Centrica is boosting shareholder returns after profit at its British Gas business increased almost 10-fold compared to last year. Investors may cheer, but the move probably won’t go down well with the wider public, as soaring living costs leave many households struggling to pay their bills.
Here’s the key business news from London this morning:
In The City
Centrica Plc: The company will pay 1.33 pence a share in interim dividends compared to 1 pence for the same period last year, while also extending its share buyback by £450 million.
- British Gas, the nation’s biggest household energy supplier, increased adjusted operating profit nearly 10-fold year-on-year to £969 million, the highest-ever first-half result
Shell Plc: The oil major’s second-quarter profit fell from the highs seen last year but it also pledged extra share buybacks and raised its dividend.
- The results are broadly in line with industry peers Chevron Corp. and Equinor ASA, where the decline in oil and gas prices dragged earnings lower even as production increased
- Shell also reported a drop in the performance of its gas-trading unit, which in previous quarters generated big returns diverting cargoes of liquefied natural gas to Europe
Barclays Plc: The lender said it would buy back a further £750 million of its shares after a short-lived boost from rising interest rates in its domestic business and a slight miss for its investment bank.
- While the UK business reported a 14% rise in total income compared to a year ago, Barclays reduced its net interest margin outlook for the year to 3.15%, down from 3.2%, reflecting “product dynamics including the trajectory of deposit balances and further macroeconomic developments”
BT Group Plc: The company’s profit in the first fiscal quarter rose after it increased prices earlier in the year and continued to slash costs.
- The telecom giant is looking for ways to return to reliable growth, and recently announced a plan to slash its workforce by more than 40% by the end of the decade
In Westminster
Advisers to Chancellor Jeremy Hunt are increasingly concerned that the Bank of England risks raising interest rates too much in the coming months, potentially pushing the UK into an unnecessary recession.
A majority of Hunt’s seven-member Economic Advisory Council believes that the bank should slow its fastest cycle of rate increases in three decades, people familiar with the discussions told Bloomberg. That view is being taken seriously by top Treasury officials in the wake of better-than-expected inflation figures and other data that suggest a broader slowdown.
In Case You Missed It
Matthew Moulding’s e-commerce business, THG Plc, is buying the free newspaper City AM. The entrepreneur should “get his empire in order first,” writes Bloomberg Opinion’s Andrea Felsted.
Meanwhile, the UK is probably at least a half decade away from making 1 million cars a year again, according to the industry’s trade group.
Finally, the billionaire behind Tottenham Hotspur has been arrested over alleged insider trading, throwing into question the future ownership of the London football club.
Looking Ahead
Pharmaceutical giant AstraZeneca Plc, British Airways owner IAG Group SA and emerging markets-focused lender Standard Chartered Plc will cap off the earnings week tomorrow.
We’ll also get results from NatWest Group Plc, which is set to get more attention than usual after the bank’s Chief Executive Officer Alison Rose stepped down this week. If you have some catching up to do on this affair, you can listen to In the City — where host David Merritt discusses the mistakes made by NatWest and Nigel Farage’s call for more resignations at the bank.
For a more considered take on the UK's economic and financial news, sign up to Money Distilled with John Stepek.
