RBS widens loss significantly, Bellway expects to build more homes

London open

The FTSE 100 is expected to open 24.5 points higher on Friday, after closing up 1.59% at 6,740.16 on Thursday.

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RBS reported an attributable loss of £2.045m at the half-year stage, compared to -£179m of red ink for the same period one year ago. That figure included £1,315m in litigation and conduct charges, the bulk of which, £1.28bn, were incurred during the second quarter, with £450m of that amount being the result of charges linked to PPI claims. The lender also booked £630m in restructuring costs. For the three months ending in June, RBS reported a net loss of £1bn versus a profit of £280m for the comparable period of one year ago. The bank led by Ross McEwan said it continued to be on track to deliver its target of £800m in cost reductions for 2016.

Home builder Bellway said it expected full year housing revenue to increase by around 27% to £2.2bn with a 12.5% increase in the number of housing completions to 8,721. In a trading statement, the company said it also a record pre-exceptional operating margin, which is expected to rise by around 150 basis points to approach 22%. The forward order book also looks positive, with 4,644 homes with a value of £1.1bn compared with 4,568 homes valued at 1.08bn last year. “It is still too early to assess the effect of the EU referendum result, however trading in recent weeks has been encouraging and Bellway, with its strong balance sheet and robust land bank, can be flexible and respond opportunistically to any changes in market conditions,” said chief executive Ted Ayres.

Inhaled airways disease focused company Vectura Group announced on Friday that a sales milestone receipt of $8m has been triggered following confirmation by Pacira Pharmaceuticals, Inc. that worldwide annual net sales of EXPAREL, on a cash received basis to 30 June, were above $250m. The FTSE 250 firm said that on 4 August, Pacira announced net sales of EXPAREL of $65.8m in the second quarter, an increase of 15% compared with the first quarter of 2015. It also confirmed that preparations in support of the launch of EXPAREL in oral surgery in September are on track. “We are pleased to see the continued evolution of sales for EXPAREL triggering this milestone payment to Vectura,” said CEO James Ward-Lilley. ”The merger with Skyepharma added to the group's strongly-growing revenue streams of on-market products.”

Newspaper round-up

The Bank of England has done everything possible under the constraints of monetary orthodoxy to cushion the Brexit shock. It is now up to the British government to save the economy, and the sooner the better. Monetary policy is close to the limits. The Bank’s pre-emptive £170bn stimulus package is brave – and unquestionably the right thing to do in these dramatic circumstances – but it is not an economic bazooka and much of the boost will leak into asset price inflation. – Telegraph

London’s historic Baltic Exchange has moved a step closer to a sale with bidder Singapore Exchange offering a deal to owners that will see them receive almost £90m for ceding ownership of the global shipping data hub. Singapore Exchange (SGX), owner of the South East Asian bourse, has said it plans to offer £77.6m in cash for the business which is owned by its 400 members and was established in 1744. – Telegraph

The biggest offshore wind farm developer in Britain has said the country can meet its future energy commitments without the £18bn Hinkley Point C nuclear project. Henrik Poulsen, chief executive of Dong Energy, said wind turbines could be built on time and on budget, giving the UK a reliable source of power if combined with output from new biomass or gas-fired plants. – Guardian

Faced with the shock to the economy of the Brexit vote, the Bank of England had a choice. It could sit tight and hope the storm would quickly blow over, or it could assume the worst and act accordingly. Perhaps understandably, Threadneedle Street has decided to go for the all-action approach. It was slow to react to the great recession of 2008 and 2009, and was not going to be accused of making the same mistake twice. The risks of doing nothing were higher than the risks of providing oodles of fresh stimulus. – Guardian

What at a shock: the unreliable boyfriend has actually done something he said he would. You do wonder if he’s feeling all right. Even Mark Carney didn’t have much choice this time. The Bank of England governor only got away with misleading everyone (again) last month by pointing out that the nine-strong MPC expected “monetary policy to be loosened in August”. So doing nothing in this post-Brexit world wasn’t an option, unless he fancied turning the Bank into some sort of comedy club. The only real debate was how loose the MPC might hang. The answer? Well, loose-ish. – The Times

US close

US stocks finished relatively flat on Thursday after the Bank of England cut interest rates and data showed weekly jobless claims rose more than expected.

The Dow Jones Industrial Average was last down 0.02% at 18,352.05, the S&P 500 added 0.02% to 2,164.25 and the Nasdaq 100 was up 0.2% at 4,743.81.

Initial jobless claims rose 3,000 to 269,000 in the week to 30 July, according to the Labor Department.

Economists had been expecting a reading of 265,000.

The data comes ahead of the all-important non-farm payrolls report which is expected to show employers added 175,000 jobs in July, compared to 287,000 in June.

Another report from the Commerce Department showed factory orders dropped 1.5% in June from a year ago, better than the 1.9% fall expected.

Earlier in London, the BoE's Monetary Policy Committee voted unanimously to lower interest rates by 25 basis points to 0.25%, as expected by economists. The Bank voted 6-3 to boost the size of the asset purchase programme by £60bn.