- FTSE 100 up 10 points
- Wetherspoons' sales pass £2bn
- US economy adds 254,000 jobs in September
4.06pm: FTSE 100 moves higher late on
Banks led London’s blue chips higher late on in the day, as the FTSE 100 looked to be heading into the weekend up 10 points at 8,292.
NatWest Group PLC (LSE:NWG) headed up the day’s risers come Friday afternoon with a 4.1% gain, while Standard Chartered PLC (LSE:STAN), Barclays PLC (LSE:BARC) and Lloyds Banking Group PLC (LSE:LLOY) also sat among winners.
A resurgence in oil prices buoyed heavyweights Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) in the meantime.
Growing fears over escalations in the Middle East sent Brent crude ever-closer to the US$80 a barrel mark, with the benchmark hitting US$78 come Friday afternoon.
Among losers, power firm SSE PLC (LSE:SSE) led the way with a 2.9% decline after being stripped of a ‘buy’ rating by Jefferies analysts.
Across the Atlantic, US stocks continued to benefit after non-farm payroll figures for last month outdid expectations, with the Nasdaq up 0.8%.
These had shown the US economy added 254,000 jobs last month, against expectations for 147,000, putting to rest fears of looming recession, but in turn dashing hopes of further hefty rate cuts.
3.39pm: Gold holds at $2,650 as slashed US rate cut hopes clash with Middle East fears
Gold looked on course to hold onto gains for the week as fears over escalations in the Middle East persisted, despite US rate cut expectations being cut.
As of Friday, the yellow metal sat at US$2,650, leaving it slightly below but little changed since Monday.
Slashed expectations for another 50 basis point rate cut in the US on Friday, after a strong set of non-farm payroll data saw more jobs added in the US economy than expected last month, had weighed on gold prices.
However, fears of a strike by Israel against Iran after the latter’s missile attack earlier in the week appeared to curb the chance of any major decline.
This comes after gold peaked at above US$2,680 in late September as expectations of further aggressive rate cuts by the Fed coincided with investors looking to safe havens on the back of the latest tensions in the Middle East.
DHF Capital chief executive Bas Kooijman noted a “milder rhythm” of Fed rate cuts may now leave gold with “less support”.
However, “geopolitical” factors remain, Kooijman added, alongside the prospect of further central bank buying.
3.13pm: Pound back on course for worst week in a year
Sterling gave up gains against the dollar on Friday, as stronger-than-expected US jobs data saw expectations of further steep rate cuts by the Federal Reserve slashed.
By the afternoon, the pound was trading at US$1.3100, having dropped by 0.18% against the greenback.
This left the pound on course for a 2.3% drop since Monday, in what would be its worst weekly performance compared to the dollar since February 2023.
Comments from Bank of England chief economist Huw Pill urging caution over rate cuts had appeared to buoy the pound earlier on, after governor Andrew Bailey signalled policymakers could become “more aggressive” on Thursday.
2.39pm: Wall Street surges at open
Wall Street enjoyed a strong start to Friday after job market data came in far better than expected earlier on.
The Nasdaq jumped 1.2% at the open, while the S&P 500 added 0.8% and Dow Jones ticked up by 0.6%.
Non-farm payroll figures appeared to calm any nerves over a recession in the world’s largest economy, as they showed 254,000 jobs were added last month against expectations for 147,000.
Unemployment also scaled back to 4.1%, with markets having been expecting the rate to remain at 4.2%.
2.26pm: US rate cut expectations wound down as job market fears ease
Expectations for another hefty cut to base interest by the Federal Reserve have been wound down after the US economy added more jobs than expected in September.
Non-farm payroll figures from the US Bureau of Labor Statistics showed 254,000 jobs were added across the economy last month, against expectations for 147,000.
Unemployment, which was expected to remain at 4.2%, also beat expectations, having dipped to 4.1%.
Expectations for another 50 basis point cut to base interest in November, following September’s reduction, were swiftly cut as concerns over an impending recession were further removed.
Money markets were pricing in a 6% chance of such a cut at the Fed’s next meeting on Friday following the data, down from 54% just a week ago.
“Looking at the labour market strength evident in September’s employment report, the real debate at the Fed should be about whether to loosen monetary policy at all,” Capital Economics’ Paul Ashworth commented.
“Any hopes of a 50 basis point cut are long gone.
“We continue to expect the Fed to take a more measured approach - cutting rates by 25 basis points at each meeting until the policy rate is down to between 3% and 3.25%.”
2.10pm: US economy adds far more jobs than expected
US non-farm payroll data on Friday showed the US economy added far more jobs than expected last month.
Some 254,000 jobs were added in September, according to the US Bureau of Labor Statistics, against expectations for 147,000.
Unemployment, which was anticipated to remain at 4.2%, also beat expectations, coming in at 4.1% over the month.
The figures are set to reassure over the prospect of a looming recession in the US, after markets previously mulled over whether the Federal Reserve had left it too late to cut interest rates.
1.55pm: Stocks recover
The FTSE 100 has recovered from intraday lows of 8,234 to trade flat at 8,279 at the time of writing.
It comes as the US markets look set for a bullish start to Friday.
The Nasdaq 100 is currently trading 1.3% higher in the pre market, while the broader S&P 500 is up 0.9%.
1.38pm: Shein preparing investor roadshow to gauge London IPO interest, reports Reuters
Chinese fast-fashion giant Shein is preparing to hold an investor roadshow in preparation for a potential initial public offering in London, according to sources cited by Reuters.
Shein has reportedly been meeting with advisers to discuss its listing plans, although no final decisions have been made regarding the timing or size of the IPO.
The company is expected to use the roadshows to gauge investor interest and provide more details about its financials.
Shein is reportedly seeking a $64 billion valuation in a public listing, which would make it among the largest London IPOs of all time.
It comes amid a torrid time for the London Stock Exchange, with few to no blockbuster IPOs in recent years and numerous high-profile exits.
But the prospect of Shein floating in London has proved highly controversial because of the group’s reported links to forced labour in its supply line
The retailer, known for its strong online presence, was valued at $66 billion earlier this year in a funding round. While Shein has not officially commented on the potential listing, insiders suggest that preparations are well underway.
In June, UK charity Stop Uyghur Genocide, with support from human rights lawfirm Leigh Day, called on the Financial Conduct Authority to block any listing of Shein shares on the London capital markets.
Shein disclosed multiple instances of child labour in its supply line in August.
1.14pm: Barratt's £2.5bn takeover of Redrow gets final green light
Barratt Developments PLC (LSE:BDEV)’s £2.5 billion tie-up with Redrow PLC has been given the final go-ahead by regulators in the UK.
Britain’s Competition and Markets Authority (CMA) confirmed on Friday that a phase two investigation of the merger would not be launched and the deal could finally go ahead.
An initial enforcement order had been placed on the proposal, delaying full integration of the two companies as the CMA consulted on undertakings to quell competition concerns.
This came after the CMA said the duo only had a high combined market share in one area of the country, in Whitchurch, Shropshire.
“Today is a significant milestone for Barratt Redrow, as we come together as one organisation,” Barratt chief executive David Thomas said... Read more
12.58pm: Royal Mail delivers 16,000 jobs for Christmas
Royal Mail has unveiled plans to recruit 16,000 temporary workers as it braces for the busier Christmas period.
New roles will be added at 37 mail centres, alongside two parcel and five seasonal sorting hubs, alongside stretching to delivery and collection offices.
International Distributions Services PLC (LSE:IDS)-owned Royal Mail is anticipating 1.7 million packages will pass through each of the parcel hubs in Daventry and Warrington daily over the festive period.
Additional space equating to the size of 20 football pitches has also been created across the five seasonal sites to cope with the uptick in demand.
The new roles are set to be added from late October and run until January, also covering busier shopping events such as Black Friday and Cyber Monday.
“It's our busiest time of year and we plan all year round to help ensure we deliver the best possible service for UK consumers and businesses,” chief operating officer Alistair Cochrane commented.
“We are continuing to make a substantial commitment in additional resources including the recruitment of thousands of temporary workers to handle the festive mailbag and the growing market of online Christmas shopping.”
12.12pm: Wall Street seen higher ahead of jobs data-heavy Friday
Wall Street was in line for a positive start on Friday ahead of a heavy day of job market data, inducing non-farm payroll and unemployment figures.
Futures had the Nasdaq adding 0.3% at the open, while the Dow Jones and S&P 500 also looked to gain.
Both unemployment and non-farm payroll figures on Friday come as traders eye further reassurance over the health of the economy while the Federal Reserve looks to bring down interest rates.
“Traders [are] looking out for a degree of stability after recent speculation that a surge in unemployment could form the basis of an impending US recession,” Scope Markets analyst Joshua Mahony commented.
He noted expectations were for unemployment to have remained at 4.2% last month, with the non-farm payroll figure showing 147,000 jobs being added to the economy.
Worse-than-expected non-farm payroll figures in August had sent stock markets globally into freefall as fears of a US recession built, with data more recently appearing to have calmed nerves.
12.00pm: VW warns EU China EV tariffs ‘wrong approach’
Volkswagen AG has warned the European Union’s move to impose tariffs of up to 35.3% on Chinese electric vehicles is the “wrong approach”.
Members had reportedly been split in a vote over introducing the new rules on Friday, with Germany among those said to have rejected new tariffs.
This left the European Commission with the final say, with its approval set to see these introduced from November following concerns subsidies from Beijing have allowed Chinese manufacturers to undercut carmakers on the continent.
“We stand by our position that the planned tariffs are the wrong approach and would not improve the competitiveness of the European automotive industry,” the German carmaker said.
It urged the European Union to hold more talks with Beijing, adding these could “prevent any countervailing duties and thus a trade conflict”.
11.45am: FTSE 100 in cautious mood after BoE chief comments
London’s blue chips traded lower throughout Friday morning, as cautious comments from the Bank of England’s chief economist appeared to weigh on sentiment.
The FTSE 100 was down 38 points by late morning, with JD Sports Fashion PLC (LSE:JD.) leading stocks lower on a 2.5% decline.
RELX PLC (LSE:REL), Rolls-Royce Holdings PLC (LSE:RR.) and AstraZeneca PLC (LSE:AZN) were also among those in the red, as gains from Schroders PLC (LSE:SDR), easyJet PLC and NetWest Group PLC failed to buoy the index.
BoE chief economist Huw Pill had struck a cautious tone earlier in the day when discussing future rate cuts, contradicting comments from governor Andrew Bailey on Thursday... Read more
“While markets remain optimistic that we will see cuts in both November and December, Pill’s preference to remain restrictive in a bid to drive down underlying inflation does highlight the lack of a central dovish narrative,” Scope Markets analyst Joshua Mahony said.
Pill’s comments helped to lift the pound from its three-year low against the dollar though, coinciding with news construction sector activity grew at the fastest pace in two-and-a-half years last month... Read more
Sterling climbed 0.36% to US$1.3172 on Friday, recouping around a third of that lost during Thursday’s selloff.
11.30am: European Commission brings in Chinese EV tariffs
Tariffs of up to 35.3% will be imposed on Chinese electric vehicles entering the European Union, despite members being split in a vote on the move on Friday.
The European Commission said on Friday that the new rules would be introduced after “necessary support” was obtained during the vote.
Reports had emerged earlier in the day that a split vote among member states meant it would ultimately be up to the commission to decide on the rules.
France and The Netherlands were said to be among 10 countries to vote in favour of the rules, as 12 abstained and five, including Germany, rejected the move, Euronews reported.
10.53am: EU vote on Chinese EV tariffs inconclusive
European Union members reportedly failed to decisively vote on new trade rules which would see tariffs of up to 35.3% slapped on imported electric vehicles from China.
France and The Netherlands were said to be among 10 countries to vote in favour of the rules, as 12 abstained and five, including Germany, rejected the move, Euronews reported.
This meant it was up to the European Commission in Brussels to ultimately decide whether to approve the new rules, which would come into force in November.
These proposals have come in response to fears that Chinese manufacturers are able to undercut European firms due to subsidies offered by Beijing.
The Commission has previously warned that inaction could see European carmakers suffer irreversible losses through attempts to compete with Chinese firms on the continent.
Some electric car makers would be hit with tariffs of up to 35.3% under the rules, on top of an existing 10% levy.
Others, which were said to have “cooperated” with the European Commission, would be charged less.
Tesla Inc (NASDAQ:TSLA) would face a 7.8% tariff as a result, while China’s BYD and Geely would be charged 17% and 18.8% respectively.
10.12am: BoE chief economist urges caution over rate cuts
Bank of England chief economist Huw Pill has urged caution towards cutting interest rates too quickly in contrast with comments from governor Andrew Bailey earlier this week.
After Bailey signalled on Thursday that the central bank could move “more aggressively” in cutting rates, Pill said on Friday that there was “ample reason for caution”.
“Further cuts in Bank Rate remain in prospect should the economic and inflation outlook evolve broadly as expected,” Pill told the Institute of Chartered Accountants for England and Wales.
However, “it will be important to guard against the risk of cutting rates either too far or too fast,” he added.
“For me, the need for such caution points to a gradual withdrawal of monetary policy restriction.”
Bailey’s comments, where he also said the bank could become “a bit more activist,” saw the pound stoop to a three-year low against the dollar as traders priced in a move away from a cautious rate-cutting cycle, after August's initial 0.25% reduction.
Pill had been among one of four Monetary Policy Committee members to vote against August's cut, which was followed by an unchanged rate after September’s meeting.
The pound regained against the dollar on Friday following the news, ticking up 0.25% to US$1.3157.
9.44am: Construction output climbs at fastest rate in two-and-a-half years
Construction output across the UK grew at the fastest rate in two-and-a-half years last month, according to S&P Global.
S&P’s construction purchasing managers index climbed from 53.6 to 57.2 in September, marking the strongest upturn since April 2022 and a seventh successive month of growth.
Robust demand for renewables saw civil engineering represent the fastest-growing sub-sector, while momentum also built across commercial construction and housing.
“A combination of lower interest rates, domestic economic stability and strong pipelines of infrastructure work have helped to boost order books in recent months,” S&P economics director Tim Moore commented.
“New project starts contributed to a moderate expansion of employment numbers and a faster rise in purchasing activity across the construction sector in September.”
However, the uptick in demand for raw materials and the pass-through of higher wages was said to have seen input costs climb at the fastest pace in 16 months.
Optimism was also seen at its lowest since April, though Moore noted this was higher than a year ago as lower borrowing costs aided expectations for a boost in house building ahead.
9.25am: Carmakers lobby government for EV support
Carmakers have urged the government to support Britain’s electric vehicle industry as sales risk missing a mandated target in its first year, despite steep price cuts from carmakers.
Carmakers are set to collectively offer £2 billion worth of discounts this year to buoy sales of electrics, Industry body the Society of Motor Manufacturers and Traders (SMMT) said Friday.
However, sales still risk missing the government’s new mandated target regardless, which requires 22% of cars sold to be electric, placing manufacturers at risk of fines.
SMMT chief executive Mike Hawes in an open letter, signed by the likes of Volkswagen, Jaguar Land Rover, Ford and BMW, called on chancellor Rachel Reeves to use October’s Autumn Budget to unveil measures to aid the market as a result... Read more
8.52am: Pound set for worst week vs dollar in year
Sterling is on course for its worst weekly performance against the dollar in over a year.
Come Friday morning, the pound had dropped to US$1.3147, following a 1.8% decline since Monday morning.
This left the pound on course for its worst week against the greenback since July 2023.
Comments from Bank of England governor Andrew Bailey on Thursday had weighed on the pound, after he pointed out policymakers could become “more aggressive” on rate cuts if inflation continued to ease.
This saw the pound stoop to a three-year low as heightened fears over further escalations in the Middle East also drove investors to safe haven assets.
8.34am: British Gas boss hails government carbon capture backing
Chris O’Shea, head of British Gas owner Centrica PLC (LSE:CNA), has hailed news the government will pour £22 billion into the UK’s carbon capture and storage sector.
Ministers firmed up the commitment overnight, which will see subsidies offered to support so-called carbon capture clusters in Merseyside and Teesside.
Plans are to ultimately fit carbon capture technology to the likes of factories and power plants in the areas, with emissions then being transported to depleted subsea oil and gas reserves.
“With some of the greatest geological storage potential of any country in the world, Britain has the natural advantages and the pipeline of projects to become a global leader in storage and CCUS,” O’Shea said.
“There is an incredible prize for the country, and our climate, in seeing the first of these projects advance.”
He highlighted Centrica’s plans to convert its Morecambe bay gas fields into the “largest single carbon storage facility in the UK,” alongside efforts to convert the Rough gas facility to store hydrogen.
“We can't wait to work with government on how we now rapidly unlock further investment in these climate-critical technologies,” he added.
Shares in Centrica ticked up 0.2% early on, while Drax Group (LSE:DRX), which is located in the eastern carbon capture cluster, gained 1.3%.
8.13am: Wetherspoons climbs as sales surpass £2bn
JD Wetherspoons ticked up 1.7% early on after reporting full-year sales climbed above £2 billion for the first time.
Like-for-like sales increased by 7.6%, the pub chain reported, while pre-tax profit soared 73.5% to £73.9 million.
Issues of perceived tax inequalities between pubs and supermarkets appeared to be a prominent theme in the results though… Read more
8.00am: Oil holds gains as Middle East escalation fears weigh
Oil was in sight of US$80 a barrel on Friday morning after holding gains overnight following a boost on fears of further escalations in the Middle East.
At US$77.51, benchmark Brent crude was up 3.5% from Thursday morning and by 8% since Monday.
Prices had not reacted too aggressively to news of Iran’s direct missile strike on Israel earlier in the week, as expectations of surplus supply ahead remained.
This was as markets continued to price in weak demand from China and growing supply from Saudi Arabia later in the year, in turn offsetting concerns related to the Middle East.
However, fresh fears surrounding a response to Iran’s strike by Israel on Thursday appeared to finally weigh on sentiment.
President Joe Biden had alluded to strikes by Israel against Iran’s oil industry.
When asked on Thursday if he would support strikes against oil facilities in the country, which is the world’s seventh largest oil producer, he replied: “We’re discussing that.”
7.31am: Government firms up £22bn carbon capture support
The government will pump just under £22 billion into Britain's carbon capture and storage sector.
Following reports of the move on Thursday, chancellor Rachel Reeves firmed up the plans overnight ahead of a visit to the northeast alongside prime minister Keir Starmer and energy secretary Ed Miliband.
This will see support offered to so-called carbon capture clusters, including the HyNet scheme at Merseyside and another in the northeast, incorporating Teesside.
Some £21.7 billion worth of government funding will be offered from 2028 for 25 years to subsidise carbon capture at the industrial sites.
Plans are for this captured carbon to then be transported to storage in depleted subsea oil and gas reserves.
BP PLC (LSE:BP.) and Equinor, which are involved in the eastern cluster, are set to be among firms to provide private investment for the plans, according to Reeves.
“This game-changing technology will bring 4,000 good jobs and billions of private investment into communities across Merseyside and Teesside,” Reeves said.
7.14am: FTSE 100 to fall
London’s blue chips were set for another muted start to the day on Friday, with futures pointing to a 3-point drop ahead of the market’s open.
This would come after Thursday’s 8-point decline, as caution hit stocks after escalations between Israel and neighbouring countries in the Middle East this week.
Asian markets fared better overnight, with Chinese stocks among those climbing.
Another quiet day in London is set to see JD Wetherspoon PLC (LSE:JDW) offer up full-year results, while non-farm payrolls will give traders more US economic data to mull over later on.