Langton Capital – 2022-09-06 – Politics, more on energy costs, likely bail outs, services PMI & more:
Politics, more on energy costs, likely bail outs, services PMI & more:A DAY IN THE LIFE: We’ve had our puppy for a couple of months now and, whilst it’s probably true to say that most dogs are a bit dim, puppies are particularly energetic when it comes to proving just how true this is. Whether it’s biting raindrops, growling at the wind or chasing pigeons, everything seems to involve mess, noise and the expenditure of large amounts of energy and, after a particularly hectic session over the weekend, the dog ate three bowls of food, drank about two pints of water and then collapsed, dead to the world, for about 14hrs meaning that, whoever implied that leading a dog’s life was somehow suboptimal, maybe didn’t get it altogether right. Anyway, it would appear that either a) summer holidays have been extended or b) a lot of people hadn’t turned off their automated Out-of-Office replies and we’re betting on the latter. On to the news: LANGTON EMAIL: The Free Email is now written in short form. Extended versions of many stories are in the Premium Email. Reply to this email if you would like to upgrade. Prices for the Premium at time of writing are £345 for one subscription, £595 for multiple, both plus VAT. Or sign up for easy in, easy out monthly option HERE POLITICS: This was impossible to ignore yesterday with most think tanks and trade bodies and many companies making suggestions as to what new PM, Liz Truss, should do in her first week, month or year in office. That’s assuming Ms Truss makes it to her one year anniversary, of course. Indeed, speculation has intensified overnight that a bailout package, including support for businesses, will be announced shortly. The BBC says ‘the “deficit reduction scheme” is expected to form the centre piece of the government’s attempt to tackle the high cost of energy for consumers.’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Comments from Economists (and near economists), Trade bodies, Company comments, Langton comment etc: • See premium. Reply for sample or to upgrade. Single £345, multiple £595. PUBS & RESTAURANTS: Energy costs: Regarding inflation, gas prices once again soared yesterday as Russia announced it would not reopen its main gas pipeline to Europe until the ‘collective West’ drops its sanctions… Trading: Springboard reports that footfall in the UK was up 0.9% in the week ending 27 August compared to 2021 levels, benefitting from a combination of the August Bank Holiday and back to school spending…. Barclaycard spending data: The latest Barclaycard Consumer Spending report has suggested that UK consumers cut spending on clothing & DIY in August but spent more in some other areas, including some parts of hospitality. The FT interprets this as being ‘a sign of “collapsing” demand owing to the intensifying cost of living crisis’. Despite inflation driving nominal numbers higher, spending overall fell by 10.7% between July and August and is 1.9% down against August last year… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Services PMI: S&P Markit yesterday reported on the UK’s Service Sector PMI yesterday saying that it had slipped to 50.9 in August from 52.6 in July. Though still above the expansion/contraction number of 50.0, this is the lowest PMI for 18mths… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. The consumer The CEBR is forecasting that rent arrears will rise to an 11-year high as a result of the cost of living crisis. It says that the absolute number of those in arrears will be around a third higher than was the case during the pandemic… The RAC says that petrol costs on the forecourt have not fallen as rapidly as they should have done. It says unleaded costs are around 170p but adds that they should be some 9p or so a litre cheaper… Other news: The hop harvest is forecast to be poor. That could jack prices. The grape harvest could be early. The Mail reports on beerflation saying that the cost of beer production is up by 62% in two years ‘with further inflation ahead as the price of making your pint soars…’ COMPANY NEWS: Brewdog CEO James Watt says the ‘genuinely existential threat’ of rising energy bills must be countered by emergency tax relief for the hospitality industry. Everards Brewery has gained planning permission to build a 120-room hotel at Everards Meadows, beside its Leicestershire brewery. Marston’s yesterday announced that non-executive director designate Nick Varney has purchased 80,000 shares in the company at 35.89p per share. Brakspear has ‘made two new appointments within its Honeycomb Houses managed division, designed to bolster the 10-strong estate and put it in a strong position for growth. James White is appointed as operations manager, while Ken Umasanthiram joins as head of food.’ HOLIDAYS & LEISURE TRAVEL: Per Travel Weekly, Abta CEO Mark Tanzer has called for Liz Truss to introduce a price cap on energy costs for businesses as well as extending business rates support and offering more ‘headroom’ with the repayment of loans taken out during the pandemic. Rick Jones, PwC partner in corporate finance, M&A and refinancing, has said that there are reasons to be positive in travel despite rising energy costs. Jones told Travel Weekly that ‘People have been locked in unable to travel for two years and are looking for experiences. It’s not that consumers aren’t price-sensitive but they’re currently less price-sensitive than maybe one expects.’ OTHER LEISURE: Netflix will launch a cheaper ad-supported tier for its streaming platform at the start of November, in a bid to prevent squeezed customers from fully cancelling their subscriptions. Instagram, which is owned by Meta, has been fined €405m by Irish regulators after it was held that it released children’s data, including phone numbers and email addresses. The BBC is reported to have drafted in Bain & Co to conduct a review of its strategy in the face of the potential abolition of the television licence fee. FINANCE & MARKETS: Mortgage broker Henry Dannell has told City AM that the amount of cash being freed up via ‘equity release’ schemes by home owners could exceed £6.5bn a year by 2025… The euro has further weakened on news that the Nord Stream 1 gas pipeline to Germany will remain shut down until western sanctions against Russia are lifted. Sterling weakness in the news but the currency actually rose a little yesterday to $1.1566 and €1.1621. Oil a shade lower at $95.02. UK 10yr gilt yield up another 3bps at 2.94%. World markets mostly weaker yesterday and London set to open down around 14pts as at 6.30am. FORTHCOMING NEWS: A gentle run in before it becomes noticeably busier later in the month. Amidst a smattering of economic announcements, Restaurant Group reports H1 results to end June on Thursday and Gear 4 Music hosts its AGM on Friday. RETAIL WITH NICK BUBB: • See premium. Reply for sample or to upgrade. Single £345, multiple £595. |
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