UK Inflation Worries; Mitchells & Butlers Rises

123jump.com Staff
08 Jan, 2010
New York City

UK producer price surge fuels inflation fears. The pound was nearly unchanged after the report. Ted Baker sales surge. Mitchells & Butlers remains cautious. Aberdeen Asset Management agrees to acquire a unit of RBS for

[R]4:00PM London, 11:00 AM New York – UK producer price surge fuels inflation fears. The pound was nearly unchanged after the report. Ted Baker sales surge. Mitchells & Butlers remains cautious. Aberdeen Asset Management agrees to acquire a unit of RBS for £84.7 million.[/R]

European markets were on the decline and Asian markets closed higher on the optimism that the U.S. jobs report will show minimal losses. However, this morning jobs report showed a larger than expected fall.

UK producer prices index or wholesale annual inflation for all manufactured products rose 3.5% in December. Input price annual inflation rose by 6.9%. This mainly reflects price rises manufactured, electrical & food products and transport equipment.

UK producer prices increased 0.5% in November from October according to the data released by the Office for National Statistics. Prices increased in seven of the ten categories led by a jump in food, transportation and metals.

Prices increased 0.7% excluding food, fuel and tobacco products and gained 2.6% from a year ago. Crude oil prices increased 66% from a year in the month.

European unemployment increased to 10% in November and the U.S. unemployment in December was unchanged at 10%. December U.S. payrolls declined 85,000. The larger than expected payroll decline dragged the European and U.S. indexes lower.

In London FTSE 100 Index closed lower 4.18 or 0.08% to 5,522.54 and the pound edged higher to close at $1.603 and at €1.116.

Aberdeen Acquires RBS Asset Management Arm

Aberdeen Asset Management Plc said it agreed to acquire a fund management unit from Royal Bank of Scotland for £84.7 million and will fund the purchase through the sale of 84 million new shares.

Separately the money manager also said its asset under management declined 1.4% to 144.1 million pounds in the fourth quarter ending in December.

Gainers & Losers

Aberdeen Asset Management Plc an independent asset management company dropped 2.9% to 134.50 pence.

Mears Group PLC rose 1.5% to 283.00 after the social housing maintenance specialist said that business in the year ending December met management expectations.


Michael Page International plc fell 0.8% to 418.40 pence after the specialist recruitment consultancy said fourth quarter group gross profit fell 24% to £90.6 million compared with a gross profit of £118.7 million a year ago. EMEA gross profit fell 29.3% to £42.2 million compared with a gross profit of £59.7 million a year ago.

Mitchells & Butlers plc increased 6.0% to 267.30 pence after the pub group said trading in the new financial year has remained strong, driven by sales growth across the main brands and comparable same store sales increased 3.4% in the 6 weeks to January 2.

The Rank Group Plc gained 2.5% to 91.85 pence after the bingo and gaming group announces 3% growth in group revenue for the year to December 27 on casino expansion and the effect of tax changes.

The Royal Bank of Scotland Group plc rose 0.7% to 36.12 pence after the bank agreed to sell its asset management arm and a wealth management products distribution.

The Restaurant Group plc climbed 2.0% to 205.00 pence after the company to beat profit expectations.

Spirax-Sarco Engineering plc added 5.3% to 1,301.00 pence after the manufacturer of steam-handling boiler and pipeline control valves said full-year sales rose 3% from last year including a small contribution from acquisitions and an exchange benefit of 10%.

Ted Baker PLC advanced 2.9% to 520.00 after the fashion group announces a 19.1% increase in retail sales for the period November 1 to December 24, compared with the period a year ago. The fashion group said sales in UK are ahead of management expectations.