the cost of running the scheme, is likely to amount to £11 billion. Lloyds shares start today’s session at 83.3p, up 52% this year.
Lloyds said this morning: “The group is currently assessing the implications and impact of this consultation in the context of its current provision for this issue and will update the market as and when appropriate.”
