(Alliance News) - The UK's economic recovery gathered pace in April, figures from the Office for National Statistics showed on Friday.
Gross domestic product expanded 2.3% month-on-month in April, marking the fastest monthly growth since July 2020, as lockdown restrictions eased. This marks an uptick from a rise of 2.1% for March, though April's reading was slightly below expectations, according to FXStreet, for 2.4% growth.
In mid-April, beer gardens, hairdressers and non-essential retail re-opened in England. The service sector grew by 3.4% in April, the ONS said, with consumer-facing services growing by 13%.
Meanwhile, industrial production fell by 1.3% in April with the manufacturing sector contracting 0.3%, and construction output shrinking 2.0% following "exceptionally strong" growth in March.
While UK GDP remains 3.7% below pre-pandemic levels, it is now 1.2% above the initial recovery peak in October 2020.
For the three months to April, GDP grew by 1.5%. The ONS noted this was mainly because of services output, boosted by strong retail sales over the three months.
"Strong growth in retail spending, increased car and caravan purchases, schools being open for the full month and the beginning of the reopening of hospitality all boosted the economy in April," said Jonathan Athow, deputy national statistician for Economic Statistics at the ONS.
"The economy is now less than 4% below its pre-pandemic peak overall, however, declines in the often-erratic pharmaceutical industry, shutdowns in many car plants and large-scale oil field maintenance pulled back the headline rate of growth."
Commenting on the GDP figures, Jesus Cabra Guisasola, an associate at Validus Risk Management, said: "There are no doubts that the UK has been one of the countries coming out in a better position from the pandemic after the success of its vaccination program."
He added: "There is optimism surrounding sterling in the coming months and any delay on the reopening would have a minimal impact on the recovery. Hence, we could see GBPUSD closer to the 1.45-mark, a level not seen since early 2018."
The pound stood at USD1.4174 early Friday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.4% at 7,119.00
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Hang Seng: up 0.4% at 28,843.09
Nikkei 225: closed marginally lower, down 9.83 points at 28,948.73
DJIA: closed up 19.10 points, or 0.1%, at 34,466.24
S&P 500: closed up 19.63 points, or 0.5%, at 4,239.18
Nasdaq Composite: closed up 108.58 points, or 0.8%, at 14,020.33
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EUR: up at USD1.2184 (USD1.2168)
GBP: unchanged at USD1.4174
USD: down at JPY109.40 (JPY109.56)
Gold: up at USD1,901.04 per ounce (USD1,891.85)
Oil (Brent): flat at USD72.47 a barrel (USD72.45)
(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
UK PM Boris Johnson hosts G7 summit in Cornwall
Germany balance of payments
1000 CEST France IEA oil market report
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UK Prime Minister Boris Johnson has suggested the EU is taking an "excessively burdensome" approach to post-Brexit trading arrangements for Northern Ireland. Johnson, who signed the Brexit divorce deal which included the Northern Ireland protocol, insisted he was not trying to back out of the agreement. But he said the UK's "internal market" had to be respected and "we just need to make it work". The EU has threatened to launch a trade war against Britain if it fails to implement checks on goods entering Northern Ireland under the terms of the Brexit "divorce" settlement which Johnson signed. The protocol effectively keeps Northern Ireland in the European single market in order to avoid a hard border with Ireland, meaning a trade barrier in the Irish Sea for goods crossing from Great Britain. Johnson, who will hold talks with EU leaders over the course of the G7 summit, told the BBC: "You will understand that there are ways of enforcing the protocol, ways of making it work, that may be excessively burdensome."
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BROKER RATING CHANGES
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LIBERUM RAISES AUTO TRADER GROUP PRICE TARGET TO 700 (660) PENCE - 'BUY'
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BARCLAYS RAISES AUTO TRADER GROUP TARGET TO 600 (580) PENCE - 'EQUAL WEIGHT'
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JPMORGAN RAISES AUTO TRADER PRICE TARGET TO 575 (490) PENCE - 'UNDERWEIGHT'
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DEUTSCHE BANK CUTS ASHTEAD GROUP TO 'HOLD' ('BUY') - TARGET 5018 (4750) PENCE
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COMPANIES - FTSE 250
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Sanne said it is now in takeover talks with Cinven after receiving a fifth unsolicited approach worth 875 pence per share. Sanne shares closed at 772p on Thursday, with the latest offer representing a premium of 13%. The stock was up 12% on Friday morning at 863.00p. The provider of alternative asset and corporate services in late May rejected Cinven's fourth offer of 850p, believing it did not reflect its long-term prospects. However, Sanne has now decided to enter takeover talks after receiving the 875p bid, and has been granted an extension to the put-up-or-shut-up deadline for Cinven to either announce a firm offer or walk away. The new deadline is July 9. There can be no certainty an offer will be made, Sanne said.
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Domino's Pizza Group said Chief Financial Officer Neil Smith is leaving the company to take up another opportunity. The pizza delivery master franchiser said it will now commence a search process to find a successor, with Smith set to depart on November 26 following completion of his notice period.
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COMPANIES - MAIN MARKET AND AIM
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Build-to-rent housing provider Sigma Capital said it has agreed to be taken over by funds managed by PineBridge Benson Elliot, in a deal worth GBP188.4 million. Sigma shareholders will receive 202.1p per share in cash, representing a premium of 36% to Sigma's closing price on Thursday. The stock was up 35% early Friday at 200.62p. PineBridge Benson Elliot is a pan-European real estate private equity specialist, with USD3.2 billion of managed equity. The offer has acceptances representing 61% of Sigma Capital shares and is recommended unanimously by Sigma's independent shareholders. "We are delighted that our independent directors intend to recommend this offer from PineBridge Benson Elliot, having reviewed a number of options from other parties. We know the team well and believe that our complementary skills, experience and sector knowledge, as well as PineBridge Benson Elliot's capital backing, will make a powerful combination," said Sigma Capital Founder & Chief Executive Graham Barnet.
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COMPANIES - GLOBAL
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The UK competition & Markets Authority said it has secured commitments from Alphabet's Google about its plan to remove third-party cookies on Chrome. The regulator said it take up a role in the "design and development" of Google's Privacy Sandbox proposals to ensure they don't distort competition, for example by blocking newspapers from earning an income from their content. The CMA launched a consultation on Google's commitments, saying they would be legally binding.
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Friday's Shareholder Meetings
BlackRock Smaller Companies Trust PLC - AGM
Hurricane Energy PLC - GM re proposed restructuring plan
Microsaic Systems PLC - AGM
Warpaint London PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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