- FTSE 100 adds 16 points on the day
- Tech issues lead gains on Wall Street after Meta earnings
- Barclays, Shell weak after results, but Centrica gains
4.45pm: London sees gains
At the close, the UK's blue chip index had added 16 points to finish at 7,693 points for a 0.2% gain on the day.
Positive signs about slowing interest rate hikes from the US Fed and the ECB weren't enough to lift the FTSE 100 over the 7,700 mark it had breached earlier in the day, however.
“While the FTSE’s surge has slowed this week, the overall picture remains firmly bullish," IG's Chris Beauchamp said.
"Shell and Barclays have been the big detractors this afternoon, but despite this the index seems to have more upside ahead. Looking ahead, the BoE seems set to follow the Fed and ECB’s lead on rates, and a dovish tone next week should help UK stocks to make up some lost ground.”
3.35pm: US home sales bounce back
The final US data of the day sees June pending home sales rise by 0.3%, above the consensus forecast for a 0.5% fall.
Kieran Clancy, senior US economist at Pantheon Macroeconomics commented: "The MBA purchase application index signalled a small decline in June pending home sales, but the relationship between the two is far from perfect month-to-month ... In any case, the bigger picture is that pending home sales remain extremely depressed; the small rise in the June index leaves it only 1.7% above the cycle low, reached in November 2022. This, in turn, signals that July existing home sales will remain weak."
He added: "The fundamental issue in the housing market right now is that most homeowners are financed at a much lower rate than the prevailing mortgage rate of just under 7%. Would-be sellers therefore face a huge jump in their mortgage payments, so they are choosing to stay put instead. In other words, existing home sales are stuck at their incompressible minimum level, where the only people moving are those who are forced to, such as those relocating for work or family reasons. This dynamic will persist until mortgage rates fall significantly, likely early next year."
3.10pm: Crude moves
Oil prices were higher on Thursday afternoon, recouping losses from the previous session thanks to supply tightness owing to OPEC+ production cuts and renewed optimism on the outlook for global growth.
UK Brent crude added 0.3% to $81.97 a barrel, while US West Texas Intermediate (WTI) rose or 0.6% to $79.23. Intra-day peaks for both contracts were near their highest since April 19 this year.
Crude has posted four consecutive weekly gains on an expected tightening of supply because of output cuts by OPEC+, as well as some involuntary outages.
Risk appetite in wider financial markets is being boosted by growing hopes that central banks are nearing the end of policy tightening campaigns, which would boost the outlook for global growth and, therefore, energy demand.
The Federal Reserve yesterday and the European Central Bank today both raised interest rates by 25 basis points but were dovish on future rate moves.
2.45pm: Tech advance boost
The FTSE 100 index held near session high as US stocks opened in the green led by the Nasdaq as tech stocks charged higher driven by an earnings-inspired rally in Meta stock.
Around 15 minutes after the New York market open, the tech-laden Nasdaq Composite had added 210 points or 1.5% at 14,337 points, while the S&P 500 was up 40 points or 0.9% at 4,607 points, and the Dow Jones was up 102 points or 0.3% at 35,622 points.
Also boosting investor sentiment was new data from the Bureau of Economic Analysis (BEA) which showed the US economy grew faster than expected during the second quarter.
The BEA’s advance estimate of US 2Q GDP was for 2.4% growth at an annualized rate, up from 2.0% in the first quarter. Analysts had expected growth of 1.8%, according to a Bloomberg survey.
Nathaniel Casey, investment strategist at wealth manager Evelyn Partners, commented: “This modest acceleration of GDP growth has primarily been caused by an increase in private domestic investment. This increase in private investment contributed a positive 1.0% to the overall figure compared to a negative 2.2% contribution in Q1. A considerable driver of this came from equipment which contributed 0.5% following two previous quarters of contraction."
He added: “Despite a deceleration in personal consumption from 2.8% in the first quarter, it continued to provide a positive contribution of 1.1%, to the real GDP growth figure for Q2. Breaking this down further, we can see this deceleration was primarily driven by goods, which contributed 0.2%, down from 1.3% in the first quarter of this year.
“This slowdown in consumption is in line with the latest retail sales data for June, which suggested annualised sales growth is hovering at its lowest rate since the pandemic. Furthermore, with wage growth slowing, employment growth easing and student loans payments resuming, real disposable income is likely to remain limited even as price pressures ease. This means it’s probable that consumption will continue to underwhelm in the following quarters."
2.25pm: Data quartet assessed
The day’s batch of US economic data proved stronger than expected.
The Department of Commerce said US gross domestic product grew at an annualised rate of 2.4% in seasonally adjusted terms in the second quarter of 2023, above forecasts for growth of 2.0%.
Meanwhile, US durable goods orders jumped higher in June, up a seasonally adjusted 4.7% at a month-on-month, well above forecasts for a rise of 1.5%, driven by orders for civilian airplanes.
Excluding the transportation sector, however, durable orders were only up by 0.6% on the month. Transportation orders climbed by 12.1% to 115.3bn, driven by a 69.4% rise in those for civilian aircraft. Capital goods orders excluding defence and aircraft were up by 0.2%.
Meanwhile, the previous month's increase in total durable goods orders was revised up by 0.2% to 2.0%.
And the US trade in goods deficit with the rest of the world narrowed by slightly more than expected last month, down a seasonally adjusted 4.4% month-on-month to reach $87.8bn versus an anticipated reading of $91.5bn. Exports rose by 0.2% versus May to reach $162.5bn, while imports fell by 1.4% to $250.3bn.
Finally, US initial unemployment claims slipped by 7,000 over the week ending on 22 July 2023, to reach 221,000, below forecasts for a reading of 235,000. Meanwhile, the four-week moving average, which aims to smooth out the fluctuations in the weekly data, dropped by 3,750 to 233,750.
2.10pm: ECB hikes
As expected, the European Central Bank (ECB) has followed in the Federal Reserve's footsteps and raised interest rates by 25 basis points.
Alex Livingstone, head of Trading – FX & ETFs, Titan Asset Management, commented: “The ECB decided to follow in the Fed’s footsteps today hiking rates by 25bps to 4.25%.
"However, the language in the statement struck a more dovish tone than markets anticipated as the ECB gestured to clearer signs of inflation easing and admission of tightening financial conditions weighing on demand. This is a clear nod to economic growth becoming a more important topic of focus down the line as inflation dissipates.”
Naeem Aslam, chief investment officer at Zaye Capital Markets said: "We expect interest rates to rise by another 75–100 basis points before the ECB reaches the pinnacle of its cycle, so the real fireworks will be in the speech where the ECB leaves the door wide open for additional rises.
"The largest difficulty, though, is how the European Central Bank (ECB) will manage the slowdown in Eurozone economy as interest rates rise."
1.30pm: A quick look at some of today’s movers
Risers
ITV - up 5% to 72.9p: Shares in ITV rose almost 3% as investors decided to jump onto the positives from a mixed set of interims from the broadcaster. For while earnings for the first six months of 2023 dropped 52% to £152mln, followers of the stock seemed more interested in the outlook. CEO Carolyn McCall predicted a more upbeat future as advertisers gear up for large streaming and linear audiences, attracted by significant events such as the Women's World Cup, the Rugby World Cup and the much-awaited return of Big Brother.
Mitchells & Butlers - up 6% 229.5p: Shares frothed up 7% to a year's high of 230p after the pub group reported improving sales growth and said cost inflation is "starting to abate". Like-for-like sales were up 8.9% for the year to date, having improved to 9.7% in the third quarter from 8.5% in the first half.
Inchcape - up 10% to 864p: Inchcape was the star of the show in the FTSE 250 with shares up 13.4% to 884p. The company predicted full-year results would be towards the top end of the range of published market consensus after unveiling a 45% jump in revenue up 45% to £5.6bn in the first half of the year, supported by contribution from Derco and 13% organic revenue growth.
Litigation Capital Management - up 15% to 87p: Litigation Capital hit a rally on Thursday following a Supreme Court ruling on the legal status of litigation funding, which forms the basis of LCM’s revenues. The tribunal ruled that litigation funding agreements do not constitute damages-based agreements and thus may not be enforceable.
Fallers
Amigo Holdings - down 20% to 0.65p: Amigo Holdings evidently finds itself friendless as last-ditch attempts to raise rescue funds look set to fail, and, the lender said it is now advancing the process to wind down its operations. Any investors still holding Amigo counted the day’s 25% drop in the London listed share price.
Empresaria Group- down 29% to 37p: The staffing company tanked 29% on the junior AIM market today after today’s interim trading update dropped. Net fee income was down 9% year on year to £29.7mln, with net debt increasing. Full-year adjusted profit before tax is expected to be “materially lower” than market expectations.
Safestyle UK - down 40% to 10.7p: Safestyle warned that profits for the current year are set to come in well below analysts' forecasts, as the market for its PVCu doors and windows takes a severe hit from falling household incomes, which have been impacted by stubbornly high inflation and rising interest rates.
1.00pm: Wall Street seen high after Fed rate rise, ECB next
US stocks are expected to push higher again after the Federal Reserve, as expected, instituted a 25 basis point hike interest rate hike on Wednesday, with eyes on more corporate earnings and some data. Ahead of the US restart the ECB rate call is due shortly.
In pre-market trading, futures for the Dow Jones Industrial Average (DJIA) were 0.2% higher, while those for the broader S&P 500 added 0.6%.
But contracts for the Nasdaq-100 jumped 1.2% helped by more upbeat tech earnings. Facebook owner Meta Platforms shares popped nearly 7% in extended trading on better-than-expected results and strong guidance.
In regular trading on Wednesday, the Nasdaq Composite lost 0.1%, while the S&P 500 dipped 0.02%. However, the DJIA rose for a 13th straight session, gaining 82 points, or 0.2% to close at 35,52, notching up its longest win streak since 1987. If the DJIA ends Thursday with a 14th straight positive session, it will mark the longest winning streak for the 30-stock average since June 1897.
The moves came after the Fed announced its widely-expected hike, bringing interest rates to their highest level since 2001. Remarks from Fed chair Jerome Powell hinted that the central bank could also hold rates steady at these levels, and suggested that the Federal Open Market Committee will remain data-dependent.
Joshua Mahony, chief market analyst at Scope Markets commented: "The 25-basis point hike had been largely baked in, but Jerome Powell managed to provide markets with a little more juice for traders to get into.
Firstly, the FOMC considers every meeting as being ‘live’, with their data dependency likely to provide a bumpy ride given the potential rise in CPI over the next two readings.
However, Powell also noted that he deems current policy as being ‘restrictive’, with the committee expecting to see inflation return to 2% without major job losses."
"For markets, this signals a general satisfaction with policy as it stands, with Fedwatch pricing for another 2023 rate hike declining from 32% to 28%. That growing optimism that the Fed may have reached a terminal rate brought gains for equities, with the dollar coming under pressure," he added.
The US central bank meets again in September after a batch of new inflation and employment data.
Economic data due on Thursday include initial weekly jobless claims, June durable goods orders, a preliminary second-quarter GDP reading and pending home sales.
It is another packed earnings day, with results expected from Honeywell (NYSE:HON), McDonald’s, Intel, Ford Motor, and Royal Caribbean.
12.32pm: Pound and euro rise as markets expect Fed to pause
The pound has risen against the dollar as markets believe the interest rates by the US Federal Reserve on Wednesday will be the last in this cycle.
Meanwhile expectations remain that rates have further to rise in the UK and Europe.
The ECB is set to hike rates by a further 25 points today while the Bank of England is likely to follow suit at its next meeting.
Sterling rose 0.1% to US$1.2950 while the euro rose 0.5% to US$1.1137.
12.00pm: EU to probe Microsoft over Office and Teams
EU regulators have opened a formal investigation into claims that Microsoft is unfairly bundling its Teams video conferencing service with its popular Office software as Brussels intensifies its scrutiny of big technology groups.
The move comes after rivals said the group’s concessions to stop bundling Teams with its Office 365 software in Europe were insufficient for fair competition, according to multiple people with direct knowledge of Brussels’s thinking, reported by the Financial Times.
The investigation could lead to formal charges against Microsoft as early as the autumn, according to two people familiar with the matter.
“We will continue to co-operate with the commission and remain committed to finding solutions that will address its concerns,” said Microsoft.
11.32am: Abrdn poaches Persimmon finance chief, will merge Gars into other funds - Sky
Abrdn PLC (LSE:ABDN) has hired Jason Windsor as chief financial officer, poaching him from housebuilder Persimmon PLC (LSE:PSN).
The Edinburgh-based fund manager, said Windsor will join at the end of October. Windsor has been with Persimmon for only a year.
Persimmon said Windsor will leave on September 1, when chief executive Dean Finch will assume interim responsibility for finances while a successor is found.
Persimmon said there is no change to the guidance that it provided back in April.
Separately, Sky News reported that abrdn plans to merge its Global Absolute Return Strategies fund into the company's diversified asset funds and will cease to operate as a standalone vehicle.
11.05am: Who could take the helm at NatWest
As the dust settles on the departure of Dame Alison Rose from NatWest Group PLC (LSE:NWG) attention has switched to who could fill her shoes.
There are a number of names doing the rounds including Paul Thwaite who has been interim boss “for an initial period of 12 months” while the board decided on a permanent successor to Rose.
Like Rose, Thwaite is a veteran of the group, who joined in 1997 and rose through its ranks.
Katie Murray is another tipped for the hot seat.
She was elevated to the job of chief financial officer in January 2019 and will be well known investors given her role as chief number cruncher.
Could Ewen Stevenson make a return to the City.
He was the well respected head of finance at HSBC until he left last year.
Joe Garner, the former boss of Nationwide, is another possible external candidate.
He has had a varied career, which included running BT’s Openreach division, a decade at HSBC and stints at Procter & Gamble (NYSE:PG) and Dixons Carphone.
10.45am: Friends of the Earth slams Centrica and Shell
The bumper profit at Centrica haven't pleased everyone.
Friends of the Earth have slammed the news which saw Centrica report a ten-fold increase in profit at its British Gas retail arm to £969mln compared to £98mln last year.
Emi Murphy at the environmental pressure group said: "There’s no acceptable reality where an energy company should see profits rise by nearly 900% over the same period millions struggle to afford to power and heat their homes."
"It’s indefensible that firms behind both our soaring bills and the deteriorating state of the planet are still raking in billions in excess profits."
“People will rightly question why there has been so little progress in rolling out the measures that will make a genuine difference to their energy bills," she added.
Murphy had a pop at Shell in equal measure after its results.
“With the world quite literally on fire, fossil fuel companies should be doing everything they can to ramp up the production of cheap and clean renewable power, not stalling investment and rowing back on their climate commitments as Shell has recently."
"Not only is the switch to clean energy vital for the health of our planet, it would also help to bring down our energy bills – keeping homes warmer in winter - and release us from the volatility of expensive oil and gas once and for all.”
10.15am: Inchcape the star turn in the FTSE 250
Over in the FTSE 250 and Inchcape PLC (LSE:INCH) is the star of the show, up 13.4% to 884p.
The company predicted full year results would be towards the top end of the range of published market consensus after unveiling a 45% jump in revenue up 45% to £5.6bn in the first half of the year, supported by contribution from Derco and 13% organic revenue growth.
Adjusted pre-tax profit climbed 35% to £249mln, with a strong operating profit performance more than offsetting higher interest costs during the period.
Duncan Tait, CEO, commented: "Inchcape has produced another excellent performance during the first half of 2023, driven by growth from acquisitions and by consistently strong organic growth."
"In particular, the acqusition of Derco has transformed our market position in the Americas and is already having a positive impact on the group."
Investors were also raising a glass to Mitchells & Butlers PLC (LSE:MAB) with shares up 7% to a year's high of 230p after the pub group reported improving sales growth and said cost inflation is "starting to abate".
Like-for-like sales were up 8.9% for the year to date, having improved to 9.7% in the third quarter from 8.5% in the first half.
Cost inflation is now expected to be at the bottom end of its 10-12% guidance range.
ITV PLC (LSE:ITV) was another in favour with shares up 4.3% at 72.61p.
Sophie Lund-Yates at Hargreaves Lansdown said its "it’s encouraging to see the Studios business picking up the pace – making content for the new binge-watching culture is a good place to be."
But advertising revenue fell 11% in the first half "as it grapples with an increasingly difficult backdrop for linear TV ads," she pointed out.
"The dividend’s been held which will please investors, but shareholder returns could be fickle in the future if cash needs to be funnelled at new ventures", she added.
9.55am: St James's Place margins face consumer duty hit
On the other side of line some big moves on the downside in the leading index with Barclays and Shell prominent names in the red as we have already discussed.
The biggest faller in the index is St James's Place PLC, down a whopping 12% to 1,041p.
The wealth manager reported net inflows in the six months to June 30 but this was below the £4bn consensus, according to broker Peel Hunt.
The broker said the key point in statement is implementation of consumer duty and cap on pension charges which is expected to lower revenue margins by c.4 basis points going forward.
"Overall, a £12mln impact on net income is expected in the second half, more pronounced impact in future years," the broker explained.
Peel Hunt said overall the numbers were "slightly mixed with profits ahead but new business below expectations and expected impact from Consumer Duty. "
9.32am: Centrica, Informa and Frasers on the rise after updates
Some significant moves following updates today. Here are some of the FTSE 100 risers.
In the FTSE 100, the risers are led by British Gas owner Centrica PLC (LSE:CNA) which is up 4.9% after a strong first half.
Equity analyst Aarin Chekrie at Hargreaves Lansdown noted the "British Gas Energy division has helped to fuel performance across the first half of the year, thanks to increased allowances in the UK price cap."
"This allowed a significant one-off recovery of costs from prior periods, which helped boost the division’s underlying operating profits around nine times to £969mln."
"But keep in mind, the majority of these tailwinds should have been accounted for now, and over the medium term, profits are expected to moderate to around £150mln-£250mln per year," he added.
"The Energy Marketing & Trading division is continuing to perform well too. This is the trading arm of Centrica, and benefits from energy price volatility", he explained.
Also higher is Informa PLC (LSE:INF) which posted further strong growth in revenue to £1,520.5mln, up 53%, while adjusted operating profitmore than doubled to £413.5mln and free cash flow rose 62.8% to £224.6mln.
"This morning’s release echoes the positive tone of recent updates from the company," said analysts at Shore Capital.
"We are pleased to note this positive performance, which further reinforces our view that Informa's extensive and diversified portfolio of leading B2B exhibitions will drive attractive growth and strong cash generation," the broker commented.
"The acquisition of Tarsus and prospect of further transactions should also add impetus and we see good potential for further upgrades," it reckoned.
Frasers Group PLC (LSE:FRAS) was also on the rise after the retailer's acquisition strategy started to bear fruit leading to a record full-year performance.
Revenue in the year to 30 April 2023 jumped by 15.8% to £5.56bn, Mike Ashley’s firm said in a statement.
Shore Capital's Eleonora Dani said the numbers were a "4% beat to our topline forecast," with the UK sports retail segment showning "significant growth."
"The positive performance and momentum achieved in FY23A are expected to carry over into the new financial year," she thinks.
"Notably, Sports Direct is poised to benefit significantly from strengthened relationships with key brand partners," she said.
Dani expects consensus forecasts to rise by around 3% after the update and keeps a 'buy' rating.
9.04am: Shell lower after earnings miss
Shell PLC (LSE:SHEL, NYSE:SHEL) was another weak feature early, with shares down 1.9% at 2,351p, after it reported results which missed City expectations.
Michael Hewson at CMC Markets UK said: “We already had an inkling that Shell’s profits in Q2 might fall short when the company reported that its chemicals division would make a loss earlier this month, and so it has proved with today's results showing a sharp fall in profits.”
“Today’s Q2 results saw adjusted profits fall to US$5.07bn, below expectations of US$5.61bn, and well below the US$9.6bn in Q1. The company blamed lower prices, volumes as well as margins, along with weaker trading for the slowdown,” he noted.
Stuart Lamont at RBC Brewin Dolphin, said: “Lower oil and gas prices have hit Shell’s revenues and profitability.”
“The company had previously set the scene with downgrades in its earnings estimates to reflect a more normalised trading environment, but it has still missed expectations with today’s results.”
“The share buyback programme and increased dividend are good news for shareholders, but will inevitably come with questions attached in the current environment.”
8.55am: FTSE firms but drop in investment banking arm hits Barclays
The City has taken a dim of view of Barclays second quarter results with shares now down 6.2% at 153.78p as income came in below forecast due to a fall in its investment banking arm.
Richard Hunter at interactive investor, commented “The benefits of Barclays’ diverse business model continue to shine through, with a strong overall set of numbers offsetting any pockets of trading weakness.”
There was plenty to like about the numbers with profits up, a big increase to the dividend and a £750mln share buyback but this was offset by income coming in below forecast, hit by a fall in investment banking and a slight reduction in guidance for UK net interest margin.
Income in the investment banking arm fell 22% in the quarter to £3.16bn from £4.03bn.
Shore Capital’s banking analyst Gary Greenwood noted income was around £240mln lower than forecast with a £132mln miss in the bank’s corporate & investment bank arm the principal reason.
He thought that “despite a small downgrade to Barclays UK net interest margin guidance” will have only a modest impact on the overall earnings expectations given the group’s diversified business model.
The bank lowered its guidance to 3.15% from 3.2% before.
While bad debt provisions nearly doubled in the quarter to £372mln this was better than the City had feared with the consensus standing at £597mln.
8.37am: Centrica powers ahead after strong first half
British Gas owner Centrica PLC (LSE:CNA) has recorded bumper profits during the six months to June 31, 2023, prompting a new wave of investment, a higher dividend and a larger share buyback.
Adjusted operating profit climbed by 55.2% over the period to £2.08bn, while net cash increased tenfold to £3.06bn.
Improvements in British Gas aided the surging profits, Centrica said in a statement, with the retail wing penning a tenfold increase in operating profit to £969mln.
Shares have an early glow, up 4.9% at 130.20p while the FTSE 100 has jumped after a flat start, up 20.99 points at 7,697.88.
8.18am: FTSE 100, Barclays lower as investment banking income falls, bad debts rise
The FTSE 100 made a subdued start to the day as investors digest a raft of UK earnings which saw some of the biggest names in the business world updating on their fortunes.
At 8.15am London’s blue-chip index was flat at 7,676.59 while the FTSE 250 jumped 72.77 points, 0.4%, to 19,259.31.
Barclays PLC (LSE:BARC) fell 4% as a rise in bad debt provisions and a fall in investment banking income clouded a solid set of results which included a big hike to the dividend and a £750mln share buyback.
Bad debt provisions nearly doubled to £372mln from £200mln in the quarter to June 30, taking charges for the half-year to £896mln, up from £341mln last year.
Shore Capital analyst Gary Greenwood also pointed out the lender had made “a small downgrade to Barclays UK net interest margin guidance which we expect to have only a modest impact on the overall earnings expectations.”
He said the rise in impairments was £225mln than he expected better than the City had feared but the fall in investment banking income was around £130mln worse than expected.
Shell eased 2.1% after earnings tumbled, missing City expectations, due to lower oil and gas prices, offsetting news of new share buybacks and an increase to the quarterly dividend of 15% to US$0.33.
The oil supermajor reported second-quarter post-tax profit, or income, of US$3.1bn, plunging 64% year on year, so that income for the first half more than halved to US$11.9bn.
Stuart Lamont at RBC Brewin Dolphin, said: “Lower oil and gas prices have hit Shell’s revenues and profitability.”
“The company had previously set the scene with downgrades in its earnings estimates to reflect a more normalised trading environment, but it has still missed expectations with today’s results.”
Heading the other way was British Gas owner Centrica which recorded bumper profits during the six months to June 31, 2023, prompting a new wave of investment, a higher dividend and a larger share buyback.
Adjusted operating profit climbed by 55.2% over the period to £2.08bn, while net cash increased tenfold to £3.06bn.
Improvements in British Gas aided the surging profits, Centrica said in a statement, with the retail wing penning a tenfold increase in operating profit to £969mln.
8.00am: Shell launches bumper buyback but profit slides
Shell PLC (LSE:SHEL, NYSE:SHEL) is launching US$5.5bn of new share buybacks and increased its quarterly dividend 15% to US$0.33 even after earnings tumbled due to lower oil and gas prices.
The oil supermajor reported second-quarter post-tax profit, or income, of US$3.1bn, plunging 64% year on year, so that income for the first half more than halved to US$11.9bn.
Earnings per share for the second quarter dropped to US$0.46 from US$1.26 in the first quarter and US$2.42 a year ago.
Chief executive Wael Sawan said the company had been affected by lower oil and gas prices and refining margins, lower volumes and lower LNG trading & optimisation results.
7.56am: Barclays boosts dividend, share buyback but bad debts jump
Barclays PLC (LSE:BARC) saw bad debt provisions more than double in the second quarter but still reported strong growth in profitability, boosted by rising interest rates, and a bumper share buyback.
In the three months to June 30, the high street lender reported pretax profit of £2.0bn compared to £1.5bn the year prior but income fell 6% to £6.29bn from £6.71bn hit by falls in investment banking.
Bad debt provisions nearly doubled to £372mln from £200mln taking charges for the half-year to £896mln, up from £341mln last year.
The rise in bad debt provisions come after peer Lloyds Banking Group reported a big jump on Wednesday.
Looking ahead, Barclays expects its UK net interest margin to be less than 3.20% in 2023, with a current view of around 3.15% while it is targeting a return on total equity greater than 10% in 2023, consistent with our medium-term target.
Shareholders were rewarded with a 20% hike to the dividend to 2.7p from 2.25p while the bank also announced a £750mln share buyback.
7.25am: BT holds guidance but predicts further fall in broadband customers
Some big beasts of the UK corporate world reporting today.
BT Group PLC (LSE:BT.A) held guidance for 2024 after a modest rise in revenue in the financial first quarter but forecast a drop in broadband customers due to competitor losses and a weak broadband market.
In the three months to June 30, the telco said pro-forma adjusted revenue rose 4% to £5.2bn due to increased fibre-enabled product sales and price increases in Openreach, increased service revenue in Consumer and improved equipment trading in Business, offset partially by legacy product declines.
Pro forma adjusted EBITDA rose 5% to £2.0bn, up 5% with revenue flow through and cost control more than offsetting cost inflation while reported pre-tax profit climbed 11% to £536mln, primarily due to EBITDA growth.
The firm expanded its fibre to the premises footprint to 11mln premises, 44% of the way to its 25mln target, with a further 6.2mln where initial build is underway.
BT said Openreach broadband average revenue per user grew 10.2% year-on-year but the broadband base fell 126,000 in the quarter due to tough competition, a weak broadband market and communications providers ceasing copper lines.
BT continues to expect the Openreach broadband base to decline by around 400,000 in the financial year 2024.
7.00am: FTSE 100 seen higher ahead of bumper day of earnings
Blue-chips are set to open higher on Thursday following the as-expected 25 basis point interest rate in the US which economists increasingly believe will be the last in this cycle.
Spread betting companies are calling the FTSE 100 up by around 15 points after closing down 14.91 points at 7,676.89 on Wednesday.
Investors are also preparing for another raft of updates from leading UK companies with Barclays, Centrica, Drax Persimmon, BT and Rentokil Initial among the big names reporting today.
New York stocks closed Wednesday mixed in choppy trading after the latest interest rate increase by the Federal Reserve, which took borrowing costs to their highest level in 22 years.
James Knightley at ING Economics said: "The Fed unanimously hiked its policy interest rate range 25bp as widely expected with the statement retaining the phrasing that further policy firming "may be appropriate".
"With two months' worth of data to come before the next FOMC meeting, we suspect evidence of slowing inflation and softer activity won't make that necessary," he thinks.
The Fed's chair Jerome Powell was coy when it came to future policy. He did not commit to another hold in September, but did not really choreograph another hike either, as he affirmed a "data-dependant" approach to future decisions.
Leaving the door open for future hikes this year, Powell ruled out cuts until the next at the earliest. "We will be comfortable cutting rates when are comfortable cutting rates", he said.
It's the ECB’s turn today with a similar 25 basis point rise flagged.