BUSINESS LIVE: Vertu sees UK zero emissions boost; Landsec increases stake in Bluewater; Saga Insurance Challenges

The FTSE 100 edged higher at the open as gains in energy stocks offset declines in defense stocks, while investors remain cautious ahead of economic data that could impact expectations about the path of US and UK interest rates.

Energy giants Shell and BP are up more than 1 percent each, while crude oil prices remain steady around recent highs.

Shares of aerospace and defense companies such as Melrose Industries, Rolls-Royce and Senior PLC fell between 2.6 and 5.9 percent after European aerospace group Airbus cut its industrial and financial guidance for this year.

Traders have largely refrained from placing big bets ahead of US personal consumption expenditure (PCE) data due on Friday, even as they expected the data to show renewed moderation in inflation.

Data on UK gross domestic product is also due this week and could help boost Bank of England policymakers’ confidence for a rate cut in August.

Comments from BoE officials last week had revived hopes of a cut in August, which were partly dampened by strong retail sales on Friday.

Derren Nathan equity research, Hargreaves Lansdown:

‘With few UK business or economic releases planned for today, the FTSE 100 is expected to open flat.

‘One British company that has brought things up to date is car dealer network Vertu Motors. New vehicle volumes increased by 6.8%, but margins decreased due to higher discounts.

‘The softness in car prices is another sign that inflation is easing and will provide some comfort to those hoping for rate cuts in the near future.

‘The volume of used vehicles also grew strongly, with prices remaining stable. The Group also noted that regulatory support for electric vehicles could lead to an increase in the value of used petrol and diesel cars as supply decreases. Overall, Vertu expects results for the year ending February 2025 to be in line with market expectations.”

Over-50s specialist Saga has said its cruise business has seen an “exceptional” number of bookings this year, but warned of a challenging market putting pressure on its insurance division.

The London-listed company, which specializes in products and services for the over-50s, highlighted a good start to the year for its ocean and river cruises.

Bookings are up on last year, with revenue up 14 percent as more passengers secure their holidays, Saga said.

However, the company noted that conditions in the insurance sector remain challenging, with inflation continuing to put pressure on operating costs.

Atom Bank will become the latest lender to leave its offices as so many employees work from home.

Chief executive Mark Mullen said footfall at the app-based bank’s headquarters in Durham is just a third of previous levels and a search will begin for a new location in the north-east of England.

Vertu Motors expects the UK’s zero-emission vehicle mandate to create ‘volatility’ in the new car market, reducing the supply of new petrol and diesel vehicles and increasing second-hand prices.

The zero-emission vehicle mandate determines the percentage of new manufacturers of zero-emission cars and vans that must produce each year until 2030.

The government’s targets call for 80 percent of new cars and 70 percent of new vans sold in Britain to be zero-emission by 2030, rising to 100 percent by 2035.

It came as Vertu reported solid growth in new and used car sales volumes ahead of its annual general meeting, with the dealer group on track to meet full-year expectations.

Boss Robert Forrester said:

‘I am pleased to report that trading remains positive.

‘Used car prices have remained stable and we have gained market share in the new retail and mobility car market and achieved strong like-for-like volume growth in used cars.

“The performance of our high-margin aftersales business has remained strong.”