UK Consumer Confidence Slumps; UK Jobless Rate at 7.9%

Arthi Gupta
16 Feb, 2011
New York City

The UK indexes edged higher after consumer confidence plummeted and jobless claims rose in January. The Bank of England forecasted inflation to range between 4% and 5% in the near term. BAE Systems acquired Intelligence Services Group.

[R]3:30 PM London – The UK indexes edged higher after consumer confidence plummeted and jobless claims rose in January. The Bank of England forecasted inflation to range between 4% and 5% in the near term. BAE Systems acquired Intelligence Services Group.[/R]

In London, FTSE 100 Index gained 30.18 or 0.50% to 6,068.23 and the pound edged lower to close at $1.6048.

UK Consumer Confidence Slumps

UK consumer confidence slumped in January following the government''s VAT sales tax rate hike. The Nationwide consumer confidence index dropped to 47 in January following the upwardly revised reading of 54 in December.

UK Jobless Claims Rise

Jobless claims in the UK unexpectedly rose in January for the first time in four months. In January, the number of people claiming jobseekers'' allowance increased by 2,400 on a monthly basis to 1.46 million, figures from the Office for National Statistics showed on Wednesday.

The ILO jobless rate rose to 7.9% in the fourth quarter from 7.7% in the third, the statistics office said. The total number of unemployed people increased 44,000 in the quarter to 2.49 million.

The BoE Forecasts Higher Inflation

UK inflation is likely to range between 4% and 5% in the near term, the Bank of England said in its latest Inflation Report on Wednesday.

The central bank expects inflation to remain well above the 2% target over the next year or so, reflecting in part higher Value Added Tax.

The central bank projects inflation to ease to near 1.7% in early 2013, which is below the target. The bank judged that the chances of inflation being either above or below the target in the medium term are “broadly balanced.”

BAE Completes Acquisition of L-1’ Intelligence Services

BAE Systems plc said it closed the acquisition of L-1 Identity Solutions, Inc.''s Intelligence Services Group for a total purchase price of about $297 million in cash. The Intelligence Services Group operations will become an integral, complementary part of BAE Systems'' growing Intelligence & Security sector.

Gainers & Losers

African Barrick Gold plc gained 0.66% to 530.50 pence after the gold producer in Tanzania reported fourth quarter revenue increased 35% to $309.52 million from $229.62 million in the comparable period. Net profit generated in the quarter was $79.0 versus a loss of $15.98 million a year earlier. Basic earnings per share were 19.3 cents, as against a loss of 3.9 cents in the previous year.

Millennium & Copthorne Hotels PLC rose 0.43% to 584.00 pence after the global hotel company reported fourth quarter revenue increased 16.5% to £207.3 million from £178.0 million last year. Profit in the quarter rose 6% to £ 31.5 million or 10.0 pence a share from £29.7 million or 9.6 pence a share in the prior year.

Morgan Crucible Co. Plc surged 7.96% to 298.50 pence after the carbon and ceramics manufacturer reported fiscal year 2010 revenue grew 8% to £1.02 billion from £942.6 million a year ago. Profit for the year soared 124% to £42.5 million or 15 pence per share compared to £19 million or 6.8 pence per share last year.

Thorntons PLC plunged 5.05% to 94.00 pence after the company engaged in manufacturing and retailing of confectionery reported first-half revenue increased 5% to £133.49 million from £127.42 million last year. Profit in the period slipped 5% to £5.98 million or 8.8 pence per share from £6.29 million or 9.3 pence per share a year before.

WS Atkins plc climbed 0.36% to 689.00 pence after the professional services firm in its interim period from October 1, 2010 to date, said that it is “performing well and trading remains in line with its expectations, despite challenging market conditions.”