Ahead of the Spring Budget, where Chancellor Rishi Sunak is expected to increase business relief rates, the hospitality, leisure and travel sector have seen a rise in stock market pricing this morning.
As of 10am this morning, Whitbread’s share price was up 5.1%; JD Wetherspoon – up 4.6%; IAG – up 4.2%; easyJet – up 2.3%; Hammerson – up 1.3%; and British Land – up 1.3%.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown comments: “With business lifelines expected to be extended and a dose of extra support expected to be administered to ailing shops, pubs and restaurants, there has been a bouyant start for hospitality and landlords in early trading in London. Airlines, who have relied heavily on the furlough scheme are also higher given the likelihood it will be extended into the Autumn.
“Expectations that the VAT cut to 5% will linger for longer for the hospitality industry helped boost Whitbread, which is reliant on bookings in its hotels and Thyme restaurants for its Premier Inn chain. It was the top riser on the FTSE 100 in early trading. JD Wetherspoon is also higher with prospects that the cut will help it keep pint prices lower and volumes higher when its vast footprint of pubs reopens. Both companies have been big recipients of the furlough scheme and now it seems it is likely to be extended to the end of September, that has added another shot of relief.
“Some of the companies hardest hit by the pandemic like British Airways owner IAG and easyJet are also among the risers on the FTSE 100 today. Both airlines have also been reliant on the government’s jobs support scheme and they are still in dire need for that ongoing help given that there is still no flight path laid out for the easing of international travel restrictions.
“Landlords British Land and Hammerson have built on gains in recent days as news trickles through of £5 billion in grants to help struggling high street shops and hospitality firms. This could help more units stay filled for longer in town and city centres already littered with empty shops.”