- FTSE 100 down 37 points
- Direct Line accepts Aviva bid
- House prices hit new high
3.56pm: FTSE 100 heads towards weekend lower
London’s blue chip index came under pressure on Friday and headed into late trading down 37 points at 8,311.
Over the week, the index looked set for a gain, having risen 0.3% since Monday.
A lack of any major movers saw Severn Trent PLC (LSE:SVT) and United Utilities Group PLC (LSE:UU.) top Friday’s fallers after both receiving downgrades by Jefferies analysts.
Both were bumped from ‘buy’ to ‘hold’ ratings ahead of final proposals from regulator Ofwat this month on price controls and investment requirements for the coming years.
Frasers Group PLC (LSE:FRAS) also sat among the losers as investors appeared unimpressed with a bid to acquire Norwegian sporting goods retailer XXL.
Heavyweights Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) fell too, in line with a further drop in oil prices.
B&M European Value Retail SA (LSE:BME) led risers in the meantime, up 2.4%, alongside JD Sports Fashion PLC (LSE:JD.).
Housebuilders Barratt Redrow PLC (LSE:BTRW) and Vistry Group PLC (LSE:VTY), alongside property portal Rightmove PLC (LSE:RMV), also edged higher after Halifax reported house prices hit a record in November earlier in the day.
3.29pm: Shell, BP slip as oil approaches $70 a barrel
Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) both reversed on gains on Friday afternoon in line with a further decline for oil prices.
Benchmark Brent crude fell to US$70.92 a barrel come the afternoon, marking a 1.8% drop for the day.
Brent had traded as high as the US$74 mark midweek, but fears of a supply glut in 2025 appear to have persisted despite the OPEC+ cartel’s latest decision to extend output cuts.
"Crude oil’s outlook remains tied to evolving supply-demand dynamics," City Index analyst Fawad Razaqzada commented.
"Elevated interest rates, a strong US dollar, geopolitical tensions and struggling Chinese and Eurozone economies continue to weigh on demand.
"Meanwhile, rising non-OPEC production, including record US output, keeps supply pressures high."
BP dropped 1.0% on Friday, while Shell fell 0.9%, leaving the heavyweights among those weighing on the FTSE 100, which slipped 30 points to 8,318.
3.14pm: Red weather warning prompts caution over insurance policies
A rare red weather warning has been issued for some areas in the UK this weekend as Storm Darragh threatens to bring 90-mile-an-hour winds.
Coastal areas of Wales and the South West have been hit with the “danger to life” warning, which will run over the course of Saturday morning.
Amber warnings have been issued to surrounding regions by the Met Office, with yellow cautions stretching across vast expanses of the UK.
Ahead of the storm’s arrival, Go.Compare spokesperson Tom Banks warned over driving in the worst-hit areas.
“We would always recommend to avoid using in the car, unless absolutely necessary,” he said.
Banks noted car insurance policies would not be invalidated but that “exceptions” may well be made.
“Your car insurance will cover you as normal but if your insurer thinks you were driving irresponsibly or recklessly during a red weather warning, and you had an accident, it might not pay out your claim,” he added.
“For example, if you drive in an area that has been closed by the police because of flooding and your car got damaged, your claim could be refused.”
2.43pm: US stocks open higher as rate cut hopes grow
Wall Street was in a positive mood after non-farm payroll figures showed the addition of 127,000 jobs across the US economy in November on Friday.
Both the Nasdaq and S&P 500 opened 0.3% higher, while the Dow Jones ticked up 0.2%.
Markets had been braced for the non-farm payroll figures, which exceeded expectations, as the debate around whether the Federal Reserve will cut interest this month went on.
Futures markets were pricing in an 89% chance of a December rate cut in the wake of the data, compared to 68% beforehand.
“A strong November non-farm payrolls at 227,000 included some reversals from October and was further offset by a tick up in the unemployment rate to 4.24%,” Janus Henderson Investors’ Adam Hetts commented.
“This big rebound from a distorted October read is actually quite balanced, should relieve some economic concerns, and keep the 18 December rate cut expectations on track.
“Zooming out a bit from today, the trend of a slowly slowing labour market continues to sit in the sweet spot as far as rate cuts are concerned.”
1.56pm: Pound jumps against dollar on US job figures
Sterling racked up a gain against the dollar in the wake of figures showing the addition of 227,000 jobs to the US economy last month.
The pound jumped to $1.2806 for a 0.36% rise over the day versus the greenback after news of the expectation-beating figure.
Charles Schwab UK managing director Richard Flynn noted the data added to a string of figures showing resilience within the US economy and supported the view that the Federal Reserve could hold interest at its next meeting this month.
1.45pm: Federal Reserve could hold interest after jobs beat - analyst
Expectation-beating non-farm payroll figures for November could leave the Federal Reserve inclined to hold interest rates later this month.
Some 227,000 jobs were added to the US economy in November, against an upwardly revised 36,000 in October and against expectations for 200,000.
Charles Schwab UK managing director Richard Flynn noted the figures added to “the recent spate of resilient economic data” in the US.
“The economy has reached a point where it is growing healthily, with fairly full employment, and consistent wage growth,” he said.
“We are seeing very little evidence that there are issues needing to be addressed.
“Hope to preserve this period of calm may encourage the Fed to lean towards a ‘hold’ decision at its next meeting, particularly amidst uncertainty around how the upcoming change in government will impact the economy.”
1.35pm: US non-farm payrolls ahead of expectations
The US economy added 227,000 jobs over the course of November, non-farm payroll figures showed on Friday.
Expectations had been for the addition of 200,000 jobs, with the surge marking a bounceback after October’s upwardly revised reading of 36,000.
Unemployment ticked up from 4.1% to 4.2% as expected in the meantime, the Bureau of Labour Statistics reported.
Futures showed Wall Street little moved on the news, with the Nasdaq, S&P 500 and Dow Jones all seen in the red.
1.22pm: BoE official warns high interest hurting economy
Bank of England Monetary Policy Committee member Swati Dhingra has cautioned that high interest rates are taking their toll on the economy.
Dhingra, who has been consistently dovish since joining the rate-setting committee in September 2022, warned economic growth would be muted unless the bank opted to cut interest further from 4.75% at its next meeting this month.
“We’re really paying the price,” she told Bloomberg TV.
“Consumption has been very weak [and] businesses have been telling us for months that they’ve reduced investment.
“So it’s a combination of all of those factors, the weak consumption, the weak investment, and possible damage to supply capacity is what I would worry about.
“That’s why I think we should be easing policy more.”
Dhingra signalled she would vote in favour of cutting rates at the bank’s next meeting on December 19, after November saw the committee vote eight to one for a 25 basis point reduction.
12.46pm: Frasers leads FTSE 100 fallers
Acquisition-hungry Sports Direct owner Frasers Group PLC (LSE:FRAS)’s bid to acquire all outstanding shares in Norwegian sporting goods retailer XXL has not gone down well with some factinons of Frasers’ investor base.
Frasers is the biggest faller among the FTSE 100 set, dipping 2.6% a the time of writing.
The proposed acquisition, if completed, values XXL at approximately 246.36 million Norwegian kroner (£17.5 million), offering a fairly underwhelming 25% premium over the company’s closing share price yesterday.
The bid is “classic Frasers behaviour”, said Dan Coatsworth, investment analyst at AJ Bell.
“The approach is similar to Mulberry in that Frasers has fiercely criticised XXL’s fundraising efforts, this time implying the Norwegian retailer is making a bad decision with a reworked rights issue.
“A proposed 25% bid premium isn’t generous yet XXL is on its knees and Frasers is factoring in high risks associated with the company,” he added.
Frasers shares are currently swapping for 645p.
The broader FTSE 100 set is currently down four points to 8,345.
12.09am: Mortgage rates fall every day of week as NatWest cuts
Mortgage rates fell every day over the course of the week as NatWest Group PLC (LSE:NWG) was among major lenders to scale back prices.
According to Moneyfacts, interest on the average two-year fixed mortgage rate fell below the 5.5% mark once again, having sat at 5.4% in early November.
Come Friday, interest on the typical two-year fix was at 5.4894%, against 5.5197% a week ago.
NatWest on Thursday announced cuts of up to 0.39% across its two and five-year fixed rate mortgage products.
Coventry Building Society then said on Friday that rates on all of its fixed rate mortgages would be reduced, including cuts of as much as 0.26% on residential deals.
“This week has been mostly positive,” Orchard Financial Advisers managing director Ben Perks commented.
“For the first time since the Budget, we’ve seen more reductions than increases.
“It definitely feels like the winds are changing and hopefully they’ll continue to do so.”
11.27am: Nasdaq to fall as caution seen on Wall Street ahead of non-farm payrolls
Wall Street appeared in a cautious mood ahead of Friday’s all-important non-farm payroll figures.
Futures had the Nasdaq, S&P 500 and Dow Jones all down by 0.1% ahead of the opening bell.
Following the addition of just 12,000 jobs across the US economy through October, attention has been drawn to Friday’s figures for November.
“Markets are hoping for a balanced outcome,” Tickmill Group partner Patrick Munnelly commented.
“Not too strong to undermine the likelihood of a rate cut, nor too weak to spark concerns about economic health.”
Expectations are for 200,000 jobs to have been added to the US economy over the month, with unemployment anticipated to come in at 4.2%, against 4.1% previously.
11.15am: Eurozone economy grows faster in third quarter
Eurozone gross domestic product growth picked up over the third quarter, figures showed on Friday.
GDP across the euro area climbed by 0.4% in the three months to September, against 0.2% over the previous quarter, a final reading from Eurostat showed.
On an annual basis, the economy grew by 0.9%, following the second quarter’s 0.5% uptick.
Germany, the continent’s largest economy, contracted by 0.3% against a year earlier though, while French GDP climbed by 1.2% in the meantime.
11.10am: Direct Line shares up 7%
Direct Line Insurance Group PLC (LSE:DLG) shares remain well bid following an agreement to be taken over by FTSE 100 insurance giant Aviva PLC (LSE:AV.).
The proposed combination includes 129.7p in cash and the rest in new Aviva shares, plus a 5p dividend payment subject to board approval.
Aviva’s offer represents a 73.3% premium to Direct Line’s closing share price on November 27, when Aviva approached the group with its first, rejected takeover proposal.
Direct Line shares proceeded to rally 7% to 252.2p at the time of writing.
Dan Coatsworth, investment analyst at AJ Bell, suggested that shareholders could push for a higher valuation, although “judging by recent City chatter, 275p should be enough to keep everyone happy and Aviva might be able to wrap this up fairly quickly”.
“Aviva has performed every step of the takeover dance flawlessly. It’s spotted a rival going through a weak phase and thrown its hat into the ring as an interested buyer with a low-ball price to test the water.
“It will have almost certainly known the first bid would have been rejected and it’s now come back with a higher and fairer offer, and Direct Line’s board has indicated it’s good enough.
10.41am: Morning commute chaos
The morning commute was thrown into disarray this morning following a “nationwide fault” in National Rail’s communication system.
Train drivers flagged a fault with the radio system, causing cancellations and delays as a manual solution was cobbled together.
“There is a nationwide fault with the communication system used between train drivers and signallers. As a result, some services across the National Rail network may be subject to delays this morning,” National Rail said in a statement.
“This issue is mainly affecting trains registering to enter their route for the start of service and deregistering to end their service. Once trains are underway, they are able to run normally at normal speeds.
Short-notice cancellations and alterations are expected due to the knock-on effect on the timetables. Please check before you travel, allow extra time for your journey and monitor live departure boards.”
The Northern, Elizabeth and South Western Railway lines are most affected, said Northern Rail.
10.14am: Berkeley shares down
Shares in FTSE 100-listed hosuebuilder Berkeley Group Holdings PLC (LSE:BKG) are off more than 1.5% today following an interim trading update.
In a statement, Berkeley disclosed that transaction volumes in the current 2025 financial year “remain around a third lower” than two years prior.
Berkeley acknowledged that “whilst we have seen a slight uptick in recent weeks, a meaningful recovery will require a sustained improvement in consumer confidence and stability in the wider macroeconomic environment”.
Berkeley saw a high-single-digit yearly decrease in pre-tax profit to £275.1 million and a 5.8% dip on basic earnings per share in the first half.
Shares were trading at 4,096p each at the time of writing.
9.58am: Bitcoin falls from all-time high
Bitcoin (BTC) has fallen sharply from the fresh all-time high achieved by the world’s largest cryptocurrency on Thursday.
Bitcoin topped out at $104,000 late on Thursday evening before crashing more than 13% lower in the space of five hours.
After bottoming out at $90,500, the BTC/USD pair has since settled at around $98,300, where it was trading on the spot markets at the time of writing.
On Thursday, Trump announced the appointment of former PayPal chief operating officer David Sacks as his ‘White House A.I. & Crypto Czar’.
An ardent Trump supporter who reportedly raised millions for the president-elect’s campaign, Sacks “will guide policy for the Administration in Artificial Intelligence and Cryptocurrency, two areas critical to the future of American competitiveness”, Trump wrote on Truth Social.
9.27am: Stamp duty deadline fuelling housing demand - analysts
Demand for housing is being fuelled by hurried buying ahead of a drop in stamp duty thresholds next April, analysts have pointed out.
Halifax on Friday reported a 4.8% jump in average house prices to a record £298,083 in the year to November, which marked the fastest growth since the same month in 2022.
Analysts pointed to the looming deadline for a reversal in temporarily lifted stamp duty thresholds as a key reason behind surging demand.
“Hesitation has turned to hurry in some parts of the market, especially among first-time buyers racing to complete their purchases before the stamp duty thresholds change,” Garrington Property Finders chief executive Jonathan Hopper commented.
“This sense of urgency is prompting some buyers to view in haste and offer high in order to secure a home now and complete their purchase before the tax changes take effect.”
The stamp duty threshold is due to fall from £250,000 to £125,000 come April 1 following confirmation in the Budget.
First time buyers will pay the tax on properties worth over £300,000 in the meantime, against £425,000 previously.
“It means property prices are likely to rise in the run-up to the deadline as buyers and sellers race to beat the tax hike,” Bestinvest analyst Alice Haine added.
“Beyond the start of April, the market is likely to be more muted as buyers choose to purchase cheaper homes to reduce their tax bill or negotiate more aggressively to afford their desired property.”
9.06am: CBI scales back economic growth forecast after Budget
The Confederation of British Industry has cut forecasts for UK economic growth and warned of investment and hiring setbacks in the wake of October’s Budget.
Economic growth of 0.9% was predicted for 2024, against its previous forecast for 1.0%, while its expectation for next year was dialled down from 1.9% to 1.6%.
“Measures in the autumn Budget will increase firms’ costs at a time when their profit margins have already been under pressure,” chief economist Louise Hellem said.
“Many businesses have told us that these measures will likely push up prices and weigh on their hiring and investment plans going forward.”
Inflation was forecast to average 2.6% through 2025 and 2.5% in 2026, as the likes of hospitality and retail price growth provided upward pressure.
8.48am: Quiz sheds 50% after funding warning
Quiz PLC (AIM:QUIZ) spiralled 50% on Friday after the omni-channel fashion firm warned it may need further funding early next year.
Shares dropped 50.7% to 2.64p in the wake of the update, where Quiz pointed to a “marked decline” in both online and in-store traffic through November.
Additional funding would likely be needed in early 2025 in “the absence of a material improvement to trading during the important pre-and-post-Christmas period,” Quiz said... Read more
8.35am: Direct Line surges, leads FTSE 250 higher
Direct Line Insurance Group PLC (LSE:DLG) surged on Friday morning after accepting a takeover bid by Aviva PLC (LSE:AV.), leading the FTSE 250 higher.
Shares jumped 7.8% to 253.64p in the wake of the news that it had agreed to the 275p per share offer.
Molten Ventures PLC (LSE:GROW), Metro Bank Holdings PLC (LSE:MTRO) and Dr Martens PLC (LSE:DOCS) were also among those climbing on the FTSE 250.
Overall, the index edged one point higher, placing it as an outlier in London early on while the likes of the FTSE 100, down 12 points, fell.
8.28am: Berkeley dips as transaction volumes slump
Berkeley Group Holdings PLC (LSE:BKG) shares moved lower on Friday morning after the FTSE 100-listed housebuilder warned of a slump in transaction volumes.
Transaction volumes in the current 2025 financial year “remain around a third lower” than two years prior, it said in an interim update.
The company acknowledged that “whilst we have seen a slight uptick in recent weeks, a meaningful recovery will require a sustained improvement in consumer confidence and stability in the wider macroeconomic environment”... Read more
Shares slipped 0.4% to 4,148p.
8.20am: Thames Water last-minute bid could see break-up, listing
Thames Water has reportedly received a last-minute takeover bid which would see the UK’s largest water supplier broken up and listed on the stock exchange.
British infrastructure investor Covalis tabled an offer ahead of Thursday’s deadline for indicative bids, according to the Financial Times.
Some £1 billion would be paid upfront, before a further £4 billion was raised through sales of Thames’ assets, refinancing and a stock market listing.
Billions of pounds worth of Thames’ assets could be sold, potentially including entire regions, as new owners worked to cut its near-£19 billion debt pile and stave off cash woes.
France’s Suez had also penned a deal with Covalis to aid the break-up but would not own any shares, with the UK government set to receive a seat on Thames’ board.
Hong Kong-based Northumbrian Water owner CK Infrastructure Holdings and Castle Water, co-owned by Conservative treasurer Graham Edwards, are also reportedly in the running as potential bidders for the crisis-hit supplier.
8.05am: FTSE 100 just on the front foot
London’s blue chips racked up an ever-so-slight gain as trading got underway on Friday, climbing one point to 8,351.
Banks were among those in the green early on in the absence of any major movers, while Spirax Group PLC and Frasers Group PLC (LSE:FRAS) led fallers.
7.59am: Direct Line agrees to boosted Aviva bid
Direct Line Insurance Group PLC (LSE:DLG) has preliminary agreed to an enlarged takeover bid by Aviva PLC (LSE:AV.).
The 275p per share offer represents a 73.3% premium to its closing price on November 27 and includes 129.7p in cash and the rest in new Aviva shares, plus a 5p dividend payment subject to board approval.
Direct Line rejected the initial offer, with the motor and home insurer calling it a "highly opportunistic” bid that “substantially undervalued the company"... Read more
7.56am: Quiz warns further funding may be needed
Quiz PLC (AIM:QUIZ) has warned it may need further funding by early next year after a drop in footfall and online traffic hit sales in recent months.
Both online and in-store traffic suffered a “marked decline” during the important trading month of November, the omni-channel fashion firm said on Friday.
Revenue slipped by £1.5 million to £24.9 million in its latest quarter as a result, and was down 8.6% over the eight months to November at £52.2 million.
This was behind management’s expectations, with Quiz pointing to uncertainty around both the impact from November’s Black Friday and October’s Budget on trading.
“In the absence of either a material improvement to trading during the important pre-and-post-Christmas period [...] the board anticipates that additional funding will be required by the group in the first quarter of 2025,” Quiz said.
7.25am: House prices new high after strongest growth in two years
House prices have hit a new record high after November saw the strongest growth in two years.
According to Halifax, the typical house now costs £298,083, after prices increased by 4.8% over the year to November for the largest uptick since the same month in 2022.
Month on month, prices ticked up by 1.3%, marking the fifth consecutive positive reading.
“Latest figures continue to show improving levels of demand for mortgages, as an easing in mortgage rates boost buyer confidence,” Halifax mortgages head Amanda Bryden said.
Wider economic issues and pressed affordability threatened this, she warned, though positive employment data and further declines in mortgage rates should buoy demand.
“This should underpin further house price growth, albeit at a modest pace as borrowing costs remain above the average of a few years ago,” Bryden added.
7.12am: Index to reverse on gains
Futures had the FTSE 100 largely reversing on Thursday’s 13-point gain ahead of trading, with London’s blue-chip index seen 8 points lower at 8,355.
Overnight, Asian markets were mixed, with Chinese stocks climbing but Japan’s Nikkei among those to fall.
Attention over the week has been on Friday and its US non-farm payrolls report, due later in the day.
Back in London, news house prices had climbed further to a record high through November was the early focus.
5.00am: Friday's schedule
House price data from the UK and US non-farm payroll figures are due on Friday, while Berkeley will be among those to report.
Expectations are for another uptick in house prices through November after Zoopla reported growth of 1.5% in the year to October.
Non-farm payrolls will be in focus later, with markets predicting the addition of 218,000 jobs across the US economy in November.
Just 12,000 roles were added through October, while unemployment is anticipated to have remained unchanged at 4.1%.
Announcements due:
Finals: Schroder European Real Estate Investment Trust PLC
Interims: Berkeley Group Holdings PLC (LSE:BKG)
AGMs: Amedeo Air Four Plus Ltd, Associated British Foods PLC, Bluefield Solar Income Fund Ltd, Hargreaves Lansdown PLC, James Halstead PLC, Steppe Cement Ltd
Economic announcements: Halifax House Price Index (UK), Non-Farm Payrolls (US), Unemployment Rate (US), Consumer Credit (US), GDP (EU)