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4.30pm: FTSE 100 ends week on subdued tone

The FTSE 100 close 29.06 points lower at 7,878.66.

Danni Hewson, AJ Bell head of financial analysis, said: “What a difference a week makes. Last Friday the FTSE 100 was still gripping onto that 8,000 ledge, a psychological barrier that hinted that a new dawn had broken.

“But the last seven days has put investors back in the inflation blender and today’s data will only add to the narrative that the rate hike cycle in the US is nowhere near over yet.

“Crucial core inflation numbers that the Fed gives real credence to have come in much hotter than expected, and the fact January’s numbers were higher than the previous month also puts paid to the narrative that inflation is steadily cooling off.”

12.30pm: Call to nationalise the Sleeper

Rail union RMT wants the Scottish Government to take the Caledonian Sleeper into public ownership.

A decision is expected next week on who will operate the service between Inverness and London from this summer. It is currently operated by private company Serco.

RMT general secretary Mick Lynch said:  “We have pressured the Scottish Government alongside politicians and others to do the right thing and take Caledonian Sleeper into public ownership.

“It is what our members on the service want and would be in the interests of the travelling public.”

8.05am: London higher

The FTSE 100 opened 20 points higher at 7,927.79.

7am: IAG in profit

British Airways owner, International Consolidated Airlines Group (IAG), swung back into an operating profit and forecasts a further recovery this year.

Full year operating profit before exceptional items for the year to the end of December came in at £1.23 billion against a £2.97bn loss last time.

The company said it expects a range of €1.8 to €2.3 billion this year, based on current foreign exchange rates and jet fuel forward prices. However, it is “mindful of uncertainty in the macro environment and fuel and non-fuel cost inflation.”

Luis Gallego, IAG chief executive, said: “2022 was a year of strong recovery, driven by sustained leisure demand and markets reopening.

“At this point of the year we continue to see robust forward-bookings, while also remaining conscious of global macro-economic uncertainties.

“We are transforming our businesses, with the intention of returning IAG to pre-COVID levels of profit within the next few years, through major initiatives to improve customer experience and operational performance.

“Our unique group structure allows us to maximise revenue and cost synergies, and invest capital to achieve strong returns, whilst continuing progress towards net zero by 2050.

IAG is acquiring the remaining 80% of Air Europa in a €400 million cash and shares deal.

Mr Gallego added: “With the acquisition of Air Europa now agreed but subject to regulatory and other approvals which could take around 18 months, we are intending to welcome another leading airline to the Group.

“This acquisition will enable us to grow Madrid as a hub, offering a gateway to Latin America and beyond, with benefits for customers, employees and shareholders.”

Global markets

Data showing an improvement in UK consumer confidence this month was expected to underpin a positive opening for equity markets.

GfK’s long-running consumer confidence index rose by a significant seven points in February.

Joe Staton, client strategy director at GfK, said: “Despite widely reported headwinds of inflation continuing to outstrip wage rises, and the ongoing household challenge from the cost-of-living crisis, consumers have suddenly shown more optimism about the state of their personal finances and the general economic situation, especially for the coming year.”

Germany risks falling into recession this year as data showed its economy shrank more than expected at the end of last year.

Output shrank by 0.4% in Europe’s largest economy in the fourth quarter of 2022 compared with the previous three months, the statistics office said today.

Stocks in New York closed in positive territory with the Dow Jones Industrial Average ending up 0.3%, the S&P 500 up 0.5% and the Nasdaq Composite 0.7% higher.

In Asia on Friday, the Nikkei 225 index was up 1.3%, the Shanghai Composite was down 0.5%, while the Hang Seng index in Hong Kong was down 1.2%. 

Sterling was quoted at $1.202 early today.