(Alliance News) - London stocks are called to open higher on Friday, as gold reaches new record highs and investors begin to digest an upwardly revised UK economic growth reading.
Meanwhile, UK households are warned to brace themselves for an "awful April", ahead of an anticipated slew of price hikes in energy bills to council taxes.
The US closed lower on Thursday following international backlask against President Donald Trump's latest 25% tariff on car imports into the US, as the pound began to shrink again against the US dollar.
Top trade officials from South Korea, Japan and China will meet this weekend in Seoul to discuss economic cooperation. Both South Korea and Japan are major car exporters.
In early corporate news, SSE names Chief Commercial Officer Martin Pibworth as its new chief executive designate, while WH Smith agrees the sale of its UK High Street business.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.1% at 8,671.42
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Hang Seng: down 0.7% at 23,420.25
Nikkei 225: closed down 1.8% at 37,120.33
S&P/ASX 200: closed up 0.2% at 7,982.00
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DJIA: closed down 155.09 points, or 0.4%, at 42,299.70
S&P 500: closed down 18.89 points, or 0.3%, at 5,693.31
Nasdaq Composite: closed down 94.98 points, or 0.5%, at 17,804.03
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EUR: down at USD1.0796 (USD1.0797)
GBP: down at USD1.2958 (USD1.2960)
USD: down at JPY150.44 (JPY151.05)
Gold: up at USD3,080.62 per ounce (USD3,051.11)
(Brent): down at USD73.05 a barrel (USD73.83)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
08:30 GMT eurozone European Central Bank vice-president Luis de Guindos speaks
08:55 GMT Germany unemployment
10:00 GMT eurozone consumer confidence
11:00 GMT Ireland retail sales
12:30 GMT US personal consumption expenditures
14:00 GMT US Michigan consumer sentiment index
16:15 GMT US Federal Reserve Vice Chair Michael Barr speaks
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The UK's estimated economic growth for 2024 was revised upwards, data published by the Office for National Statistics showed Friday. The ONS said real annual GDP is expected to have grown by 1.1% in 2024, revised up from the first estimate increase of 0.9%. This is up from an unrevised increase of 0.4% in 2023. UK real gross domestic product is estimated to have increased 0.1% quarter-on-quarter for the three months ending December, unrevised from the initial estimate, ONS noted. This was in line with an FXStreet-cited consensus, and unchanged from growth seen in the previous quarter. On an annual basis, UK GDP is estimated to have increased 1.5% during the fourth quarter, beating an expected 1.4% rise. "Looking at our more timely monthly estimates, GDP was estimated to have fallen by 0.1% in January 2025, largely because of a decline in production output," added the ONS. "The services sector increased by 0.1% in output terms for quarter 4, 2024; construction also grew, by 0.3%, while production fell by 0.4%." Real GDP per head falls 0.1% during the quarter, unrevised from the first estimate and up 0.5% on-year. Separately, the ONS reported that the UK's trade in goods deficit widened by GBP400 million to GBP55.6 billion in the three months to January, while the trade in services surplus is estimated to have decreased by GBP100 million to GBP50.0 billion.
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UK retail sales outperformed the market consensus for February, numbers from the Office for National Statistics showed on Friday. Retail sales volumes rose by 1.0% in February from January, well ahead of an FXStreet-cited consensus for a 0.3% fall. In January, retail sales had risen 1.4%, which had been downwardly revised from 1.7%. "Non-food store sales volumes grew strongly in February 2025, with rises across all four sub-sectors (department, other non-food, clothing, and household goods stores), while supermarket sales volumes fell back following a strong rise in January 2025," said the ONS. On an annual basis, retail sales volumes in February rose 2.2%, accelerating from a 1.0% rise in the year to January. Growth of 0.5% was expected for February, so the latest reading topped consensus. The ONS added: "More broadly, there was a 0.3% rise across the three months to February 2025, when compared with the three months to November 2024. This was because of strong growth in January and February 2025. There was a 2.0% rise when comparing with the same period last year."
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Households in the UK are about to see across-the-board increases to their bills as "awful April" heralds the start of price hikes on everything from energy to council tax. Energy bills for millions of households are to rise by 6.4% from April 1 when Ofgem increases its price cap for a third consecutive quarter, while water bills will increase by an average GBP123 per year – the largest rise since the industry was privatised in 1989. Most councils in England are planning to raise council tax bills by 4.99% – the maximum amount permitted – next month, with some including Birmingham, Bradford, Newham, Somerset, Trafford and Windsor & Maidenhead having been granted special permission to go even higher. Broadband and phone bills are rising, while the cost of a TV licence and the standard rate of car tax are both going up by GBP5, and electric vehicles will no longer be exempt. With the average household already spending GBP2,062 on essentials each month, analysts believe the latest increases could add another GBP49.45 to this figure.
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Chinese leader Xi Jinping on Friday warned of "severe challenges" to global trade, vowing to open the country's door "wider and wider" to foreign firms as Beijing faces down a mounting trade war with the US. Meeting executives including hedge fund boss Ray Dalio and Samsung Electronics chief Lee Jae-yong in Beijing's ornate Great Hall of the People, Xi warned that "unilateralism and protectionism" were on the rise. "Multilateralism is the inevitable choice for addressing the difficulties and challenges facing the world, and economic globalisation is an unstoppable historical trend," Xi said. His comments were a veiled criticism of Trump's recently imposed tariffs, which are dampening the prospects this year for Chinese exports after they soared to record highs last year. Beijing has sought to woo foreign businesses as those global trade headwinds threaten its already-shaky economic growth. It has also positioned itself as a staunch defender of the multilateral trading system as the mercurial resident of the White House rocks the international order. During Friday's meeting, Xi called for upholding World Trade Organisation rules, while promising China would continue to "advance trade and investment liberalisation".
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It seems "inevitable" that US President Donald Trump's tariff plans will push up near-term inflation, although the increase could be short-lived, a senior Federal Reserve official said. "It looks inevitable that tariffs are going to increase inflation in the near-term," Boston Fed President Susan Collins told an event in Boston. "If it's a price level increase that should feed through into inflation relatively quickly," said Collins, who is a voting member of the Fed's rate-setting committee this year. "And then over time, the underlying inflationary forces would then kick in." "And so my baseline outlook is more in that context," she continued, adding that if there were additional rounds of tariffs, or if they were more broad-based, then the inflationary impact could be "more persistent." Collins' comments echo those of her Fed colleague and St. Louis Fed President Alberto Musalem, who also has a vote on the US central bank's rate-setting committee this year.
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The era of deep economic, security and military ties between Canada and the US "is over," Prime Minister Mark Carney said Thursday, a day after President Trump announced steep auto tariffs. "The old relationship we had with the US based on deepening integration of our economies and tight security and military cooperation is over," Carney said in Ottawa. He added that the White House had reached out to schedule a call with Trump, which Carney expected to happen in "the next day or two."
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BROKER RATING CHANGES
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Berenberg raises Next price target to 13,400 (12,600) pence - 'buy'
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RBC cuts Burberry price target to 1,200 (1,300) pence - 'outperform'
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Goldman Sachs raises AstraZeneca price target to 15,130 (15,067) pence - 'buy'
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COMPANIES - FTSE 100
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SSE taps Martin Pibworth as its new chief executive officer designate, following a "competitive" recruitment process. Pibworth will formally take over from current Chief Executive Officer Alistair Phillips-Davies at the firm's annual general meeting on July 17. Phillips-Davies announced his intention to retire from SSE in November 2024. Pibworth has been with SSE since 1998, over which time he has held key commercial roles including, most recently, chief commercial officer. Phillips-Davies will step down from the CEO role in July, remaining as non-executive chair of SSEN Distribution, before leaving SSE in November 2025.
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Haleon begins the first tranche of its share buyback programme, for an initial consideration of up to GBP200 million. The tranche will begin "immeditely" and end no later than June 26. This initial buyback part of a wider programme intending to purchase up to a total of GBP330 million, representing the remainder of the GBP500 million allocated to buybacks for 2025 after the completion of Haleon's around GBP170 million purchase of Pfizer shares in mid-March. The ongoing buyback is expected to enhance Haleon's earnings per share, and is being carried out by Goldman Sachs International. Any further tranches will be announced "in due course".
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COMPANIES - FTSE 250
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WH Smith agrees the sale of its UK High Street business to Modella Capital for GBP76 million, to create a "pure play global travel retailer". The WHSmith brand is not included within the sale, and WH Smith's Travel divisions will continue to trade under its own brand across 32 countries. The sale "is consistent with the group's strategic focus and will allow management to concentrate on capturing the substantial growth opportunities in its key travel markets with a clear focus on driving shareholder value", noted WH Smith. Its Travel arm comprised 75% of revenue and 85% of the group's trading profit in its most recent financial year. WH Smith says it is currently trading in line with market expectations, and expects the sale to enhance revenue growth, its pretax profit margin, and enhance the rate of growth in trading profit and earnings per share.
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OTHER COMPANIES
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Westminster Group reports a narrowed pretax loss for the six months that ended December 31, at GBP1.0 million from GBP1.1 million a year prior. Revenue grows 28% to GBP3.7 million from GBP2.9 million, and the specialist security and services firm continues to declare no dividend. "We continued to battle against one of the worst world economic and political backgrounds of recent times with global instability and the resulting global economic turmoil and financial uncertainty," says Chief Executive Officer Peter Fowler. "Whilst we remain mindful that global events can still impact business outlook and the outcome or timing of potential projects is never certain, the achievements we are making and the contracts we are securing, underpin our confidence for the future long-term growth and success of our business."
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By Emily Parsons, Alliance News reporter
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