Producer prices rattle Wall Street, Irn-Bru maker AG Barr announces job cuts and housebuilders lifted by upbeat Vistry report

“With less than a week to go until the next meeting of US central bankers, markets are having to face up to the prospect that the path to a pivot will be a long and winding one,” says Danni Hewson, Head of Financial Analysis at AJ Bell.

“After markets broadly managed to shrug off last week’s hotter than expected inflation data, today’s producer price numbers have settled like a bucket of cold porridge.

“Investors can still subscribe to the expectation that the ‘Goldilocks’ scenario is in play, but it’s going into extra time and that’s requiring a bit of a rethink. The uncertainty has weighed on US markets and in London things have been looking pretty subdued as well.”

AG Barr

“Shares in Irn-Bru maker AG Barr ended the day on the front foot after the company announced cost cutting measures that seemed to strike a chord with investors.

“Streamlining the business makes sense, but it comes with a price. Almost two hundred jobs are set to go as the drinks maker looks to close several sites and integrate 2022 acquisition Boost Drinks more neatly into the organisation.

“The business has been able to pass on increased prices to consumers, lifting profits above expectations. But it’s a competitive market and what worked in the past might not be fit for the future as its direct to store model is facing the chop.”

Vistry

“One of the day’s big winners was housebuilder Vistry which announced plans to accelerate construction over the next year. Its upbeat trading update also helped to drag other housebuilders along with it.

“Building affordable homes in areas where people want live is not a ground-breaking strategy, but it is one that’s paying off and is likely to pay off further as interest rates begin to fall.

“Exactly when those cuts might begin has been up for a lot of debate this week after a deluge of economic data which will undoubtedly be mulled over by the Bank of England’s MPC members when they meet next week.

“Barring a crystal ball, investors will have to wait for rate setters to give their two-penneth after next week’s decision, though no crystal ball is needed to guess which way that decision is going to go.”

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