Good morning. The Federal Reserve began an aggressive campaign to curb rampant inflation, raising interest rates last night for the first time since December 2018 and indicating that more will follow.
Officials at America’s central bank now expect to increase rates at each of this year’s six remaining policy meetings as they try to prevent the world’s largest economy from overheating.
The focus will shift to the Bank of England, which many economists have accused of being “behind the curve”, with the conclusion of the latest meeting of the monetary policy committee (MPC) meeting at midday.
UK inflation is running at a 30-year high and forecast to reach 8 per cent in the coming months so the money markets are pricing the chances of a third consecutive rise today at 100 per cent.
Before today’s MPC meeting four members of the The Times’s shadow committee voted to raise rates by 0.25 points to 0.75 per cent; another four opted for an increase of 0.5 points to 1 per cent. One voted to raise rates by 0.75 points to 1.25 per cent. We have a full report on thetimes.co.uk. We will have news of the announcement and full analysis from our economics team, Mehreen Khan and Arthi Nachiappan, later this afternoon.
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On the corporate front this morning two of the markets’ “growth stories” have nudged forecasts lower:
OCADO GROUP: Revenue in the group’s UK retail business, which is jointly owned with Marks & Spencer, fell 5.7 per cent to £564.7 million in the 13 weeks to the end of February compared with the same period last year. The fall is sharper than City analysts had forecast. Average basket size, a key metric for online retailers, fell 15 per cent year-on-year to £124. With rising inflation and the more challenging environment Ocado warned that the full-year growth rate “may be closer to 10 per cent” this financial year. The online retailer had previously guided to growth of between 10 per cent and 15 per cent.
DELIVEROO: Alongside full-year results the takeaway delivery group warned that growth in gross transaction value in 2022 was expected to be in the range of 15 per cent to 25 per cent, having previously guided 20 to 25 per cent growth for the closely watched measure.
Losses Deliveroo at widened in 2021, rising 40 per cent to £298.2 million in the year to the end of December. Revenue over the period rose 57 per cent to £1.82 billion. Shares in Deliveroo have more than halved since the company floated a year (and two days) ago at 350p. They closed last night at 116.5p.
Elsewhere this morning:
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ASTRAZENECA: The Medicines and Healthcare products Regulatory Agency has approved AstraZeneca’s antibody-based Covid-19 treatment Evusheld for patients with poor immune response. AstraZeneca’s antibody cocktail has already been authorised in the United States to prevent Covid-19 infections in individuals with weak immune systems or a history of severe side effects from coronavirus vaccines.
NATIONAL EXPRESS: The bus and coach group has urged Stagecoach shareholders to accept their all-share bid and reject a rival all-cash 105p-a-share offer tabled last week by the German infrastructure investor DWS and recommended by the Stagecoach board. The all-share deal values Stagecoach at 83.5p but National Express claimed that the all-share bid “provides Stagecoach shareholders with the opportunity to participate fully in the exciting future of the industry”.
CINEWORLD: The world’s second biggest cinema operator has reported a narrowing of losses in 2021 as revenue more than doubled to $1.8 billion and it started to recover from the pandemic helped by box office hits such as Spider-Man: No Way Home. Pre-tax losses fell to $708.3 million from £3 billion in 2020. It said it was “well positioned to benefit from the strong movie slate in 2022”.
Others updating this morning include the Aim-listed fuel cell group Ceres Power, the oil explorer Harbour Energy and the ticketing app Trainline.
Finally, yesterday’s Cheltenham tip delivered (for those who followed our advice to bet each way). On the penultimate day Robert Lea, our business team tipster (and occasional industrial editor) opts for Party Central in the 4.50.
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I’ll be on Times Radio just after 4.30pm today to talk through the day’s market action. Listen online, on DAB radio, your smart speaker or via the Times Radio app.
Please do keep sending your thoughts, observations (and corrections) to me at richard.fletcher@thetimes.co.uk and don’t forget to follow me on Twitter @fletcherr.
Richard