The FTSE 100 was trading higher on Thursday despite the news that the UK entered a recession at the end of 2023. (Michael Kemp)
The FTSE 100 (^FTSE) and European stocks were higher on Thursday, with Wall Street following along, as the US economy grew faster than expected in the last three months of last year.
US gross domestic product (GDP) rose 3.4% in the final quarter compared to the same quarter a year earlier, according to the final estimate by the Bureau of Economic Analysis (BEA).
This was up from the 3.2% measured in the second reading. The BEA said the faster growth was thanks to upward revisions to consumer spending and non-residential fixed investment.
According to the Office for National Statistics (ONS), gross domestic product fell by 0.3% in the last three months of 2023, giving two consecutive falls after a decrease of 0.1% in the previous quarter. It was a sharper fall than economists were expecting.
London’s benchmark index was 0.4% higher by the end of the session
Wall Street just managed to push ahead in lean trading ahead of Easter break
Germany's DAX (^GDAXI) nudged 0.1% higher and the CAC (^FCHI) in Paris also advanced 0.1%
Pierre Veyret, technical analyst at ActivTrades, said: "Equities traded slightly higher in Europe on Thursday. Benchmarks are still hovering around record levels, and market optimism remains high. Investors continue to bet on upcoming rate cuts from central banks around the world, and this confidence is clearly reflected in the market at the moment.”
“The recent dovish hints provided by ECB and FED officials, combined with a reassuring inflation trend, is what is driving market sentiment at the moment.”
“Even if some indices are already trading in uncharted territory, it seems that no one wants to exit the bullish train, driven by a fear of missing out on the rally.”
Follow along for live updates throughout the day:
LIVE COVERAGE IS OVER23 updates
LaToya Harding
Blog close and recap
Well that's all we have time for today thanks for following along. We hope you all have great Easter weekend.
Here's a quick recap of some of the top stories from today:
Official data confirms UK recession in 2023
Thames Water on brink as investors pull funding
Wall Street muted as US economy grew faster than expected
HMRC: House sales rise for two months in a row
JD Sports maintains profit guidance
Muji files for administration in latest retail insolvency
BuzzFeed UK taken over by Independent owner
Have a good evening!
LaToya Harding
Wall Street muted as US economy grew faster than expected
Stocks on Wall Street are muted today, after a recent rally, as the American economy grew at a faster rate than expected in the final three months of 2023.
US gross domestic product (GDP) rose 3.4% in the final quarter compared to the same quarter a year earlier, according to the final estimate by the Bureau of Economic Analysis (BEA).
This was up from the 3.2% measured in the second reading.
The BEA said the faster growth was thanks to upward revisions to consumer spending and non-residential fixed investment.
LaToya Harding
BuzzFeed UK taken over by Independent owner
The owner of the Independent has taken over the UK arm of BuzzFeed.
The deal means the Independent will gain BuzzFeed UK website, editorial staff and website technology as part of a long-term licensing deal. It will also take over HuffPost in the UK, food website Tasty, and Seasoned, a brand aimed at black British audiences.
It comes after BuzzFeed cut its workforce in 2017, before disbanding its BuzzFeed News UK team entirely in 2020. Last year it closed its US news team.
LaToya Harding
Why taxpayers are paying £40bn in interest on BoE reserves
UK taxpayers are paying banks almost £40bn a year as the Bank of England pays interest on reserve deposits they are required to hold at the central bank for regulatory purposes. Money former chancellor Gordon Brown wants to see deployed towards hospitals and schools.
Commercial banks have some £750bn in reserves deposited with Bank of England, and just like a regular deposit where the bank will pay you interest for having your money with them, the central bank is required to pay interest on that amount.
That means that the Bank of England is paying 5.25% to commercial banks just to hold their money, which comes in at about £40bn a year.
The pound (GBPUSD=X) fell against the dollar on Thursday after the Office for National Statistics confirmed that the UK slipped into a recession at the end of 2023.
Sterling was down 0.1% but later recovered to be trading flat. The pound was up 0.2pc against the euro, which traded at 85p.
LaToya Harding
Baltimore bridge collapse may be the biggest ever marine insurance loss
The chairman of Lloyd’s of London, the City’s global insurance marketplace, said this week’s Baltimore bridge incident could spark the biggest loss of its kind in the industry.
Bruce Carnegie Brown told the Standard that the incident “has the capacity to be the largest ever single marine insurance loss”.
He said:
“We model realistic disaster scenarios across all of our lines of business. And what’s happened in Baltimore is not outside the parameters of those.
Lloyd’s is a major provider of maritime insurance.
LaToya Harding
Best UK mortgage deals of the week
Mortgage rates moved higher for a 5-year fix and were unchanged for the 2-year fix but overall homeowners are still struggling as first-time buyers spread their home loans over a longer period to be able to make bills more affordable.
The average rate on a two-year fixed deal this week climbed to 5.74%, compared with 5.69% the previous week, while for a five-year deal, rates came in at 5.24% same as before, according to figures from Uswitch.
The market appears to be volatile, as higher costs faced by providers to fund mortgage lending pushed many to raise rates again in recent days.
This follows the Bank of England’s (BoE) decision to leave UK interest rates on hold at their current 16-year high of 5.25% for a fifth consecutive time.
LaToya Harding
9 egg-cellent homes that come into their own at Easter
The longest bank holiday weekend of the year is upon us and comes with the promise of chocolate, Easter egg hunts and relaxing with family and friends – though sadly not decent weather.
If house hunting is part of your plans, check out these properties as they are bound to put a spring in your step.
Pierre Veyret, technical analyst at ActivTrades, said:
“Equities traded slightly higher in Europe on Thursday. Benchmarks are still hovering around record levels, and market optimism remains high. Investors continue to bet on upcoming rate cuts from central banks around the world, and this confidence is clearly reflected in the market at the moment.”
“The recent dovish hints provided by ECB and FED officials, combined with a reassuring inflation trend, is what is driving market sentiment at the moment.”
“Even if some indices are already trading in uncharted territory, it seems that no one wants to exit the bullish train, driven by a fear of missing out on the rally.”
LaToya Harding
UBS net profit lower than estimated
Swiss banking giant UBS said on Thursday its 2023 net profit was slightly lower than previously stated after the estimated fair value of its Credit Suisse acquisition was reduced.
UBS said that its 2023 net profit was $27.8bn (£22.05bn), down from $29bn previously reported.
In its annual report, UBS warned that there is a risk that “a material error” may not be detected by UBS and could result in a material misstatement to Credit Suisse’s reported financial results which are now merged with UBS’s.
“This review is ongoing, and UBS expects to adopt and implement further controls and procedures following the completion of such review and discussions with regulators,” it added.
Meanwhile, UBS CEO Sergio Ermotti earned 14.4m Swiss francs (£12.61m/$15.9m) in 2023 after his surprise return at the helm of the Swiss banking giant. That makes him the best-paid European bank boss.
The number of completed house sales has now risen for two months in a row, according to the latest data from HMRC.
Stuart Cheetham, CEO of the mortgage lender MPowered Mortgages, said:
“There could be more good news to come too, with estate agents reporting an uptick in both the number of buyers and the number of homes coming onto the market. With the market becoming steadily more free-flowing, the tally of completed sales should pick up further in coming months.
“Two factors are driving the recovery – a widespread sense among buyers that last year’s drop in property prices is over and the improving affordability of mortgages."
Stevenson, managing director at national estate agent group Fine & Country, said:
“A drop in the Bank of England’s base rate is hopefully around the corner, and that will give the property market a further boost.
“First-time buyers should be particularly encouraged by lower mortgage rates. They are the foundation of the property market, and having this portion of buyers back buying in greater volumes will help increase transactions further.
“With demand building, this is a good time of year for sellers to begin marketing their property. Pricing sensibly remains important, particularly for those who are pinning hopes on moving quickly.”
LaToya Harding
Muji files for administration in latest retail insolvency
In the wake of The Body Shop and Ted Baker, the European arm of Japanese retailer Muji has filed for administration.
It has been reported that shops will remain open and that a pre-pack deal is expected, which would save the business.
Muji, known for its minimalist Japanese designs for both clothes and home goods, has six stores in London.
A spokesperson said:
“MUJI Europe Holdings , has announced its intention to appoint administrators. This is part of a planned strategic restructuring of the business and Muji’s management expect to conclude a deal shortly.
“For Muji’s colleagues and customers in Europe it is business as usual – all stores and e-commerce will continue to operate as before, and all new and outstanding orders will be fulfilled.”
LaToya Harding
Virgin, Sky, BT and TalkTalk beaten by smaller rivals in broadband ranking
Virgin, Sky, BT and TalkTalk have been beaten by smaller broadband rivals according to a customer satisfaction survey.
The big four broadband firms placed below the likes of Zen Internet, Hyperoptic and Community Fibre, which topped the table based on a survey of 4,471 people with a home broadband contract, Which? said.
Virgin Media finished bottom in the rankings, according to the survey, receiving the lowest scores in the areas of customer service and communication. With a customer score of only 56%, customers said the company was hard to get in touch with and many suffered from connection dropouts.
Sky was second bottom, receiving the lowest rank for connection speed and a score of 57%. Its customers were the most likely to say the reliability of their connection was poor. Value for money is also a weakness: one in five Sky customers gave this a low rating and half of those who had switched away from Sky told Which? they had been motivated by a price rise.
BT, the UK’s biggest provider, scored 62%. It was competitive for connection speed and reliability, but got middling ratings for customer service and technical support. Value for money was rated poor – unsurprising given that it was the first to introduce inflation-linked price rises in 2020. Despite the lacklustre ratings, BT customers were most likely to have been with the provider for more than three years.
TalkTalk secured the highest ranking of the UK's four big broadband providers with a score of 63% but it received low ratings for customer service and communication. Of the customers who had left TalkTalk for another provider, 38% said poor customer service was their main reason for doing so.
LaToya Harding
Global Bitcoin ownership rates fall from 20.9% to 14.5%
And keeping with cryptocurrency news...
Global Bitcoin ownership rates have decline from 20.9% to 14.5%, news data from Cryptonews.com said.
Other highlights from the data include:
Almost 50% of European crypto holders owned Bitcoin.
In January, 53% of Europeans and 49.7% of North Americans held Bitcoin.
Bitcoin ownership surged in February: 8.79% in Europe, 11.16% in Oceania, 12.89% in Asia, and 14.32% in Africa.
Ownership dropped from 17.7%-20.9% to 13.1%-14.5% globally in the following month
LaToya Harding
Bitcoin price holds above $70,000 as money flows into ETFs
The price of bitcoin has held above $70,000 (£55,591) in early trading on Thursday, as money flowed into spot bitcoin exchange-traded funds (ETFs).
Every day this week so far has witnessed net positive inflows into spot bitcoin ETFs from fund managers such as BlackRock (BLK) and Franklin Templeton (BEN). On Monday, there were inflows of $15m, while Tuesday and Wednesday saw inflows of $418m and $243m, respectively.
This is a reversal from last week, which witnessed outflows from Monday to Friday. These outflows significantly contributed to bitcoin's price (BTC-USD) decline from its all-time high of over $73,000 on Thursday, 14 March, to a low of around $61,000 in the middle of last week.
The downward pressure throughout last week was largely a result of increased selling of the Grayscale Bitcoin Trust ETF (GBTC). Every day last week saw significant spot bitcoin ETF outflows, with Tuesday, 19 March, recording the largest outflows at £326m.
Analysts think that the large-scale selling off of GBTC could be approaching exhaustion. If that is the case, and the sell-offs stop. This combined with the upcoming bitcoin halving event anticipated in April, could see prices start going up again.
File photo dated 26/12/2020 of the doors to JD Sports at Greenwich Peninsular, south London. JD Sports has warned that less innovation in the products it sells has made its trading (Steve Paston, PA Images)
JD Sports has revealed sales growth for the full year at 8.4%, slightly ahead of what was guided in its January update, and what consensus was expecting.
However, it warned that trading remained “challenging” as retailers increase promotional sales.
Shares at the sportswear retailer climbed on the back of the trading update as it hiked its profit guidance.
It now expects profits to be in line with its previous guidance of between £915m and £935m before tax and adjusted items in the year to early February. It had previously downgraded its outlook in January.
Chief executive Regis Schultz said:
Looking ahead, the current trading environment remains challenging due to less product innovation and elevated promotional activity, especially online.
We anticipate trading conditions will improve as we move through the year, helped by a busy sporting summer and softer comparatives with last year.
The company opened 215 new JD shops in the year to early February, and added that the launch of a new UK loyalty programme had been “encouraging," attracting 800,000 downloads so far.
LaToya Harding
Easter bunnies...bulls and bears
The Easter holiday is almost upon us, meaning a shorter trading week for most...
US final GDP readings, UoM consumer sentiment and inflation expectations are due today. Tomorrow, Good Friday, sees the US core PCE index, the Fed’s preferred measure of inflation.
This could get choppy with volumes thinner than usual. Jay Powell is also due to speak.
Neil Wilson, chief markets an analyst at Finalto, said:
"With March just about done and the first quarter over, bears have thrown in the towel. Hard landing > soft landing > no landing.
"The Fed’s preference to tolerate higher inflation and suppress yields to keep the labour market happy has been a positive catalyst for risk.
"The S&P 500 has risen 10% YTD, the Nasdaq +9%. Japanese, European and Australian equity markets have all struck new all-time highs.
"Even the FTSE 100, a laggard in so many ways lately, is positive for the year and within a whisker of its record. Gold and Bitcoin and cocoa have all hit record highs. And yet the dollar is also much stronger this year.
"Everything is up – print enough and that is what you get. Little wonder people are really starting to fret about the sustainability of debt in the US."
LaToya Harding
Oil prices on the rise
Oil prices edged up on Thursday after two days of declines. The global benchmark Brent crude was up around 0.5% to more than $86 a barrel, pushing energy stocks higher.
Mining stocks are also up more than 1% on the day as most base metals prices likewise rose, boosted by signs of stabilisation in China’s broader economy.
LaToya Harding
Thames Water on brink as investors pull funding
Investors at Thames Water have pulled the plug on a £500m emergency funding, raising concerns about the future of the country’s largest water company.
The firm said that its shareholders had refused to provide the first tranche of £750m funding set to secure its short-term cashflow, after it had failed to meet certain conditions.
The company’s shareholders, which include Ontario Municipal Employees Retirement System and the UK’s Universities Superannuation Scheme, had been due to provide the new equity by 31 March.
Thames Water could now be placed into special administration, which would result in the British government stepping in and temporarily renationalising the firm.
Chris Weston, the chief executive of Thames Water that this was a “long way off” but did not rule out the possibility.
He told BBC Radio 4’s Today programme.
“If at the end of the day – probably well into the end of next year – we were in a situation where we had no equity, then there would be the prospect […] of special administration, but we are a long way from that point at the moment."
“There is a possibility but the key message today is one of reassurance.”
“Last year was tough as interest rates had to rise to bring down inflation, but we can see our plan is working. Inflation has fallen decisively from over 11% to 3.4%, the economy grew in January and real wages have increased for eight months in a row.
"Our cuts to National Insurance will boost growth by rewarding work and putting over £900 a year back into the average earner’s pocket.”
He later said:
"I don't think any of us were expecting the economy to actually grow last year. The Bank of England wasn't, the Office for Budget Responsibility wasn't.
"In fact it did, albeit at a very slow rate. And that is a testament to the resilience of the economy but also the fact the government took some very difficult decisions early on to make sure we got the economy back on track."
It comes as the most recent numbers for January 2024 show that the UK economy picked up, raising hopes it could be on its way out of recession.
The economy grew by 0.2%, official figures show, boosted by sales in shops and online and more construction activity. This is an early estimate, but signals how the UK is faring.
LaToya Harding
Official data confirms UK recession in 2023
It has been confirmed that the UK economy went into recession at the end of last year. The Office for National Statistics (ONS) says that GDP shrank by 0.3% in the last three months of the year.
It followed contraction of 0.1% in the third quarter of 2023, confirming a technical recession – two consecutive quarters of negative growth.
The data confirmed the UK's economy entered a recession in the second half of last year. News of a recession in 2023 came out in February, but the figures were subject to revision by the ONS. The statistical body has now confirmed there were two consecutive quarters in which the economy shrank.
A recession is commonly defined as when the economy fails to grows over two consecutive quarters, or three month periods.
ONS director of Economic Statistics Liz McKeown said:
“Our updated set of GDP figures shows quarterly growth unrevised across 2023, with a little growth in the first quarter and small contractions in the latter half of the year.
“New figures on households show that savings remained high, with an increase in income in the last quarter of the year.
“Our underlying balance of payments deficit with the rest of the world widened at the end of 2023, partly because the trade picture worsened slightly.”
For the whole of 2023, the UK economy grew by just 0.1%. Excluding the COVID pandemic, that is the country's weakest economic result since the 2009 financial crisis.
GDP is estimated to have fallen by an unrevised 0.3% in Quarter 4 2023.
GDP growth was also unrevised for the other quarters of 2023.
— Office for National Statistics (ONS) (@ONS) March 28, 2024
LaToya Harding
Asia and US stocks
Asian stocks were mixed overnight after a Federal Reserve official floated the idea of delaying or reducing US interest rate cuts.
The Nikkei (^N225) fell 1.5% on the day in Japan, while the Hang Seng (^HSI) rose 0.9% in Hong Kong. The Shanghai Composite (000001.SS) was 0.6% up by the end of the session, recouping losses from the day before.
Across the pond, the S&P 500 (^GSPC) rose 0.9% to a record high, and the tech-heavy Nasdaq (^IXIC) was 0.5% higher. The Dow Jones (^DJI) also gained 1.2%.
LaToya Harding
Coming up...
Good morning, and welcome to our markets live blog. As usual, we will be covering what's moving markets and happening across the global economy.
Let's take a quick look at what's to come:
7am: Trading updates: Schroeders Cap
7am: UK Gross Domestic Product
8:55am: Germany unemployment rate
9:00am: EU M3 Money Supply
12:30pm: US GDP growth rate
12:30pm: Canada monthly GDP growth rate
Watch: What is a recession and how do we spot one?
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