- FTSE 100 down 39 points
- Retail sales climb
- Gold surpasses US$2,500
3.58pm: Stocks set to finish lower
The FTSE 100 looked to be headed towards a negative end to the week on Friday, having fallen by 34 points to 8,312 come late trading.
Housebuilders were among those weighing on the index, with Berkeley Group Holdings PLC (LSE:BKG), Persimmon PLC (LSE:PSN), Vistry PLC and Taylor Wimpey PLC (LSE:TW.) all among the day’s losers after reversing on gains seen earlier in the week.
Rightmove PLC (LSE:RMV) led the way though, falling 2.6% on a quiet day of company news.
Rising was Entain PLC (LSE:ENT), as the betting firm continued a winning streak following solid interims from peer Flutter Entertainment PLC (LSE:FLTR) earlier in the week. The stock climbed 2.6%.
Retail data had looked to offer a boost earlier on, after showing UK sales climbed 0.6% in July, though this was short-lived as poor US housing construction figures hit later in the day.
3.37pm: Gold breaks $2,500 ceiling
Gold has surged passed the US$2,500 per ounce mark for the first time as investors flocked to the yellow metal on growing expectations of an impending US base rate cut.
Bullion topped the mark to hit an all-time high of US$2,500.44 on Friday, before scaling back to US$2,483.38 in a 1.1% gain for the day.
This was after weak housing construction data in the US fuelled expectations that the Federal Reserve would cut interest at its next meeting in September.
Data on Friday showed new housing construction projects in the US fell by 6.8% over the course of July to 1.238 million, or by 16% on an annual basis.
Money markets were left pricing in three-quarter of a point rate reductions for the US by the year end following the housing data, prompting the dollar to lose 0.27% against the pound.
3.22pm: Heathrow border force staff announce strike
Heathrow border force staff will walk out on strike later this month, threatening to cause delays for thousands of passengers at Britain’s busiest airport.
Some 650 staff members across Heathrow’s four passenger terminals have been in a dispute since a new inflexible roster was put in place last April.
Some 160 members of staff are said to have left their jobs since the new roster was put in place, with applicants looking for flexible roles being denied, according to union PCS.
“Our hard-working members at Heathrow take great pride in keeping our country’s border safe, but many are being forced out of the job they love,” PCS general secretary Fran Heathcote said.
Border force staff will walk out between August 31 and September 3 as a result, with an overtime ban taking place until September 22.
“We know our strike action is likely to cause serious disruption to travellers using Heathrow at the end of the summer, but the strike can be avoided if the employer listens to the concerns of our members,” Heathcote added.
2.55pm: Wall Street starts lower on weak housing data
Wall Street faced a negative start to the day on Friday, as stocks fell on the back of poor housing data.
The Dow Jones shed 54 points after the opening bell, as the Nasdaq and S&P 500 ticked 35 and 11 points lower respectively.
This was as figures showed the number of new housing construction projects in the US fell by 6.8% over the course of July to 1.238 million, or by 16% on an annual basis.
Applications for new builds also dipped, falling by 4% compared to June and by 7% against a year earlier to 1.396 million.
The data threatens to dampen sentiment on the US economy, which had taken a knock earlier this month after a weak jobs report.
Global stocks spiralled on the back of the report, which prompted fears of recession in the world’s largest economy, with indexes in the US taking until Thursday to fully recover.
2.38pm: Taylor Swift gigs to drive £100mln London spending boost - report
Taylor Swift’s five concerts in London are set to boost spending in the capital by more than £100 million, a report has claimed.
Swift is set to put on five shows at Wembley Stadium as part of her Eras Tour, with the first taking place on Thursday night to a sell-out crowd.
Each of these is set to provide a £21.7 million boost to spending in London, according to research from discount site VoucherCodes.co.uk.
This is as the singer’s fans - or ‘Swifties’ - splash out an average of £566 each, including on accommodation, merchandise, food and drinks.
2.15pm: Global stocks set for best week of the year
Global stocks are on course to record their best week of the year so far after fears over the US economy have dissipated in recent days.
MSCI’s main world stock index was up 3.8% over the course of the week on Friday, which, if held, would mark its biggest weekly gain since November.
It comes as stocks globally have spent the week recovering from a sell-off earlier in the month, after weak US jobs data prompted fears that the world’s largest economy was headed for recession.
The FTSE 100 has climbed 1.55% over the course of the week, coinciding with gains for the likes of Europe’s Stoxx 600 and Japan’s Nikkei.
“The week has been quietly one way with bonds mostly sold, stocks mostly bought, and the USD mostly bid,” BNY markets strategy head Bob Savage commented
“The one-way nature of the bounce has been in low volume and with low conviction.”
1.26pm: Petrol prices fall to six-month low
Petrol prices fell to a six-month low in line with February levels this week, motor firm the AA reported on Friday.
At an average of 143.0p per litre, petrol hit its lowest since February, while diesel fell to levels not seen since January at 147.9p.
Though this was a “little cause for celebration” among drivers, the AA noted that petrol prices remained inflated compared to historic levels.
Prior to the coronavirus pandemic, the highest average price for petrol was reported in April 2012, at 142.5p per litre.
“They may be way below the 191.53p record for petrol in July 2022 but they are currently locked at a permanently and historically high level that drains consumers’ finances,” spokesperson Luke Bosdet said.
12.57pm: US stocks set for muted start after Thursday recovery
US stocks are in line for a largely flat start on Friday, after strong retail sales and unemployment data fuelled a rally on Thursday.
Futures had the Dow Jones just below the mark, alongside the S&P 500 and the Nasdaq.
Data on Thursday showed retail sales in the world's largest economy rose by 2.7% year-on-year, smashing estimates for 1.8%, while weekly jobless claims came in lower than estimates.
This prompted the three indexes to soar and finally fully recover from a sell-off earlier in the month on poor jobs data.
“Improved sentiment stemming from lesser concerns of a global recession has driven investors back into the stock market after last week’s meltdown,” Capital.com analyst Daniela Sabin Hathorn commented.
Further gains should come over the coming days as “sentiment continues to improve,” she added.
12.41pm: New BoE Monetary Policy Committee member announced
Economics professor Alan Taylor is set to join the Bank of England’s interest rate-setting committee from September 2, it has been announced.
This is as external member Jonathan Haskel’s term comes to an end, with Taylor set to hold the role for three years.
Cambridge and Harvard graduate Taylor has previously worked at Morgan Stanley (NYSE:MS), bond-trading firm PIMCO and currently lectures at Columbia University.
His appointment comes after the Bank of England opted for the first interest rate cut in 14-years earlier this month and as expectations grow for further reductions later in the year.
“Professor Alan Taylor’s substantial experience in both the financial sector and academia will bring valuable expertise to the Monetary Policy Committee,” chancellor Rachel Reeves commented.
11.48am: UK GDP forecasts upped by Bank of America
Wall Street’s Bank of America has upped its forecast for UK economic growth after a string of positive data in recent days.
Gross domestic product should increase by 1.1% this year, according to the bank, against a previous forecast for 0.8%.
Annual inflation expectations were also wound down from 2.7% to 2.6%.
This comes after official data this week showed unemployment unexpectedly dropped and inflation was softer than expected in July, alongside GDP growth of 0.6% over the second quarter.
Bank of America doubled down on expectations for the Bank of England to cut interest just once this year, though.
“While the slowdown in services inflation points to risks of an earlier cut in September, we would be cautious in interpreting the inflation decline, which to some extent could be attributed to volatile components,” economist Ruben Segura-Cayuela said.
“We think that the Bank of England would need more evidence to see whether the decline in domestic inflation is sustained.”
Money markets are currently pricing in two further cuts to base interest this year, following an initial reduction from 5.25% to 5.00% by the Bank of England earlier this month.
11.30am: Revolut valued at $45bn after staff share sale
Revolut has fetched a US$45 billion (£35 billion) valuation following a share sale to staff, firming up its spot as one of Europe’s most valuable start-ups.
The fintech firm highlighted the valuation on Friday as it announced a secondary share placement to both technology investors and staff.
Based on the sale, Revolut’s valuation is higher than NatWest Group PLC (LSE:NWG) and Barclays PLC (LSE:BARC)’s market capitalisations of £29 billion and £33.5 billion respectively.
Revolut had 45 million customers as of 2024, with the company adding this was on course to surpass 50 million by the end of this year.
Revenue has increased more than 80% so far this year, the firm said, from US$2.2 billion in 2024, with Revolut securing a long sought-after banking licence in the UK last month.
“[This was] an important step in the company’s continued expansion both in the UK and globally,” Revolut said, as speculation builds over a potential stock market listing in London or the US.
11.13am: Train drivers from LNER to strike for three months
Drivers from LNER, which operates between London and Edinburgh, are to go on strike every weekend between late August and early November.
This comes after a breakdown in industrial relations, according to union Aslef, which accused the company of breaking agreements and bullying.
“The continued failure of the company to resolve long-standing industrial relations issues has forced us into this position, Aslef general secretary Mick Whelan said.
“The company has brutally, and repeatedly, broken diagramming and roster agreements, failed to adhere to the agreed bargaining machinery, and totally acted in bad faith.”
Drivers from the company will walk out on Saturdays between August 31 and November 9, alongside Sundays from September 1 to November 10.
This comes after a separate dispute over pay looked to be nearing an end this week following over two years of strikes as drivers were offered a 14% rise over three years.
“When we make an agreement, we stick to it. This company doesn’t,” Whelan added, “we are not prepared to put up with their boorish behaviour and bullying tactics”.
10.57am: PwC fined £15 million by UK financial watchdog
PwC has been fined £15 million by the Financial Conduct Authority (FCA) after failing to tell the regulator about suspected fraudulent activity at London Capital & Finance (LCF).
This makes it the first auditor to be fined by Britain’s financial watchdog, with the FCA noting PwC had encountered significant issues when inspecting the books at LCF in 2016.
LCF collapsed in 2019, seeing thousands of savers’ investments wiped out after so-called “mini-bonds” promising 8% returns saw funds poured into highly-speculative projects.
These included property developments and oil exploration off the Faroe Islands, with funds also going to bond marketeers’ commissions and a new helicopter for an LCF subsidiary.
Some £236 million was spent on such bonds by over 11,000 investors.
“LCF’s actions, and PwC’s own work on the audit, led PwC to suspect that LCF might be involved in fraudulent activity,” the FCA said on Friday.
“PwC was duty bound to report those suspicions to the FCA as soon as possible, but they failed to do so.”
10.03am: Cost of living still on Brits’ minds - ONS
Brits still class the cost of living as one of the biggest issues facing the country today, an ONS poll has revealed.
Some 88% of respondents classed the cost of living as among the most important issues in Great Britain currently, according to the ONS, behind only the NHS.
The economy, housing, crime and climate change were also highlighted as concerns.
Some 45% of those surveys said their living costs had climbed over the past month, while 54% reported no change.
This comes after rampant inflation in recent years, which, despite subsiding to the Bank of England’s 2% target previously, ticked up 2.2% in July.
National Institute of Economic and Social Research analysts noted earlier this week that wages had improved by 1.6% in real terms over the second quarter, meaning people should “see a continued improvement in their standard of living” in coming months.
9.16am: CMA opts out of in-depth baby formula probe
Britain’s competition watchdog will not pursue a probe into the infant formula and follow-on milk market, despite identifying a range of concerns.
According to the Competition and Markets Authority, the combination of regulation, manufacturer behaviour, and customer needs has led to poor market outcomes.
The CMA, which started a market study in November, has decided to address the issues through quick recommendations rather than a more in-depth investigation... Read more
9.01am: Dr Martens slips as UK clothing and footwear sales drop
Dr Martens PLC (LSE:DOCS) was the FTSE 250’s biggest loser on Friday morning, after UK retail data showed sales of clothing and footwear declined in July.
According to the ONS, sales across UK clothing and footwear stores fell 0.6% during the month, as wider retail volumes increased.
Online clothing and footwear sales also dropped, by 0.1%, marking the only category to see a decline.
Boot maker Dr Marten’s sat as the FTSE 250’s biggest faller on the back of the data, dipping 4.3%, as the wider index fell by 19 points to 21,074.
8.38am: Retail sales boost not 'broad-based' enough - analyst
Though retail sales ticked up in July, a lack of growth across different categories has prompted analysts to play down the figures.
ONS data on Friday showed sales climbed by 0.5% in July, against June’s 0.9% decline.
However, this is as department store and sports retail sales largely dragged up the figures, with motor fuel, household and textile goods volumes falling.
“The rebound in sales volumes wasn’t particularly broad-based, with sales rising in three of the seven main sub-sectors,” Capital Economics economist Alex Kerr commented.
He added that while the Euros and Olympics aided sales of sports goods, these “didn’t appear to bolster food sales volumes by much as they were unchanged in July”.
“Ultimately, while it is good news that the retail sector has returned to growth at the start of the third quarter, it is perhaps not as good as the 0.5% rise suggests,” he said.
8.25am: FTSE 100 falls early on
The FTSE 100 appeared off the mark to rack up its third successive daily gain on Friday.
London’s blue chips opened 14 points lower at 8,333, as data showing an uptick in retail sales last month failed to buoy stocks.
Sports Direct owner Frasers Group PLC (LSE:FRAS) led risers early on following the data, climbing just under 2%.
Housebuilders Persimmon PLC (LSE:PSN) and Barratt Developments PLC (LSE:BDEV) were among those weighing on the FTSE 100 though, after warnings emerged that government housing targets may prove challenging to meet.
8.18am: Government housing targets in doubt if focus placed on new towns - analysts
Government targets to build 1.5 million homes over the next five years may not be met if focus is placed on building new towns entirely, analysts have warned
Thinktank Centre for Cities told the Guardian that significantly higher numbers of new towns would have to be built in England than ever before to meet the target.
This comes after deputy prime minister Angela Rayner unveiled plans for the “largest housebuilding programme since the postwar period” last month.
This would be similar to postwar projects which saw entirely new urban centres created, with a taskforce having been set up to find suitable spots.
However, Centre for Cities warned that far fewer homes were typically built by private companies in newly designed towns historically, with focus remaining on areas of high demand.
Some 307,000 new homes would have to be built under the plan, against last year's 189,000, mirroring growth last seen in 1977... Read more
7.49am: UK looking ‘attractive’ for investors - analyst
A run of positive macroeconomic data this week points to an improving picture for the UK economy and its prospects among international investors, an analyst has said.
Data this week has shown stronger retail sales last month, a soft inflation reading and economic growth over the second quarter.
Premier Miton Investors chief investment officer Neil Birrell hailed the run of solid data, noting the figures all painted an improving picture for the UK.
“There is little doubt that the UK economy is moving along nicely with virtually all indicators pointing in the right direction,” he commented on Friday.
“The stability of the economy must be making the UK look like an attractive place for international investors.”
7.29am: Retail sales tick up as Euros, Olympics fuel sports purchases
Retail sales volumes climbed as expected by 0.5% in July, following a 0.9% drop a month earlier, the Office for National Statistics reported on Friday.
This was fuelled by a rise in shopping at department stores and on sports equipment as the Euros football tournament and Olympics in Paris took place.
Over the year to July, volumes were up by 1.4%, with the increase at department and sports stores offsetting declines in motor fuel sales, alongside at household and textile goods retailers.
7.18am: FTSE 100 set for positive start
Futures had the FTSE 100 moving higher on Friday morning, following successive gains on Wednesday and Thursday.
Gross domestic product data showing the UK economy expanded by 0.6% over the second quarter, following a 0.7% gain previously, aided stocks higher on Thursday, while better-than-expected retail sales data from the US also offered a boost.
Asian markets largely ticked up overnight, with Japan’s Nikkei 225 adding 3.7% and India’s Nifty Fifty also climbing, but markets in China moving lower.
The UK’s own retail sales figures come into focus on Friday. According to the ONS, these climbed 0.5% over the course of July, after poor weather led to a 0.9% drop in June.