Wednesday, 7 December: UK manufacturing data was the latest data release from the Office for National Statistics (ONS), and against expectations, the data showed a decline in manufacturing over the month of October. Output from manufacturers fell by 0.9%, following a rise of 0.6% in September. Total industrial production dropped by 1.3%, the biggest fall in overall production since August 2013. The data release impacted sterling as it fell against both the euro and dollar and continued to trade lower during Wednesday trading – at the time of writing GBP/EUR is -0.86% at €1.17 and GBP/USD is -0.50% at $1.26.
Leading the pack of the FTSE 100 was Rio Tinto, benefitting from Credit Suisse upgrading their rating from neutral to outperform and at the same time switching their preference from BHP Biliton to Rio. The international miner was more than + 7% intra-trading, falling back slightly at the close to end the day +6.62%, a new 2016 high.
Halifax has today said annual growth in UK house prices have risen 6% compared to last year, an acceleration in prices for the first time in 8 months. However this is in contrast to Nationwide’s house prices data, who last said annual house price growth had slowed to 4.4%. According to Halifax’s data, it means the cost of a “typical” home in the UK was £218,002.
A recurring statement coming from the US of late is “the Dow reaching record highs” and today looks to only add to that. The Dow Jones currently sits slightly higher (+0.30%) and has added nearly 7% since Trump’s election win in early November. Pfizer, one of the world’s largest pharmaceutical companies, listed on the Dow Jones, has been fined a record £84.2m by the UK’s competition watchdog, for overcharging the NHS for an anti-epilepsy drug. Distributor Flynn Pharma have also been fined £5.2m following a 2,600% overnight price increase for the drug in 2012. NHS’s spending on the drug went from £2m a year in 2012 to c.£50m in 2013 – the drug is used by 48,000 patients in the UK. Pfizer used to market the medicine under the brand name Epanutin but sold the rights to Flynn Pharma, a privately owned British company, in September 2012. Following the sale, the drug was then de-branded, subsequently meaning it was no longer subject to price regulation. Pfizer are set to appeal the verdict.
Late in trading the news was announced that Tata Steel has made a commitment to secure jobs and production at Port Talbort, and other steelworks across the UK. Should the workers agree to the terms, it will bring to an end eight months of uncertainty. Should the agreement go ahead there will be a minimum five-year commitment to two blast furnaces at the Port Talbot plant, alongside a consultation on replacing the current pension scheme. Tata announced in March they were set to sell the steelworks, leaving thousands of workers uncertain if they would have a job by Christmas.
Strong performances from the main indices in Europe as the FTSE 100 added 1.81%, the CAC +1.36% and the DAX +1.96%.