UKX FTSE 100 Index

UK Inflation Data Means Higher Rates, Recession More Likely

1340 GMT - UK inflation data makes a recession more likely as the Bank of England is now pushed to raise interest rates further and for longer than previously thought, Capital Economics' Neil Shearing and Paul Dales say in a note. Services CPI inflation increased to 6.9% in April from 6.6%, suggesting price pressures look increasingly domestically generated, driven by rapid wage growth, the economists say. Policymakers will need to bear down on demand in order to cool the labor market and bring inflation down to more acceptable levels, they say. While the recent resilience of economic activity has led many forecasters to believe that a recession in no longer likely, it could be more a case that the recession has been delayed rather than canceled, they say. (edward.frankl@wsj.com)

COMPANIES NEWS:

Intertek Four-Month Revenue Grew on Strong Demand, China Reopening

Intertek Group said Wednesday that revenue rose 7.6% at constant currency in the January-April period thanks to growth in products, trade and resources.

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Aviva 1Q General Insurance Sales Rose; Backs Targets

Aviva on Wednesday said its general insurance sales rose 11% in the first quarter of 2023 and backed its targets and dividend guidance.

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Marks & Spencer FY 2023 Profit Rose; To Reintroduce Dividends in November

Marks & Spencer Group reported Wednesday a rise in fiscal 2023 pretax profit and said it will reintroduce dividends at the time of its half-year results.

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SSE Swung to FY 2023 Pretax Loss on Higher Costs; Retains Ownership of SSEN Distribution

SSE said Wednesday that it swung to a pretax loss for fiscal 2023 after booking higher costs, and that retaining 100% ownership of the SSEN distribution business was the right strategy at this time.

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Severn Trent FY 2023 Pretax Profit Fell on Lower Prices, Higher Costs

Severn Trent said Wednesday that pretax profit declined in fiscal 2023 due to lower wholesale energy prices and higher cost pressures, and that it has proposed an increased dividend.

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Kingfisher 1Q Sales Hurt by Poor Weather; Comfortable With Consensus Forecast

Kingfisher said Wednesday that first-quarter comparable sales fell 3.3% on a constant currency basis as poor weather in the U.K. and France hurt its performance, but the board is comfortable with full-year adjusted pretax profit consensus market forecasts.

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LondonMetric Property Swung to FY 2023 Pretax Loss on Adverse Property Valuations

LondonMetric Property said Wednesday that it swung to a pretax loss for fiscal 2023 due to adverse movements in the value of its property portfolio, and that although risks and uncertainty remained the outlook was improving and some confidence was returning.

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LondonMetric Property to Buy CT Property for GBP198.6 Mln in All-Share Deal

LondonMetric Property said Wednesday that it has agreed to buy CT Property Trust for 198.6 million pounds ($246.6 million) in an all-share deal.

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Great Portland Estates Swung to FY 2023 Loss on Negative Property Valuations

Great Portland Estates said Wednesday that it swung to a fiscal 2023 loss after a negative revaluation of its investment portfolio, though revenue rose.

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Playtech Sees Current Growth Rates Moderating Later in Year

Playtech said Wednesday that it expects current growth rates to moderate later in the year after experiencing some first-quarter tailwinds.

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National World Revenue to Date Declined on Print Performance

National World said Wednesday that revenue for the year to date declined 5%, driven by a fall in print revenue, but that full-year performance is expected in line with targets.

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Close Brothers Says It Performed Well in 3Q After Loan Book Growth in Banking Division

Close Brothers Group on Wednesday said it performed well in the third quarter of fiscal 2023 after it saw loan book growth in its banking division and higher net inflows in its asset management segment.

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Empiric Raises Rent Growth Guidance on Higher Revenue Occupancy in 2023-24

Empiric Student Property said Wednesday that revenue occupancy for the 2023-2024 academic year to-date is significantly higher on-year, and raised rental growth guidance.

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XPS Pensions Group Sees FY 2023 Ahead Of Previous Views

XPS Pensions Group on Wednesday said it anticipates its results for fiscal 2023 to be slightly ahead of its previous expectations.

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4imprint Group Year-To-Date Orders Up 22% But Expected to Moderate Over Year

4imprint Group said Wednesday that year-to-date order intake is up 22% but this is expected to moderate over the year given the challenging comparatives since April.

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Bonhill Group Shares Rise on InvestmentNews Sale, Tender Offer

Shares of Bonhill Group rose 21% on Wednesday after the company said that it has agreed to sell InvestmentNews to KM Business Information US for 3.3 million pounds ($4.1 million) and will return the money to shareholders.

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Petershill Partners 1Q Aggregate Assets Under Management Rose

Petershill Partners said Wednesday that it had a steady start to 2023 and that aggregate assets under management rose.

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Artisanal Spirits Revenue Returned to Growth in 2Q; On Track to Meet Forecasts

Artisanal Spirits Co. said Wednesday that revenue has returned to growth in the second quarter of the year after a flat start and that it is on course to meet revenue and Ebitda market forecasts.

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Mortgage Advice Bureau 1Q New Lending Fell 21%; 2023 in Line With Views

Mortgage Advice Bureau said Wednesday that new mortgage lending in the first quarter fell 21%, but that despite the challenging conditions its performance for the year remained in line with the board's expectations.

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C&C Group FY 2023 Pretax Profit Jumps on Revenue Rise

C&C Group said Wednesday that pretax profit rose 44% in fiscal 2023, driven by revenue rising on higher volumes and price/mix, and that it plans to adopt a progressive dividend policy.

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Arbuthnot Says Lending, Deposits Grew in January to April

Arbuthnot Banking Group on Wednesday said higher interest rates continue to boost its revenues as it reported a rise in deposits, loan balances and assets under management for the first four months of 2023.

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Zotefoams Sees 2023 in Line With Views After Stong Four-Month Performance

Zotefoams said Wednesday that its performance in the four months ended April 30 was strong as it delivered continued year-on-year revenue growth, and that the board's expectations for the year remained unchanged.

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Lok 'N Store Sees 3Q Stores Revenue Up on Year; Continues Store Portfolio Expansion

Lok 'n Store Group said Wednesday that performance continued to be strong in the quarter ended April with stores revenue up 13%, and disclosed a number of new transactions.

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600 Group to Report FY 2023 Operating Loss

600 Group said Wednesday that it expects to make an operating loss for fiscal 2023 due to lower margins on some contracts because of higher than expected cost inflation.

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PCI-PAL Sees Fiscal 2023 in Line With Views After Strong 2H Performance

PCI-PAL said Wednesday that its performance in the second half of the year ending June 30 has been strong as it achieved a continued positive momentum, and that results for the year will be in line with management's expectations.

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Inchcape Makes Interim Finance Chief Adrian Lewis Permanent

Inchcape said Wednesday that it has appointed Interim Chief Financial Officer Adrian Lewis to the role on a permanent basis, effective immediately.

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Chemring Group Appoints James Mortensen as Chief Financial Officer

Chemring Group said Wednesday that it has appointed James Mortensen as chief financial officer at a date to be decided, replacing Andrew Lewis who announced his plan to retire in January.

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Velocity Composites 1H Sales Rose on Returning Demand

Velocity Composites said Wednesday that sales grew more than expected in the first half of fiscal 2023 thanks to demand returning to prepandemic levels.

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Coral Products to Report Revenue, Adjusted Earnings Rise for FY 2023; Pay Final Dividend

Coral Products said Wednesday that it expects to report a rise in revenue and earnings before interest, taxes, depreciation, and amortisation for fiscal 2023--both of which will be ahead of market expectations--and pay a final dividend.

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RM PLC Appoints Simon Goodwin as CFO

RM PLC said Wednesday that it has appointed Simon Goodwin as chief financial officer effective Aug. 29.

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Corcel Acquires 90% Interest in Oil-And-Gas Firm Atlas Petroleum for GBP800,000

Corcel PLC said Wednesday it has signed its first oil-and-gas acquisition with the purchase of a 90% interest in Atlas Petroleum Exploration Worldwide for 800,000 pounds ($993,280) in shares.

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Kingswood 2022 Pretax Loss Narrowed on Organic Growth, Acquisitions and Net Flows

Kingswood Holdings on Wednesday said its pretax loss for 2022 narrowed as it reported higher operating profit driven by organic growth, positive net asset flows and acquisition activity.

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SSE FY 2023 Revenue Rose, Beating Consensus--Earnings Review

SSE reported earnings for fiscal 2023 on Wednesday. Here's what we watched:

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SDX Energy Denies Financial Allegations Raised by Senior Employee

SDX Energy said Wednesday that it denies allegations about certain in-country financial operations raised by a recently suspended senior employee in an email to some stakeholders.

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Megasteel Withdraws From More Acquisitions Deal on Alleged Abusive Shareholder Behavior

More Acquisitions said Wednesday that Megasteel has withdrawn from a takeover deal due to alleged abusive behavior by More shareholders.

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Civitas Social Housing Sell GBP82.7 Mln Worth Shares to Wellness Unity

Civitas Social Housing said Wednesday that Wellness Unity--a wholly owned indirect subsidiary of CK Asset Holdings--has bought a 10% stake in the company, increasing its share to 17%, worth around 82.7 million pounds ($102.7 million).

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National World Director David Fordham Reappointment Passed With Low Count

National World said Wednesday that the resolution to reappoint David Fordham as a director received a low count at the annual general meeting, but was still approved.

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Mineral & Financial Investments Raises GBP250,000

Mineral & Financial Investments said Wednesday that its has raised 250,000 pounds ($310,400) before expenses through a placing with investors of around 1.2 million new shares at 21.0 pence a share.

MARKET TALK:

LondonMetric's New Acquisition Adds to Appealing Opportunity

1348 GMT - LondonMetric's GBP199 million all-share acquisition of CT Property Trust looks a good fit strategically and should create new shareholder value, Shore Capital says. The real-estate investment trust has a portfolio of leading tenants, is in the best locations to address trends and looks capable of sustaining above-average rental growth that will help drive superior total returns over time, Shore analyst Andrew Saunders says in a research note. "The shares offer an appealing investment opportunity in industrial and logistics and long-income property, offering a fully covered 5% dividend yield for fiscal 2024," the Shore says. The U.K. investment group reiterates its buy recommendation on the stock. (joseph.hoppe@wsj.com)

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C&C Results Contained Many Upsides Despite Profit Warning, Davy Says

1318 GMT - C&C Group's profit warning clearly overshadowed the otherwise positive fiscal 2023 results, but investors should take note of a few key takeaways, Davy Research analysts Cathal Kenny and Gary Martin write in a research note. Among the key points following the FY23 results--which included an 18% revenue and 76% EBIT rise--were reinstated dividends, significant progress on net debt reduction, and flat branded margins despite record cost inflation and brand reinvestment, the analysts notes. Market share gains for Tennent's and Bulmers are also worth noting, they add. Davy acts as broker for the alcoholic drinks-maker. The Irish investment firm has an outperform rating on the stock. (christian.moess@wsj.com)

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Artisanal Spirits Robust 2Q Gives Confidence on Full-Year Targets

1246 GMT - Artisanal Spirits reported a robust 2Q, with membership growth of 10% and revenue accelerating from a broadly flat 1Q, Liberum analysts say in a note. The Edinburgh-based holding company--whose principal operating subsidiary is the Scotch Malt Whisky Society--improving performance provides confidence of achieving 2023 targets as growth trajectory is expected to continue into 2H, they add. Artisanal Spirits is also benefiting from the first year of operations from its Masterton Bond facility, which is considered a key margin driver and expected to support international growth, the analysts add. "With a strong net asset underpin the shares look very cheap for a premium, luxury whisky business that is truly unique," they add. (michael.susin@wsj.com)

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Playtech's Ebitda Guidance May Prompt Estimate Upgrades

1246 GMT - Gambling-software company Playtech sees the effect from the World Cup halo continuing to drive momentum through 2023, analysts at Jefferies say in a note. The momentum benefits both the Snaitech B2C business in Italy and its B2B operations, and the company should see strong growth in regulated markets and very strong revenue growth in the higher margin software-as-a-service business, they say. The company expects fiscal 2023 Ebitda ahead of consensus of EUR410 million, which implies a 1% to 3% upgrade to underlying consensus estimates, and after taking into account 1Q tailwinds moderating later in the year, the analysts say. (anthony.orunagoriainoff@dowjones.com)

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C&C's Reinstated Dividend Beat Views; Margins Could Improve by 2025

1233 GMT - C&C's FY 2023 performance was consistent with previous announcements and its reinstated dividend--which was expected--came in ahead of views, Shore Capital analyst Greg Johnson says in a note. The London-listed alcoholic-drink maker proposed a progressive dividend policy, and a 3.79 European cents dividend payout for FY 2023, above Shore's estimate of 2 European cents, the analyst says. C&C's branded businesses is also showing progress as operating profit rose EUR7 million, to EUR42 million, with Tennent's lager and Bulmers cider gaining share in the period, he adds. "We suspect that [branded] margin build will be an FY 2025 story as inflationary pressures abate," Johnson notes. (michael.susin@wsj.com)

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UK Medium-Term Inflation Likely to Remain Higher Than in Eurozone

1214 GMT - U.K. medium-term inflation rate is expected to stay stronger than in the eurozone, pushed by faster wage growth in the U.K. due to labor shortage, T. Rowe Price chief European economist Tomasz Wieladek says in a note. Evidence points to a clear labor shortage in the U.K. compared to the eurozone, especially in the services sector, he says. "Given the long-term labor and investment issues posed by Brexit, I think it is much more likely that U.K. inflation will surprise Euro Area inflation to the upside looking ahead," Wieladek adds. (miriam.mukuru@wsj.com)

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M&S 'Smashes' Expectations, Making Stock Attractive, Shore Capital Says

1200 GMT - Marks & Spencer's fiscal 2023 results "have positively smashed our expectations," driven by a major beat in the food unit and strong progress in the clothing and home and the international units, Shore Capital analysts say in a research note. The British retailer--from a grounded position--has ever more attractively valued shares, given the outperformance, the higher base from which to build expectations and the stock's price-to-earnings ratio, Shore analysts Clive Black and Darren Shirley say in a research note. "We may just be entering into much better waters for M&S investors, with the potential for some calmer waters for U.K. consumers too as we move through fiscal 2024 and beyond, time to jump aboard," the investment group says. Shore has M&S as a house stock. Shares are up 13% at 184.45 pence. (joseph.hoppe@wsj.com)

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Kingfisher's 1Q Performance Seen Resilient Despite Poor Weather, Strikes

1157 GMT - Kingfisher's 1Q update showed a resilient performance in the face of significant weather pressures from a cold, wet spring and strikes in France, Jefferies analysts say in a note. The home-improvement retailer is currently benefiting from pent-up demand together with the improvement in seasonal sales, they add. Looking ahead, the group is comfortable with FY 2024 pretax profit market expectations of GBP634 million, in front of Jefferies estimate, with GBP350 million guided for 1H reflecting a normal distribution of profits across the year, they say. "The low-single-digit upgrades implied by guidance today should lead to some relief," Jefferies analysts say. (michael.susin@wsj.com)

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UK Inflation Data Offer Sterling Temporary Support

1154 GMT - The market raises its interest rate expectations for the Bank of England following Wednesday's higher-than-forecast U.K. inflation data but this only offers temporary support to sterling, Societe Generale says. One-year GBP and EUR rate differentials have widened sharply after the data and this might continue in the short-term but it is "clear that the U.K. has a worse inflation/growth trade-off than the rest of Europe, probably due to Brexit," SocGen forex strategists say in a note. "Rates will rise further in the U.K., and growth will have to slow more to get inflation back under control." Sterling reverses initial gains seen after the data with GBP/USD last down 0.2% at 1.2387 and EUR/GBP up 0.2% at 0.8696. (renae.dyer@wsj.com)

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APF Transfer Pushes Up UK Public Sector Net Borrowing in April

1125 GMT - The U.K. Treasury transfered GBP9.8 billion to the Bank of England's Asset Purchase Facility (APF) in April, contributing to the increase in public sector net borrowing in that period, say Bank of America analysts in a note. The Treasury makes quarterly capital payments to the BOE asset purchase portfolio to cover the cost of holding the assets and realised losses on the portfolio, BofA says. "April's transfer was higher than we would have expected," the analysts say. The payment was the largest transfer since they began in October 2022 and a steep increase from GBP4.2 billion previously. (miriam.mukuru@wsj.com)

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Aviva Looks Attractive on Dividend Yield, Possible Buybacks

1108 GMT - Aviva reported a decent set of first-quarter numbers, with top-line gains in general insurance and better-than-expected underwriting margins, Panmure Gordon says. Bulk annuity volumes picked up, although margins can and should be better there, Panmure Gordon says, adding that the balance sheet remains solid. "The dividend yield plus the potential of additional buybacks are key reasons to own the stock," Panmure analyst Abid Hussain says in a note, even as the shares fall 5%. (philip.waller@wsj.com)

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XPS Pensions' Revenue Quality Seen Supporting Buy Case

1103 GMT - XPS Pensions Group's investment case is relatively defensive as the quality of its revenue underpins earnings predictability, with high cash conversion and low capital intensity, Shore Capital says in a note. The U.K. pensions consultancy said it expects its full year results to be ahead of its expectations and posted a 20% revenue rise for fiscal 2023. "Revenue quality is principally why you'd want to own XPS, particularly given the uncertain macro backdrop, the drivers being largely structural and non-cyclical," with more than 90% contractually recurring and the bulk of the fee base linked to inflation analyst Vivek Raja writes. Shore rates the stock buy. Shares rise 1.75% at 174.5 pence, their highest price since Sept. 2018. (elena.vardon@wsj.com)

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XPS Pensions Has Varied, Long-Term Opportunities, RBC Says

1040 GMT - XPS Pensions Group is a countercyclical opportunity and is benefiting from higher inflation, banking crises and volatile markets which are acting as a drag on many companies, RBC Capital Markets says in a note. The U.K. pensions consultancy said it expects full-year results to be ahead of previous expectations and reported an "impressive" 20% revenue growth for fiscal 2023. "Future demand for XPS's services is bolstered by the increasing complexity of the U.K. pensions landscape, and the enhanced importance placed on the pensions sector to facilitate productive investment into the U.K. economy," analysts Mandeep Jagpal and Gordon Aitken say. The launch of the Pensions Regulator's new DB funding code next year will be a seismic opportunity, the Canadian bank's analysts add. Shares rise 1.75% at 174.5 pence. (elena.vardon@wsj.com)

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SSE Must Prove the Rewards of Green Investment

1031 GMT - SSE has set out capex of GBP2.8 billion for FY 2024 to invest in green energy projects, with a sum put aside for windfall taxes, AJ Bell analyst Russ Mould says in a note. Although this is eye-catching news for the energy group, shareholders will want to see evidence that they are being rewarded for funding the company too, Mould says. "SSE can argue that its balanced integrated model, incorporating transmission and distribution assets, is what is helping to deliver the proposed record investment," he says. Shares are up 0.9% at 1,886.50 pence. (anthony.orunagoriainoff@dowjones.com)

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Outlook for Leisure Flights Continues to Improve, UBS Says

1017 GMT - There is an improvement in the number of flights that passengers are willing to board for leisure compared with last year, but it is still below 2019 levels, UBS analysts write in a research note after surveying about 6,500 people. "For leisure flights expectations, we see the most improvement in the U.K. bouncing back to 2019 expectation levels, followed by France," the analysts say, noting a slight deterioration in the U.S. Overall, the number of leisure flights that respondents expect to board in the next 12 months should be 8% lower compared with UBS's 2019 survey. (mauro.orru@wsj.com; @MauroOrru94)

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Aviva's Unspecific Combined Operating Ratio Guidance Weighs on Shares

1014 GMT - Aviva tumble to the bottom of the FTSE 100, trading 5.3% lower at 403 pence after the British insurer posted first-quarter results in which it backed its medium-term combined operating ratio target--a figure that measures underwriting profitability--of over 94%. Citi says the company was reluctant to give specific guidance for 2023 or a normalised first-quarter COR in the call with analysts. "We believe that more specific 2023 COR guidance and greater clarity on the [value of new business] margin methodology would have helped alleviate some of the pushback we heard on the shares today," analysts James Shuck and Andrew Baker say, adding however that they see strong signs of momentum in general insurance, bulk purchase annuity and workplace. (elena.vardon@wsj.com)

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UK Construction Stocks Drop as House Price Growth Slows

1002 GMT - U.K. house-builders fall after official data showed average U.K. house prices increased by 4.1% in the 12 months to March 2023, down from 5.8% in February. The average U.K. house price was GBP285,000 in March, GBP11,000 higher than 12 months ago, but GBP8,000 below the peak in November 2022, the Office for National Statistics said. "The slowdown in annual U.K. house price inflation has continued into March," ONS Head of Housing Market Indices, Aimee North, writes. "However, the rapid growth within U.K. rental prices shows no sign of abating, with another annual inflation rise in April." Persimmon, Taylor Wimpey, Barratt Developments and Berkeley Group Holdings are among the biggest FTSE 100 fallers, all down more than 4%. (philip.waller@wsj.com)

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Tullow Oil's Year-End Production Rate Looks Promising

1001 GMT - Tullow Oil's update on its Jubilee wells is positive, Davy Research analyst Colin Grant writes in a research note. The oil-and-gas company said its net production at Jubilee in 1Q was 28,100 barrels of oil per day and that it will ramp up throughout the year from the new wells drilled. "We are optimistic on the potential exit rate at year-end," Grant says. Davy keeps an outperform rating on the stock. The Irish research firm acts a stockbroker for Tullow Oil. Shares are up 1.8% at 25.46 pence. (christian.moess@wsj.com)

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Eric Schmidt Slams EU Move to Regulate AI

0952 GMT - The European Union is erring in its attempts to regulate new artificial intelligence technologies, former Google Chief Executive Eric Schmidt says at The Wall Street Journal CEO Council Summit in London. "The way the EU works, in Brussels, is they just want to manage things, and that's not a winning strategy in a brand new technology," he says. Schmidt says an AI commission he ran for the U.S. government took a position that the country should be a leader in AI and also determine how to manage such new tools. He says he wrote a proposal for the EU about what they should be concerned with rather than AI, which is social media. "But why would they listen to me?", he adds. (newley.purnell@wsj.com)

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Severn Trent Booked a Solid Set of Results

0946 GMT - Severn Trent posted a solid set of results with pre-tax, pre-interest profit in line with consensus' expectation and adjusted EPS ahead, RBC Capital Markets analyst Alexander Wheeler writes in a research note. The U.K. water utility booked a 12.2% return on regulatory equity thanks to a 7.7% financing outperformance, which shouldn't be a surprise to the market but still was above RBC's around 6% forecast, Wheeler says. For fiscal 2024, Severn Trent expects earnings to grow significantly as a result of a 15%-20% reduction in the interest charge, which should be anticipated by the market as inflation start to normalize, he says. RBC has a sector perform rating on the stock. (christian.moes@wsj.com)

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UK Gilt Underperformance Likely to Continue as April Inflation Beats Forecast

0943 GMT - The recent underperformance of U.K. gilt yields compared to U.S. Treasury yields and German Bund yields is likely to continue after U.K. April inflation data came in stronger than expected, say RBC Capital Markets analysts in a note. "Following this morning's hot U.K. April inflation prints, we could very well see this recent sharp cross-market underperformance continue - especially given investor positioning is likely skewed towards long gilt positions already," they say. The U.K. 10-year gilt yield is last up 7 basis points at 4.236% while the German 10-year Bund yield falls 2bp to 2.447% and the U.S. 10-year Treasury yield is down 1bp at 3.688%, Tradeweb data show. (miriam.mukuru@wsj.com)

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Close Brothers' 3Q Was Encouraging

0938 GMT - Close Brothers' third-quarter performance was more encouraging than its first-half update, Shore Capital says in a note. The U.K. merchant banking group said its loan book growth accelerated in the quarter, and that net flows improved, analyst Gary Greenwood writes. Meanwhile, shares look cheap considering its high dividend yield, which presents a long-term valuation opportunity, he adds. "We retain a buy recommendation, although Close remains towards the bottom of our list of banks and lenders in terms of upside potential, noting that we view the entire sector as being materially undervalued," Greenwood says. (elena.vardon@wsj.com)

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Arbuthnot Had a Good Start to 2023

0921 GMT - Arbuthnot Banking Group posted a positive update and its valuation continues to be undemanding, Shore Capital says in a note after the private and commercial bank said its deposits and lending activity rose in the four first months of 2023 as it continues to benefit from rising interest rates. "We continue to envisage positive momentum in forecasts even after publishing five material upgrades over the past year," analyst Vivek Raja writes. Shore has Arbuthnot as a house stock with a fair value of 1,640 pence. Shares, which are up 11% since the start of the year, trade flat at 942.5 pence. (elena.vardon@wsj.com)

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Kingfisher Reports Reassuring 1Q, Longer-Term Benefits Beckon

0918 GMT - Kingfisher shares fall 2% after the home-improvement retail group reported improved trading since early April, but reiterated full-year guidance. The first-quarter update was reassuring, RBC Capital Markets says, with 1Q sales broadly in line with expectations, guidance held for the full year and current trading more resilient than suggested by recent data in the home-improvement sector. Kingfisher's management team has introduced a more effective trading strategy, with a stronger digital offer and better inventory and cost control, RBC says. "We see potential for benefits longer-term from supportive industry trends," RBC analysts say in a note. (philip.waller@wsj.com)

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UK Labor-Cost Inflation Driving Inflation More Than Peers

0915 GMT - The U.K. appears to a have a broad-based problem when it comes to inflation, as labor costs prop up the rate at a higher level than peer countries, says Chris Hare, HSBC senior economist, in a note. Labor-cost inflation is running at around 7.5% year-on-year, much higher than in the eurozone, at around 5%, or the U.S., at roughly 4%, he says. This could be driving some of the inflation strength shown in the April data, Hare says. The jump in the core rate to 6.8% was "a shocker", with unexpected annual-rate rises in a number of components like recreation and second-hand cars, while other components eased by less than expected, including food, he says. Bank of England rate cuts don't now look like a prospect this year or next, he adds. (edward.frankl@wsj.com)

Contact: London NewsPlus, Dow Jones Newswires;

(END) Dow Jones Newswires

May 24, 2023 10:44 ET (14:44 GMT)

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