“The UK has an inflation problem that is worse than Europe and the US.”

Ed Monk, associate airector for personal investing at Fidelity International, noted that the UK is lagging well behind the US and Eurozone in bringing prices back under control.

“The strain on households shows little sign of easing with yet another reading of headline inflation above 10%,” he said. “This isn’t how it was supposed to go.

“Price rises were expected to be much less painful by this point of the year as the steep rises of early 2022 fell out of annual comparisons, but this reading puts inflation back to its level from January. Core inflation also remains stuck.

“It’s now clear the UK has an inflation problem that is worse and more persistent than in Europe and the US.”

Sterling higher amid stubborn inflation rate

The Bank of England interest rate stands at 4.25% but markets now look to be pricing in a peak closer to 5% after today’s inflation print.

The pound rose 0.3% to $1.246 in reaction to the figures, leaving the exchange rate close to the 10-month high above $1.25 set last week.

Today’s consumer prices index reading represents the seventh month in a row that the annual rate of inflation has topped 10% and compares with forecasts for a fall to 9.8%.

Last April’s huge energy price rise drops out of headline inflation rate in next month’s reading, but hopes of a faster decline back to the Bank of England 2% target are fading.

Writing on Twitter this morning, Panmure Gordon chief economist Simon French said: “Some UK inflation forecasts in recent weeks foresaw 2% by year end and outright deflation into 2024.

“Hard to see those materialising from today’s data. We continue to think delayed pass through, labour supply shortages will offset encouraging data in energy markets and lead to inflation around 3%-4% by year end.”

ProCook sales lose steam and fall 9.7%

ProCook expects trading conditions to remain challenging and unpredictable, the kitchenware brand said as it revealed a 9.7% drop in fourth quarter revenue.

The company, which sells products such as saucepans and baking trays, said revenue in the final quarter to April 2 was down 9.7% at £12.6 million, and 9.4% lower on a comparable basis.

The online business led the decline, with the store arm broadly flat, and the firm said the performance reflects “ongoing uncertainty in the consumer backdrop”.

Full-year sales of £63.2 million are in the middle of ProCook’s expected range and underlying pre-tax profits will be approximately break even.

Chief executive Daniel O’Neill said: “The last year has been very difficult for consumers as real disposable incomes have fallen, which is reflected in our softer sales performance against our significant growth and market outperformance last year.”

He added: “While we expect trading conditions to remain challenging and unpredictable, we continue to grow our customer base by attracting new customers to the brand and remain confident in our value-for-money, specialist offer. Certain inflationary cost pressures, including wages, remain high, however we are seeing some easing in other areas, and we expect to realise the benefits of our recent actions to reduce operating costs in the current financial year and beyond.”

Heineken revenue up despite lower volume

There were signs of inflation’s impact in Heineken’s results today, as revenue rose in the UK and globally despite less beer being sold.

The brewing giant – which makes Amstel, Desperados, Tiger and Birra Moretti as well as Heineken – said its revenue rise in the UK was due to “pricing and premiumisation”, as sales volumes dipped.

In the UK, revenue was up by around 5%, despite volume being down by close to 10%.

Liontrust Asset Management reports outflows of £4.8 billion in ‘challenging’ year

Outflows of clients’ cash at Liontrust Asset Management reached £4.8 billion in its last financial year, in the latest sign of the pressure on money managers in the City and beyond from rising interest rates.

As central banks lift borrowing costs, the knock-on effects improve returns from less risky venues for money, such as savings accounts, which often also have fewer restrictions on access to cash. And there were signs that the trend could be speeding up. The FTSE 250 company also said today that customers pulled £2 billion out in the quarter to the end of March.

Assets under management and advice at Liontrust fell 3.6% to £31.4 billion at the end of March.

But the company also said it expected revenue and profit to beat market expectations at “not less than £86 million” helped by “stronger than expected” revenue from fees of at least £17 million.

John Ions, chief executive, said: “It has been a challenging year for Liontrust in terms of net outflows and mixed performance for our funds. But this has to be set against a backdrop of the industry in aggregate suffering UK retail net outflows in 10 out of the 12 months last year, according to the Investment Association.”

Food inflation continues to soar

Food inflation remained stubbornly high in figures released by the ONS this morning. Here’s a breakdown of food inflation by type.

US earnings mixed, FTSE 100 seen lower

The FTSE 100 index is expected to open slightly lower as investors digest yesterday’s mixed session for US earnings.

The major Wall Street indices closed flat last night, but with shares in Goldman Sachs down 2% after the banking giant missed revenue expectations.

There was a more favourable reception for results from Bank of America, while Netflix shares held firm in dealings after it posted figures following the closing bell.

Revenues rose 8% in line with Netflix’s guidance to $8.2 billion (£6.6 billion) but the streaming giant’s addition of 1.75 million subscribers in the quarter was below Wall Street forecasts. Operating profit was a little better than expected at $1.7 billion (£1.4 billion).

Hargreaves Lansdown analyst Sophie Lund-Yates said; “Netflix’s first quarter has failed to set the market alight, in what is the first of big tech to go in the earnings quarter that’s expected to be the worst since the pandemic started.

“Fundamental metrics show the business is in reasonable shape, but investors need a little more than that to shake off remaining concerns about a downturn lurking in the shadows.”

The FTSE 100 index added 0.4% yesterday for its eighth consecutive session in positive territory, aided by a strong performance for mining stocks after China’s Q1 GDP figure of 4.5% beat expectations.

IG Index futures point to a fall of around nine points to 7900 when London trading resumes this morning.

Just Eat Takeaway ups earnings guidance despite slide in orders

Just Eat Takeaway has increased its full-year EBITDA guidance from 225 million euros to 275 million euros despite a significant drop in orders.

Orders with the firm fell 14% to 228 million in the first three mounths of 2023, while orders in Southern Europe saw an even sharper drop, down 18% to 25 million.

Gross transaction value, a measure of the total size of orders, declined more modestly, down 8% to 6.6 billion euros.

CEO Jitse Groen said: “Q1 2023 continued to be affected by a difficult pandemic comparison. The Company continues to make good progress on Delivery-led operational improvements and is now ahead of plan.”

UK inflation still above 10%

The Consumer Price Index again came in as a shock high, at 10.1% in March.

A drop into single-digits was widely expected, but a 19.2% rise in food prices kept it above 10%.

However, it wasn’t just food keeping price rises high, as core inflation rose, to 5.7%.

“Inflation eased slightly in March, but remains at a high level,” ONS chief economist Grant Fitzner said. “The main drivers of the decline were motor fuel prices and heating oil costs, both of which fell after sharp rises at the same time last year. Clothing, furniture and household goods prices increased, but more slowly than a year ago.

“However, these were partially offset by the cost of food, which is still climbing steeply, with bread and cereal price inflation at a record high. The overall costs facing business have been largely stable since last summer, although prices remain high.”

Recap: Yesterday’s top stories

Good morning. Here’s a summary of our top stories from yesterday.