Stocks slip as GDP falls | Barratt sees softer demand
REFRESH PAGE FOR UPDATES
4.30pm: London slips
London’s top shares were unable to hold to narrow gains and the FTSE 100 index closed 59.08 points lower at 6,826.15 in another roller-coaster day of news.
With uncertainty over the Bank of England’s bond-buying plans, Prime Minister Liz Truss added to the confusion by appearing to rule out public spending cuts. Full story
Added to that, the UK economy shrank in August, according to official figures showing gross domestic product (GDP) fell by 0.3% after growth of 0.1% in July (revised down from growth of 0.2%).
Chancellor of the Exchequer Kwasi Kwarteng said: “Our Growth Plan will address the challenges that we face with ambitious supply-side reforms and tax cuts, which will grow our economy, create more well-paid skilled jobs and in turn raise living standards for everyone.”
Rachel Reeves, Labour’s Shadow Chancellor (pictured), said: “GDP figures this morning show the UK economy is still in a dire state because of this Tory government.
“This is a Tory crisis, made in Downing Street and paid for by working people.
“The facts speak for themselves. Mortgage costs are soaring leaving families worrying about making ends meet. Borrowing costs are up. Living standards down. And we are forecast to have the lowest growth in the G7 over the next two years.
“That the IMF yesterday described the “UK like a car with two people each trying to steer the car in a different direction” leaves us an international laughing stock.
“The Conservatives must reverse their disastrous mini-Budget. Any continued failure to do so shows damaging levels of denial from the Prime Minister and her Chancellor.”
11.30am: JD Sports Fashion CFO departing
Shares in JD Sports Fashion fell after it announced that Neil Greenhalgh is stepping down as chief financial officer next year after four years in the role. The search for a successor is under way.
Mr Greenhalgh will work with the board and KPMG on the publication of the full year results to 28 January 2023.
In August the company appointed Régis Schultz as chief executive after Peter Cowgill stepped down from his role as executive chairman in May.
Mr Greenhalgh said: “The decision to step back from JD during 2023 is one that I have been considering for some time. I fully intend to help Andy and Régis settle into their roles and, by giving the board advanced notice, enable a smooth transition to a new CFO.”
7am: Barratt Developments
Housebuilder Barratt Developments said cost of living concerns as well as the availability and cost of mortgages had led to a softening of reservations.
It said the outlook for the year is less certain, but it remains on track to deliver adjusted profit before tax for the year in line with current consensus.
The pound will remain under pressure as the Bank of England’s bond-buying intentions becomes the focus of market attention.
In the US, Bank of England governor, Andrew Bailey, told a Washington conference that the intervention would end on Friday.
But the FT reported that the Bank has privately told lenders that it was prepared to extend its emergency bond-buying programme if market conditions demanded it.
Asian stocks languished at two-year lows, after a strengthening dollar, instability in the UK bond market, and upcoming US inflation data spelled a wild session on Wall Street and further volatility for investors.
The S&P 500 and Nasdaq Composite fell 0.65% and 1.10%, respectively, though the Dow Jones Industrial Average managed to close up 0.12%.