London midday: Stocks pare gains ahead of Powell speech

London stocks had pared earlier gains by midday on Friday as investors eyed a speech by US Federal Reserve chair Jerome Powell at the Jackson Hole symposium, and as the latest energy price hike piled yet more misery on UK households.

The FTSE 100 was steady at 7,479.17.

Ofgem struck fear into the hearts of Britons again after it raised the maximum that suppliers can charge to £3,549 a year. The regulator announced an 80% increase on the current price cap of £1,971 for the average dual-fuel tariff.

The new cap will affect 24 million households - about 85% of the population. Ofgem chief executive Jonathan Brearley cited Russia’s invasion of Ukraine and cuts in supplies to Europe had for higher wholesale gas prices.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "While the cap changes have been known about for some time, this change will still come as a shock when the reality of these figures sink in. It’s likely to result in a further cooling of demand for discretionary items, and an increase in people struggling to purchase even the basics. This increases the focus on Truss and Sunak, who will be under immediate and heavy pressure to do something about the situation.

"Whether tax cuts favoured by the Truss camp, or emergency payments preferred by Sunak, the reality is the energy crisis and its effects aren’t going away until the external forces at play are brought under control."

As far as Powell's speech is concerned, she said expectations are that he will push back against ideas of a policy pivot, and will instead reiterate plans to get inflation back under control.

In equity markets, shares of software maker Micro Focus rocketed after it agreed a £5.1bn takeover by Canadian rival OpenText. The offering is £5.32 per share, a 98% premium on Micro Focus’s current share price, which has fallen 87% over the past three years.

AJ Bell investment director Russ Mould said: "While the premium for shareholders looks pretty healthy when compared with yesterday’s close, it is below the level the company traded at in 2019. It also further dilutes an already pretty threadbare-looking tech sector on the UK market."

Miners were also on the rise as commodity prices advanced, with Antofagasta, Rio Tinto and Anglo American all higher.

Market Movers

FTSE 100 (UKX) 7,479.17 -0.01%
FTSE 250 (MCX) 19,324.01 0.34%
techMARK (TASX) 4,402.46 2.45%

FTSE 100 - Risers

Harbour Energy (HBR) 494.00p 4.31%
Antofagasta (ANTO) 1,193.00p 2.23%
Rio Tinto (RIO) 5,047.00p 1.94%
Centrica (CNA) 82.72p 1.57%
Barratt Developments (BDEV) 436.50p 1.49%
Haleon (HLN) 267.45p 1.46%
Anglo American (AAL) 2,961.00p 1.42%
Mondi (MNDI) 1,474.00p 1.34%
Persimmon (PSN) 1,503.50p 1.25%
Taylor Wimpey (TW.) 111.20p 1.23%

FTSE 100 - Fallers

Relx plc (REL) 2,322.00p -2.60%
Experian (EXPN) 2,708.00p -2.41%
InterContinental Hotels Group (IHG) 4,850.00p -2.34%
Entain (ENT) 1,260.00p -1.64%
Rightmove (RMV) 605.60p -1.56%
Intertek Group (ITRK) 4,056.00p -1.51%
International Consolidated Airlines Group SA (CDI) (IAG) 107.58p -1.21%
RS Group (RS1) 1,116.00p -1.15%
JD Sports Fashion (JD.) 112.60p -1.14%
Compass Group (CPG) 1,888.00p -1.13%

FTSE 250 - Risers

Micro Focus International (MCRO) 516.60p 92.91%
Ferrexpo (FXPO) 158.50p 7.68%
Polymetal International (POLY) 215.00p 7.50%
Grafton Group Ut (CDI) (GFTU) 730.00p 3.41%
Tullow Oil (TLW) 51.90p 2.87%
Currys (CURY) 60.45p 2.63%
Balanced Commercial Property Trust Limited (BCPT) 108.20p 2.46%
HGCapital Trust (HGT) 380.50p 2.28%
Impax Environmental Markets (IEM) 471.00p 2.17%
Just Group (JUST) 71.55p 2.14%

FTSE 250 - Fallers

CMC Markets (CMCX) 224.50p -5.07%
TUI AG Reg Shs (DI) (TUI) 129.35p -2.93%
Wood Group (John) (WG.) 131.30p -2.92%
TBC Bank Group (TBCG) 1,722.00p -2.82%
Essentra (ESNT) 205.00p -2.61%
Watches of Switzerland Group (WOSG) 804.00p -2.49%
Chrysalis Investments Limited NPV (CHRY) 77.00p -2.41%
Moneysupermarket.com Group (MONY) 196.30p -2.34%
Hays (HAS) 114.00p -2.31%
easyJet (EZJ) 355.90p -2.14%