The British economy stalled in the third quarter, registering flat gross domestic product growth between July and September, and surpassing expectations of a 0.1 per cent dip, fresh data from the Office for National Statistics shows. 

The FTSE 100 will open at 8am. Among the companies with reports and trading updates today are Diageo, Redrow, Chemring and Warpaint. Read the Friday 10 November Business Live blog below.

> If you are using our app or a third-party site click here to read Business Live

Federal Reserve chairman Jerome Powell warns inflation fight is not over

Redrow sales slump

Redrow expects annual profit and revenue to be at the lower end of its forecast range as the builder suffers a subdued autumn housing market.

The latest warning from a UK housebuilder on challenging conditions in the housing market comes as elevated mortgage costs and broader economic worries drive homebuyers away.

Earlier this week, Redrow’s bigger peers Taylor Wimpey and Persimmon flagged uncertainty in the coming months.

The business has had to adapt to a ‘more difficult trading environment’ in terms of build rate and operating costs, Redrow Chairman Richard Akers said.

In September, the company had forecast fiscal year 2024 profit before tax of £180million to £200million, and revenue of £1.65billion to £1.7billion.

GDP growth flatlines in Q3: ‘A decent outcome’

Emma Mogford, manager of the Premier Miton Monthly Income Fund:

‘A flat economy isn’t usually something to cheer about. However, given the pressures from the cost-of-living crisis and higher interest rates, it’s a decent outcome.

‘While pressures from higher rates remain, I think we can go into the festive season with a dash of optimism about the British economy.’

Diageo suffers demand dip

Diageo expects organic operating profit growth to decline in the first half of its current financial year due to ‘materially weaker’ performance in Latin America and Caribbean.

‘Macroeconomic pressures in the region are resulting in lower consumption and consumer downtrading,’ the world’s biggest spirits company said in a statement.

‘These impacts are slowing down progress in reducing channel inventory to appropriate levels for the current environment.’

Latin America and Caribbean makes up nearly 11 per cent of the Johnnie Walker maker’s net sales.

Sales in the region are now expected to decline by more than 20 per cent, year-on-year, in the first half of fiscal 2024, the company added.

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GDP growth flatlines: ‘The bigger issue lies with the service industry’

Michael Field, Europe market strategist at Morningstar:

‘UK GDP growth came in at 0.2% in September, against economists’ expectations of a flat performance. This comes on the foot of August’s reading of 0.1% growth. While this level of growth is far from robust, the important thing here is that the UK economy is in the black, and flat growth quarter on quarter means that the UK will not enter a technical recession in 2023.

‘Manufacturing usually takes the rap for slow economic growth in the UK, and rightfully too in many ways. Manufacturing activity, shown by manufacturing PMIs, has been in decline since the middle of 2022. With manufacturing contributing less than 20% to GDP however, this is just part of the problem.

‘The bigger issue lies with the service industry, which contributes almost 80% of GDP, and accounts for almost the same percentage in employment. Here, a large pullback in spending over the last 18 months by both businesses and consumers has hurt the economy. The somewhat bright news however is that service output rose by 0.2% in September, following a 0.7% fall in August.

‘With interest rates at the highest level since the global financial crisis, the cost of interest on debt is really starting to bite for both businesses and households. With interest rates likely to stay high for an extended period of time, it is hard to see any quick reversal on service spending, meaning low GDP growth may persist for some time yet.’

GDP growth flatlines in Q3

The British economy stalled in the third quarter, registering flat gross domestic product growth between July and September, and surpassing expectations of a 0.1 per cent dip, fresh data from the Office for National Statistics shows.

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