3rd Jul 2025 12:02
(Alliance News) - London's FTSE 100 was higher at midday on Thursday, as new data showed an acceleration in the UK private sector in June, and the German chancellor urges the EU to reach a trade deal with the US before the upcoming deadline.
The FTSE 100 index was up 29.68 points, 0.3%, at 8,804.37. The FTSE 250 was up 132.92 points, 0.6%, at 21,585.41, and the AIM All-Share was up 6.19 points, 0.9%, at 773.95.
The Cboe UK 100 was up 0.4% at 878.38, the Cboe UK 250 was up 0.7% at 19,079.20, and the Cboe Small Companies was up 0.3% at 17,470.39.
UK Chancellor Rachel Reeves has appeared in public with Prime Minister Keir Starmer a day after breaking down in tears alongside the prime minister in the Commons.
The public show of unity came after Starmer gave her his full backing and said he did not appreciate how upset she was in the Commons because he was focused on answering Prime Minister's Questions.
UK government bonds rallied and the pound steadied on Thursday, after reassurances from the prime minister about the chancellor's future.
The sight of her in tears on Wednesday, and the GBP5 billion black hole in her public spending plans as a result of the welfare U-turn, had spooked the markets, triggering a sharp sell-off of bonds, with the yield seeing the sharpest increase since US president Donald Trump's tariff plans shook up financial markets in April.
The sight of the chancellor in tears on the front bench and Starmer's initial lack of public support for her caused jitters about the government's borrowing plans, as Reeves' commitment to her rules to control spending are a key reassuring factor for the bond markets.
"I think we just need to be clear, it's a personal matter, and I'm not going to breach Rachel's privacy by going into what's a personal matter for her," Starmer said.
"She is an excellent chancellor, she will be chancellor for a very long time to come, into the next election and beyond it."
Meanwhile, rural councils in the UK are to get more money to pay for the cost of "remoteness" as part of a funding shake-up, ministers have suggested after countryside authorities raised concerns that they would lose out.
Deputy Prime Minister Angela Rayner said that "travel time" for services such as bin collection, transport and homecare visits would be taken into account under the government's plans.
Rayner, who is also the Local Government secretary, announced proposals last week for councils in deprived areas to receive a greater share of funding as part of changes to allocation rules.
In European equities on Thursday, the CAC 40 in Paris was 0.1% lower, while the DAX 40 in Frankfurt rose 0.1%.
"European markets are on the rise today with the FTSE 100 attempting to regain lost ground as a sharp rise in borrowing costs raised fear of another Truss/Kwarteng moment yesterday. The watered-down version of the Labour welfare reforms does mean we are staring at a fiscal black hole which like means greater tax hikes, with the pop in UK bond yields highlighting the fear of financial instability in the UK," commented Rostro analyst Joshua Mahony.
"With Reeves known to follow the premise that all day-to-day spending must be covered by tax revenues, the prospect of her losing her post had initially spooked markets. However, Starmer's efforts to calm markets appears to have paid off, with the PM pledging that she will "be the chancellor into the next election and for many years afterwards".
The UK service sector grew at its fastest rate for 10 months in June, supported by increased new orders, numbers on Thursday showed.
The S&P Global UK services purchasing managers' business activity index rose to 52.8 points in June from 50.9 in May, topping the flash reading of 51.3 released late last month.
The reading moved further above the neutral 50-point mark separating growth from contraction and indicates a "solid rate" of business activity expansion. However, S&P Global noted that the reading was still below the long-run series average of 54.3 points.
"The latest upturn was the strongest since August 2024," S&P Global added.
Survey respondents attributed improved output levels to organic sales growth, helped by improving business and consumer spending, S&P Global said.
The pound was quoted at USD1.3657 at midday on Thursday in London, up from USD1.3612 at the equities close on Wednesday. The euro stood higher at USD1.1798, against USD1.1781. Against the yen, the dollar was trading down at JPY143.76 compared to JPY143.85.
UK mortgage demand from home buyers is expected to soften over the summer, according to a Bank of England survey of lenders.
Lenders reported that demand for mortgages for house purchase had increased in the past few months. But demand is expected to decrease over the three months to the end of August. Re-mortgaging demand also increased in the past few months and was expected to increase in the next few months.
Blackbird was down 24% around midday.
The London-based technology licensor, developer and seller of cloud video editing platform Blackbird intends to raise around GBP1.9 million before expenses by way of a placing of 62.2 million shares at 3.0 pence each. In addition, senior management and new investors subscribe for 4.5 million new shares at the same price as the institutional placing to raise around GBP135,000 before expenses.
Separately, Blackbird launched a retail offer also at 3.0p per share to raise up to GBP200,000. All three fundraisers will raise up to a total of GBP2.2 million.
"I am pleased to announce that elevate.io has shown strong early growth metrics since the launch of the 'Creator Plan' in February 2025," said Blackbird Chair Ian McDonough. "The fundraise announced today will support elevate.io through its Product Market Fit phase, ahead of scaling up. Our vision for elevate.io is ambitious, transformative and on track. We have the right technology and the right team in place to succeed."
Watches of Switzerland remained among the FTSE 250's biggest losers, shedding 7.3%.
The watch retailer said pretax profit fell 18% to GBP76 million in the year that ended April 27, from GBP92 million the year before, as the firm recorded a GBP46.5 million exceptional impairment of assets against GBP26.2 million a year prior.
Revenue rose 7.1% to GBP1.65 billion from GBP1.54 billion, and administrative expenses increased 16% to GBP43.6 million from GBP37.5 million. The sales growth was primarily driven by US revenue, which edged up 14% to GBP786 million, while UK & Europe revenue rose 2.4% to GBP866 million.
Watches of Switzerland targets constant currency revenue growth between 6% and 10% for financial 2026, plus capital expenditure of GBP65 million to GBP75 million.
At the other end, Currys climbed 6.5%.
The electronics retailer reported pretax profit of GBP124 million for the year that ended May 3, multiplied from GBP28 million the year before, as revenue grew 2.7% to GBP8.71 billion from GBP8.48 billion the year before. UK & Ireland revenue rose 6%, while revenue in the Nordics declined 2%.
The electronics retailer also resumed dividend payments, declaring a 1.5 pence final dividend. Going forwards, it expects to set its interim dividend at one-third of the prior year dividend.
Currys continues to target at least a 3% adjusted earnings before interest and tax margin in both the UK & Ireland and the Nordics, and anticipates keeping annual capital expenditure below GBP100 million. The firm is "comfortable" with a company-compiled market consensus for GBP167 million in adjusted pretax profit for financial 2026, which would be up 3.1% from GBP162 million in financial 2025.
"Customers are increasingly adopting our credit, setup, installation, repair and connectivity services, building valuable recurring revenues for Currys," says Chief Executive Officer Alex Baldock. "We're now seen as the home of AI-enabled tech and our investments in new product categories and serving business-to-business customers are showing early signs of success...I'm pleased that thanks to all this hard work we can resume the dividend. We aim to return more of our growing free cash flow to shareholders."
Stocks in New York were called broadly flat. The Dow Jones Industrial Average was called slightly higher, while the S&P 500 index and the Nasdaq Composite were called marginally lower.
The yield on the US 10-year Treasury was quoted at 4.26%, narrowing from 4.29%. The yield on the US 30-year Treasury was quoted flat at 4.79%.
German Chancellor Friedrich Merz on Thursday urged the EU to strike a "quick and simple" deal on tariffs with the US, with just days to go before a negotiating deadline.
"It is better to achieve a quick and simple solution than a lengthy and complicated one that remains in the negotiation stage for months," Merz said in Berlin, at a time when EU trade chief Maros Sefcovic is in Washington seeking to seal an agreement.
Merz said a quick deal was needed "to remove the burden of tariffs on our businesses, which are far too high". He added that the current talks are "not about a minutely detailed trade deal" but "the quick resolution of a tariff dispute".
A speedy agreement was needed, he said, "in particular for our country's key industries: chemicals, pharmaceuticals, mechanical engineering, aluminium, steel, automobiles".
The EU has until Wednesday next week to reach a deal or see swingeing US tariffs kick in on a majority of its goods. If no agreement is reached, the US has said it will impose an additional of 20% on the EU on top of a base rate of 10%.
Meanwhile, German industry is warning of a growing dependence on China for critical raw materials such as rare-earth elements amid global trade conflicts.
"The Chinese government has realized that it can use Europe's dependence on rare earths to force concessions in other areas," Stefan Steinicke, a raw materials expert at the Federation of German Industries, BDI, told Friday's edition of the news magazine Der Spiegel.
China is reportedly restricting the export of rare earths to such an extent that it is difficult for other countries to build strategic reserves.
Brent oil was quoted higher at USD68.65 a barrel at midday in London on Thursday from USD67.57 late Wednesday. Gold was also quoted higher, at USD3,349.38 an ounce against USD3,341.71.
Still to come on Thursday's economic calendar, the latest US nonfarm payroll and weekly jobless figures at 1330 BST.
By Emily Parsons, Alliance News reporter
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