BUSINESS LIVE: Fears of higher corporate taxes; Evri recruits en masse; Pearson supports AI

The FTSE 100 is trading higher this morning, boosted by energy stocks and investor optimism over interest rate cuts in the US and UK, while weakness in Pearson capped gains.

Energy stocks led the gains, rising 1.5 percent as oil prices rise on fears of growing conflict in the Middle East. Shell and BP, both reporting this week, each rose more than 1 percent.

Meanwhile, shares in the personal care, pharmaceutical and food sectors fell 1.4 percent, weighed down by Reckitt Benckiser, which fell 9.2 percent to its lowest level in more than 11 years.

Nearly 1,000 lawsuits have been filed against Enfamil food manufacturer Reckitt Benckiser, Abbott or both in federal or state courts.

Global sentiment was positive after technology stocks recovered on Wall Street and a broadly in-line US inflation report kept bets on a September rate cut alive on Friday.

All eyes this week are on the U.S. Federal Reserve’s interest rate decision on Wednesday. Investors are expecting the central bank to adopt a dovish stance after a string of data supported the economy’s trend of cooling inflation.

A key jobs report is also expected on Friday, which could further influence the Fed’s stance.

The Bank of England’s monetary policy decision will steal the show on Thursday, with market participants pricing in around a 56 percent chance of a cut despite recent data showing sluggish services sector inflation.

Pearson is down 3.7 percent on the FTSE 100 list despite a 4 percent rise in first-half adjusted operating profit.

Adam Vettese, Market Analyst at eToro:

‘Pearson’s results reflect some restructuring in some of its business areas, with total revenues down on last year and profits flat. While we haven’t seen any EPS growth, profit margins are creeping up. The effects of inflation and FX headwinds are also waning, leading the company to reaffirm its guidance for this year and next.

‘Pearson continues to return cash to shareholders via a £200m buyback scheme, which is close to completion, and has increased its dividend by 6%. However, this has increased its overall debt position. Shares fell this morning following this update, giving it a slight lead for the year, but it seems investors still need some convincing about the company’s direction.’

British meat producer Cranswick saw sales rise in the first quarter of its financial year, driven by strong demand for its premium ranges and pet products.

Cranswick, a producer of fresh pork, bacon, gourmet sausages, poultry and continental foods, reported that export volumes rose strongly in the quarter.

British food producers are benefiting from a rebound in consumer spending and lower costs, after a long period of staggering demand and supply chain constraints due to inflationary pressures.

Sales were 6.7 percent higher than in the same period a year earlier and the group maintained its outlook for the current financial year.

Pearson, a FTSE 100 education publisher, is targeting fast-growing markets such as training young people for their careers and training entrepreneurs. The group CEO sees “advances in AI” and “significant demographic shifts” as key growth drivers in the coming years.

Pearson has reported a 4 per cent rise in operating profit in the first half of the year to £250m, driven by growth across all segments, with a particularly strong performance in its English-language business.

The group said it was also boosted by “net cost phasing and savings”, but that this was partly offset by inflation and restructuring costs in higher education.

Pearson boss Omar Abbosh said:

‘Since joining Pearson at the beginning of this year, I have led a comprehensive review of our business and the markets in which we operate.

‘This process has only strengthened my belief in the potential of Pearson and the vital role we play in helping people realize the lives they imagine through learning.

‘Significant demographic shifts and rapid developments in AI will be key drivers of growth in education and employment in the coming years, playing to Pearson’s strengths as a trusted provider of learning and assessment services.

‘We are implementing plans across our businesses that will ensure we deliver better products and services with greater efficiency. We are also targeting opportunities to gradually build our presence in materially larger and faster growing markets where we are well positioned to succeed, with a particular focus on early careers and business skills.’

Delivery giant Evri plans to hire 9,000 new employees, just days after the company announced new private equity owners.

The British parcel company is looking to expand its team of couriers and warehouse staff due to increasing demand for its services.

The focus is on Scotland, Bury St Edmunds, Plymouth and Gatwick.

Nearly one in three employers are pessimistic that Labour will raise corporation tax.

A survey of business leaders found that 29 percent think corporate tax increases are most likely over the next five years.

Keir Starmer’s government has pushed to cap the rate for the duration of this parliamentary term.

But a survey of 500 directors by consultancy firm BDO showed that people are reluctant to make this promise.