Imperial Brands trading in line; Diageo off to a good start

London pre-open

The FTSE 100 was called to open 50 points higher at 7,103.

Stocks to watch

Spirits maker Diageo got off to a good start in its 2023 fiscal year, reporting organic net sales growth across all regions ahead of its annual general meeting.

Nevertheless, the company anticipated the operating environment would remain "challenging" and volatile due to the geopolitical uncertainty, weaker consumer spend, price pressures and the disruptions from Covid-19.

Even so, Diageo boss, Ivan Menezes, expressed confidence in the business's resilience and management's ability to cope. He also believed that Diageo was still well-positioned to reach organic net sales growth "consistently" in the range of 5-7.0% across FY2023-25 and organic operating profit growth of 6-9.0%.

Tobacco company Imperial Brands unveiled a £1bn share buyback as it said current year trading was in line with expectations.

"In line with previous guidance, we expect full-year net revenue and group adjusted operating profit to both grow by around 1% at constant currency," the company said in a trading update.

Newspaper round-up

Millions of households are facing a “stealth” tax raid under Liz Truss’s government despite her promise to support workers through the cost-of-living crisis by lowering their tax bills, Britain’s leading economic thinktank said on Wednesday. The Institute for Fiscal Studies (IFS) has calculated that for every £1 given to workers by cutting headline tax rates, £2 was being taken away through a freeze on the level at which people begin paying tax on their earnings. – Guardian

The average rate on a new two-year fixed mortgage has risen above 6% for the first time since 2008, according to data that will intensify concern about the crisis in the home loans market. News that the typical new rate had climbed to 6.07% came the day before the chancellor, Kwasi Kwarteng, was due to meet with executives from Britain’s biggest banks to discuss the impact of the financial markets turmoil on mortgages and availability. – Guardian

Fitch has threatened to downgrade the UK's credit rating in the wake of spending plans set out by Liz Truss and Kwasi Kwarteng in the mini-Budget. Fitch said the country's credit rating remained "AA-" but said there had been a "material change" which required it to update investors. – Telegraph

The Treasury will impose an additional £21bn of income taxes despite Liz Truss's "tax-cutting" mini-Budget, a detailed analysis released on Thursday has revealed. The average household will be £1,450 per year worse off as a result of the stealth raid, according to the Institute for Fiscal Studies (IFS) think tank. – Telegraph

A City solicitor who told a client to “burn” a secure messaging system in a dispute with Ocado has avoided jail after being found in contempt of court. Raymond McKeeve, a former partner at the London office of US law firm Jones Day, was yesterday fined £25,000 and ordered to pay £600,000 costs. – The Times

US close

Wall Street stocks closed in the red on Wednesday, but off earlier lows, after a number of data points were released earlier in the session.

At the close, the Dow Jones Industrial Average was down 0.14% at 30,273.87, while the S&P 500 lost 0.2% to 3,783.28 and the Nasdaq Composite was off 0.25% at 11,148.64.

The Dow closed 42.45 points lower on Wednesday, taking a chunk out of solid gains recorded over the preceding two days.