UK Indexes Lower; Retail Inflation Rises 2.9%

Arthi Gupta
06 Jul, 2011
New York City

The UK indexes declined on worries of a contagion in the euro area. The UK retail inflation rose, private sector job growth eased, and home prices climbed in June. New car registrations in the UK decreased 6.2% annually in June.

[R]1:30 PM London – The UK indexes declined on worries of a contagion in the euro area. The UK retail inflation rose, private sector job growth eased, and home prices climbed in June. New car registrations in the UK decreased 6.2% annually in June.[/R]

In London, FTSE 100 Index declined 46.71 or 0.8% to 5,977.11 and the pound edged lower to $1.6012.

UK Shop Price Inflation Rises

Shop price inflation in the UK surged in June to its highest level since October 2008, driven by a sharp increase in food prices, survey results from the British Retail Consortium showed on Wednesday.

The BRC-Nielsen shop price index increased 2.9% annually in June compared to 2.3% in May. Food inflation accelerated to 5.7% in June from 4.9% in May. Non-food inflation rose to 1.3% in June from 0.8% in May.

UK Job Growth Slows

New job growth in the UK private sector slowed in June, a survey by Recruitment and Employment Confederation and KPMG showed today.

The survey said that the index for permanent vacancies fell to 52.2 in June from 55.1 in May, the lowest since August 2009. The index for temporary placements eased to 52.1 in June from 52.4 in May.

UK Home Prices Up

Home prices in the UK rose 1.2% on a monthly basis in June compared to the 0.4% growth recorded in April, which was revised up from 0.1%, data from the Lloyds Banking Group Plc''s Halifax division showed.

The latest gain was the largest since October 2010, when prices rose 1.8%.

The standardized average home price in the UK increased moderately to £163,049 in June from £161,039 in May.

UK Car Registrations Fall

New car registrations in the UK decreased 6.2% annually to 183,125 units in June, data released by the Society of Motor Manufacturers and Traders showed.

Sales of new petrol cars fell 14.2% to 90,123 units but sales of diesel cars increased 4% annually to 91,323 units in June.

UK Corporate Profitability Improves

Profitability of UK non-financial companies rose in the first quarter to its highest level since the fourth quarter of 2008, according to data from the Office for National Statistics released today.

The net rate of return of private non-financial corporations was 12.7% in the first quarter compared to 12.5% in the previous quarter and 11.1% a year earlier.

Gainers & Losers

Balfour Beatty Plc rose 0.09% to 316.80 pence after the infrastructure group said overall trading performance for the first-half continues to be consistent with the company''s expectations.

Booker Group plc surged 4.97% to 73.95 pence after the food wholesaler said total sales for the 12 weeks to June 17 rose 9.5% compared to last year and comparable sales rose 7.4%.

CRH plc fell 1.27% to €14.82 after the Ireland-based building materials firm stated first-half expense on acquisitions and investments was €200 million and divestments brought in €345 million.

DS Smith Plc dipped 0.23% to 264.40 pence after the packaging supplier and office products wholesaler received a binding offer for its European office products wholesaling business from Unipapel S.A. for an enterprise value of £200 million.

Sports Direct International Plc climbed 1.86% to 247 pence after the retailing group acquired an 80% shareholding in West Coast Capital (USC) Ltd and Cruise Clothing Ltd for a total cash consideration of £7 million.