FTSE higher, Imperial Brands impresses and Land Securities reports record leasing in central London offices

This is not the message you want to hear from the Bank of England Governor. Andrew Bailey as a latter-day King Canute has told everyone he and the Bank are helpless in the face of runaway inflation.

But despite this, and employment data showing a record jump in pay to underline his point, the FTSE 100 managed to start on the front foot on Tuesday.

A decent session in Asia helped lift the mood with commodities stocks in demand after the recent sell-off on China-related concerns.

“Food prices, which Bailey apologised for being apocalyptic about yesterday, remain in focus as the impact of India’s wheat export ban are felt and the conflict in the ‘breadbasket of Europe’ continues to rage,” AJ Bell investment director Russ Mould said.

“This will push up prices on supermarket shelves in developed countries but could have a more destabilising impact in emerging economies where food takes up a much bigger proportion of average incomes.

“Imperial Brands’ sales may have been flat in the first half but, if you put to one side the impact of its exit from Russia, it is notable that profit is up. Imperial has also been able to push through price increases and is generating mountains of cash.

“At times last year it felt like investors were going to ditch their tobacco habit entirely as ESG considerations were at the fore. However, the cigarette makers are proving hard to stub out in an environment where their pricing power and resilient demand provides a useful hedge against inflation.

“Vodafone results were overshadowed by the recent strategic stake taken by e& and rumours of a merger of its UK operations with rival mobile operator Three, though it was notable to see the group say its priorities remain unchanged. A warning on inflation took some of the recent froth off the share price.

“Reports of the demise of office working may have been premature judging by a return to profit for Land Securities in the 12 months to 31 March. Astonishingly in central London the company is seeing record leasing levels.

“In a competitive jobs market where employers probably want their staff in the office at least some of the time, attractive locations with flexible space are a must.

“There has been a recovery in the Land Security’s retail locations too as restrictions ease, with the landlord putting effort in making these attractive destinations for shoppers. Occupancy rates are also up – though this recovery could be cut short as households cut back on spending amid cost-of-living pressures.

“Power generation business ContourGlobal, which has struggled to gain traction on the stock market after a 2017 IPO, looks set to disappear from London as private equity firm KKR swooped for its portfolio of energy projects from across the world.

“With Contour set to recommend the takeover offer, which is pitched at a healthy premium, the deal looks like a fait accompli at this stage.”