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London stocks nudged higher in early trade on Friday after data showed the UK economy unexpectedly shrank in January.
At 0820 GMT, the FTSE was up 0.1% at 8,551.30.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “The FTSE 100’s opened up a touch this morning after a rebound in Asian stocks overnight. They were buoyed by hopes that the US government would avoid a shutdown of non-essential services after Senate leader Chuck Schumer said he would vote to pass the latest funding bill.
“However, disappointing UK GDP figures may keep a lid on the size of any bounce today. There’s growing pressure for chancellor Rachel Reeves to pull a bunny out of her bonnet in this month’s Spring Statement and provide a boost to the economy.”
Figures released earlier by the Office for National Statistics showed that gross domestic product contracted by 0.1% in January following 0.4% growth in December, and versus expectations for 0.1% growth.
Production output fell by 0.9% on the month in January following a 0.5% increase in December 2024. This was due mainly to a 1.1% fall in manufacturing output.
ONS director of economic statistics Liz McKeown said: “The fall in January was driven by a notable slowdown in manufacturing, with oil and gas extraction and construction also having weak months.
“However, services continued to grow in January led by a strong month for retail, especially food stores, as people ate and drank at home more.”
Paul Dales, chief UK economist at Capital Economics, said the contraction in real GDP in January highlights the weakness of the economy before the full effects of the rise in business taxes and the uncertain global backdrop is felt.
“Overall, these figures don’t do much to change our forecasts that the economy will grow by just 0.1 q/q (or perhaps 0.2% q/q) in Q1 and by only 0.7% in 2025 as a whole,” he said. “With the prospect of higher taxes from April having left business sentiment on the floor and the global backdrop deteriorating, the economy is unlikely to strengthen much from here.”
In equity markets, Melrose Industries was the standout performer on the FTSE 100 as Citi reiterated its ‘buy’ rating on the stock, saying it “presents a compelling investment opportunity”.
Housebuilder Berkeley Group gained as it reaffirmed earnings guidance but said planned government regulatory changes were putting delivery of new homes under “significant” pressure.
Heat treatment and thermal processing services firm Bodycote tumbled as it delivered a cautious outlook as it presented its full-year results, with end markets remaining mixed after a “challenging” 2024, in which adjusted operating profits grew only 1.1% to £129m.
The company said the current run-rate profit performance is at similar levels to the second half, with challenging conditions in automotive and industrial markets combined with strong demand in aerospace and defence.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Rolls-royce | +2.18% | +16.80 | 788.20 |
| 2 |  |
Anglo American Plc | +2.08% | +47.00 | 2,302.00 |
| 3 |  |
Glencore Plc | +2.03% | +6.35 | 318.90 |
| 4 |  |
Carnival Plc | +1.99% | +26.50 | 1,359.00 |
| 5 |  |
Antofagasta Plc | +1.83% | +33.00 | 1,841.00 |
| 6 |  |
Rio Tinto Plc | +1.74% | +82.50 | 4,812.50 |
| 7 |  |
Fresnillo | +1.67% | +15.00 | 914.50 |
| 8 |  |
South32 Limited | +1.64% | +2.80 | 173.20 |
| 9 |  |
Prudential Plc | +1.48% | +11.00 | 753.40 |
| 10 |  |
Rentokil Initial Plc | +1.44% | +4.70 | 331.10 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Reckitt Benckiser Group Plc | -3.60% | -188.00 | 5,032.00 |
| 2 |  |
Aib Group Plc | -2.16% | -12.00 | 543.00 |
| 3 |  |
Wise Plc | -1.75% | -16.00 | 896.50 |
| 4 |  |
Ck Infrastructure Holdings Limited | -1.23% | -6.60 | 528.00 |
| 5 |  |
Bp 8%pf | -1.06% | -1.50 | 140.50 |
| 6 |  |
Pershing Square Holdings Ltd | -0.98% | -36.00 | 3,636.00 |
| 7 |  |
Centrica Plc | -0.94% | -1.35 | 142.45 |
| 8 |  |
Sse Plc | -0.87% | -13.00 | 1,486.50 |
| 9 |  |
Gen.acc.7se.pf | -0.75% | -1.00 | 132.00 |
| 10 |  |
Wpp Plc | -0.54% | -3.40 | 628.60 |
US close: Dow Jones extends losing streak to fourth session
Major indices closed lower on Thursday as market participants digested yet another key inflation reading and new tariff threats from the White House.
At the close, the Dow Jones Industrial Average was down 1.30% at 40,813.57, while the S&P 500 lost 1.39% to 5,521.52 and the Nasdaq Composite came out the gate 1.96% weaker at 17,303.01.
The Dow closed 537.36 points lower on Thursday as the blue-chip index extended its losing streak to four sessions, while the S&P 500 closed in correction territory.
Thursday’s primary focus was news that wholesale prices were unchanged in February, according to the Bureau of Labor Statistics, proving to somewhat quell inflation fears amid ongoing concerns regarding Donald Trump’s trade war. Headline producer prices were flat against January’s upwardly revised 0.6% month-on-month increase. Economists had been expecting to see a 0.3% monthly increase. On an annualised basis, producer prices rose 3.2%.
Last month’s PPI reading comes just a day after February’s consumer price index, the Federal Reserve’s preferred inflation gauge, came in softer than expected on Wednesday, with headline inflation rising 0.2% month-on-month and 2.8% on an annualised basis.
On another note, Trump threatened to put 200% tariffs on all alcoholic products coming from countries in the European Union in retaliation for the bloc’s 50% tariff on whisky, further rattling markets.
Elsewhere on the macro front, Americans lined up for unemployment benefits at a decelerated clip in the week ended 8 March, according to the Labor Department. Initial jobless claims fell by 2,000 to 220,000 last week, below market expectations for an uptick to 225,000, while continuing claims eased by 27,000 at 1.87m.
In the corporate space, discount retailer Dollar General posted better-than-expected Q4 sales but fell short of profit estimates as a result of sticky inflation and ongoing economic uncertainty.
Friday newspaper round-up: Nationwide, Shein, Jes Staley
Every little helps, so they say. Nationwide building society announced this week that it would be dishing out £50 mini-windfalls to more than 12 million members. And there should be more “free cash” coming down the track for many of them, as Nationwide hopes to announce its third annual “Fairer Share” payout in May. This would follow payments of £100 that were made in 2023 and 2024. – Guardian
British food and drink exports to the EU have tumbled by more than a third since Brexit, according to new trade body figures highlighting how bureaucratic barriers have changed the relationship between the UK and its most important trading partner. Products including whisky, chocolate and cheese remain popular with EU customers but overall food export volumes to the bloc fell to 6.37bn kg in 2024, representing a 34% decline compared with 2019 levels, the Food and Drink Federation (FDF) found. – Guardian
Sir Keir Starmer is poised to relax a planned ban on popular hybrid cars amid warnings that electric vehicle (EV) sales targets are squeezing manufacturers too tightly. The Department for Transport was expected to ban some hybrids from sale after 2030, when selling pure petrol and diesel cars will also become illegal. However, sources said it was reconsidering the plans following intensive lobbying by the industry. – Telegraph
US politicians have said the special relationship is being undermined by a “cloak of secrecy” around Yvette Cooper’s order that Apple install an iPhone back door. Five members of Congress have written to Lord Justice Singh, the president of the Investigatory Powers Tribunal (IPT), urging British officials to lift a gagging order ahead of Apple challenging the order. – Telegraph
The Chinese fast-fashion company Shein has for the first time confirmed plans to float on the stock market, with London believed to be the preferred location. Donald Tang, the Singapore-based company’s executive chairman, said Shein wanted to be a public company “to embrace the … accountability and transparency of being a public company”, in an interview with The Times in London. – The Times
The former boss of Barclays denied that one of his daughters had acted for him as a “vehicle of communication” with the convicted paedophile Jeffrey Epstein while he was running the FTSE 100 bank. The Upper Tribunal in London was shown emails on Thursday sent between Alexa Staley and Epstein from March 2016 to February 2017 in which the sex offender asked her to pass on messages to her father. Jes Staley, 68, maintains that he severed all communication with Epstein in October 2015, before taking charge of what is one of Britain’s biggest banks in December that year. The Financial Conduct Authority, the City regulator, alleges that his adult daughter acted as intermediary for the two men. – The Times
