LIVE BUSINESS: CPI returns to 2%; Berkeley improves wayfinding; Vodafone raises £1.4bn

Premier Inn owner Whitbread said business has been boosted by the Taylor Swift Eras tour. The hotel giant said sales in the three months to the end of May rose just 1 per cent on a year earlier, reaching £739m.

Vodafone Group has sold a larger-than-expected 18 per cent stake in India’s Indus Towers for $1.82bn (£1.4bn), with local telecoms operator Bharti Airtel acquiring shares to increase its stake to almost 50 percent.

The UK telecoms giant, which owns a 21.5 percent stake in mobile tower operator Indus, had initially planned to sell a 10 percent stake, but strong investor demand prompted it to almost double the size of the sale, according to Reuters.

Vodafone said it sold 484.7 million Indus shares at 310-341 rupees per share, raising 153 billion rupees, in gross proceeds that it will use to repay debt.

It has bank loans of €1.8 billion against its Indian assets, which also include a stake in Vodafone Idea, the indebted country’s third-largest telecoms operator by number of subscribers.

Indus shares fell as much as 9.4 per cent, before paring losses to trade down 4.3 per cent at Rs 329.60 around noon in Mumbai, with more than 750 million shares traded, already its busiest session ever.

Anthony Codling, head of European housing at RBC Capital Markets:

‘Berkeley’s FY24 results were slightly above expectations, once again demonstrating the strength and resilience of the Group’s business model.

‘Not content to run on all cylinders, Berkeley announced today that it will add another cylinder to its finely tuned engine, a build-for-hire platform; has also increased its guidance for fiscal 2025 by 5% to £525 million – bold moves in uncertain times.

‘The Build to Rent platform is not a response that points to a weakness in the sales market, but rather points to the significant potential of the private rental market.

‘Whether we’re looking for homes for sale or homes for rent, we’re short on supply and Berkeley is doing its part to supply the homes we need. We expect the shares to react positively to today’s results and the improved outlook for tomorrow.”

High-end British housebuilder Berkeley has raised its profit outlook by 5 percent for fiscal 2025 after beating last year’s profit expectations.

Berkeley, which operates in London, Birmingham and the south of England, made a pre-tax profit of £557.3 million for the year to April 30, down 8 per cent on the previous 12 months but ahead of expectations. analyst forecasts of £549.5 million.

Persistent inflation in Britain has clouded prospects for monetary policy easing, tempering expectations of a rapid recovery in the housing market despite signs of stability in early 2024.

Berkeley chief executive Rob Perrins said the launch of the build-to-rent segment was aimed at maximizing profitability in current market conditions, and the group has identified around 4,000 homes across its 17 brownfield regeneration sites as a portfolio. initial for the platform.

The company raised its full-year pre-tax profit outlook to £525m, saying it continued to benefit from a strong order book and good housing inquiries in the country’s most undersupplied markets.

Nvidia has overtaken Microsoft and Apple to become the world’s most valuable company as it cashes in on the rise of artificial intelligence.

Shares in the US chipmaker rose more than 3 per cent in early trading yesterday, taking its value to $3.33bn (£2.6bn).

That surpassed Apple and Microsoft, which were worth $3.32 trillion and $3.28 trillion respectively.

Luke Bartholomew, deputy chief economist at Abrdn:

‘Headline inflation was expected to return to target, but it will still be very welcome news for the Bank of England.

‘The big question now is whether underlying inflation pressures in the economy are consistent with inflation remaining around 2% over the medium term, or whether inflation will begin to rise again once favorable base effects fade.

‘On that front, there is still evidence of residual stickiness in services inflation, reflecting the strength of recent wage growth. That is why it is still very unlikely that interest rates will be reduced tomorrow. But we believe that the Bank’s communication tomorrow will lead the way for a cut in August, which now looks increasingly likely.’

Thomas Pugh, economist at RSM UK:

‘Today’s news that inflation has fallen back to 2% for the first time in three years will bring some joy to Rishi Sunak, but it is too late for the Monetary Policy Committee (MPC) to cut interest rates tomorrow . What’s more, another mistake in services inflation has reduced the chances of a rate cut in August.

‘The slowdown in headline inflation was driven by a larger-than-expected drop in goods inflation to -1.3%. However, services inflation, which is a better measure of underlying price pressures in the economy than headline inflation, again missed expectations and only slowed to 5.7% versus 5.7% expectations. ,5%.

‘This will raise concerns in the MPC that underlying price pressures in the economy are not slowing as quickly as expected and makes an interest rate cut in August less likely.

‘However, we do not rule out a rate cut in August. It seems likely that services inflation in May was still driven by the impact of the 9.7% increase in the national minimum wage in April, which was a one-off as inflation in the restaurant and hotel category only slowed 0.2 percentage points.

‘The outlook for 2025 depends partly on whether a new government is forced to raise more revenue in the next parliament, which could give the Bank more room to cut interest rates, or borrows more, which would argue for less. rate cuts. Our base scenario is that interest rates end next year at 3.5%.’

Matthew Chapman, associate partner at McKinsey & Company:

‘The UK could continue to face a mixed outlook. Wage growth and service level inflation remain high at 6% and 5.7% respectively. And to allay concerns about domestically generated inflation, there may need to be more evidence of sustained disinflation and a labor market slowdown.

‘While inflation is returning to normal levels, price increases of 7% in house rentals will continue to strain the budgets of many households. At the same time, near double-digit inflation in the cost of package travel (9%) and 7% in accommodation services could drive consumers away from discretionary spending on travel and hospitality as the holiday season approaches. Summer Vacation.

Consumer price inflation returned to the Bank of England’s target of 2 per cent last month for the first time in almost three years, new data from the Office for National Statistics shows.

The reading, which was down from 2.3 percent in April, was in line with expectations and will put pressure on the Bank of England to cut interest rates at its next Monetary Policy Committee meeting.