LIVE: FTSE 100 in the red, inflation unchanged at 8.7%

Proactive Investors –

FTSE 100 is down 9 points
Inflation is unchanged at 8.7%
Housebuilders fall
Southend airport for sale

Esken, the debt-ridden owner of Southend airport, confirmed the site has been put up for sale after sounding the alarm on its finances.

Southend Airport was put up for sale alongside its renewables business.

Shares in Esken plummeted 25% to 2.79p, with the stock down 67% over the past year.

Esken purchased the airport in 2008 for £21mln when it went under the name Stobart Group.

A string of airlines pulled operations from the site during Covid, including Ryanair (LON:0RYA) and Wizzair, with EasyJet the only one returning, sparking whispers the budget airline could be the favourite to purchase the airport.

Traders exit housebuilders

Traders are rushing to exit housebuilders with the deepening mortgage crisis showing no signs of abating.

Shares in housebuilders Barratt and Persimmon (LON:PSN) were among the largest fallers on the FTSE 100, both down roughly 3%.

Rival housebuilders Taylor Wimpey (LON:TW) and Berkeley also shed around 2.7%.

An exodus of housebuilders comes after inflation stagnated in May at 8.7%, ahead of the consensus of 8.4%.

Markets are now anticipating the Bank of England to raise rates tomorrow to 4.75% from 4.5%, with the expectation rates will hit 6% by the end of the year.

M&S blasted for not paying minimum wage

Some of the UK’s largest retailers were blasted for not paying staff the minimum wage, the government announced.

Some £5mln was kept from 63,000 workers’ pockets by 202 companies between 2017 and 2019, including WH Smith (LON:SMWH), M&S, Argos and Lloyds (LON:LLOY) Pharmacy.

“Paying the legal minimum wage is non-negotiable and all businesses […] should know better than to short-change hard-working staff,” enterprise minister Kevin Hollinrake said.

WH Smith was the worst offender, failing to pay staff £1.08mln, while Lloyds and M&S fell short by £903,307 and £578,391 respectively.

Sainsburys (LON:SBRY) owned Argos did not pay £480,094 meanwhile, with over 40,000 workers being affected across the four businesses.

Markets across Europe

A quick glance at how markets across Europe are reacting.

CAC 40 in France is down 0.05%, while the DAX in German has added 0.13%.

IBEX 35 in Spain is up 0.12%, while the FTSE 100 is off lows and now in positive territory, up 0.036%, or 2 points, to 7,572.

House prices rise

ONS figures on house prices suggested a 0.4% increase between March and April.

Average house prices were up 3.5% in the year to April, down from 4.1% a month earlier, with the average house costing £286,000, £7,000 lower than September’s peak.

London house prices hit £534,000 but saw the lowest annual growth – up just 2.4% in a year.

“However, mortgage market movements in the past few weeks could usher in a new era that brings an abrupt conclusion to these halcyon days,” said Sarah Coles, head of personal finance at Hargreaves Lansdown (LON:HRGV).

“Despite price rises in April, there were already some warning signs, with buyer demand falling with each passing month, and sales at rock bottom. The fall of mortgage approvals didn’t bode brilliantly for the months ahead either.”

With more bad news on inflation, which remained unchanged in May at 8.7%, this is likely to fuel rate expectations even further and see mortgage rates climb either.

One positive in the market is the labour market, with unemployment at low levels.

However, further rate hikes will increase the chances of recession, which could mean more jobs could become insecure.