16th Jan 2025 11:44
(Alliance News) - Stock prices in London were higher at midday on Thursday, shrugging off the Office for National Statistics' report of "sluggish" GDP growth.
UK gross domestic product edged up 0.1% in November, underperforming against the FXStreet-cited market consensus of 0.2% growth.
Prime Minister Keir Starmer told broadcasters during a visit to Ukraine that the government would be "unrelenting" in its pursuit of economic growth, saying: "It was always going to take time to turn around 14 years of economic failure under the last government. That was always going to take time. The figures out today are a step in the right direction, but there's much, much more we've got to do and that we will do."
However, AJ Bell's Danni Hewson commented: "It's hard to get excited about 0.1% growth, especially when the bigger picture is of an economy still stuck in the muck. Whilst November managed to deliver a tiny bit of growth as pubs and restaurants were filled with revellers determined to get into the Christmas spirit, if you zoom out to take in three months as a whole things have flatlined once again."
She added that "confidence since seems to have gone missing and that feeling is likely to persist into 2025, particularly if inflation insidiously creeps back up to uncomfortable levels which make it difficult for the Bank of England to justify rate cuts".
Pepperstone's Michael Brown concurred that "2025 is likely to remain a year of stagflation for the UK economy, permitting the Bank of England to ease policy only gradually, likely continuing with the present quarterly pace of 25bp cuts with another such move at the February meeting, though being unable to lower rates to support growth as much as policymakers may desire, owing to the sticky nature of underlying inflation within the UK economy".
The FTSE 100 index was up 57.41 points, 0.7%, at 8,358.54. The FTSE 250 was up 15.48 points, 0.1%, at 20,349.10, and the AIM All-Share was up 1.31 points, 0.2%, at 715.84.
The Cboe UK 100 was up 0.6% at 837.47, the Cboe UK 250 was up 0.2% at 17,716.65, and the Cboe Small Companies was up 0.3% at 15,400.06.
On the FTSE 100, BP rose 1.3%.
The oil titan announced plans to cut 4,700 jobs across its global workforce and 3,000 contractor roles as part of a cost-saving drive.
BP did not disclose how many people were affected per country, but the reductions amount to just over 5% of its 90,000 worldwide employees.
BP has about 14,000 UK workers. Around 6,000 of those are based in petrol and service stations and will not be affected by the cuts.
Pearson lost 3.0%.
The educational material publisher reported underlying sales growth of 2% in 2024, led by an 8% increase in its English Language Learning division, and said it was encouraged by the "growing commercial momentum" around its artificial intelligence offerings, as the firm grew adjusted operating profit last year.
"The company's Virtual Learning and Virtual Schools businesses are finding things tough while the Workforce Skills arm is seeing slowing growth," AJ Bell's Russ Mould said, concluding: "At a group level growth feels modest, even if margins are improving and cash flow performance was robust.
"This latest update won't earn Pearson detention with the market but neither can it be awarded top marks."
On the FTSE 250, Dunelm lost 3.7%.
The home furnishings retailer said total sales in its second quarter rose 1.6% on-year to GBP490 million, and said it expects pretax profit in line with the market expectation range of GBP207 million and GBP217 million.
However, it noted "ongoing cost challenges" in the homewares market, and said the UK government's planned increase in employer national insurance contributions is an "an additional cost headwind".
Celadon Pharmaceuticals continued to lead AIM, its stock price having more than doubled.
The pharmaceutical company said its strategic collaboration with Valeos, announced in September, is now actively contributing to its operations which "will enable us to accelerate the supply of pharmaceutical-grade EU-GMP cannabis Active Pharmaceutical Ingredient products to our customers".
This includes a German medical cannabis supply contract, which Celadon announced in November and expects to generate up to GBP26 million in revenue over its three-year term.
[The above corrects the opening London market comment, which mistakenly described the Germany agreement as a newly announced contract.]
In European equities on Thursday, the CAC 40 in Paris was up 2.0%, while the DAX 40 in Frankfurt was up 0.2%.
The pound was quoted lower at USD1.2207 at midday on Thursday in London, compared to USD1.2243 at the equities close on Wednesday. The euro stood flat at USD1.0289, against USD1.0293. Against the yen, the dollar was trading lower at JPY155.75 compared to JPY156.51.
Stocks in New York were called mixed. The Dow Jones Industrial Average was called down 0.1%, the S&P 500 index up 0.3%, and the Nasdaq Composite up 0.4%.
Brent oil was quoted lower at USD80.53 a barrel at midday in London on Thursday from USD81.46 late Wednesday.
Gold was quoted higher at USD2,709.25 an ounce against USD2,683.65 on Wednesday.
Still to come on Thursday's economic calendar are several US data releases including initial jobless claims, retail sales and the Philadelphia Fed manufacturing index.
By Emma Curzon, Alliance News reporter
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