BUSINESS LIVE: Inflation holds at 4%; Bloomsbury ups profit expectations; Coca-Cola HBC scores record profits

Lindsay James, investment strategist at Quilter Investors:

‘Core inflation, excluding energy, food, alcohol and tobacco, has been falling considerably more slowly than the headline rate, and progress here also appears to have stalled. It held steady at 5.1% in November and December, and once again refused to let up in January, driven in part by strong services inflation that rose from 6.4% to 6.5%.

‘That said, the month-on-month data is more encouraging, so this is unlikely to deter the Bank of England from its recent suggestion that interest rates have peaked.

‘Yesterday’s UK labor market statistics revealed a further fall in wages, with annual growth in regular earnings (excluding bonuses) slowing to 6.2% between October and December, down from 6.6% in the previous three-month period.

“However, while at first glance this appears high, annualizing the pattern over the past three months indicates that it is now falling quite rapidly, with the annualized nominal growth rate of regular earnings at 2.2%, rapidly approaching the Bank of England rate target and providing some reassurance that this inflationary pulse is weakening.

‘What’s more, tomorrow’s GDP data is expected to reveal that the UK fell into recession at the end of last year. Although Andrew Bailey has stepped back with the expectation that it will be shallow and short-lived, the pressure on the Bank to cut rates sooner rather than later will undoubtedly continue, and today’s release of CPI data will do little to change that.

Coca-Cola HBC expects profits to grow in 2024 after the bottler achieved record profits last year, helped by strong demand for its soft drinks, coffee and energy drinks, as well as easing cost pressures.

The Switzerland-based company, in which US beverage giant Coca-Cola owns a stake of around 23 percent, expects comparable operating profit to grow between 3 and 9 percent in 2024.

It reported a 17.7 percent rise in comparable operating profit for the year ended Dec. 31 to 1.08 billion euros.

Boss Zoran Bogdanovic said:

“While we expect the macroeconomic and geopolitical environment to remain challenging, we remain confident that we will continue to make progress towards our medium-term growth objectives.”

Yodel was bought in a last-minute rescue by a consortium led by rival operator Shift.

The package delivery giant, owned by the Barclay family, was acquired by YDLGP, a new group that includes Jacob Corlett, founder of Shift, and investment bank Solano Pa.

Harry Potter publisher Bloomsbury Publishing has forecast annual profits and revenue “significantly above” market expectations, driven in part by strong sales of Sarah J. Maas’ latest sci-fi and fantasy title.

‘I am delighted to report an exceptionally strong period of trading, driven mainly by growing demand for fantasy fiction.

‘Sarah J. Maas is a publishing phenomenon and we are very lucky to have signed her first book 13 years ago.

“His books have a large audience that continues to grow supported by major Bloomsbury promotional campaigns, generating strong word-of-mouth recommendations, particularly through the TikTok and Instagram channels.”

Victoria Scholar, Chief Investment Officer at Interactive Investor:

“UK CPI inflation hit 4% in January, unchanged from December, and better than analyst expectations for a reading of 4.2%. Core CPI stood at 5.1%, also below consensus estimates of 5.2%. Upward contributions from higher gas and electricity rates were offset by downward contributions from furniture, household goods, food and non-alcoholic beverages.

‘Gas and electricity prices rose at a faster rate than this time last year due to the effect of the energy price cap and second-hand cars rose for the first time since May. Meanwhile, prices of furniture and household goods fell 5.2% monthly, the largest monthly drop since January 2020.

‘Food and non-alcoholic beverage inflation fell from 8% in December to 7% in January, the lowest annual rate since April 2022, declining for the 10th consecutive month from a high of 19.2% in March 2023.’ Food prices fell in the month for the first time in more than two years. Bread and cereal prices fell 1.3% month-on-month, the largest monthly drop since May 2021. However, food prices remain high compared to two years ago.

‘Inflation has steadily declined from the 40-year highs seen in October 2022. Although inflation rose very slightly last month, January’s reading remains unchanged month-on-month despite forecasts for another marginal increase, which which reflects the compensatory contributions of different goods. and services.

“The Bank of England will no doubt be pleased to have avoided an upward surprise in the inflation rate, particularly after US inflation came in higher than expected just yesterday, triggering a sell-off on Wall Street.”

The price of bitcoin swung wildly as investors worried about the outlook for interest rates in the United States.

The world’s largest cryptocurrency rose as high as $50,383 in early trading (a level last seen in December 2021), bringing gains over the past three weeks to nearly 30 percent.

Consumer price inflation was lower than expected in January, holding firm at 4 per cent for the month against forecasts for a rise to 4.2 per cent, new data from the Office for National Statistics shows.