Friday, 6th April: The sugar tax which was announced March 2016 came into effect today. Since the date the tax was announced up to its implementation today, soft drink manufacturers and retailers took quick action to amend the contents of drinks and create own-label drinks in hopes of mitigating the effect of the tax on their operations. Due to the proactive action taken by such companies, the forecaste figure which was to be raised from the sugar tax has been reduced significantly, from c.£520m down to c.£275m in the first year.
EasyJet was forced to cancel 3% of their planned capacity in March this year because of the uncompromising weather conditions across Europe, which doesn’t sound like much, but actually affected 1,274 flights, more than double in comparison to the number of flights cancelled in March 2017. Regardless of these cancellations, they still managed to get more passengers on board for alternative flights, as the reported passenger numbers for the month increased by 3.4%. The market didn’t really seem to take this into consideration though, as the groups’ share price was negatively affected by the news and they opened around 0.7% lower.
The retailers received an even more unforgiving response on the blue-chip index, as the likes of Marks & Spencer and Next were both trading more than 3.0% lower during the morning and dominated the bottom end of the index following further trade threats which were reignited by Trump after the market had just began to relax from the war of words only yesterday.
After remaining in negative territory for the majority of the day, in the afternoon the FTSE 100 managed to climb higher for about 30 minutes before it slumped back down and ended the day 0.22% lower at 7183.64.