BUSINESS LIVE: Ofgem price cap review; Greggs warns on cost pressures 

BUSINESS LIVE: Ofgem weighs price cap shake-up; National Express reveals final Stagecoach offer; Greggs warns on cost pressures

The FTSE 100 is flat in late morning trading. Among UK companies with reports and updates are National Express, Greggs and Plus500. Read the Monday 16 May Business Live blog below.

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  • Mike Sheen

    Host commentator


  • Camilla Canocchi

    Host commentator






12:03

Diesel is edging closer to £2-A-LITRE

The average price of diesel at Britain’s pumps has risen above £1.80-a-litre for the first time on record and is set to keep climbing closer to £2.

On Sunday, the UK average price for a litre of diesel hit 180.29p, which surpasses the previous record of 179.90p set on 23 March – the day Rishi Sunak introduced the 5p fuel duty cut to ease skyrocketing forecourt prices.

Petrol is also on the rise, hitting 166.65p, which is less than a penny below the record for unleaded – 167.30p set on 22 March.

Full story below…

11:57

How EU countries are expected to perform this year
11:55

Europe’s economic growth forecasts slashed

The European Commission has slashed its forecast for European growth this year, while hiking its inflation forecast, as the Ukraine war helps push energy and commodity prices higher.

The EC predicts real GDP growth in both the EU and the euro area of 2.7 per cent in 2022, down from its previous forecast of 4 per cent in February, just before the war started.

Growth is to slow to 2.3 per cent next year, also below the 2.7 per cent seen before.

11:55

National Express refuses to budge on Stagecoach takeover offer

National Express has confirmed it will not raise its bid for Stagecoach, maintaining that its offer is ‘superior’ to that of rival bidder DWS.

The bus and coach operator reiterated that its all-share combination with Stagecoach was still a better choice for shareholders and said the offer was now final.

11:37

Dignity promotes operations head Kate Davidson to CEO

Funeral giant Dignity has promoted chief operating officer Kate Davidson to the top job.

She will take over from Gary Channon as the company’s next chief executive from June 10, the company told investors on Monday morning.

Davidson, who has over 15 years’ experience in the funeral and crematoria industry, has been serving on the company’s board since the start of the year.

The appointment comes five days after Dignity reported a ‘weak’ performance over the past three months after a ‘drop in the death rate’.

Dignity shares are down 1.9 per cent at 474p.

11:31

McDonalds to sell Russian business

McDonald’s has revealed it will exit the Russian market and has initiated a process to sell its Russian business, bringing an end to more than 30 years operating in the country.

In March, McDonald’s closed all its restaurants in Russia including its iconic Pushkin Square location.

As part of the exit, the company expects to record a non-cash charge of about $1.2billion to $1.4billion.

It said: 

The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald’s to conclude that continued ownership of the business in Russia is no longer tenable.


McDonald’s restaurant in the center of Dmitrov, a Russian town

11:12

Market update: FTSE 100 up 0.1%; FTSE 250 up 0.1%

London-listed stocks have recovered from opening losses and are now trading in the green, with the FTSE 100 and FTSE 250 each up 0.1 per cent.

Miners and financials lead gains on the FTSE 100, while Plus500 tops the mid-cap index after a strong trad-ing update.

10:52

Ryanair expects profitability by 2023 but airline warns of ‘fragile’ recovery

Ryanair expects to return to ‘reasonable’ profitability by 2023, but is has warned that the recovery in the travel sector remains ‘fragile’.

The budget airline told investors the ‘sudden’ emergence of Omicron in December and the Russian invasion of Ukraine in February ‘immediately’ hit bookings for the Christmas and Easter period. 

However, recovering demand helped it post a smaller-than-expected loss of €355million (£302million) in the year to the end of March, a big improvement compared to the €1billion (£867million) loss it made in the previous year. 

Full story below…

10:45

Bitcoin back below $30,000

Cryptocurrencies have resumed their slide, giving up the gains they had made at the weekend, with bitcoin falling below $30,000 again.

 It comes as European officials reiterated warnings of risks posed by cryptocurrencies after Terra, a so-called stablecoin, collapsed.

Terra was pegged to the US dollar, so its value should have moved in tandem. One Terra was worth one US dollar until a few days ago when its value suddenly started to plunge. It is now worth just a few cents.

Naeem Aslam at Ava Trade said this and increased scrutiny from regulators will continue to push cryptos lower: 

The blowout in Terra and Luna has pushed crypto traders to the side, and the event has massively influenced the sentiment among traders. Crypto traders have been worried about the Bitcoin price, and the current weakness in the bitcoin price suggests that it is likely that we may see further lows for the bitcoin price.

For instance, last week, we saw the bitcoin price falling near the 24K, and this week it is likely that we may see a retest of this level. This is mainly because another stable coin going belly up is going to bring higher scrutiny from lawmakers. Terra’s blowout has left many people wounded, and this isn’t going to go away unnoticed.

We are expecting more weakness for the BTC price this week, but it is also important to note that the bitcoin price is trading near the oversold area as per the RSI suggestion on the daily and the weekly time frame.

10:36

Made.com shares dive 13% as it warns over losses as sales fall

Online furniture retailer Made.com has seen shares plunge after warning it is set to slump to a full-year underlying loss due to tumbling sales and supply chain woes.

The company slashed its sales outlook and said trading would remain ‘highly challenging’ this year, sending shares falling 13.2 per cent to 55.20p.

Made.com, which floated on the stock market last June, forecast full-year gross sales would fall by up to 15 per cent.

And it now expects to post an annual underlying loss of between £15million and £35million, dragged lower also by a £5million cost of supply chain issues.

Made.com said:

Although Made’s performance has remained strong versus pre-pandemic levels, trading has been volatile in recent months and more challenging than anticipated at the start of the year.

We now assume the market will remain highly challenging for the rest of 2022.

10:28

Housing market confidence remains despite rising mortgage rates and cost of living

The cost of living crisis and interest rate hikes have not yet dampened confidence in the housing market, as new research suggests buyers and sellers remain optimistic about finalising a deal.

Around 82 per cent of sellers were optimistic about completing a sale within three months in April 2022, the same level as in March, according to a survey of 120,000 customers by property website OnTheMarket.

Similarly, 76 per cent of buyers were confident they would purchase a property within the next quarter, a slight improvement from March.

09:32

Market update: FTSE 100 flat; FTSE 250 down 0.2%

London-listed stocks have recovered some ground, with the FTSE 100 now trading flat for the session.

Glencore and Vodaphone lead gains on the blue-chip index, which is dragged by consumer and healthcare stocks.

The FTSE 250 is down 0.2 per cent.

09:10

Price cap changes ‘could spell disaster’ for struggling households

Senior personal finance analyst at interactive investor Myron Jobson:

‘Staying on top of energy bills is becoming a daily battle for many. The recent increase in the energy price cap, which has added almost £700 a year to the average household’s bills, has pushed many finely crafted budgets to breaking point.

‘Adjusting the cap more regularly in the current high and rising inflation environment means energy bills will go up more frequently, which could spell disaster for households already struggling to stay financially afloat. With the cost of seemingly everything else also on the up, more regular price rises will be a worry for many.

‘However, smaller but more frequent price changes would be more palatable than less fre-quent but sharp price hikes for many consumers as it provides greater consistency. It is easier to budget for smaller price hikes than larger ones.

‘A more regular review of the energy price cap would mean that prices would come down as quickly as they go up. However, high inflation means the latter will be a reality for some time. As such, it is important to regularly review your spending habits to ensure that you are living with within your means and plan ahead to avoid money worries in future.

‘Those struggling to keep on top their energy bills needn’t suffer in silence – there is support out there. Energy companies have schemes to help people who are struggling to afford their bills.’

09:09

Cost pressures weigh on Greggs

Greggs has warned of rising cost pressures, but left its full-year outlook unchanged as sales of chicken goujons and potato wedges helped boost trade. 

The bakery chain posted a 27.4 per cent rise in like-for-like sales in the first 19 weeks of the year, although it noted that the figure was flattered by comparison with last .year when trading was impacted by Covid restrictions.

Sales in larger cities and office locations have continued to lag behind the rest of its stores, the company said, but its shops in train stations and other transport hubs saw a ‘marked’ increase in activity in recent weeks. 

Full story below…

08:58

Vodafone shares jump 3% after UEA telecoms giant snaps up 10% stake

Vodafone shares have risen 3.4 per cent after the United Arab Emirates-based telecoms company Etisalat made a £3.6billion swoop on Vodafone shares. 

The Abu Dhabi-based company revealed at the weekend it had snapped up almost 10 per cent of the FTSE 100 firm. 

The mammoth trade makes Etisalat the biggest shareholder in Vodafone, ahead of major institutions such as Vanguard and HSBC. 

Full story below…

08:51

Ryanair suffers £300m annual loss

Ryanair has suffered a £300million annual loss for thanks to the pandemic – and has warned any recovery could be grounded by further Covid variants or Ukraine.

The budget airline said it was impossible to accurately forecast anything beyond hoping for a return to ‘reasonable profitability’ this year.

Ryanair, which is operating more flights than any other European airline according to air traffic regulator Eurocontrol, said it planned to grow its traffic to 165 million passengers this year.

The increase would be up from 97 million a year ago and a pre-COVID-19 record of 149 million.

But Ryanair Chief Executive Officer Michael O’Leary said it was ‘impractical, if not impossible’ to provide a sensible or accurate profit guidance range at this time given the potential continued risk the war in Ukraine and COVID-19 poses to booking.

He added:

This recovery remains fragile. We see a very strong recovery of traffic into the summer this year. But we have been scarred by the Omicron variant which crashed Christmas and the invasion of Ukraine, which crashed travel plans for Easter as well.

If there are any adverse news flows on Covid or Ukraine this recovery could be threatened again.

We’d expect prices to be up high single digit per cent.

It seems to us that there will be higher prices going into that peak summer period because there is so much demand for the beaches of Europe.

08:32

Market open: FTSE 100 and FTSE 250 each down 0.7%

London-listed stocks have fallen in early trading, dragged by losses in consumer staple and healthcare stocks, as concerns about a slowdown in the Chinese economy weighed on sen-timent.

The FTSE 100 is down 0.7 per cent, with the likes of Unilever and AstraZeneca the biggest fallers.

Meanwhile, the FTSE 250 is also down 0.7 per cent, with Diploma, Darktrace and Kainos suffering the largest losses.

08:05

Saudi Aramco’s profits surged by 82 per cent for the first three months of the year, as the energy giant capitalised on soaring crude oil prices. The state-backed firm’s quarterly income of £32.2billion was a record since shares floated in 2019, with profits significantly higher than the £17.7billion for the same period last year.

Saudi Aramco’s profits surged by 82 per cent for the first three months of the year, as the energy giant capitalised on soaring crude oil prices. 

The state-backed firm’s quarterly income of £32.2billion was a record since shares floated in 2019, with profits significantly higher than the £17.7billion for the same period last year. 

08:04

Ofgem: Cap changes would allow consumer prices to fall more quickly

Ofgem boss Jonathan Brearley:

‘Today’s proposed change would mean the price cap is more reflective of current market prices and any price falls would be delivered more quickly to consumers.

‘It would also help energy suppliers better predict how much energy they need to purchase for their customers, reducing the risk of further supplier failures, which ultimately pushes up costs for consumers.’

07:51

Economists predict that inflation will jump to 9% this week

Economists predict that inflation will jump to 9 per cent this week as the cost of living continues to rise for households. 

April’s inflation figures will be released on Wednesday, with forecasts pointing towards a significant increase on March’s 7 per cent rate.