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London open: Stocks edge higher despite concerns around proposed Brexit deal
Stocks are trading slightly higher as traders gird for another possible meaningful vote later in the day, likely before 2200 BST, on Prime Minister Boris Johnson’s Brexit deal proposal.
Nevertheless, market participants were divided regarding the merits, or lack thereof, of the PM’s proposed deal.
Despite that, as of 0857 BST, the FTSE 100 was adding 0.01% to 7,151.94, while the FTSE 250 was up by 0.22% a 20,271.24.
In parallel, the pound was 0.03% higher against the single European currency to 1.1624.
Speaking on Friday evening, Bank of England Governor, Mark Carney, said that news of a deal between the UK and EU was “good news” and that it should lead to a partial rebound in company investment as much of the uncertainty that had been weighing on the economy would be removed.
But Pantheon Macroeconomics‘s chief UK economist, Samuel Tombs, disagreed, telling clients that the lack of a UK wide backstop meant that firms were now facing the risk of customs controls being imposed at some stage and of being left outside the single market for trade in goods.
If Johnson’s deal was approved, Tombs said he would cut his forecast for UK GDP growth in 2020 from 1.4% to 1.2%, instead of marking it up to 1.8% as he would have had Theresa May’s proposed deal been signed off.
At the weekend, MPs voted in a favour of an amendment proposed by Sir Oliver Letwin meant to close off the last remaining loop-hole for a no-deal Brexit even if MPs had voted in favour of Johnson’s proposed deal with Brussels, which in the end resulted in Johnson’s proposal not being voted on at all.
Nonetheless, some reports indicated that as things now stood, even if the UK did leave the European Union on 31 October with a deal, should Westminster fail to reach an agreement with the EU on a free trade area between the two economies during the so-called transition period, then the UK could still stumble out of the bloc without a deal.
To take note of, in remarks made on the Andrew Marr show on Sunday, Foreign Secretary, Dominic Raab, said that the government had enough votes in the House of Commons to secure the passage of Johnson’s deal.
No major economic releases were scheduled in the UK, euro area or US on Monday.
According to home price comparison website Rightmove, asking prices for UK homes increased at a 0.6% month-on-month clip in October, which was less than the average 1.6% bounce seen in each October over the preceding 10 years.
Just Eat reaffirms full-year guidance
Third quarter revenue at online food delivery service Just Eat grew 25% to £248m as the group reaffirmed full year guidance and losses in its Latin American operations. Group orders increased 16% to £62m, with an 8% rise in the UK to £33m. The company said it still expected 2019 revenue in the range of £1bn – £1.1bn and underlying core earnings of £185m – to £205m (both excluding Brazil and Mexico). It added that it still expected losses in Brazil and Mexico to be in the range of £80m – £100m.
AstraZeneca announced that its Farxiga treatment has received approval from the US Food and Drug Administration to reduce the risk of hospitalisation for heart failure in adults with type-2 diabetes and established cardiovascular disease. The treatment has received marketing authorisation in the European Union and is currently under regulatory review in China, with a decision anticipated in the first half of next year.
Great Portland Estates announced on Monday that its joint venture, the GHS Limited Partnership, has pre-let the first flagship store at 64 New Bond Street to the luxury Italian menswear brand Canali, which has signed a new 10-year lease on covering 5,014 square feet over three floors. The FTSE 250 company said 64 New Bond Street formed part of the “world-class” Hanover Square mixed-use development, adding that once completed, it would provide 167,200 square feet of Grade A offices, 33,500 square feet of retail predominately fronting New Bond Street, an 8,300 square foot restaurant, and six residential apartments totalling 12,200 square feet.
