UK stock markets are expected to remain quiet in the early session on Wednesday as investors look ahead to today’s Budget speech.

In one of the most eagerly awaited in years, finance minister Philip Hammond will announce on Wednesday how much he can afford to help unhappy voters as he faces a potentially sharp deterioration in the economy’s growth prospects.

Hammond will begin his speech at 12.30pm today.

PRODUCTIVITY, HOUSING & BREXIT

‘This Budget is all about three things - Brexit, productivity and housing,’ believes Neil Wilson, senior market analyst at ETX Capital.

‘The first looms over everything like a spectre but do not expect anything overt from the Chancellor,’ Wilson says. ‘But on productivity and housing there ought to be some significant policy announcements.’

In early trade the FTSE 100 rises a modest 14 points or so to 7,425.37 following a firm showing on Tuesday, when the UK blue-chip index rose 0.3% thanks to a flurry of company updates and strong consumer stocks.

TRAVEL AGENT MARGINS SQUEEZED

In corporate news, travel firm Thomas Cook (TCG) reports an 8% rise in full year earnings, helped by a turnaround of its German airline Condor. But investors lead a hefty sell-off in the shares as they fret over declining margins in the UK part of the business.

The stock slumps 12.5% in early trade on Wednesday to 106.5p.

Shares in rival TUI (TUI), the owner of Thomson, also decline in sympathy, losing around 3% to £12.915.

Enterprise accounting software supplier Sage (SGE), Britain’s second largest listed software company, posts a 10% rise in full year organic operating profit to £475m.

The company also says it sees organic revenues rising 8% over the coming 12 months, an acceleration on the 6.6% reported last year to 30 September. The shares remain largely flat, nudging 8p lower to 767p, valuing the business at approximately £8.22bn.

ANALYSTS BACK DEFENCE FIRM

Shares UK defence technology developer Qinetiq (QQ.) jump nearly 6% to 2173p as analysts at investment bank Berenberg put out a supportive research note on the company. Berenberg moves from a Hold to a Buy recommendation, although it has cut its price target from 310p to 235p.

UK water utility United Utilities (UU.) reports a 10% increase in profit for the first half of the year, helped by regulatory changes in how utilities charge customers.

Property sales and lower costs also help, although there’s just a 2.2% increase in the interim payout, to 13.24p per share. The stock stays largely flat, up just 5p to 783.5p.

BIG PROFITS JUMP AT SSP

Food travel company SSP (SSPG) sees its share price rally close on 8% to 649.5p in early trade on Wednesday. The company posts a huge jump in currency-assisted profits and it reveals plans for a £100m cash return.

Underlying pre-tax profit leaps 38.3% £148.7m, while revenue grew 19.5% to £2.38bn, helped by the weakened pound. But the company does warn of likely lower like-for-like growth in full year 2018.

Events business Euromoney Institutional Investor (ERM), the publisher of the Euromoney magazine, plans to sell its stake in Dealogic. Its stake in the financial content firm will go to Ion Investment in a deal worth around $135m (approximately £102m).

The company also unveils robust full year results showing a 22% jump in headline pre-tax profit and 33% increase in the dividend.

But the share price sags 1.2% to £11.415, presumably because investors feel Dealogic was worth more.

Good news for the housing sector ahead of today’s Budget comes from Countryside Properties (CSP), which claims a robust housing market in the UK.

The company says it is seeing strong customer demand, favourable mortgage lending conditions and ‘good political support,’ although it may or may not feel the same way on that latter point later today.

The shares nudge 0.5% higher to 341.3p.

KEY COMMODITIES STABLE

Gold prices remain in a narrow range on Wednesday as investors stay cautious ahead of the release of minutes from the US Federal Reserve’s last meeting. They could offer hints on the outlook for the central bank’s monetary policy, investors believe.

Oil prices make narrow gains on Wednesday after a reported fall in US crude inventories and on expectations that an OPEC-led production cut aimed at tightening the market will be extended beyond next March.

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Issue Date: 22 Nov 2017