Inflation reaches its highest level in 41 years and grows to 11.1%, London fever

Inflation data makes for a grim reading this morning. Consumer price growth accelerated to 11.1%, more than expected and the highest in 41 years. The figures add to the pressure on the Bank of England to raise rates and put tomorrow’s challenge from the government in an even harsher light. The impact of these prices on businesses is wide-ranging: Premier Foods Plc says more people are eating at home rather than in restaurants (good for them, but not for restaurants), while British Land Plc needs to make its portfolio of properties run even harder due to higher prices. Interest rates.

Here is the key business news from London-listed companies this morning:

In the city
UK Inflation: The rise in the Consumer Price Index was stronger than the 10.9% figure expected by the central bank or the median of 10.7% that economists had forecast.

Responding to the figures, Chancellor of the Exchequer Jeremy Hunt said it was his “duty” to help the Bank of England bring inflation back to target by “acting responsibly” with the nation’s finances.

CMC Markets Plc: The financial derivatives dealer’s first-half net investment income fell year-over-year as runaway inflation and higher interest rates rattled financial markets.

Premier Foods Plc: Rising prices have led more people to turn down restaurants for home-cooked meals, leading to an increase in sales for the food maker.

The British Land Company Plc: Higher interest rates have increased developer property returns, with the impact on valuations partially offset by rental growth.

The company says “timely” disposals strengthened its balance sheet, helping it seize new opportunities.

Deliveroo Plc: the food delivery company is closing its Australian business after it failed to get enough orders to compete against rivals such as Uber Eats and Menulog.

Deliveroo Australia Pty has been placed into administration and will cease operations imminently

-Australia accounted for around 3% of the company’s total gross transaction value.

A Westminster
Jeremy Hunt is expected to officially remove the cap on UK bankers’ bonuses when he presents his Autumn Statement, a budget in all but name, on Thursday. The chancellor will present a budget that includes tax increases and spending cuts of up to £55bn, the biggest round of fiscal tightening since the original austerity era began in 2010.

Rishi Sunak urged UK executives to embrace wage moderation, warning that rising wages could trigger a wage and price spiral. The prime minister needs to strike a balance between moderating double-digit inflation and avoiding worker unrest, as sectors from nursing to transport plan strikes this winter over real-term pay cuts.

In case you missed it
US President Joe Biden and European leaders urged caution after a rocket hit a Polish village just across the border from Ukraine, keen to prevent the incident from escalating into a big drama with Russia.

Investors are most bearish on UK stocks among major regions, according to a Bank of America Corp. survey. Meanwhile, hedging UK bond positions has never been more difficult, according to broker Tradition Ltd., which notes that recent volatility in the gold markets has affected visibility.

British team Liverpool Football Club may be worth a $5 billion price tag, writes Bloomberg Opinion columnist Chris Hughes, according to estimates by GlobalData. This compares with publicly listed Manchester United Plc’s enterprise value of 2.4 billion euros and comes after Liverpool FC owner Fenway Sports Group Holdings LLC opened up about a potential deal.

Looking to the future
Burberry Group Plc is among the companies due to publish results tomorrow.

The recent signing of Daniel Lee by the trench coat maker indicates the brand’s intention to compete with the likes of LVMH and Gucci. It’s still early days for CEO Jonathan Akeroyd, who took over in March, just months before COO and CFO Julie Brown set a date for her resignation of April 2023. Burberry stuck to its medium-term outlook in its latest results. despite the administration’s turmoil, but the speed of change could still bring challenges, writes Deborah Aitken of Bloomberg Intelligence.

Burberry is particularly sensitive to steps to control the spread of Covid-19 in China, which generates a large part of its revenue. Last week, the country reduced the amount of time travelers and close contacts must spend in quarantine and withdrew testing, in a significant calibration of its Covid Zero policy.