- FTSE 100 closes 24 points higher
- UK GDP grows in January
- TikTok faces real prospect of US ban
4:49pm: FTSE 100 closes higher after miners rally
The FTSE 100 has closed 24 points higher after strong gains from some of the index’s mining giants, with Glencore, Anglo-American and Antofagasta all having lifted more than 5%.
Much of the boost has been driven by improving prospects in China, although Glencore received an additional lift from a Deutsche Bank upgrade.
Deutsche upped its rating on the Swiss commodities giant to 'buy' from 'hold' with a 540p share price target.
“We expect the market focus to shift towards the upcoming completion of the EVR acquisition and a decision on whether or not to proceed with the CoalCo demerger," said Liam Fitzpatrick, head of metal and mining equity research at Deutsche Bank.
Attempting to push the index downwards were falls from Vodafone (-4%), JD Sports (-4%) and Rentokil (-3%).
Wednesday’s slight lift came after UK GDP figures lifted to 0.2% in January compared to the previous month, figures from the Office for National Statistics showed, which was in line with forecasts.
“WTI Crude oil jumped 2% to $79.11 per barrel and Brent was up 1.9% to $83.45 per barrel on a drop in US stockpiles and worries about supply disruptions following attacks on Russian refineries.
“A higher oil price has negative implications for business and consumers and is exactly what could make central banks sit on their hands if there are knock-on effects for the cost of energy, transport and goods.”
Over in the US, Wall Street is having a mixed day of trading with the Dow Jones the only one of the three lead indexes to have lifted.
At lunch, the Dow Jones was up around 155 points to 39,159, while the Nasdaq and S&P 500 dropped around 75 and 3 points respectively.
While Nvidia shares are down around 3%, one of the biggest fallers has been budget retailer Dollar Tree, which dropped around 14% after it said it plans to shutter around 1,000 stores.
600 of its Family Dollar stores are expected to close in the first half of the year before a further 370 close in the latter six months, the group revealed on Wednesday.
Dan Coatsworth at AJ Bell said:“Dollar Tree has succeeded in getting more people through its doors but customers are spending less per visit. That’s created a problem for the company’s earnings and is a perfect illustration of how sticky inflation and high interest rates are causing more consumers to think twice about how and where they spend money.
“While everyone is focused on the Federal Reserve and when it might cut rates, the downturn in US consumer spending is playing out right in front of our eyes. It could take several rate cuts before we see any widespread change in consumer habits.”
4pm: FTSE off peaks but solid gains still
Heading towards the close, shares in London are heading for solid gains, with the blue-chip index having notched a new high for 2024, above 7785.
Currently the Footsie is up 0.35% at 7,775.65.
Miners have led the way, with copper-focused Antofagasta top of the list, up 5.6%, just ahead of more diversified giants Glencore, up 5.4%, and Anglo American, up 5.1%.
While Glencore was boosted by some broker support, increasing China confidence has been seen as the major factor this week.
After plunging since the start of the year, iron ore prices seemed to find a floor today.
Market analyst Chris Beauchamp at IG said: "The rebound in Chinese markets is catching the attention this side of the globe, as mining stocks in London lead the way higher.
"After huge outflows from Chinese markets over the last year, it looks like investor confidence in the outlook is returning, along with hopes of renewed raw material demand."
After the miners, there's a mix of utilities, bookmakers and oil majors.
Even though US tech stocks are on a small slide today, Scottish Mortgage Investment Trust PLC (LSE:SMT) is on the up in London.
Beauchamp noted the mixed showing in Wall Street, with the Dow Jones rising while tech stocks drop back.
He says: "The rally in stocks has moved into a choppier phase, a change from the relentless gains of Q4 2023, and the sideways price action could intensify as we begin the run towards next week’s Fed decision."
3.44pm: Space fund takes off
Shares in the Seraphim Space Investment Trust PLC (LSE:SSIT) have blasted up over 10% today on the back of the fund's interim results, which showed NAV up 1.8% over the half year, driven by positive valuation movements in the portfolio.
A note from Deutsche Bank pointed out that the largest driver was D-Orbit which first closed on a Series C round, with the valuation up c.50% after some trouble listing two years ago.
"Seraphim Space’s share price has endured a turbulent period since IPO in 2021, given the market’s shift in sentiment to growth stocks and private assets," said Deutsche.
"The NAV however, has remained resilient with the fund benefitting from structural downside protections on a significant portion of the portfolio. Moreover, appetite for spacetech has helped to insulate the sector from some weakness.
"Several portfolio companies have continued to raise funds, with several at stable/higher valuations as demand for spacetech continues to grow, reflected in increasing external investor participation in the sector."
At 58.6p, the shares have more than doubled from the lows below 27p seen last summer, though still halfway from their highs in late 2021.
3.35pm: FTSE nears 7800
The FTSE 100 has topped 7,780 for the first time since the middle of last May, up 33 points or 0.5%.
It's now the highest since 19 May last year, with the next target is 7,800 seen on 23 May.
An unlikely mix of miners, oil majors, bookmakers and insurers make up the majority of the top blue-chip risers in London.
3.20pm: TikTok faces real prospect of US ban
Social media platform TikTok is facing a comprehensive ban in the US after the House voted to pass a bill that would force its Chinese parent company ByteDance to divest from the app.
A total of 352 House members on both sides of the aisle voted to approve the bill with 65 against, giving ByteDance 165 days to divest or face a ban from all app stores and web hosting services.
The bill still needs Senate approval before being passed to President Joe Biden, who has signalled his approval of the bill.
Valued at $220 billion, ByteDance is one of the most valuable private companies in the world, alongside the likes of Ant Group. SpaceX and Shein.
3pm: Hunt acknowledges debt burden after 30-year bond sale
The Chancellor has been talking about the UK's debt burden, coinciding with the government's earlier £4.0 billion fundraising via the issue of a new 30-year inflation-linked bond, in a very oversubscribed offer.
Demand for the government bond was enormous, with bids for the new issue totalling £56 billion, Reuters reported, in what is the last bond sale of this tax year.
The government’s timing on inflation-linked gilts has not been great recently with soaring costs of repaying interest on ‘linkers’ issued under the quantitative easing programme when rates and inflation were at rock bottom one reason why finances are so tight currently.
Hunt acknowledged a "long and difficult journey" in bringing debt down as a percentage of gross domestic product, especially within his five-year target.
When quizzed on his fiscal obligation by the Treasury Select Committee, which pondered whether the UK could expect to see a sustained fall in debt as a percentage of the economy, Hunt replied: “It is going to be a long and difficult journey but I think it’s right that we try.
“We were encourage to hear the January growth figures this morning, but the economy is not growing particularly fast at the moment,” he said.
“Indeed, in the last published numbers we were in a technical recession because we are in a high interest environment because we need to bring down inflation.
“But in that context it is right to try within sensible fiscal rules to get the economy back growing again.”
2:20pm: US stocks see mixed open as Nvidia slips
US stocks have started Wednesday with a mix of rises and falls, following on from Tuesday's session in which the S&P 500 hit a new high.
The Dow Jones is the only index to have begun the day ahead, with it edging 45 points higher to around 38,769.
Both the Nasdaq and S&P 500 are down, with the former slipping by 65 points or 0.4% and the latter dropping by 5 points or 0.1%.
Nvidia shares have slipped around 3%, while Meta and Apple have also ticked lower.
2pm: Oilers lift FTSE to new highs
The FTSE 100 has notched another new nine-month high, rising over 30 points to top 7,770 recently .
Joining miners at the top of the leaderboard are oil majors Shell and BP, on the back of a stronger oil price.
A barrel of Brent crude is up 2.1% to $83.62 today.
1.30pm: SpaceX nears launch
SpaceX could launch its giant Starship rocket as soon as tomorrow morning, in what boss Elon Musk is hoping will be third-time lucky.
Having said last week that the 120-metre rocket was fully stacked and preparing for launch, on Wednesday the company said the space rocket "could launch as soon as March 14".
The timing of Starship's third uncrewed flight test is "pending regulatory approval," SpaceX said on its website, which is required from the Federal Aviation Authority.
The first two flights of the two-stage rocket made it off the ground but exploded before reaching orbit.
Thursday March 14 is the primary date for the Starship launch, with a launch window all the way to next Monday, March 18.
1.20pm: US stocks set for mixed start, FTSE back higher
Tech stocks are set to drive declines amid a mixed start for Wall Street, according to futures markets.
Ahead of the opening bell, the tech-heavy Nasdaq 100's futures were down 0.25%, while the Dow Jones was trading modestly above flat and S&P 500 futures were just below the flat-line.
Nvidia and Tesla are among the bigger falls in pre-market trading.
Elsewhere, the Intel Corp shares edged 2% lower pre-market after it was revealed the Pentagon had pulled out of plans to provide a US$2.5 billion chip grant to the technology giant.
Coinbase Global Inc (NASDAQ:COIN) (Coinbase Global Inc (NASDAQ:COIN)), one of the world’s largest crypto exchanges, said it is planning on raising US$1 billion through convertible bonds, echoing a similar strategy to bitcoin holder MicroStrategy. The shares fell 2%.
Back in Blighty the FTSE 100 is back in the green, up 11 points at 7,758.84.
12.40pm: First comprehensive AI act approved
The world's first comprehensive laws for constraining the risks of artificial intelligence (AI) have been approved by European lawmakers on Wednesday.
European Parliament lawmakers voted overwhelmingly in favour of the AI Act, which classifies products according to risk in order to apply scrutiny.
The act is designed to "nudge the future of AI in a human-centric direction", said one of the act's creators, Dragos Tudorache, so that the technology would move in "a direction where humans are in control" and where it "helps us leverage new discoveries, economic growth, societal progress and unlock human potential".
AI has been the catalyst of a new leg of significant stock market gains in recent months, led by NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) (NVIDIA Corp (NASDAQ:NVDA, ETR:NVD), NVIDIA Corp (NASDAQ:NVDA, ETR:NVD)) and other tech giants.
The first obligations in the AI Act will come into force this year and others over the next three years, said legal expert Marcus Evans at Norton Rose Fulbright.
12.13pm: Supermarkets in the red
Listed supermarkets Tesco and Sainsbury's have fallen into the red after opening higher.
News in the sector today includes results from Morrisons, which revealed the Bradford-based grocer made a second successive loss, topping £1 billion last year partly due to debts incurred during its private equity takeover by Clayton Dubilier & Rice (CDR).
Total revenues also fell to £18.4 billion from £18.5 billion, though the supermarket's losses are down from the previous year's £1.5 billion.
Finance costs of £735 million weighed on the results for the year to 29 October, rising from £590 million the year before, as £400 million was spent servicing annual interest payments on borrowings of £5.4 billion.
Rather than paying banks director, Morrisons' is funded by an intercompany loan from its parent company.
According to filings at Companies House, net debt at Morrisons’ parent company Market Topco has risen to £8.6 billion, from £3.2 billion before the takeover.
Interest rates have climbed markedly since the CDR takeover, which has led to increasing debt servicing costs.
11.44am: Direct Line falls after Ageas improves cash offer
Shares in Direct Line have fallen almost 5% to 215p after Belgian giant Ageas made what it called an "improved offer".
The latest proposal is made up of 120p in cash and one new Ageas share for every 28.41107 Direct Line shares.
Based on closing prices the day before the offer (last Friday) it implied a value of 237p per Direct Line share, an increase in value of approximately 3% relative to the implied 231p of the first proposal.
The board of the FTSE 250 group said they consider the latest possible offer "is uncertain, unattractive, and that it significantly undervalues Direct Line Group and its future prospects while also being highly opportunistic in nature".
Accordingly, it was unanimously rejected.
11.25am: Broker thoughts on Glencore and Entain
More details on Glencore's broker upgrade and a few more broker comments from investment banks.
Deutsche Bank has moved the commodities giant stock to 'buy' from 'hold', with a 540p price target and predictions of some extra potential cash returns depending on the decision on the CoalCo demerger.
“We believe there is a growing chance that the planned separation is deferred and, if so, Glencore will again become the leading cash generator in the sector,” analysts said.
A potential $2 billion to $3 billion in cash returns is forecast in the second half of the financial year.
Meanwhile, other analysts at Deutsche have hit Ladbrokes owner Entain PLC with downgrades of sorts, cutting forecasts after better-than-expected earnings last week were overshadowed by a regulatory cost hit.
Though the bookmaker outdid market expectations with annual profits, news that new rules in the UK and Netherlands would cause a £40 million hit this year sent shares to their lowest in three and half years.
Deutsche cut its forecast for Entain’s pre-tax earnings for the current year by 5% to £986.7 million as a result of higher regulatory costs, prompting a share price target cut from 1,113p to 1,089p.
As this still marks a prospective rise of 40% from Tuesday's close the bank maintained its 'buy' rating.
Elsewhere, Citi had some positive words on Pearson PLC (LSE:PSON), seeing 2024 as "a cleaner year in terms of growth" with "all segments contributing".
Ahead of results from IG Group Holdings Plc (LSE:IGG), RBC analysts updated their forecasts, lowering Q3 and 2024 net trading revenue estimates "to reflect softer market conditions".
EPS forecasts drop by 3% for 2024 and 1% for FY25 and '26, but a price target of 950p remains unchanged.
10.46am: US SPAC eyes struggling banks
A special purpose acquisition company (SPAC) called Porticoes Capital plans to snap up banks shut down by the Federal Deposit Insurance Corporation (FDIC), according to an SEC filing.
The novel strategy is being led by a group of Wall Street veterans, who aim to raise significant funds for these acquisitions, the FT is reporting, coming in the aftermath of the Silicon Valley Bank failure and ongoing sector concerns as seen with the recent rescue of New York Community Bancorp (NYSE:NYCB).
Unlike typical SPACs, Porticoes is not planning to be publicly listed, but is seeks to operate through a private offering and is restricted to buying failed banks.
The report said that it would need more banks to fail for Porticoes to be able to use the money it has raised.
10.20am: Shell cuts, BP Israel talks paused
Shell PLC (LSE:SHEL, NYSE:SHEL) is planning to cut a fifth of jobs in its mergers and acquisitions team, in an effort to reduce costs, according to a Bloomberg report.
The deal division, which has several hundred employees, "were told that there would be a significant reduction in headcount, with further details to be communicated in April", sources said.
Shell has made similar cuts across other business units.
Elsewhere in big oil, Israel’s NewMed said talks have been paused over a $2 billion bid by BP PLC (LSE:BP.) and the Abu Dhabi National Oil Company (Adnoc) for a 50% stake.
The natural gas group said talks have been suspended because of “uncertainty”.
10.12am: Miners and utilities lead FTSE to new highs
Now we're talking, the FTSE is up 18 points and has set a new year-to-date and nine-month intraday high.
The lead London index is up 0.23% at 7,765.91.
Top of the leaderboard is Glencore PLC (LSE:GLEN), up 2.3%, ahead of some other mining stocks after getting an update from Deutsche Bank.
Utilities are prominent among the blue-chip risers, with water companies United Utilities up 2.1% and Severn Trent 1.4%,
This comes as the water consumer watchdog, the Consumer Council for Water, warned that plans by water companies to raise customer bills by up to 70% over the next five years are “unaffordable” for most households.
“The majority of people said that their bill is either unaffordable now; will be in the future; or they don’t know if they will be able to afford it,” said Mike Keil, CCW chief executive told the FT.
“It’s a serious concern that such a small percentage of customers consider what the companies are proposing to be affordable."
Other utilities are rising too, which suggests it's not water-related but more likely to do with interest rates and bond pricing, with National Grid up 1.3%, British gas owner Centrica up 0.6% and power generator SSE up 0.5%.
Insurers are there too, with Aviva up 1.1%, Beazley 0.8%.
Precious metals miners Fresnillio, down 2.2%, is bottom of the list.
9.36am: Trade deficit expected to narrow
Alongside trade figures earlier, the ONS reported that there was no evidence that disruption to shipping in the Red Sea had affected imports in January 2024.
While the trade deficit widened to £3.1 billion, weaker than the consensus forecast, economist Rob Wood at Pantheon Macroeconomics said he thinks the deficit will narrow.
The trade balance will be helped in 2024 by a return to prices for goods rising less quickly than for services, which the UK specialises in, he said.
With the cost of energy imports also expected to continue declining, he expects UK GDP to rise 0.3% quarter-to-quarter through 2024, driven by domestic demand, which will drag in more imports.
As external demand remains weak he thinks the trade deficit will narrow to around £25 billion this year, from £36.6 billion last year.
Deutsche Bank’s chief UK economist, Sanjay Raja, also has some positive thoughts on GDP, where he noted the 0.2% rise in January was driven by a jump in services and an even bigger jump in construction output.
"Big picture: the economy is starting to turn a corner. The technical recession that the UK slipped into late last year will be short-lived," says Raja.
"And we should see growth gradually return to its trend rate over the course of the year, as sentiment continues its uptrend and fiscal and monetary policy loosen through 2024.”
The FTSE 100 meanwhile is picking up some confidence, up 13 points now.
9.17am: Action in Europe
While London's share benchmarks wobble amid a lack of much action among big blue chips, there's more going on in Europe.
Spain's IBEX up almost 100 points or 0.94%, led by retailer Inditex, while falls for Adidas and Volkswagen are also reflected in a wider drop for Germany's DAX.
Zara owner Inditex is up 4.4% after reporting a 30% rise in net income for the year to January, in line with analysts’ forecasts.
And so far this year, sales have swelled 11% to kick off the spring season.
Market analyst Victoria Scholar at Interactive Investor says, “Zara is successfully navigating the economic headwinds and outshining its biggest rival H&M thanks to its impressive ability to position itself as both quality and affordability. It doesn’t participate in the race to the bottom on price with the likes of Shein, but instead nimbly keeps up with the latest high-end trends, quickly responding to customer demand by increasing supply of popular items."
Looking at the wider market picture, Scholar says: “European markets have opened mixed with the FTSE 100 lagging other European indices like the DAX and the CAC."
The Stoxx 50 is inching closer to a 23-year high and the Stoxx 600 hit a fresh record high.
"This comes after a strong session on Wall Street with the S&P 500 hitting a fresh record high despite US CPI inflation coming in at 3.2% in February ahead of forecasts for 3.1%. The Nikkei has logged its third daily decline and the Hang Seng is giving back some gains after Tuesday’s surge."
Adidas meanwhile is down 2.5% after reporting a full-year net loss of €58 million, the first annual loss for the sportswear giant since 1992.
In the final quarter of 2023, footwear sales grew by 8% while apparel sales fell by 13%.
"Adidas has struggled with the fallout from the end of its tie-up with Kanye West and the suspension of their popular Yeezy trainers. While footwear sales are storming ahead thanks to strong demand for Sambas and Gazelles, Adidas apparel has fallen out of fashion, struggling with weak demand," says Scholar.
"The rise in popularity of athleisure clothing with brands like Lululemon and Alo has come at the expense of Adidas’ clothing lines which are in the doldrums."
VW meanwhile is down 0.5% on what UBS analysts said a "low quality" fourth quarter and "disappointing China guidance".
8.55am: Balfour bump not enough for London market
Balfour Beatty (LSE:BBY) shares are up 9% as the construction group confirmed it intends to buy back £100 million of shares this year even though profits dropped in 2023.
Orders also dropped to £16.5 billion from £17.4 billion, though Balfour said the book was flat on a constant currency basis which was “encouraging” given recent interest rate rises.
“The second half of the year showed a clear improvement in orders compared to the first half as interest rates in both markets stabilised,” it added.
Mark Crouch, analyst at eToro, says Balfour Beatty delivered a "strong performance in a challenging environment".
Wider indices have lost their tentative early confidence, taking a breather perhaps.
The FTSE 100 having dropped monetarily into the red and now up just 2 points, while the FTSE 250's gains have been roughly halved to 33 points.
On the UK GDP figures earlier, analyst Danni Hewson at AJ Bell said: "0.2% is hardly a number to get excited about, it’s just a continuation of the trend that we’ve seen over the past couple of years. An economy bumping along the bottom, flatlining and stagnating.
“Psychologically shedding the label of recession is important because it helps foster confidence. But the biggest shot of adrenaline is likely to come once the Bank of England finally delivers the much-anticipated interest rate cut that markets are expecting in the summer.
“It’s that optimism which pushed the FTSE 100 up to a nine-month high yesterday and is being mirrored over on the other side of the Atlantic despite concerns about sticky inflation."
She adds: “Confidence is crucial. It gets builders building, makers making and sellers selling. And those green shoots are visible, they just need a bit of fair weather to bed in.”
8.36am: Dividend growth
Global dividends swelled 5% to new record levels last year and are expected to continue growing in 2024.
Last year's total reached $1.66 trillion thanks to strong bank payouts on the back of higher interest rates, though US tech giant Apple provided the largest payout.
The quarterly Janus Henderson dividend report showed 86% of the world’s 1,200 biggest public companies increased their dividends or kept them steady in their most recent reporting period.
In the final quarter of 2023 underlying dividends grew 7.2%.
Janus Henderson forecasts dividends of $1.72 trillion for 2024, up 3.9% on a headline basis and equivalent to underlying growth of 5.0% as ordinary dividends grow but special payouts decrease.
8.22am: FTSE starts higher
The FTSE 100 has hit the ground running on Tuesday, with a small rise at the open to extend gains into a third day.
In early trades the blue-chip index has added just over 10 points to reach 7,758.29, still a little below the nine-month intraday highs seen yesterday.
The FTSE 250 also began on the right foot, rising 69 points to 19,634.67.
Earlier, UK GDP figures were slightly encouraging, with economic output up 0.2% in January compared to the previous month, figures from the Office for National Statistics showed, which was in line with forecasts.
"The UK economy could be on the road to recovery after it fell into a shallow recession in the second half of last year," says Rob Morgan, chief investment analyst at Charles Stanley (LSE:CAY).
He said the the first quarter of 2024 has "got off to a reasonable start" but "it is only that", with GDP estimated to have fallen by 0.1% in the three months to January.
"We must await data for February and March to confirm whether the UK has shaken off its mild recession," he adds.
"Nonetheless, today’s figures are promising and indicative of an economy starting to regain momentum, driven by a new year rebound in the services sector, construction and a reinvigorated consumer. Manufacturing was an area of disappointment, but it may well have been held back by supply chain disruption owing to the conflict in the Middle East."
Among individual shares, BAT is up 0.4% after confirming its buyback share sale.
Metro Bank is up less than 1% after reporting its first profit in five years but with some cloudiness in the outlook.
7.59am: Metro Bank back in the black
Metro Bank Holdings PLC (LSE:MTRO) has reported its first pre-tax profit in five years and said deposits are on the up, and cost cutting targets have been increased.
Statutory profit before tax at the challenger bank came in at £30.5 million for 2023, the first since 2018, compared to a £70.7 million loss the year before.
Underlying losses remained but were down 67% to £16.9 million after a worse second half blotted a profitable first.
A crisis engulfed the lender in October following news of an emergency £600 million debt refinancing package to fortify its rocky balance sheet, which was later agreed, with a £325 million rescue equity raise linked to a planned £50 million of cost cutting, including a reported 800 job losses.
Boss Daniel Frumkin said 2023 had been “a varied year for performance”, with some positives “offset by continued external headwinds combined with the need to make difficult decisions”.
Guidance includes a “marginal reduction” in net interest margin but cost guidance has been upgraded as Metro expects to deliver a total of £80 million of annualised cost reductions in 2024.
7.39am: BAT buyback ahoy as share sale completed
British American Tobacco PLC (LSE:BATS) said it bagged roughly 166.9 billion Indian rupees, or £1.5 billion, from selling a portion of its stake in Indian consumer goods conglomerate ITC.
In a block trade it announced yesterday, the cigarette maker sold around a 3.5% stake in a company it has been invested in for over a century.
As promised, BAT confirmed that intends to use the net proceeds in a share buyback over the next two years, starting with £700 million this year.
"This will enable the allocation of operating cashflow to fund investment in our transformation, continue to deleverage towards our new target range of 2-2.5x adjusted net debt / adjusted EBITDA, while also maintaining a progressive dividend and supporting a sustainable share buyback," it said a statement.
7.27am: Services sector, manufacturing, trade etc
There's lots more data for investors to crunch from the ONS this morning, including on services, manufacturing, construction and trade.
The UK index of services for January was up 0.2% on December, as forecast, bouncing back from the 0.1% decline a month earlier.
On a three-month basis the services index was flat, improving from a 0.2% fall.
UK industrial production for January fell 0.2%, however, which was worse than expected, having been up 0.6% last time. Year on year, industrial production was up 0.5%, which also disappointed versus forecasts for a 0.8% rise.
Manufacturing production for the month was flat as estimates indicated, following a 0.8% monthly gain in December. Versus a year earlier, manufacturing production was up 2.0% as expected.
The UK underlying trade deficit widened £2.2 billion to £13.8 billion in the three months to January.
Construction output for the month was up 1.1%, much better than the decline of 0.1% forecast and the previous month's 0.5% fall. Versus a year ago, construction output was up 0.7% after a 3.2% fall in December.
7.16am: FTSE 100 set to start higher
Traders have predicted the FTSE 100 will add to yesterday's strong gains on Wednesday as GDP figures showed the economy bounced back from a slight recession.
The blue-chip index was up 12 points on the IG spread-betting platform ahead of open, having added 78.58 points the day before to close at 7,747.81.
Gross domestic product figures from the Office for National Statistics showed the UK economy grew 0.2% in January compared to the previous month, as forecast, following the technical recession in the second half of 2023.
But economic growth was down 0.1% for the three months to the end of January compared to the preceding period, also as expected, though this represented an easing from the previous 0.3% decline.
Year-on-year, three-month GDP was down 0.3%.
The total underlying trade deficit widened £2.2bn to £13.8bn in the three months to January 2024.
Commenting on the GDP figures, ONS director of economics statistics Liz McKeown said: “The economy picked up in January with strong growth in retail and wholesaling. Construction also performed well with housebuilders having a good month, having been subdued for much of the last year.
“These were partially offset by falls in TV and film production, lawyers and the often-erratic pharmaceutical industry.
“Over the last three months as a whole, the economy contracted slightly.”