FTSE 100 ends higher after BoE holds rates

FTSE NEWS

The FTSE 100 closed higher on Thursday (4 November) after the Bank of England voted to keep rates on hold. The index rose 0.43% to 7,279.91.

• On Monday (8 November), data firm Springboard offers insight into the health of the High Street with new footfall figures across UK retail destinations.
• Kantar reveals the latest market shares of the UK’s largest supermarket chains on Tuesday (9 November).
• The Office for National Statistics (ONS) reveals what effect last month’s Budget will have on inflation in a new report on Wednesday (10 November).
• Trade body UK Finance publishes mortgage arrears and repossession data on Thursday (11 November), a key indicator of household financial resilience.
• On Friday (12 November), REC and Emsi check the pulse of the UK’s labour market with their latest Jobs Recovery Tracker.

SECTOR IN FOCUS

Newspaper groups may write headlines, but they usually shy away from being the subject of them.

However, Daily Mail and General Trust plc (DMGT) was plastered all over the business pages this week after edging closer to becoming a private company again for the first time in 90 years.

On Wednesday (4 November), the Rothermere family, which founded the Daily Mail newspaper in 1896 and listed DMGT in 1932, made an offer of £3.1bn for the 64% of the group it doesn’t already own.

If the offer is accepted, shareholders will receive 255p a share as well as a 568p a share special dividend and 0.58 shares in Cazoo Group (NYSE:CZOO), the online car retailer.

• It would also leave Reach plc (RCH), the parent company of the Daily Mirror, Daily Express and Daily Star newspapers, as the last remaining major media group listed on the London Stock Exchange.

DMGT is the publisher of the Daily Mail, i and Metro newspapers.

ECONOMIC UPDATE

The Bank of England’s Monetary Policy Committee (MPC) surprised markets on Thursday (4 November) after voting against a widely-expected rate hike.

Traders had expected the powerful rate-setting committee to raise rates to 0.25% from a record-low 0.1% to combat rising inflation, with further hikes predicted for next year.

However, while the committee held their nerve this time around, Andrew Bailey, the Bank’s governor, warned that a rate rise would likely be needed “over the coming months”.

Markets are likely to interpret that as meaning rates will rise next month, or at the start of next year, particularly with the Bank predicting inflation to hit 5% by spring – more than twice its medium-term target of 2%.

FUND WATCH

European shares reached record levels this week after a string of positive company updates. If you’re after a good European fund for your portfolio, Threadneedle European Select Z Acc GBP (GB00B8BC5H23) is worth considering. This actively managed fund invests at least 75% of its assets in larger firms based on continental Europe or those which have significant operations there. It has an ongoing charge of 0.8% and has returned nearly 92% in five years.

ETF WATCH

For fans of exchange-traded funds (ETFs), the four-star Morningstar rated iShares Core MSCI Europe ETF EUR Acc (SMEA) could be a decent option. This ETF tracks the MSCI Europe Index, giving you exposure to around 400 large and medium-sized European companies. It has an ongoing charge of just 0.12% and has returned more than 55% in five years.

COMPANY ANNOUNCEMENTS

10 November – Marks and Spencer Group plc (MKS) has become known for turnarounds that result in little progress in recent years. However, City broker Peel Hunt believes MKS is showing signs of promise this time around, upgrading the retailer from ‘hold’ to ‘add’ following its capital markets day last month. However, the broker added that there is still plenty for MKS to do and warned that the waters remain ‘choppy’ for retailers given the global supply chain problems dogging the sector. MKS reports its full-year results on Wednesday (10 November).

11 November – Activist investor Causeway Capital has been building its stake in WH Smith plc (SMWH), with the assumption that it will call for a big shake-up to turnaround the firm’s fortunes. The retailer issued a mixed update in September as it sought to temper expectations for 2022. It reports its full-year results on Thursday (11 November).