UK stocks: Factors to watch on October 23
EWU•Britain’s FTSE 100 was seen opening 0.2% higher. The roundup covered a collapsed Smith & Nephew-Johnson & Johnson deal, possible Rolls-Royce engine subsidies, weaker retail sales and consumer confidence, and other UK economic and regulatory developments.
1. Company developments
A deal to combine Johnson & Johnson’s orthopaedics business with Smith & Nephew to create a $34 billion medical technology company reportedly unravelled after Smith & Nephew rejected its former CEO leading the merged business. Rolls-Royce was reportedly nearing a deal for up to £200 million in British government subsidies for a new short-haul aircraft engine.
2. UK economic indicators
British retail sales fell 0.4% in September, more than expected, while consumer confidence recorded its sharpest month-on-month fall since early in the COVID-19 pandemic. Prime Minister Andy Burnham said the government would help businesses save almost £800 million a year through reduced paperwork and an extended suspension of some trade tariffs.
3. Policy and markets
UK gas and power system operators said the country should have enough energy to meet peak demand this winter despite higher prices driven by conflict in the Middle East. Financial regulators proposed further easing of employee-vetting rules, and the banking watchdog said it would review how regulation affects investment, capital and economic growth. Oil prices rose, gold eased and nickel pulled back.
