UK Inflation at 4.4%; Home Prices Fall 2%; CRH Net Soars

Arthi Gupta
16 Aug, 2011
New York City

The UK indexes declined on weaker-than-estimated global economic data. The UK inflation rose 4.4% in July and home prices declined in June. Resolution first-half revenues rose and CRH net soared.

[R]3:30 PM London – The UK indexes declined on weaker-than-estimated global economic data. The UK inflation rose 4.4% in July and home prices declined in June. Resolution first-half revenues rose and CRH net soared.[/R]

The Bank of England Governor Mervyn King wrote in his third open letter this year that the current elevated inflation continues to reflect the temporary impact of the increase in sales tax and past rises in global energy prices and import prices.

Inflation is likely to rise to around 5% in the months ahead, he added.

News Corp.''s James Murdoch may be summoned by the UK Parliament again to answer additional questions about phone hacking, according to media reports.

James Murdoch told lawmakers last month that he was unaware of evidence of widespread phone hacking at News Corp.''s News of the World.

French President Nicholas Sarkozy and German Chancellor Angela Merkel are scheduled to meet in Paris later today to discuss measures to tackle the region''s sovereign debt crisis.

The euro area economic growth slowed more than anticipated in the second quarter.

In London, FTSE 100 Index declined 41.62 or 0.78% to 5,309.54 and the pound edged lower to $1.6381.

UK Inflation Rises

UK annual inflation rose to 4.4% in July from 4.2% in June, according to data from the Office for National Statistics published today. Inflation held above the 2% target for 20th consecutive month

Clothing and footwear prices rose 3.1% annually in July. Costs of transportation and food and non-alcoholic beverages gained 7.8% and 6.2%, respectively.

UK Home Prices Decline

Home prices in the United Kingdom declined 2% from a year ago in June, slower than the revised 2.2% decrease recorded in May, data released by the Department for Communities and Local Government showed.

On a monthly basis, home prices increased a seasonally adjusted 0.6% in June, reversing the 0.8% decline in May.

The average mix-adjusted home price in the UK rose to £204,981 in June as against £202,767 recorded in May.

AEGON Sells Guardian Life and Pension Business

AEGON N.V., the Dutch insurer decided to sell its UK-based Guardian life and pension business for a total cash consideration of £275 million to Cinven, a European private equity group.

Also, AEGON Asset Management has entered into a long-term agreement with Cinven and will continue to manage the assets of Guardian which total £7.4 billion.

Gainers & Losers

CRH plc gained 0.74% to €12.25 after the building materials supplier reported first-half sales revenue increased 6.7% to €8.17 billion from €7.66 billion in the previous year. Profit in the period soared 322% to €76 million from €18 million a year earlier.

Dee Valley Group rose 1.59% to 1,275 pence after the water services provider said revenue from April 1 to date is in line with expectations and reflects the 5.3% price increase for 2011/12. Water consumption has remained steady in comparison with the previous year, the company added.

GVC Holdings Plc increased 0.90% to 111.50 pence after the online gaming company confirmed speculation that it is in exclusive talks with Sportingbet Plc for the possible purchase of Sportingbet''s Turkish language Web site business.

John Menzies Plc surged 10.99% to 505 pence after the provider of aviation and distribution services reported first-half revenues grew 1.9% to £941.9 million from £924 million reported in the prior year. Profit before tax increased 3.9% to £21.4 million from £20.6 million a year ago.

Resolution Ltd. fell 1.08% to 264.90 pence after the insurer reported first-half total IFRS revenue grew 100% to £3.76 billion from last year''s £1.88 billion.

Operating profit before tax for the period surged 158% to £390 million from £151 million a year ago, driven by the inclusion of the acquired businesses and a £221 million one-off benefit following the release of negative reserves in the acquired AXA UK Life and Bupa Health.