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(Alliance News) - London's FTSE 100 recouped early losses to trade just in the green at midday on Monday although a raft of gloomy economic reports provided little festive cheer.
In London, the FTSE 100 index was up 10.02 points, 0.1%, at 8,095.11. The FTSE 250 was down 49.10 points, 0.2%, at 20,401.59, and the AIM All-Share was up 0.87 of a point, 0.1%, at 711.47.
The Cboe UK 100 was up 0.1% at 812.51, the Cboe UK 250 was down 0.3% at 17,888.41, and the Cboe Small Companies was up 0.1% at 15,803.23.
Figures from the Office for National Statistics showed the UK economy ground to a standstill in the third quarter of 2024.
The ONS said that in the three months ended September 30, real GDP growth was zero compared to the second quarter, revised down from the first estimate increase of 0.1% growth.
Economists had expected growth to remain unchanged at 0.1%.
Looking ahead, Elliott Jordan-Doak at Pantheon Macroeconomics expects GDP growth to rebound to 0.2% quarter-to-quarter in the three months to December.
He then predicts growth next year to average a "healthy" 0.4% quarter-to-quarter.
"Real disposable income growth will slow next year, but we think the saving rate dropping to 10.1% in the third quarter, from 10.3% in the second quarter shows that consumers are content with their levels of savings, and that the saving rate dropping further will support consumption growth in 2025."
Meanwhile, UK businesses issued a stark warning to Chancellor Rachel Reeves that the economy is "headed for the worst of all worlds" with activity expected to fall sharply in the first three months of 2025.
A survey by the Confederation of British Industry found firms expected to reduce both output and hiring.
The chancellor's hike to employers' national insurance, set to rake in around GBP25 billion a year, was highlighted as one of the reasons for the gloomy outlook.
Alpesh Paleja, the CBI's interim deputy chief economist, said: "There is little festive cheer in our latest surveys, which suggest that the economy is headed for the worst of all worlds – firms expect to reduce both output and hiring, and price growth expectations are getting firmer.
"Businesses continue to cite the impact of measures announced in the Budget – particularly the rise in employer NICs – exacerbating an already tepid demand environment."
Completing a trio of downbeat reports, confidence in the UK economy among consumers is waning, according to the British Retail Consortium.
The BRC consumer spending monitor for December showed a drop in public confidence in the state of the UK economy, while plans for personal spending also fell.
The personal financial situation index remained in negative territory, though steady, at minus 3 points, BRC said. However, the index for the state of the economy fell to negative 27 points in December from negative 19 in November, and the overall personal spending index fell to negative 3 points from positive 3.
On the FTSE 100, retailers were mostly lower. Sports retailer JD Sports fell 0.9%, grocer J Sainsbury eased 0.4% and food and clothing firm Marks & Spencer also declined 0.4%.
Susannah Streeter at Hargreaves Lansdown said that retailers will be hoping two days of last-minute present buying will help "revive fortunes after a distinct lack of lustre for the golden quarter."
"It’s been tough going for clothing stores in particular, in the UK, with sales falling in November. It’s hoped the cold turn in the weather and late dash for present ideas might finally see winter woollies piled high at counters."
The pound was quoted lower at USD1.2531 at midday on Monday in London, compared to USD1.2549 at the equities close on Friday. The euro stood at USD1.0395, down against USD1.0399.
Against the yen, the dollar was trading higher at JPY156.86 compared to JPY156.58 on Friday.
In European equities on Monday, the CAC 40 in Paris was down 0.1%, as was the DAX 40 in Frankfurt.
In New York, stocks were called mixed. The DJIA was seen down 0.2%, the S&P 500 index 0.1% lower, and the Nasdaq Composite up 0.2%.
In London, Direct Line rose 3.6% after agreeing a GBP3.7 billion takeover by London-based insurer, Aviva.
The cash-and-shares bid values each share in Bromley-based Direct Line at 275p each.
Direct Line shareholders will receive 0.2867 of an Aviva share, 129.7p in cash, and up to 5p in dividends payments for each Direct Line share held.
Aviva Chief Executive Amanda Blanc said the deal is "excellent news" for the customers and shareholders of Aviva and Direct Line.
"It builds on our track record of delivering four years of strong financial performance and, in line with our strategy, it accelerates our growth in capital light business."
Aviva expects earnings per share accretion of around 10% once pretax cost synergies of GBP125 million are fully realised, with underlying EPS accretion expected from the first full year post-completion.
FTSE 100-lised Aviva rose 0.4%.
Airtel Africa led the FTSE 100 risers, up 3.0%, after launcing an up to GBP100 million share buyback.
The telecommunications and mobile money services provider in 14 countries in Africa aims to complete the buyback by April 24, 2025.
It started the programme with a USD50 million first tranche.
A previous USD100 million buyback was launched in March and completed in October.
AstraZeneca climbed 1.6% after receiving approval in the European Union for Tagrisso, its non-small cell lung cancer treatment.
The Cambridge-based pharmaceutical company said the approval followed its Laura phase 3 trial, which demonstrated that Tagrisso extended the median progression-free survival for adult patients to more than three years.
It also reduced the risk of disease progression or death by 84% compared to a placebo.
Elsewhere, Seeing Machines climbed 6.8% after it announced a significant investment from, and collaboration with, Mitsubishi Electric Mobility.
Canberra-based Seeing Machines designs artificial intelligence-powered operator monitoring systems to enhance transport safety. It said it secured a GBP26.2 million strategic investment as part of a collaboration agreement.
The investment, via a subscription for shares at 4.09 pence each, is worth around 15% of Seeing Machines' share capital.
Seeing Machines said it understands MEM has bought additional shares from Lombard Odier Asset Management and VS International Venture, the largest and second largest shareholders respectively of the company, to increase its holding to 19.9%.
Brent oil was quoted at USD72.65 a barrel at midday in London on Monday, up from USD72.71 late Friday.
Gold was quoted at USD2,616.13 an ounce, down against USD2,627.90.
By Jeremy Cutler, Alliance News reporter
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