BUSINESS LIVE: Wage growth slows to 5.1%; Abrdn confirms new CEO; Centamin set for $2.5bn takeover

The FTSE 100 is trading lower this morning, with AstraZeneca weighing on the benchmark index, while cooling UK wage growth is fuelling expectations of further interest rate cuts from the Bank of England.

The pharmaceutical and biotechnology sector hit its lowest level in more than a month, weighed down by AstraZeneca, which lost 5.4 percent.

Detailed results from one of the drugmaker’s major lung cancer trials showed Monday that the experimental precision drug did not significantly improve overall outcomes in patients.

This week, investors will be focused on headline inflation figures from the UD and UK gross domestic product data, which will provide further clues to central bank policy easing ahead of their meetings this month.

Centamin rose 22.3 percent after global mining company AngloGold Ashanti announced it would buy the company in a $2.5 billion deal.

This led to a 6.2 percent increase in earnings for miners leading the charge.

IQE fell 11.3 percent after the semiconductor wafer maker said its annual performance was below analysts’ expectations.

Burberry shares have fallen to a 15-year low amid concerns the brand will struggle to remain a “top-tier luxury brand”.

Shares fell as much as 8 percent yesterday to their lowest level since 2009, after analysts at Barclays warned the company’s status as a major player in the sector was under threat.

Figures from market research firm Kantar on Tuesday showed inflation in the UK supermarket sector fell slightly this month, after rising for the first time in 18 months last month.

According to Kantar, annual supermarket price inflation was 1.7 percent in the four weeks to September 1, compared with 1.8 percent in the previous four-week period.

Despite the decline, almost 60 percent of British households are still concerned about the rising cost of their groceries, Kantar said.

“This is their second biggest financial concern, after energy bills,” said Fraser McKevitt, the researcher’s head of retail and consumer insight.

The data showed that prices rose fastest in markets such as vitamin and mineral supplements, chilled fruit juices and chocolate products, while prices for toilet paper, dog food and bottled cola fell fastest.

The Kantar data, the latest snapshot of British consumer behaviour since the July 4 national election, shows that grocery sales rose by 3 per cnet in the four-week period compared with a year earlier, a slight slowdown from the 3.8 per cnet growth in last month’s report.

Kallum Pickering, Chief Economist at Peel Hunt:

‘Not too hot, not too cold. The Goldilocks UK labour market report for July is consistent with the broader economic trend of more growth and less inflation for the UK so far this year.

‘The data are consistent with our expectations that UK economic performance could continue to surprise on the upside and that the Bank of England (BoE) will only normalise its monetary policy cautiously. A pause is likely at the September 19 meeting, after which the Bank Rate will be cut by 25 basis points to 4.75% on November 7.’

Shares in the British hospitality company behind TGI Fridays have fallen dramatically, leaving the company teetering on the brink of collapse.

In a spectacularly bleak stock market update, Hostmore delivered a series of shocking reports that completely floored investors.

Aldi could overtake Asda to become the UK’s third-largest supermarket if it opens more stores in an £800m expansion project.

Giles Hurley, CEO of the discount chain for the UK and Ireland, said he wants more stores “everywhere” in Britain as a battle for market share rages.

The comments came after the German supermarket chain announced UK profits more than tripled last year to £536.7 million, while sales rose 16 percent to £17.9 billion.

Carlsberg’s £3.3 billion deal to buy Britvic could be investigated amid concerns it will reduce competition in the UK market.

The Competition and Markets Authority (CMA) said it was gathering information before launching a formal investigation into the partnership.

The CMA invited people to give their views on the takeover and its potential impact on competition in the UK.

The two companies said combining Carlsberg’s beer range with squash maker Robinsons’ soft drinks would create an “enhanced proposition in the UK and other markets in Western Europe”.

Britvic, which is based in Hemel Hempstead, Hertfordshire and also makes J20 and Tango, had previously rejected a £3.1bn bid.

The woman who designed Kate Middleton’s wedding dress has been appointed creative director of Givenchy.

Sarah Burton will take on the role at the LVMH-owned fashion house after stepping down from Alexander McQueen last year.

The 50-year-old British designer is best known for designing the Princess of Wales’s wedding dress in 2011 and Pippa Middleton’s bridesmaid dress.

Thomas Pugh, economist at RSM UK:

‘A further slowdown in regular private sector wage growth in the three months to July to 4.9 per cent, the lowest rate since April 2022, should go a long way towards alleviating some of the MPC’s concerns about strong wage growth fuelling inflation.

‘But it won’t be enough to convince the MPC to cut rates again next week. The fall in the unemployment rate to 4.1 percent and the big jump of 265,000 in employment suggest the labor market is tightening again.

“Admittedly, the employment statistics are so bad at the moment that it is difficult to place much confidence in them.

‘But signs of a rebound in employment will make the MPC nervous about the extent to which wage growth will fall further and effectively rule out another rate cut next week.

‘Looking ahead, we expect private sector wage growth to moderate gradually over the remainder of this year, which would give the MPC sufficient cover to cut rates again towards the end of the year, probably in November and possibly December. The rate cut cycle in 2025 will then be more aggressive, with four cuts currently planned for next year.

‘There was also good news on economic inactivity, which fell by 112,000. But that was mainly due to fewer students. The number of people saying they are too sick to work remained near a record high and is almost 670,000 higher than at the start of the pandemic.

‘If more of these people can be helped back to work, it would go a long way towards resolving some of the difficult choices the Minister of Finance has to make in the budget next month.

‘Just as importantly for households, real wages rose by 2.2 percent. That, combined with rising consumer confidence, should boost consumer spending in the second half of this year, supporting a consumer-led recovery.’

Global mining company AngloGold Ashanti is to buy London-listed, Egypt-focused smaller rival Centamin in a deal valued at $2.5 billion.

Under the terms of the deal, Centamin shareholders will receive 0.06983 new AngloGold Ashanti shares for each Centamin share and $0.125 in cash.

The expected value of the offer represents a 36.7 percent premium to Centamin’s closing price of 120p on Monday.

Abrdn has appointed interim managing director Jason Windsor as its new CEO, formally tasking the former Aviva executive with revitalising the asset manager’s finances and performance.

Windsor took on the role of interim CEO in May after his predecessor Stephen Bird suddenly stepped down.

Abrdn, one of Britain’s best-known investment funds, has been struggling financially in recent years, with capital outflows of more than £10bn in the past two years. This year, however, the firm has encouraged investors by beating performance expectations and starting to cut costs.

Douglas Flint, chairman of Abrdn, said Windsor was the board’s “unanimous choice” to lead the company into its next phase.

“He has made a tremendous impact both internally and externally since joining Abrdn, especially as his actions demonstrate the deep care he has for our clients, customers and people,” said Flint.

Average weekly earnings before bonuses rose 5.1 per cent year-on-year in the three months to the end of July, in line with expectations, while the unemployment rate fell to a low of 4.1 per cent in 2024, recent data from the Office for National Statistics showed.