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4.30pm: London blue chips lower, US economy slips

The US economy suffered a sharp slowdown in the first quarter of the year, according to the first official estimate, reviving fears of a recession and prompting the pound to rise against the dollar

Growth came in at an annualised rate of 1.1% between January and March, the Commerce Department said. Economists had been expecting a figure of 2%.

However, Wall Street stocks were in positive territory early in the session as traders chewed over a number of big-name earnings reports and expected the slowdown in the growth to limit interest rate rises.

Danni Hewson, AJ Bell head of financial analysis, said: “Slowing growth was always going to be the price for finally pulling up runaway inflation but today’s US GDP figures have still surprised on the downside.

“Growth of 1.1% might look spritely from a UK perspective but the expectation had been for around 2%, which would still have been a big slowdown from the previous quarter.

“Rising interest rates have pushed companies to think about their investment plans and in many cases put a foot on the brakes or slice away at overheads, with headcount often the easiest cost to cut quickly. 

“In spite of government interventions, not least the controversial inflation reduction act, there are now great big warning signs flashing frantically over the American economy.”

Facebook-owner Meta‘s shares surged 15% after the company reported a surprising rebound in digital advertising sales, buying it time to keep pouring money into speculative businesses like artificial intelligence and virtual reality.

In London, the FTSE 100 closed 21.06 points lower 7,831.58−21.06 (0.27%).

Gambling companies Flutter and Entain ended the day down, but only slightly after the publication of government proposals to tighten regulation. The changes do have teeth, but investors will recognise that most revenue growth is likely to come from outside of the UK now rules in the United States have been relaxed, said Hewson.

Sainsbury’s was another faller, finishing Thursday towards the bottom of the FTSE 100 pack as the supermarket sector seems to stuck with the pressures of food inflation.

By the London close, US stocks were trading higher. The Dow Jones Industrial Average had gained 0.7%, the S&P 500 was up 1.1% and the Nasdaq Composite was 1.7% ahead on the back of tech gains. 

3.45pm: New Vodafone chief

Vodafone has appointed interim boss Margherita Della Valle as permanent chief executive, ending nearly five months of uncertainty over the top role.

The telecommunications giant said Ms Della Valle – the firm’s former chief financial officer – had been hired after a “rigorous internal and external search”.

3pm: BP AGM revolt

Energy company BP faced a shareholder revolt and protests from climate campaigners over its decision to slow its energy transition.

Full update here

Sainsbury’s

Sainsbury’s has posted a fall in annual pre-tax profit to £690m, down 5% year-on-year, but at the top end of the £630m to £690m range guided by the company in January.

Retail sales rose 5.2%, and excluding fuel sales were up 2%.

In the year ahead the company expects pre-tax profit between £640m to £700m.

Barclays

Barclays reported better than expected first quarter pre-tax profit supported by strong growth in its UK business which offset a flat performance in its investment banking arm.

It said it was on track to meet full-year guidance as it posted a 16% jump in pre-tax profits driven by growth across all its businesses.

The high street lender said pre-tax profit in the three months to 31 March reached £2.60bn from £2.23bn a year ago, and above the company compiled consensus of £2.2bn.

St James’s Place

Investment manager St James’s Place posted a rise in funds under management during the first quarter.

It reported a slowdown in gross inflows to £4.17bn over the three months to March compared to £4.73bn in the corresponding period last year.

Net inflows for the latest quarter came in at £2bn, down from £2.91bn.

Scottish Friendly

Scottish Friendly, the Glasgow-based mutual group, has reported record sales of £47.7m for 2022.

Total sales increased from £46.9m in 2021 to £47.7m last year. Although sales of Scottish Friendly’s own-brand investment ISAs fell by 22% to £14.3m, protection sales increased by 16% to £29.6m.

Assets under management were down from £5.4bn to £4.5bn. Scottish Friendly said this reflects the challenging investment market and the combined impact of premiums received from policyholders and claims paid out.

Members increased by 38,000 to 814,000, with over one million policies administered.