European stock markets are rising, while oil prices have edged lower ahead of the Opec+ meeting, giving up earlier gains.
- UK’s FTSE 100 up 37 points, or 0.5%, at 7,574
- Germany’s Dax up 82 points, or 0.5%, at 15,701
- France’s CAC up 27 points, or 0.4%, at 7,128
- Italy’s FTSE MiB up 0.5% at 27,269
- Spain’s Ibex up 11 points, or 0.15%, at 8,739
Amazon intends to create 1,500 new apprenticeships in the UK this year.
The internet giant said it was offering 40 entry-to-degree-level schemes, including in publishing, retail, marketing and a programme focused on environmental, social and corporate governance.
The company said it hired 25,000 more people at its warehouses and delivery stations last year, taking its UK workforce to 70,000 –- more than previously planned. Amazon also opened its first 17 physical stores in the UK –- 15 Amazon Fresh food stores in London and two Amazon 4-star retail stores in London and Kent, which sell products from Amazon and small businesses.
The water company Severn Trent said this morning it’s on course to invest more than £500m in a programme to improve river quality, after it got fined £1.5m for illegal sewage discharges into watercourses in December. About 360,000 litres of raw sewage were illegally discharged as a result of the breaches at four water treatment plants in Worcestershire.
The FTSE 100 listed company also said its full-year outlook remained unchanged.
Turning to today’s corporate results… Vodafone said it’s on track to meet its full-year guidance after reporting a 2.7% rise in group service revenue in the third quarter, underpinned by growth in both Europe and Africa.
Chief executive Nick Read said the company had delivered a “solid quarter” with service revenue growth of 1.1% in Germany, its biggest market. News that the activist investor Cevian Capital has taken a stake in Vodafone drove up its shares by 4% on Monday, with hopes for more deals.
Read, who has already pulled off 19 deals, has called for more consolidation in Europe and said Vodafone was willing to pursue merger opportunities for its Vantage Towers infrastructure spin-out. The Financial Times reported that Cevian, Europe’s largest activist fund, wanted Vodafone to be more aggressive in driving consolidation in markets such as Spain, Italy and the UK.
In further evidence of the cost of living squeeze, UK shop price inflation almost doubled in January to the highest level for nearly a decade as the cost of furniture and flooring shot up, reports our retail correspondent Sarah Butler.
Annual inflation of goods bought from retailers rose to 1.5% last month from 0.8% in December, according to the latest data from the British Retail Consortium (BRC) trade body and the market research company NielsenIQ, the highest level since December 2012.
The price of food rose by 2.7% in January, up from 2.4% in the previous month and the highest rate since October 2013. However, the biggest change in inflation was in non-food items, with prices rising by 0.9% compared with 0.2% a month before.
Helen Dickinson, the chief executive of the BRC, said:
January saw shop price inflation nearly double, driven by a sharp rise in non-food inflation. In particular, furniture and flooring saw exceptionally high demand leading to increased prices as the rising oil costs made shipping more expensive.
Food prices continue to rise, especially domestic produce which have been impacted by poor harvests, labour shortages, and rising global food prices.
Introduction: Oil prices climb towards seven-year highs ahead of Opec+ meeting
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Oil prices have climbed towards the seven-year highs reached last week, after a drawdown on US crude stocks suggested strong demand and amid a lack of supply, but investors remained cautious ahead of a meeting by the Opec oil cartel and its allies (known as Opec+) later today.
US crude stocks fell by 1.6m barrels in the week to 28 January, more than expected, Reuters reported, citing market sources who had seen American Petroleum Institute figures.
Brent crude is up 20 cents at $89.36 a barrel while US light crude has gained 21 cents to $88.41 a barrel. The Organisation of the Petroleum Exporting Countries and its allies including Russia are expected to stick to the group’s policy of moderate boosts to output at today’s meeting, i.e. pumping 40,000 more barrels a day from March.
Tight global supplies and geopolitical tensions in Eastern Europe and the Middle East, in particular the standoff between Russia and Ukraine, have driven up oil prices by about 15% so far this year. Last Friday, crude benchmarks hit their highest prices since October 2014, with Brent touching $91.70 and US crude hitting $88.84 a barrel.
Tensions are rising between Russia, the world’s second-biggest oil producer, and the West over Ukraine, stoking fears that energy supplies to Europe could be disrupted. Vladimir Putin has accused the US of ignoring Russia’s security proposals in his first public comments on the growing crisis over Ukraine since December last night.
Markets will also be closely watching inflation data for the eurozone for January. Economists are forecasting a drop to to 4.4% from 5% in the annual rate, due to events a year ago which saw a big jump in the January 2021 inflation numbers (the reintroduction of regular VAT rates and additional climate measures which boosted German inflation).
Michael Hewson, chief market analyst at CMC Markets UK, says:
While it will be convenient for the European Central Bank to paint this as evidence of their argument that inflationary pressure is transitory and now falling, we already know from the experience of the US it is nothing of the sort.
There is also the added complication that factory gate price in inflation is even higher, and well above 20% in Germany, Italy and Spain. With markets already pricing in the prospect of two ECB rate rises this year, tomorrow’s ECB press conference will be an exercise in trying to spin a narrative that the market simply doesn’t buy.
Just before the US open, we get to see the latest ADP payrolls report, which in December saw the US economy add 807,000 jobs, which was a bit of an outlier to the equivalent non-farm payrolls report a couple of days later. Today’s January report could well come in much weaker due to the disruption caused by Omicron over the Christmas and New Year period, which has seen weekly jobless claims rise sharply.
- 10am GMT: Eurozone inflation for January (forecast: 4.4%)
- 10am GMT: Italy inflation for January (forecast: 3.8%)
- 1.15pm GMT: US ADP jobs report for January (forecast: 207,000)