FTSE 100 Live: Stocks higher, UK reverses recession but warning lights flash

• The FTSE 100 rose as much as 32 points
• The UK economy grew by 0.1% in the first quarter
• Home prices across the country showed a surprising rise in June

9.19 am: Revolution Beauty says business is strong as it turns fire on Boohoo

Hold on to your popcorn because the war of words between Revolution Beauty and Boohoo shows no signs of ending.

Boohoo’s review of the revolution beauty’s turn today and share awards to executives yesterday after the AGM drama earlier this week.

It considers Boohoo’s „hostile” actions as „value-destroying, opportunistic and self-serving, as well as not in the interests of the company’s shareholders as a whole”.

It also took a dig at Boohoo’s corporate governance history, describing it as „contradictory”.

„As shareholders are aware, boohoo has a long and well-documented record of poor corporate governance and legal, reputational, supply chain and shareholder engagement issues,” it said.

It said the size of the stock awards „pales in comparison to Boohoo’s more executive-friendly incentive packages offered in the past, including significant cash bonuses to the management team even after missing certain financial targets.”

„Contrary to the largesse demonstrated by Boohoo on a consistent basis, the company’s offering of options is entirely fair and reasonable, and subject to market practice norms,” ​​Revolution Beauty.

You realize this won’t be the last we hear from these two companies.

Away from the drama and current trading the group continues to be strong across the board and management is confident that the positive trading momentum will continue as the year progresses.

„As stated earlier, the current expectation for FY24 is high single digit growth in revenue and constant currency adjusted EBITDA in high single digit millions,” the company said.

Shares continued to rise in return to trading, up another 9% today. Chief executive Bob Holt and chairman Derek Zisman expressed their confidence in the company by buying shares yesterday.

8.54am: UK turns recession but warning lights flash

London’s blue-chips were up 21 points with the FTSE 100 steady at 7,493.

A winter recession analysts foresee many risks to the UK economy.

Danni Hewson at AJ Bell says the UK has been „paralleled” in the first few months of the year but „warning signs are already flashing frantically.”

He noted that household disposable incomes are further eroded by the continued pain of rising prices, while fewer people put aside a little for a rainy day or take advantage of rising interest rates, which will cause such distress for many.

„With hundreds of thousands of mortgage holders hit with increased monthly payments, there is little doubt that the servicing industry is in for a tough ride,” he added.

„Any growth is good, but remember this growth means the UK economy is still struggling to make up ground lost during the pandemic, and while we are in the same boat as Germany, it is because of the failure to properly capitalize on the pace of reopening. Concern.”

8.40 am: Barratt signs property deal with Chitra

Barratt Developments has sold 604 homes to Lloyds Banking Group’s wholly-owned subsidiary Citra Living Properties for £168.4mln.

The homebuilder said it recognizes revenue and profit when each home is legally completed under a future sales contract.

Of the 604 houses, more than 500 houses are expected to be transferred to Citra’s ownership in the 12 months to June 30, 2024, and the rest in the next financial year.

Chief executive David Thomas said: „We are delighted to announce a significant development in our partnership with Citra.”

„Since forming our strategic partnership in 2021, we have agreed to sell approximately 502 homes on individual sites to Citra.”

Barrett shares were modestly higher in early trade while the FTSE 100 rose 15 points to 7,487.

8.13am: FTSE 100 rises, house prices surprise

The FTSE 100 made a bright start to the last day of the quarter, as house prices were buoyed by rising mortgage rates and figures confirmed the UK had avoided a winter recession.

At 8.13 am, London’s leading index was up 22.47 points at 7,494.16, while the FTSE 250 was up 27.73 points at 18,298.46.

US gains also provided support after growth in the world’s largest economy revised sharply higher. This week followed a surprisingly strong set of data in the US.

Deutsche Bank’s Jim Reid said: „All of this positive data has played into the recent market story, which is that strong growth and sticky inflation will keep rates at control levels for longer than central banks previously expected.”

UK house prices were fairly steady in June, but fell by 3.5% compared to June 2022, according to the latest figures.

The nationwide home price index said prices rose 0.1% in June after a similar fall in May.

EY Item Club said: „Given the size of previous price gains and the headwinds the housing market faces from rising mortgage rates and other financial pressures, house prices are showing a surprising degree of resilience.”

But it thinks „resistance will disappear, at least to some extent.”

Robert Gardner, the nation’s chief economist, agreed: „A sharp increase in borrowing costs could cause a significant drag on housing market activity in the near term.”

In other economic news, figures from the Office for National Statistics confirmed that the UK avoided recession with unrevised growth at 0.1% in the first quarter of 2023.

Samuel Tombs at Pantheon Macroeconomics thinks the economy will avoid a recession in the coming quarters, with a gradual recovery in real spending by households to offset the growing weakness in business investment.

„We think GDP will be flat in Q2, then rise 0.4% quarter-on-quarter in Q3 and 0.2% quarter-on-quarter in Q4,” he added.

Centrica rose 0.7% after announcing it would double gas storage capacity at its crude facility, while broker upgrades lifted Trax and Aviva.

HSBC raised Aviva to 'buy’ with a price target of 480p, helping the shares rise 0.9%, while Credit Suisse upgraded it from 'neutral’ to 'outperform’ with an increased price target from 700p to 760p. Shares rose 3.6%.

7.48am: Nationwide house prices rose 0.1% in June

UK house prices were fairly steady in June, but fell by 3.5% compared to June 2022, according to the latest figures.

The nationwide home price index said prices rose 0.1% in June after a similar fall in May.

The average UK house price is now £262,239, up from £260,736 in May.

But Robert Gardner, chief economist at Nationwide, said: „A sharp increase in borrowing costs could cause a significant drag on housing market activity going forward.”

And, „House prices remain high relative to incomes, and as a result, deposit requirements are still a significant barrier for those looking to enter the market.”

„Despite the high interest rates available to savers, the sharp rise in rents coupled with persistently high rates of inflation generally make it difficult for many prospective buyers to save a deposit,” he pointed out.

„However, a relatively soft landing is still possible, provided the broader economy performs as we (and other forecasters) expect.

„Labor market conditions are expected to remain relatively strong,” while income growth is expected to remain firm.

Long-term interest rates should also start to decline as bank rates are likely to peak in the coming quarters, he said.

„With the labor market and interest rates performing broadly as expected, we are unlikely to see a wave of forced selling,” he said.

7.28am: Centrica doubles gas savings in Rough area

British gas operator Centrica has announced that it has nearly doubled the capacity of Ruffville, the UK’s largest gas storage facility.

The facility, 18 miles off the East Yorkshire coast, reopened for gas storage in October 2022, by which time it would have been able to store around 30bn cubic feet (bcf) of gas for UK homes and businesses.

But after engineering work and investment, Centrica Ruff said it can now store up to 54 bcf of gas, an 80% increase.

Centrica said it would boost the UK’s energy resilience in the coming winter and provide the equivalent amount of gas to heat 2.4 million homes over the winter.

Rough now provides half of the UK’s total gas storage.

7.13am: UK economy steady in first quarter

According to figures from the Office for National Statistics, the economy grew by 0.1% in the first quarter.

The figure was unrevised and in line with the city’s forecasts.

The services sector grew by 0.1% in the quarter, driven by increases in information and communication and administrative and support services activities; Elsewhere, the construction sector grew a revised 0.4% (previously 0.7%), while the manufacturing sector grew 0.1%, with a revised 0.6% growth in manufacturing (previously 0.5%).

The household savings rate stood at 8.7% in the latest quarter, up from 9.3% in the fourth quarter of 2022.

Real household disposable income fell 0.8% following positive growth of 1.3% in the previous quarter.

Households experienced simultaneous withdrawals from their deposit accounts and negative secured loans for the first time.

7.00 am: FTSE US to follow higher

The FTSE 100 was expected to make a brighter start on Friday after US blue-chips advanced, after strong economic data raised hopes of a softer landing in the world’s largest economy.

Widespread betting firms are calling London’s leading index up to around 22 points. The FTSE 100 ended Thursday down 28.80 points, or 0.4%, at 7,471.69.

„The surprising pullback in US economic data this week made it all but certain that we’ll see another rate hike in July, but raised the possibility of another 2 rate hikes after that,” said Michael Hewson of CMC Markets. .

Both the Dow Jones and the S&P 500 posted strong gains, but the Nasdaq was little changed as investors feared the elastic figures could mean more interest rate hikes.

In Asia, markets were mixed. The Nikkei 225 index was down 0.3% in Tokyo. In China, the Shanghai Composite rose 0.9%, while in Hong Kong the Hang Seng index rose 0.2%.

Activity in China’s manufacturing sector contracted for a third straight month in June, but the 49.0 reading was in line with forecasts and higher than May’s 48.8 reading.

Back in London, and the initial focus will be the final GDP reading for the quarter.