Market report

Market shrugs off slower growth | Ryanair downgrades


5.25pm: Ryanair revises guidance

Ryanair has revised its guidance for the current year to a net loss of between €250 million and €450m, compared to its previous forecast range of €100m to €200m.

Its full-year traffic forecast has been cut to just under 100m passengers from just over 100m.

The Dublib-based airline said its Christmas and New Year bookings have been hit by new travel restrictions across Europe, causing it to cut its planned January schedule capacity by 33%.

Schedules for February and March remain unchanged, pending developments in the Omicron variant.

Ryanair said it hopes to have more clarity on the impact of Omicron on intra-Europe travel restrictions in time for its third-quarter results on 31 January.

5pm: London picks up after slow start

After a sluggish start to the session London shrugged off a downgrade to GDP and the FTSE 100 ended the day up 44.25 points, a 0.6% rise, to 7341.66.

The mood was subdued after the Office for National Statistics (ONS) downgraded its estimate for economic growth (see below) but it picked up after a new study said people infected with Omicron are less likely to need hospital treatment than those who had Delta.

The market was led higher by hotel groups and by a buoyant housing sector. Whitbread, owner of Premier Inn, shared the limelight with Holiday Inn owner Intercontinental Hotels, both 2% higher.

Rolls-Royce, which makes engines for planes, soared 3.3% on hopes that travel may pick up again, although Ryanair has slashed its January schedules and more than doubled its annual loss forecast.  Passenger numbers will be down in December as many will have been forced to put plans on hold as countries such as France re-introduced restrictions.  

Shares in Scottish ready meals company Parsley Box, chaired by Chris van der Kuyl, closed 15% lower after it announced plans to raise funds in the new year.

AJ Bell investment director Russ Mould said: “The worst performing IPO of 2021 is going from bad to worse.” Full update here

7am: GDP revised downwards

Galabank business park

Britain’s economy grew more slowly than previously thought in the July-September period, before the Omicron variant of the coronavirus posed a further threat to the recovery later in the year, according to official data.

Gross domestic product increased by 1.1% in the third quarter, weaker than a preliminary estimate of growth of 1.3%.

That was slower than the economy’s 5.4% bounce-back in the second quarter when many coronavirus restrictions were lifted, the Office for National Statistics said.

Investors are braced for a slowdown in growth in the fourth quarter of 2021 due to a rise in COVI9-cases caused by Omicron which has hurt Britain’s hospitality and leisure sector and hit retailers.

“Our revised figures show UK GDP recovered a little slower in the third quarter, with much weaker performances from health and hairdressers across the quarter, and the energy sector contracting more in September, than we previously estimated,” ONS Director of Economic Statistics Darren Morgan said.

Scotland’s onshore GDP grew by 0.2% in October, according to statistics announced today by the Chief Statistician.

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