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What to watch: Trainline ticket sales dive, IG's revenue jumps, and Next upgrades profits

Oscar Williams-Grut, Tom Belger and Lianna Brinded
·5 mins read
Commuters wait to board a London Midland train at Tile Hill train station in Coventry
Commuters wait to board a London Midland train at Tile Hill train station in Coventry. Photo: PA

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Trainline ticket sales dive

The COVID-19 lockdown hit ticket sales at train booking app Trainline (TRN.L) hard in the first half of the year, the company said on Thursday.

Trainline said UK train ticket sales fell by 85% in the six months to the end of August, contributing to a 76% fall in group revenue.

The company said train travel was beginning to recover, “albeit more slowly than previously expected.” Trainline said it was “phasing its operations back to normal” and planned to redouble investment in digital.

"I'm pleased to now see the industry recovering, particularly in our International markets, as well as a faster shift to online reservation and digital ticketing, as anticipated, given the increased customer need for touchless travel,” chief executive Clare Gilmartin said.

Shares were up 0.7%.

IG's revenue jumps

Online trading platform IG (IGG.L) continues to see a surge in activity as the boom in retail investors continues.

IG said its revenue over the last 3 months had been £206m — 62% more than it made in the same period last year. The number of clients actively trading on its platforms jumped 50% and IG signed up 34,600 new customers in the period.

Chief executive June Felix called it an “outstanding performance”.

Shares rose 6.7%.

Next stock pops

Retailer Next (NXT.L) briefly rose to the top of the FTSE 100 on Thursday after an upbeat update on trading.

The group raised its profit outlook for the second time in two months, despite posting £311m ($396m) in lost profit.

Next expects to make a full-year pre-tax profit of £300m, up from its previous forecast of £195m in July. The company said recent trading had been strong, with full-price sales in the last seven weeks up 4% on last year.

Shares rose 2% at the open in London, before paring back gains to trade up 0.8%.

Stock markets slide after Fed update

European stock markets opened lower on Thursday and US futures were pointing to a sell-off on Wall Street later today, as traders reacted to the latest policy statement from the US Federal Reserve.

On Wednesday, the Fed kept US interest rates near zero and signalled that rates were likely to stay that way until at least 2023. Chairman Jerome Powell said the US economy was recovering quicker than expected but warned the outlook was uncertain.

After initially rising on the policy announcement, US stocks began falling as Powell delivered his press conference on Wednesday and US futures were deeply negative by Thursday morning. S&P 500 futures (ES=F) were down 1.6%, Dow Jones futures (YM=F) were 1.3% lower, and Nasdaq futures (NQ=F) were off by 1.7%.

The risk-off sentiment spread to Europe, where major stock markets opened deeply in the red.

Britain’s FTSE 100 (^FTSE), Germany’s DAX (^GDAXI), and France’s CAC 40 (^FCHI) all fell over 1% in early trade.

Bank of England set to hold fire

The Bank of England is expected to leave interest rates unchanged and maintain its package of economic stimulus on Thursday, despite increasing pressure on the central bank to take more action.

The Monetary Policy Committee will publish its latest decisions at 12pm on Thursday. Private sector economists expect interest rates to be held at their record low of 0.1% and believe the Bank of England will maintain its bond buying programme at £745bn.

Allan Monks, an economist with JP Morgan, said he expects the Bank of England to “indicate a greater degree of caution about the outlook.”

But Monks and most other analysts don’t expect any concrete policy changes.

“We expect the Bank of England (BoE) to keep policy on hold in this week's meeting,” a team of Bank of America economists led by Robert Wood wrote in a recent note.

Biden’s warning on post-Brexit US-UK trade deal

US Democratic presidential candidate Joe Biden has warned the UK that unless it honours the Northern Irish peace agreement, there will be no post-Brexit trade deal with the US.

“We can’t allow the Good Friday Agreement that brought peace to Northern Ireland to become a casualty of Brexit,” said Biden on Twitter.

“Any trade deal between the U.S. and U.K. must be contingent upon respect for the Agreement and preventing the return of a hard border. Period.”

Biden’s intervention comes amid a row between the UK and EU over the Withdrawal Agreement that has threatened to derail trade talks. Both the UK and EU have accused each other of putting the Good Friday Agreement at risk.

John Lewis cuts bonus for first time since 1953

John Lewis has confirmed staff will receive no bonus for the first time since the aftermath of World War II, as it revealed it had lost hundreds of millions of pounds this year.

The retailer’s latest results reveal it lost £635m ($823m) in the half-year to 25 July, having made a £192m profit in the same period a year earlier.

It said it now expected a “small loss or a small profit” for the full year as stores have reopened, but sales remain 30% down on last year. Its worst-case scenario remains a sales drop of 5% at Waitrose and 35% at John Lewis.

Co-op profit rises

The Co-operative Group’s CEO has warned the company “will not be immune” to Britain’s economic downturn even as it reported a 35% leap in profits in the first half of the year.

The company’s revenues rose 7.6% to £5.8bn ($7.5bn) in the half-year to 4 July as it benefited from the pandemic, according to its interim results published on Thursday.

It reported an “exceptional” six months for its Co-op Food and wholesale arms, with the latter supplying Nisa convenience stores since it bought the Nisa franchise in 2018.

Co-op’s grocery stores saw a seventh year in a row of like-for-like sales growth, with revenue up 5.2% to £3.9bn.

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