Wednesday business news bulletin

Sainsbury's sales down; MPC split over interest; Profits down at Currys owner

Sainsbury’s revealed lower-than-expected sales growth today as the supermarket chain joined Tesco in warning of a “competitive” trading environment.

The company saw like-for-like sales excluding fuel rise 5.1% in the 12 weeks to June 16, below some analyst predictions of around 5.5%.

The performance comes a day after its larger rival Tesco disappointed the City with like-for-like sales growth of 4.7%.

Sainsbury’s said the recent round of price-cutting by rivals Tesco, Asda and Morrisons reflected the competitive nature of the market, but added that it had moved to cut prices on 4,500 products since April.

The chances of a July hike in interest rates increased today after it emerged borrowers came within a whisker of a back-to-back rise earlier this month.

Bank of England policymakers voted by the slimmest of majorities to hold interest rates at 5.5% in June, minutes of their two-day meeting revealed.

The 5-4 decision of the Bank’s Monetary Policy Committee (MPC) to keep rates unchanged surprised analysts and added weight to expectations of a fifth rise in 11 months in July.

Currys and Dixons owner DSG International said today it was in a better shape than a year ago, despite posting a sharp fall in annual profits.

Bottom-line profits of £114.1 million for the year to April 28 compared with £295.9 million a year earlier, reflecting the lower value of its under-performing Italian arm and the closure of PC City stores in France.

Profits at an underlying level were down to £295.1 million from £311 million, even though Currys performed well with a like-for-like sales rise of 3%.

The pound at noon was US$1.993 compared to US$1.987 at the previous close while the euro at noon was £0.6741 compared to £0.6747 at the previous close.

For more on these and other business stories read nebusiness in The Journal tomorrow.

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