TUC urge government to tackle inequality in UK after IFS report
There is a 25 percent gap between the richest and poorest areas of Britain, prompting the TUC to urge the government to combat the problem.
The Institute of Fiscal Studies’ annual living standards, poverty and inequality report, released on Wednesday, found that whilst the gap between the richest and poorest households in the UK has narrowed since the recession of 2007-08, there remains significant geographical differences.
The report found London to be the most unequal part of the UK, but added that the incomes of low-income households in London rising by more 10 percent since 2000, whilst the incomes of high-income households have fallen by more than 10 percent.
The average income in the highest-income region in Britain, the South East, is 25 percent higher than in the lowest-income region, the West Midlands. The average income in the South East is now nearly twice as far above the national average as it was in the 1970s, at 13 percent compared with 7 percent.
Frances O’Grady, the TUC general secretary, said ministers could not shrug off findings and put pressure on the government to do more to tackle the problem of inequality in the UK.
Reckitt Benckiser sells food division to owner of Schwartz for $4.2bn
Reckitt Benckiser (LON:RB) has sold its food division to the owner of US spice and herb giant Schwartz, in a deal worth $4.2 billion.
McCormick & Co won the bid to acquire Reckitt Benckiser’s business, which includes French’s mustard as well as Franks’ RedHot and Cattlemen’s sauces.
The deal was confirmed by Reckitt in a statement on Tuesday, and will go some way to alleviate the debt the company has been dealing with since it bought baby formula maker Mead Johnson for $17.9 billion.
The chief executive of Reckitt Benckiser, Rakesh Kapoor, said: “Following the acquisition of Mead Johnson Nutrition, this transaction marks another step towards transforming RB into a global leader in consumer health and hygiene.”
Shares in Reckitt Benckiser are currently up 1.68 percent at 7,943.00 (1053GMT).
BREAKING: Inflation falls to 2.6pc in June
The UK’s inflation rate fell to 2.6 percent in June, the first fall since October last year driven by a drop in petrol prices.
The latest figure is down from 2.9 percent in May, official figures showed on Tuesday, but still remains ahead of wage growth. Average wage inflation stands at 2 percent, excluding bonuses.
It is the lowest inflation figure since February 2015, with fuel prices falling by 1.1 percent between May and June 2017, the fourth successive month of price decreases.Netflix hits 104m subscribers after successful quarter
Netflix (NASDAQ:NFLX) shares jumped over 10 percent in after hours trading in New York, after the company said it had hit 104 million subscribers.
Netflix added 5.2 million new subscribers in the second quarter, 2 million more than expected by analysts. The company said the increase in subscribers was the result of increased investment in its shows, several of which went viral over the quarter. Its series 13 Reasons Why, documenting the suicide of a young girl, caused controversy for its handling of the topic.
However, after the release of new series’ of popular shows Orange is the New Black and House of Cards in the second quarter, subscribers could fall in the third with no big releases scheduled.
However, the company remained optimistic they it would continue its momentum, forecasting revenue of $2.969 billion and a net addition of 4.4 million new subscribers.
Netflix shares jumped 10 percent after the closing bell, currently trading up 0.36 percent at 161.70 (0946GMT).
Alliance Pharma shares up on strong international sales
Shares in pharmaceutical firm Alliance Pharma (LON:APH) jumped at market open on Tuesday, after reporting an 8 percent increase in first half sales.
Sales rose to £50.3 million during the period, up from £46.4 million in the first half of 2016.
The group saw a solid performance across all its international growth brands, with scar-reduction product Kelo-Cote, our achieving a 52 percent increase in sales at £6.2 million. Sales of MacuShield rose 67 percent to £3.4 million.
In a statement, Alliance attributed the strong results to favourable currency movements:
“Currency movements benefited sales in the period by approximately £2.6 million due to the weakening of Sterling when compared against the rates for the same period last year primarily of the Euro and US Dollar.
“However, the impact on operating profits will be much smaller due to the increases in cost of goods and operating costs denominated in these currencies.”
Shares in Alliance are currently up 1.50 percent at 53.29 (0927GMT).
Carillion shares jump after being awarded HS2 contract
Troubled outsourcer Carillion (LON:CLLN) has been awarded a contract from the British government to develop the HS2 rail line, one of several contracts announced on Monday.
The company was named as one of the winners after a competitive bidding process, with several large firms competing for the £6.6 billion contracts. Carillion has been awarded two contracts worth a combined £1.34 billion to build tunnels on the central section of the route, between London and Birmingham.
The deal will come as a relief to the company, who have seen shares plunge over the last couple of weeks after a shock profit warning.
In a separate announcement, the company said it had appointed professional services firm EY to support its strategic review, with a particular focus upon cost reduction and cash collection.
The board is undertaking a comprehensive review of the Group’s business and capital structure in the wake of the profit warning, alongside taking immediate action to generate significant cashflow in the short term and achieve a reduction in average net borrowing.
Parity Group shares jump 15pc after profit increase
Technology-focused consultancy Parity Group (LON:PTY) saw shares bounce 15 percent on Monday, after profit for the first six months of the year moved into double figures.
Without giving specific figures, the group said it expects an increase on H1 2016 and for profit to be consistent with the market’s full year expectations.
Parity also confirmed that it had seen a further reduction in net debt, reflecting a positive swing in the Group’s working capital. Net debt as at 30 June 2017 stood at £2.3 million, a decrease from December’s figure of £4.4 million.
Alan Rommel, CEO, commented:
“We are pleased to see the continued momentum in the Group’s performance as we deliver on our strategy of growing our higher margin Consultancy Services division, which enjoys longer term visibility and high levels of client engagement.
“Our strong cash and working capital management has further reduced net borrowing and leaves us well placed to continue to self-fund investment to grow our sales capacity.”
Shares in Parity Group are currently trading up 14.25 percent at 1043 (1039GMT).
Weir Group shares jump 8pc on positive trading update
Weir Group (LON:WEIR) shares jumped nearly 10 percent on Monday morning, after a trading update showed strong performance in their oil division.
The resource-focused engineering group said a quicker-than-expected recovery in the North American markets had a positive impact on performance, with “higher levels of frack fleet utilisation and significant tightening of industry capacity are both benefiting the Group’s Oil & Gas division.”
“As a result, it has seen increased volumes, stronger operating leverage and modest pricing recovery ahead of prior expectations, and has delivered low double-digit operating margins in the first half”, the group said in a statement on Monday.
The positive update comes after the group took a cautious tone at the beginning of the year, after a year of weak oil prices took its toll on company results.
Shares in Weir Group are currently trading up 8.28 percent at 1,975.00 (1020GMT).
Chinese growth hits 6.9pc in Q2
The Chinese economy grew at a rate of 6.9 percent in the second quarter, according to the latest government data released on Monday.
This was a faster pace than expected and above the government’s growth target. The figure was the same as the first quarter of 2017, and 0.1 percent above analysts’ projections.
The official data showed strong performance across all sectors; property investment also rose by 8.5 percent in the first half, an improvement on the same period in 2016.
Industrial output for June grew by 7.6 percent, well above the forecast of 6.5 percent, and retail spending rose by 11 percent compared to June the previous year. The figures are encouraging for the Chinese government, who are currently dealing with debt levels of 277 per cent of GDP.
Royal Mail shares fall as company offers new pension plan
Royal Mail (LON:RMG) became the biggest faller on the FTSE 100 on Friday, with shares dropping more than 2 percent after the company offered workers a new pension plan.
The offer came after significant union opposition to Royal Mail’s decision to close their defined benefit pension scheme, which pays out based on workers’ final salary and length of service.
The company have struggled financially with the weight of this type of pension plan, and are now offering workers a choice between a defined-benefit and a defined-contribution scheme.
“Royal Mail is one of few companies offering to replace one defined-benefit scheme with another,” the company pointed out.
“Royal Mail believes that the risk to the company of the proposed defined benefit cash balance scheme would be materially lower than under the current plan and is a manageable risk,” it said.
Royal Mail have said the new plan is likely to cost about £400 million annually, a significant cost-saving on the £1 billion it would cost to keep the original final salary pension scheme running.
Royal Mail shares are currently trading down 2.26 percent at 401.70 (1334GMT).