UK Sentiment Slumps, Output Price Inflation Eases

Arthi Gupta
11 May, 2012
New York City

The UK indexes fell after consumer sentiment deteriorated and output price inflation slowed in April. Greece inched closer to forming a coalition government. Petrofac estimates to deliver net profit growth of at least 15% this year.

[R]3:15 PM London – The UK indexes fell after consumer sentiment deteriorated and output price inflation slowed in April. Greece inched closer to forming a coalition government. Petrofac estimates to deliver net profit growth of at least 15% this year.[/R]

The UK indexes dropped and banks led the decliners after JPMorgan Chase made a surprise announcement that it suffered $2 billion trading loss in the last six weeks after an ""egregious"" failure at the Chief Investment Office.

In Greece, Evangelos Venizelos, the leader of Pasok party inched toward forming a new coalition government. Venizelos is the third person in less than a week mandated to form a new government.

In London, the benchmark index FTSE 100 declined 34.04 or 0.6% to 5,510 and the pound edged lower to $1.6112.

For the week, the FTSE 100 plunged 4.6% and suffered one of the worst weekly losses in the last four years.

UK Sentiment Slumps

Consumer sentiment in the UK deteriorated in April after improving to a nine-month high in March.

The Nationwide Building Society said its consumer confidence index fell to 44 in April from 53 in March.

UK Output Price Inflation Eased

The UK output price inflation slowed to 3.3% in April from an upwardly revised 3.7% in March, the Office for National Statistics showed.

Input price inflation also eased in April to 1.2% from a downwardly revised 5.6% in the prior month.

On a monthly basis, input prices fell 1.5% in April following a revised 1.7% gain in March.

Gainers & Losers

International Consolidated Airlines Group SA, the parent of British Air and Iberian airline rose 0.9% to 164.50 pence after it said first quarter revenue rose 7.8% to €3.92 billion from €3.64 billion a year ago. Pre-tax loss in the quarter widened 460% to €263 million from €47 million loss last year.

International Power plc increased a fraction to 417.80 pence after the electricity generator announced the sale of 40% of Hidd Power Co. in Bahrain to Malakoff International Ltd. for $113.4 million.

Petrofac Ltd fell 2.4% to 1,580 pence after the oil services firm forecasted to deliver net profit growth of at least 15%.in 2012.

Thomas Cook Group plc fell 2.3% to 21 pence after the leisure travel company estimates to receive proceeds of $202.9 million from the sale of 11 Boeing 757s and 2 B767s to Guggenheim, and proceeds of $91.5 million from the sale of 6 Boeing 767s to Aircastle.