Weekly Market Update 23/08/2024
BT group suffered a sharp drop in its share price on Tuesday as Sky announced they would be using rival CityFibre to roll out full fibre internet across the UK, concentrating on areas not currently serviced by BT Openreach. Sky’s current 6.5m subscribers are expected to stay on the BT Openreach network, however, BT shares closed down 6.4% on Tuesday at £1.36 and remained around this level for the rest of the week.
On Thursday, sterling rose against the dollar as the S&P Global Flash UK PMI composite output index, a measure of the health of manufacturing and services, rose to 53.4 in August, up from 52.8 in July. A figure above 50 indicates most businesses reporting expansion on the previous month. This increase showed robust private sector growth, indicating a strong summer of economic growth. The pound shot to a 13-month high against the dollar, but soon returned to flat as the dollar rose.
Ofgem has announced that the energy price cap is to be raised by 10% between October and December, citing an increase in wholesale costs. This will see the typical household paying £1,717 per year, up from the current cap of £1,568. Although prices are not as high as during the peak of the energy crisis, they are still far above what households were paying before Russia’s invasion of Ukraine in February 2022. This also comes after chancellor Rachel Reeves announced cuts to winter fuel payments for better-off pensioners, to help plug a fiscal hole she claimed was inherited from the previous Tory government.
Andrea Wood, Chartered MCSI
Investment Manager
