Markets

GDP shrinks | retail ‘damp squib’ | Entain boss quits

chart and business finance

UK GDP fell 0.3% in October, following 0.2% growth in September, and was flat over the three month period. Analysts had expected GDP to be flat month-on-month.

There was a 0.2% fall in the services sector, 0.1% in consumer Services. 0.5% in construction and 0.8% in production.

Nicholas Hyett, investment analyst at Wealth Club: “With the Bank of England expecting to leave interest rates unchanged on Thursday, this is shaping up to be a flatline festive period. GDP has gone nowhere over a three month period, as a bleak October offset some more positive numbers from the end of the summer.

“Manufacturing is down nearly 1% and house building activity has fallen nearly 5%. With labour markets also showing signs of weakness, another interest rate hike is looking increasingly unlikely. 

“The question now is when the Bank starts cutting rates. Leave it too long and the cure could yet prove worse than the disease.”

Jeremy Batstone-Carr, European Strategist, Raymond James Investment Services, said: ““These figures come ahead of the Bank of England’s next base rate announcement, and though price pressures are easing, today’s weak data is unlikely to be enough to encourage the Bank to lower its vigilance and cut base rates.”

Chancellor Jeremy Hunt said:  “It is inevitable GDP will be subdued whilst interest rates are doing their job to bring down inflation. But the big reductions in business taxation announced in the Autumn Statement mean the economy is now well placed to start growing again.”


Retail ‘damp squib’

Black Friday sales were a damp squib for Scotland’s retailers as sales fell in real terms in November. Adjusted for inflation retail sales fell by 1.2%, the fifth successive month of declining performance; including the first two months of the ‘golden trading quarter’.

Ewan MacDonald-Russell, deputy head of the Scottish Retail Consortium, said: “These figures are concerning for hard-pressed retailers many of whom desperately need a good last quarter of 2023 to get them through the traditionally fallow months at the start of next year.

“Retailers already know they will be facing large increases in wage costs in the new year.  If the Scottish Government doesn’t take action in it’s upcoming Budget to meaningfully blunt a rise in business rates then shops will very likely have to make very difficult decisions in 2024 to balance the books.”


Springfield Properties

Springfield Properties, Highlands-based housebuilder, said it is encouraged by the early indications of a return in homebuyer confidence, with inflation falling and the Bank of England holding interest rates for two consecutive months.

Full story here


Entain boss quits

Ladbrokes owner Entain said its chief executive Jette Nygaard-Andersen has stepped down with immediate effect.

Stella David, currently a non-executive director, has become CEO on an interim basis and will remain in the role until a permanent replacement is found, the company said.

Entain did not specify a reason for Nygaard-Andersen’s resignation.

It comes weeks after the company received final approval from a British judge to settle charges stemming from alleged bribery offences at the group’s former Turkish unit, concluding an HM Revenue & Customs (HMRC) probe that began in 2019.


Market report

More than £1 billion was wiped from the value of Britain’s biggest mobile operators after Ofcom, the industry regulator, said it planned to ban inflation-linked price rises midway through contracts.

The move is apart of a crackdown on practices that it says work against the interests of consumers. BT was down 5.25p o 126.25p, while Vodafone lost 1.5p to close at 67p.

Shares in investment platforms Hargreaves Lansdown and AJ Bell slid after Britain’s market watchdog raised concerns about the interest and fees that some in the sector are charging.

The Financial Conduct Authority has warned 42 firms that it will act to ensure fair value and is giving them until the end of February to bring their houses into ordeer. Hargreaves slumped by 51p to 714.25p, while Bell was 10.5p lighter at 301p.

Royal Mail-owner International Distribution Services surged 11% after Bank of America upgraded it to a ‘buy’.

Heavyweights BP and Anglo American dragged the FTSE 100 down, dropping 1.4% and 5.2% respectively as oil and metals prices pulled back. 

The FTSE 100 was mostly ahead during the day but closd marginally in the red, down 2.12 points at 7,542.77.



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