UK inflation comes in lower than expected as markets await US figure later today, TUI maintains guidance and Balfour Beatty optimistic as profits creep up

“A lower-than-expected jump in UK inflation has boosted market expectation that the Bank of England could deliver another rate cut next month,” says AJ Bell Head of Financial Analysis Danni Hewson.

“Though what investors are really waiting to hear is whether today’s US inflation number is cool enough to push the Fed to act more aggressively, with expectation of a half percentage point cut next month currently finely balanced according to the CME’s FedWatch tool.

“Concerns about the resilience of the US economy resulted in last week’s market meltdown and nerves have lingered, something US central bankers will be acutely aware of even if placating markets isn’t top of their agenda.”

TUI

“Travellers looking to manage their budgets have found themselves reassessing the value of the package deal over the past couple of years and whilst some airlines have been impacted by last minute booking and price sensitivity, TUI has gone from strength to strength.

“Europe’s biggest travel operator, which delisted from London markets earlier this year, still has a huge customer base in the UK. Its shares jumped in early trading after delivering a crowd-pleasing set of results, with no slowdown in bookings despite a 3% increase in prices.

“TUI has maintained its guidance for the full year with revenue expected to be up 10% and profits significantly higher.

“The price crunch that’s dented household budgets over the past couple of years means people are acutely aware of every pound they’re spending, especially when it comes to their prized disposable income.

“Knowing that the majority of the cost of a week in the sun has already been paid for before travellers even board the plane makes it easier to relax into that longed-for holiday. All those extras like meals and transfers can soon add up if you’re doing it on the hoof and families in particular have latched onto the package model as a way to take the stress out of travelling.”

Balfour Beatty

“One of the first moves by new chancellor Rachel Reeves was to lower the axe on a number of UK infrastructure projects as the Treasury sought to balance its books.

“Shares in engineering giant Balfour Beatty slumped on the news but despite concerns about the future direction of travel, the company has delivered a solid set of half year results with optimism threaded through the update like a stick of rock.

“If anyone needed a visual of the scale of the projects the company delivers, they just need to look at images out of Birmingham overnight where a massive bridge spanning the new HS2 line was eased into place. These are the kinds of projects that improve our journeys, make us more productive and, importantly, add to economic growth.

“Profits were up a touch, and the order book has been padded out. There are still huge budgetary barriers to major infrastructure investment in the UK but longer term the government has been clear that ‘getting Britian building again’ must be at the heart of the country’s future, and that’s something Balfour Beatty believes will be a boon to it and its shareholders.”

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