BUSINESS LIVE: UK economy shrinks 0.5% in July


BUSINESS LIVE: UK economy shrinks 0.5% in July

The FTSE 100 is down 0.2 per cent in early trading. Among the companies with reports and trading updates today are 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 hires Superbet CFO as finance chief

William Hill owner 888 Holdings has hired an executive of European rival Superbet as its next chief financial officer.

Sean Wilkins will join as CFO in February, bringing 17 years of experience leading financial operations at both private and public companies.

St James’s Place names ex-Prudential exec as its next chief executive

St James’s Place has appointed former Prudential executive Mark FitzPatrick to succeed its boss Andrew Croft, who is stepping down in early December.

FitzPatrick will join as the chief executive-designate of St James’s Place on 1 October, and take over the reins from Croft from December.

BP boss exits: ‘There is depth in the management team to cope until a suitable replacement can be found’

John Moore, senior investment manager at RBC Brewin Dolphin:

‘BP is going through a business transformation programme that recognises the significant changes in the energy market.

‘While the departure of the CEO midway through this process isn’t ideal, there is depth in the management team to cope until a suitable replacement can be found.’

Aviva to sell Singlife joint venture stake for £800m

Aviva will sell its 25.9 per cent stake in Singapore Life Holdings (Singlife), together with two debt instruments, to Sumitomo Life for £800million in cash.

The FTSE 100 insurance giant told investors on Wednesday Sumitomo Life will pay £500million for the equity stake and £300million for the two debt instruments.

Market open: FTSE 100 down 0.1%; FTSE 250 off 0.2%

London-listed stocks are trading lower this morning on the back of fresh ONS data showing economic output in July contracted at the fastest pace this year, sparking recessionary concerns.

‘The economy is stagnant, narrowly skirting recession’

Ben Laidler, analyst at eToro:

‘These latest GDP figures are worse than expected, with growth weighed down by strike action and consumer pressures. They are the weakest numbers we’ve seen this year and are likely to reignite stagflation fears, with the economy stagnant and inflation at a world-leading 6.8%.

‘The services sector, which makes up a dominant 80% of the economy, led the fall. Driven by strikes in the health and education sectors, whilst retailers led consumer sector weakness as the cost-of-living crisis continued to take its toll.

‘The economy is stagnant, narrowly skirting recession and up just 0.2% over the past three months, but still facing strong inflation headwinds. This leaves the Bank of England in a tough position as it considers hiking interest rates further.’

Poundland snaps up 71 Wilko stores

Wilko staff were given a glimmer of hope last night as the owner of Poundland struck a deal to buy dozens of its closing stores.

As the shutters came down for the final time on the first 24 of the High Street retailer’s 398 shops, Pepco agreed to buy 71 in a move that could save some jobs.

UK economy shrinks 0.5% in July: ‘Today’s data supports interest rates peaking soon’

Thomas Pugh, economist at RSM UK:

‘The UK economy shrank by 0.5% in July, completely reversing June’s 0.5% rise. However, more than half the drop was related to strike action in the healthcare, education and transport sectors. Meanwhile, consumers focused on entertaining themselves, and their kids, during the exceptionally wet July meaning that output in arts entertainment and recreation sector soared, no doubt helped by the Barbenheimer effect.

‘The big picture is that growth is still flat lining. We expect the economy to continue to stagnate for the rest of the year but there is a growing risk of a recession towards the end of this year or early 2024. This would support the MPC pausing after a 25bps hike next week.

‘Overall, even though at the margin, today’s data supports interest rates peaking soon, the MPC is unlikely to be much moved as strike action and exceptionally wet weather clouds the picture. Next week’s inflation data is likely to be more important. But we think the most likely outcome is one more 25bps hike next week and then a pause.’

BP plunged into crisis as boss Bernard Looney is forced out

BP was plunged into crisis last night by the shock resignation of chief executive Bernard Looney over personal relationships with staff.

In a move that stunned the energy industry and the City, the 53-year-old stood down immediately, triggering the hunt for a replacement at one of Britain’s biggest companies.

BP said that Looney – who was paid £10million last year – ‘accepts he was not fully transparent’ when quizzed about relationships with colleagues.

‘UK stands at economic crossroad’ ahead of General Election

Marcus Brookes, chief investment officer at Quilter Investors:

‘As the UK stands at this economic crossroad, two things are clear. Firstly, today’s data will be critical in challenging the country’s economic perceptions and will play a big role in the Bank of England’s future decisions.

‘Secondly, with the election campaigning period looming, the state of the economy will undeniably take centre stage.

‘The UK’s unique set of economic circumstances, coupled with global pressures, means that it remains on a precarious edge, with some even sounding the alarm bells for a potential recession in 2024.’

Britain’s economy contracted by 0.5% in July after summer washout, ONS says – sparking fears of a ‘light recession’ this year

The UK economy shrank by 0.5% in July after a summer washout and weeks of strike action, sparking fears of a ‘light recession’ later this year.

Data from the Office for National Statistics (ONS) today showed that gross domestic product (GDP) contracted at a sharper rate than the 0.2% decline economists had forecast.

It came after a 0.5% monthly increase in June.

GDP shrinks 0.5% in July: ‘Slowdown could be indicating that recession is around the corner’

Neil Birrell, Premier Miton chief investment officer and manager of Premier Miton Diversified Growth Fund:

‘The UK economy shrank much more than expected in July, with the services sector notably weak, which may be seen as good news by some, particularly the Bank of England ahead of their meeting to discuss interest rates, although the speed of the slowdown could be indicating that recession is around the corner.

‘Either way, it does suggest that higher interest rates and sticky inflation are having a more significant effect on the economy. All eyes will be on the Bank for the announcement of the rate decision.’

UK economy shrinks 0.5% in July

The UK economy contracted by a larger-than-expected 0.5 per cent in July as strikes in hospitals and schools weighed on output, fresh data from the Office for National Statistics shows.

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