London stocks ended firmly higher on Thursday, lifted by positive sentiment around US-led trade deals and a raft of upbeat corporate earnings, despite fresh signs of slowing economic momentum at home.

Sentiment rose on news of the US-Japan trade agreement and hopes that a similar US-EU deal could be imminent.

Economics in the UK was less encouraging with data showing the slowest pace of private sector expansion in two months and below economists’ forecasts. Services growth weakened notably, while manufacturing output reached a nine-month high.

UK vehicle production fell 11.9% in the first half of the year, according to the SMMT, marking the worst performance since 1953 outside of pandemic-related disruption.

The British Retail Consortium reported declines in both economic and personal financial outlooks.

Despite the domestic fragility, the FTSE 100 rose 0.85% to close at 9,138.37, mainly because of its heavy overseas weighting.

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Lloyds Banking Group

Lloyds Banking Group said underlying profit for the first half of the year rose 2% to £3.56 billion (£3.49bn) and has hiked its interim dividend by 15% to 1.22p.

Chief executive Charlie Nunn said: “We continue to make great progress in our strategic delivery. Guided by our purpose of Helping Britain Prosper we are building a highly differentiated franchise that is successfully delivering for all our stakeholders.

“We delivered sustained strength in our financial performance in the first half of 2025, with good income and balance sheet growth, alongside continued cost discipline and robust asset quality, leading to strong capital generation.

“We are well positioned to generate higher, more sustainable returns. Given that, we reaffirm our 2025 guidance and remain confident in our 2026 commitments.

Lloyds shares finished the session 1.98% higher.

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BT

BT has posted a weaker financial performance but said its roll-out of full-fibre broadband had passed one million premises for a sixth consecutive quarter.

The build rate of 81,000 per week means it has now reached 19 million premises, including 5.2 million in rural locations.

Adjusted revenues fell 3% to £4.9 billion in the three months to 30 June as weaker handset sales in Consumer and challenging international trading offset the benefit of the full-fibre roll out in Openreach and price increases.

Pre-tax profits fell 10% to £468 million, which was primarily due to an increase in net finance costs and depreciation.

Chief executive Allison Kirkby said the company remains on track to deliver its targets for this year, next year and the end of the decade.

The company has appointed Patricia Cobain as chief financial officer from next year. She currently holds the same role at Virgin Media O2.

The shares jumped 10.43% at 220.2p.

Dan Coatsworth, investment analyst at AJ Bell, said: “BT turned in one of its best ever days on the stock market after it lost fewer Openreach customers than expected. Its share price surge sits in the top 10 best one-day performances for the stock in the past 20 years.

“BT has faced considerable competition and a structural shift in the market where fewer people are using landlines. Its broadband is relatively expensive and people are finding it hard to justify this extra cost when they can get a perfectly decent internet connection for less elsewhere.

“A slowdown in the pace of customer departures implies that BT doesn’t have an existential crisis on its hands, and investors have taken that as the trigger to snap up the shares.

“The share price surge is somewhat ironic, given it happened on the same day as a mass outage for BT and EE customers.”

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Reach

News group Reach, owner of the Daily Record, Mirror and Express, said revenue declined 3.4% to £256m in the first half.

Print revenue came in 4.8% lower at £194.1m (HY24: £204.0m), while digital revenue continued to grow to £61.1m (HY24: £60.0m), up 1.8%.

Both print circulation revenue £144.3m (HY24: £149.9m) and print advertising revenue £27.7m (HY24: £32.7m) outperformed the volume decline, which remains broadly in line with historical trends.

Adjusted operating profit of £44.8m was slightly ahead of the prior year with an improved operating profit margin of 17.5% (HY24: 16.8%).

Year-on-year page views, a measure for on-platform audience volumes, were up 6% with the scaling of our content hub driving improved levels of productivity and more effective distribution.

The interim dividend is maintained at 2.88p

Chief executive Piers North said: “Today marks the beginning of a new chapter for our business, as we launch the priorities that will fuel our growth. These include initiatives to reach new audiences, increase our video content and accelerate our tech and AI capabilities. Crucially, we’ll do more work to diversify our revenues, putting a serious focus on adding subscriptions to our revenue mix.

“Over the past six months we have performed well. Our audience growth has been driven by our innovative content and distribution hubs, our in-house recommender tools, and our US expansion. Digital revenue continues to grow, supported by reliable print revenues, despite a challenging market and set against a strong events comparator.

“With our market leading scale, editorial impact at both national and local levels, and strong operating profit margin, we are confident that our priorities will set us up for future success.”

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Centrica

British Gas owner Centrica said hat it had swung to a statutory operating loss of £69m in the six months ended 30 June compared with a £1.7bn profit last time.

The utility group’s household supply arm’s earnings slumped by £50m to £133m, as energy demand waned and Britons turned down their central heating. 

Centrica cited “unseasonably warm weather conditions across the UK and Europe, with April being the third warmest on record”.

The group posted an adjusted operating profit of £549m for the first six months of the year, almost halving from just over £1 billion in the same period last year.