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(Alliance News) - The UK economy finally has completely rebounded from the hit delivered by the pandemic, nearly two years after the first lockdown to control Covid-19 first was put in place, data showed on Friday.
Gross domestic product grew by 0.8% in January, rebounding from December's 0.2% drop, and was ahead of market consensus - provided by FXStreet - of 0.2% growth.
The Office of National Statistics noted the UK economy is now 0.8% bigger than its pre-coronavirus size in February 2020.
Industrial production growth was 0.7% month-on-month in January, primarily driven by 0.8% growth in manufacturing. This follows growth of 0.3% in December 2021.
The market had predicted a measly 0.1% monthly rise in industrial production, while manufacturing was guided to rise by 0.2%.
Services output grew by 0.8% in January from the month before and is 1.3% above its pre-coronavirus pandemic level, the ONS noted. This followed a 0.5% fall in December.
Pantheon Macroeconomics said the "modest" hit from Omicron "waned quickly" in January, but it believes GDP growth is set to slow as real disposable income drops.
Pantheon is predicting the UK economy to grow by about 0.9% quarter-on-quarter in the first quarter.
"As a result, it is a safe bet to assume that the [Bank of England's] Monetary Policy Committee will raise bank rate by 25bp, to 0.75%, next week. Nonetheless, the recovery likely will stall in Q2," it added.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.6% at 7,141.26
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Hang Seng: down 1.6% at 20,553.79
Nikkei 225: closed down 2.1% at 25,162.78
S&P/ASX 200: closed down 0.9% at 7,063.60
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DJIA: closed down 112.18 points, or 0.3%, at 33,174.07
S&P 500: closed down 18.36 points, or 0.4%, at 4,259.52
Nasdaq Composite: closed down 125.58 points, or 1.0%, at 13,129.96
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EUR: down at USD1.0993 (USD1.1007)
GBP: down at USD1.3083 (USD1.3125)
USD: up at JPY116.74 (JPY116.05)
Gold: down at USD1,988.80 per ounce (USD1,995.65)
Oil (Brent): down at USD111.84 a barrel (USD112.45)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's key economic events still to come
0930 GMT UK manufacturing production
1230 GMT UK NIESR monthly GDP tracker
1000 EST US Michigan consumer sentiment index
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Nearly 100,000 people have been evacuated from Ukrainian cities in the past few days, Ukrainian President Volodymyr Zelensky has said in a video message. But he said the port city of Mariupol and nearby Volnovakha remained surrounded by Russian forces. Zelensky accused Russia of shelling the escape corridor and a collection point for people fleeing Mariupol on Thursday. The Ukrainian president also charged that Moscow was doing everything possible to deceive Ukrainians in the cities besieged by Russian units. He called on citizens with contacts to Mariupol residents to tell them not to give up the battle for the city. The information could not be verified independently.
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Zelensky also commented on Russia's allegations that Ukraine is developing biological weapons. "No chemical or other weapons of mass destruction are being developed in my country," he said. "The whole world knows that and so do you."
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Latvia, Poland and Lithuania were advocating for an EU ban on Russian energy imports at an EU leaders' summit in Versailles on Thursday despite the risk to unity within the EU over Russia's war in Ukraine. "I'm convinced that we should make a decision to stop energy imports from Russia to get [Russian President Vladimir] Putin to the negotiating table to stop the war," Latvian Prime Minister Krisjanis Karins said. The EU's 27 heads of state came together at the informal summit after a frantic two weeks of supplying arms to Ukraine, sheltering nearly 2.2 million people and signing off on three rounds of massive sanctions on Russia for the invasion of its neighbour. Any moves towards an embargo however are likely to meet resistance from Germany, Austria and Hungary, who cover significant parts of their energy needs with Russian imports. German Chancellor Scholz came out strongly against the idea on Monday. EU leaders were also considering how to create the conditions for a ceasefire in Ukraine.
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Inflation in Germany remained high in February, accelerating from the month before due to soaring energy prices. From a year before, consumer prices in February rose by 5.1%, the Federal Statistic Office Destatis reported. They rose 0.9% from January, when prices had increased 4.9% year-on-year. Significant price increases at upstream stages and delivery bottlenecks had "a major impact" on the rate of inflation, Destasis said. "The effects of the Covid-19 pandemic are increasingly superimposed by uncertainties related with the Russian attack on Ukraine," said FSO President Georg Thiel. The crises drove energy prices up by 23% year-on-year.
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BROKER RATING CHANGES
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Barclays starts Deliveroo with 'equal weight' - price target 165 pence
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JPMorgan raises Fevertree Drinks to 'neutral' (underweight) - target 1,650 (2,000) pence
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COMPANIES - FTSE 100
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Evraz said all 10 remaining non-executives have left the steel maker's board, with its recently appointed chief executive the last director standing. Alexander Abramov, Alexander Frolov, Alexander Izosimov, Deborah Gudgeon, Eugene Shvidler, Eugene Tenenbaum, Karl Gruber, Maria Gordon, Michael Peat and Stephen Odell have left their non-executive posts, Evraz said. Only CEO Aleksey Ivanov remains. Ivanov assumed the role from September 1, replacing Frolov who moved to a non-executive post at the end of August. Friday's mass exodus comes after the UK Financial Conduct Authority on Thursday temporarily suspended the listing of Evraz.
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Housebuilder Berkeley said its trading has been "robust" in the period from November 1 to February 28. The company said the value of underlying sales reservations has remained slightly ahead of pre-pandemic levels and cancellations are at normal rates, while sales pricing is "sufficiently" ahead of its business plan - allowing the housebuilder to absorb construction cost increases. As a result, Berkeley said it is on track to meet its annual earnings guidance for the year ending April 30. Forward sales, representing cash due under exchanged private sales, is expected to be above GBP1.70 billion at year-end. They stood at GBP1.70 billion on October 31. Net cash is forecast to be around GBP900 million, up from GBP846 million at the end of October.
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Cybersecurity firm Avast joining the rapidly expanding list of companies that have withdrawn their services from Russia. Avast noted it has employees in both Russia and Ukraine. Ukraine, Russia and Belarus collectively contributed around 1.5% of Avast's annual revenue in 2021.
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Online grocer Ocado noted the International Trade Commission on Thursday decided in favour of Ocado on all points in the complaint brought by AutoStore. The ITC, consisting of five patent judges, found that either the AutoStore patents were invalid or not infringed by Ocado's technology. Ocado said it continues to pursue its claims against AutoStore for infringement of Ocado's own intellectual property rights.
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COMPANIES - MAIN MARKET AND AIM
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DP Eurasia, the master franchisee of Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia, said Friday there has been no material disruption to its operations so far. "Trading from its 188 stores in Russia continues, and the group remains dedicated to the communities it serves," it asserted. DP Eurasia did, however, say it felt it is "prudent" to limit any further investment into its operations. It also has suspended royalty payments from its Russian operations.
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Secure Trust Bank has agreed to exit the debt purchase market, and, as a result, its subsidiary, Debt Managers, has sold its 650,000 strong customer loan portfolio to Intrum UK Finance. "The cash purchase consideration for the portfolio will be determined by the financial position of the portfolio as at completion, taking account of debt collections and of further debt purchases from STB by DMS to date," the lender noted. At the end of September, the portfolio held a gross value of GBP84.7 million. STB is expecting to secure GBP79.7 million for the portfolio.
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Parsley Box confirmed it raised GBP5.9 million as planned from the placing of new shares at 20 pence each. Edinburgh-based meal delivery firm also plans to raise a further GBP1.1 million from an open offer at the same price. This will result in the issue of 35 million new shares in total, 41% of its expanded total. The company called a general meeting of shareholders for March 30 to approve the fundraise.
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Aquis Exchange - which operates the Aquis Stock Exchange - is planning to list on that market on March 29. Aquis is looking to list on the Apex Segment of the Aquis Stock Exchange Growth Market, but noted it will continue to trade on AIM. "Aquis continues to build momentum across all areas of its activities and the dual listing on the AQSE Growth Market is a logical step in the group's progression and a tangible demonstration of confidence in that market," the company explained.
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COMPANIES - GLOBAL
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Exxon Mobil is mulling the sale of a series of assets in North Dakota in a possible USD5 billion deal, Bloomberg reported. Bloomberg, citing people with knowledge of the matter, said the oil major is in the final stage of interviewing bankers to help launch a process to sell its Bakken shale assets. Exxon may yet decide against selling the Bakken assets, however, Bloomberg added. Bloomberg noted that output levels in the Bakken oil field are "muted" as the area is more mature.
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Friday's shareholder meetings
Hardide PLC - AGM
Tritax EuroBox PLC - GM re Roosendaal acquisition
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By Tom Waite; thomaslwaite@alliancenews.com
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