Business Live: Britain’s economy shrank 0.5% in July
The FTSE 100 is down 0.2 percent in early trading. Companies with reports and trading updates today include Redrow, Aviva, Old Mutual, Hornby, 888 Holdings and CAB Payments. Read the Wednesday 13 September business live blog below.
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William Hill owner 888 appoints Superbet CFO as finance chief
William Hill owner 888 Holdings has appointed an executive from European rival Superbet as its next chief financial officer.
Shawn Wilkins will join as CFO in February, bringing with him 17 years of experience leading financial operations at both private and public companies.
St James’s Place has appointed an ex-Prudential executive as its next chief executive.
St James’s Place has appointed former Prudential executive Mark Fitzpatrick to replace its boss Andrew Croft, who is stepping down in early December.
Fitzpatrick will join as chief executive-designate of St James’s Place on October 1, and will take the reins from Croft from December.
BP boss out: ‘There is depth in the management team to cope until a suitable replacement is found’
John Moore, Senior Investment Manager at RBC Brewin Dolphin:
‘BP is undergoing a business transformation program that recognizes significant changes in the energy market.
‘While the departure of the CEO midway through this process is not ideal, the management team has the capacity to deal with this until a suitable replacement is found.’
Aviva to sell SingleLife joint venture stake for £800 million
Aviva will sell its 25.9 per cent stake in Singapore Life Holdings (SingLife), along with two debt instruments, to Sumitomo Life for £800 million in cash.
Sumitomo Life will pay £500 million for an equity stake and £300 million for two debt instruments, the FTSE 100 insurance giant told investors on Wednesday.
Markets open: FTSE 100 down 0.1%; 0.2% off FTSE 250
London-listed shares are trading lower this morning after fresh ONS data showed economic output in July contracted at the fastest pace this year, raising recession concerns.
‘The economy is stable, avoiding recession’
Ben Laidler, analyst at eToro:
‘These latest GDP figures are worse than expected, with growth hit by strike action and consumer pressures. These are the weakest numbers we have seen this year and are likely to reignite fears of stagflation, bringing the economy to a standstill and inflation reaching a world-leading 6.8%.
‘The service sector, which accounts for 80% of the economy, led to the decline. The health and education sectors were driven by strikes, while retailers led the consumer sector’s weakness as the cost-of-living crisis continued.
‘The economy is stable, narrowly avoiding recession and growing only 0.2% over the past three months, but still faces strong inflation headwinds. Due to this, the Bank of England is in a difficult situation because it is considering increasing interest rates further.
Poundland closes 71 Wilko stores
Wilko staff were given a glimmer of hope last night after the Poundland owner struck a deal to buy dozens of its closing stores.
As the shutters fell on the first 24 of the high street retailer’s 398 stores for the final time, Pepco agreed to buy 71 in a move that could save some jobs.
UK economy shrank 0.5% in July: ‘Today’s data supports interest rates peaking soon’
RSM UK economist Thomas Pugh:
‘The UK economy shrank 0.5% in July, completely reversing June’s 0.5% growth. However, more than half of the decline was related to strike action in the healthcare, education and transportation sectors. Meanwhile, consumers focused on entertaining themselves and their children during an exceptionally wet July, meaning output in the arts entertainment and recreation sector increased, no doubt helped by the Barbenheimer effect.
‘The bigger picture is that growth is still flat. We expect the economy to remain stable through the remainder of the year, but the risk of a recession late this year or early 2024 is increasing. This will help prevent MPC hike by 25 bps next week.
‘Overall, although at the margin, today’s data supports interest rates peaking soon, but the MPC is unlikely to change much due to strike action and exceptionally wet weather. Next week’s inflation data is likely to be more important. But we believe the most likely outcome is another 25bps rise next week and then a pause.’
BP in crisis as boss Bernard Looney ousts
BP was thrown into crisis last night with the sudden resignation of Chief Executive Bernard Looney over personal relations with employees.
In a move that stunned the energy industry and the city, the 53-year-old stepped down immediately, prompting a search for a replacement at one of Britain’s biggest companies.
BP said Looney – who was paid £10 million last year – ‘admitted that he was not completely transparent’ when asked about relationships with colleagues.
‘Britain stands at an economic crossroads’ before the general elections
Marcus Brooks, Chief Investment Officer of Quilter Investors:
‘As Britain stands at this economic crossroads, two things are clear. First, today’s data will be important in challenging the country’s economic assumptions and will play a big role in the Bank of England’s future decisions.
‘Secondly, as the election campaign season approaches, the state of the economy will undoubtedly take center stage.
‘The UK’s unique set of economic circumstances, coupled with global pressures, means it remains on a precarious edge, with some even raising alarm bells for a possible recession in 2024.’
ONS says UK economy shrank 0.5% in July after summer rains – ‘mild recession’ expected this year
Britain’s economy shrank 0.5% in July after a heatwave and weeks of strikes, raising fears of a ‘mild recession’ later this year.
Data from the Office for National Statistics (ONS) today showed that gross domestic product (GDP) declined at a faster rate than economists’ forecast of a 0.2% decline.
This came after a 0.5% monthly increase in June.
GDP declined 0.5% in July: ‘Slowdown may indicate recession is coming’
Neil Birrell, Chief Investment Officer of Premier Mitton and Manager of the Premier Mitton Diversified Growth Fund:
‘The UK economy shrank more than expected in July, with the services sector significantly weaker, which may be seen as good news by some, especially as the Bank of England ahead of its meeting to discuss interest rates , although the pace of recession may accelerate. This is indicating that a recession is near.
‘Either way, it suggests that higher interest rates and sticky inflation are having a more significant impact on the economy. All eyes will be on the bank to announce the rate decision.
Britain’s economy shrank 0.5% in July
The latest figures from the Office for National Statistics show Britain’s economy shrank by a larger-than-expected 0.5 per cent in July as strikes at hospitals and schools hit output.
