UK Growth Is a Headache for the BOE

UK Growth Is a Headache for the BOE

0850 GMT - A pickup in U.K. economic growth will likely mean further monetary tightening by the Bank of England ahead, T.Rowe Price chief European economist Tomasz Wieladek writes in a note. The economy grew 0.5% in June, ahead of expectations, on the back of surging manufacturing output. This suggests that the BOE's attempts to rein in high inflation--through interest-rate hikes that should dampen demand--aren't working as hoped, Wieladek says. "Perhaps there hasn't been enough tightening yet, or there is a significant delay," he says. Even if inflation data next week are better than expected, the bank will likely need to raise rates again, he says. ([e-mail]; @joshualeokirby)

COMPANIES NEWS:

VP CFO Anna Bielby to Become CEO as Neil Stothard Retires

VP PLC's Chief Executive Neil Stothard is retiring from the group at the end of September and will be replaced by Anna Bielby, currently its chief financial officer.

---

UnitedHealth, EMIS Merger Cleared Provisionally by UK Regulator

The U.K.'s Competition and Markets authority said it hasn't found any competition concerns in the UnitedHealth Group and EMIS Group merger so far following an in-depth investigation, clearing the 1.2 billion pounds ($1.52 billion) deal provisionally.

---

Chaarat Gold Holdings' Kapan Production Falls, Mulls Sale of Mine

Chaarat Gold Holdings has reported a fall in production from its Kapan Mine in Armenia for the first half, and is considering a potential sale of the asset.

---

Smoove Extends PEXA's Takeover Offer Deadline

Smoove said that the deadline for PEXA Group to make a firm takeover offer has been extended to Sept. 8.

---

Celsius Resources Says Shareholders Unlikely to Approve Silvercorp Takeover Bid

Celsius Resources said Silvercorp Metals' current takeover offer is unlikely to have substantial support from shareholders and that it is considering other approaches.

---

FBD Holdings Pretax Profit Rose on Insurance Revenue, Investment Returns

FBD Holdings' pretax profit grew over the first half of 2023 driven by insurance revenue growth, investment returns and lower expenses.

---

GCP Infrastructure to Merge With GCP Asset Backed in GBP907 Mln Deal

GCP Infrastructure Investments has agreed to merge with GCP Asset Backed Income Fund under a deal that will result in GCP Asset being wound up and its assets transferred to the company in exchange for shares, creating a company worth about 907 million pounds ($1.15 billion).

---

FIH Group Appoints Nicholas Henry as Nonexecutive Chair

FIH Group has named Nicholas Paul Henry as nonexecutive chairman and director, succeeding Robin Williams.

---

Atlantis Japan Growth Fund to Merge With Nippon Active Value Fund

Atlantis Japan Growth Fund has agreed to merge with U.K. investment trust Nippon Active Value Fund whereby Nippon will buy Atlantis's assets in exchange for shares.

---

SW (Finance) I Raises GBP550 Mln More for Southern Water Group

SW (Finance) I raised a further 550 million pounds ($697.1 million) in equity to support the turnaround plan of its holding company Southern Water Group.

---

UnitedHealth, EMIS Merger Provisionally Cleared by UK Regulator--Update

The U.K.'s Competition and Markets authority said it hasn't found any competition concerns in the UnitedHealth Group-Optum UK and EMIS Group merger so far following an in-depth investigation, provisionally clearing the 1.2 billion pound ($1.52 billion) deal.

MARKET TALK:

UK GDP Rebound Helped by One-Offs, Though Industrial Output Reassures

0937 GMT - The rebound in U.K. economic activity in June was flattered by some one-off factors, but there are signs of optimism from improving industrial production, according to Investec economist Sandra Horsfield. The bank holiday for King Charles's coronation in May resulted in a rebound in working days in June, particularly helping manufacturing and construction ouput figures--which grew 2.4% and 1.6% respectively--she says in a note. Warm weather also boosted hospitality and tourism, as well as construction, Horsfield adds. July was, by contrast, rainy, but better performance of car manufacturing and sales suggests improving supply-chains beyond one-off effects. Still, industrial action remains a drag, with junior doctors launching a fresh round of strikes on Friday. ([e-mail])

---

Persimmon's Share Price Looks About Right Given Caution

0932 GMT - Persimmon's first-half results broadly met expectations and its upward tightening of full-year volume guidance drives Numis to raise its 2023 pretax profit forecast 5% to GBP343.7 million, analysts say. The house builder is clearly getting hit harder than its peers given lower outlets and a shorter order book--factors likely to remain at play over the medium term, Numis analysts say in a research note. As such, a cautious stance is still warranted, and given Persimmon's investment requirements over the next few years and the effect this will have on shareholder returns and distributions, the share price looks about right compared to peers with larger discounts, the U.K. brokerage says. Numis raises its rating to hold from reduce, and retains its 1,185 pence price target. Shares are down 1.2% at 1,135 pence. ([e-mail])

---

Domino's Pizza Growth Potential Already Priced In, DB Says

0920 GMT - Domino's Pizza Group remains a well-operated business, but growth prospects seem to be already priced in, Deutsche Bank Research analysts Harishankar Ramamoorthy and Simon Davies say in a note as they downgrade the stock rating to hold from buy. Shares of the pizza chain currently trade up 40% year-to-date, while the U.K. medium-cap index is flat, they highlight. The outperformance is supported by robust cash-generative growth in the mid-term, and the group has tools to boost demand in case of a potential recession, the analysts add. "We believe the business is fairly valued at current levels," they say. ([e-mail])

Contact: London NewsPlus, Dow Jones Newswires;

(END) Dow Jones Newswires

08-11-23 0646ET