UK Service Sector Activity Slows; Tesco to Create 20,000 Jobs

Arthi Gupta
05 Mar, 2012
New York City

The UK indexes declined after the government net reserves rose and service sector activity slowed in February. British industry group lowered the growth outlook for the current year. Tesco plans to add 20,000 new jobs in the UK over the next two years.

[R]2:30 PM London – The UK indexes declined after the government net reserves rose and service sector activity slowed in February. British industry group lowered the growth outlook for the current year. Tesco plans to add 20,000 new jobs in the UK over the next two years.[/R]

The UK indexes slid after China lowered its GDP growth target to 7.5% in 2012, the lowest since 2004 from the previous target of 8% growth, according to Premier Wen Jiabao's address at the annual meeting of the National People's Congress in Beijing.

Miners led the decline with Rio Tinto down 2.4%, Vedanta Resources dropping 2.6%, and Kazakhmys falling 2.7%.

The British Chambers of Commerce cut the economic growth estimate in the UK to 0.6% in 2012 from the previously estimated 0.8% and left the 2013 growth estimate at 1.8%.

In London trading FTSE 100 Index eased 12.59 or 0.2% to 5,898.61 and the pound edged higher to $1.5839.

UK Net Reserves Up

The UK government’s net reserves increased $746 million in February, bringing the total to $46.844 billion at the end of the month from $47 billion at the end of January.

The Bank of England’s net holdings of foreign currency and gold increased by $3.73 million in February, bringing the total to $0.98 million compared to -$2.75 at the end of January.

UK Service Sector Activity Slows

The UK service sector activity slowed in February, data from the survey by Markit Economics and CIPS showed today.

The seasonally adjusted purchasing managers' index for the service sector dropped to 53.8 in February from 56 in January.

Tesco to Create 20000 Jobs

Tesco announced that it will create 20,000 new jobs in the UK over the next two years through a significant investment in customer service, renovating existing stores and opening new ones.

Gainers & Losers

BP plc rose 1.6% to 504.30 pence after the international oil and gas explorer agreed to a $7.8 billion settlement with individuals and businesses affected from the Deepwater Horizon accident and oil spill.

Glencore International Plc fell 2.7% to 408.60 pence after the commodities trader reported revenue surged 28% to $186.15 billion from $144.98 billion in the earlier year period. Income attributable to equity holders soared 214% from $4.05 billion or 69 cents per share from $1.29 billion or 35 cents per share a year ago.

Intertek Group plc soared 3.7% to 2,399 pence after the product testing group stated fiscal year 2011 revenue surged 27% to £1,749 million in 2011 from £1,374 million in 2010. Adjusted profit before tax rose 23% to £260.1 million from £211.9 million in 2010.

Misys Plc surged 6.7% to 337.30 pence after the banking industry IT services provider confirmed that it is currently in talks with CVC Capital Partners Ltd. and ValueAct Capital regarding a possible cash takeover offer.

Weir Group PLC slumped 3.4% to 1,965 pence after a broker downgrade.