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- FTSE 100 edges lower, bond yields jump
- FirstGroup soars on better-than-expected results
- Eurozone falls into recession in first quarter
Eurozone slips into recession
The eurozone has fallen into recession, new data shows, after first quarter growth was revised down slightly.
Eurostat said that GDP across the euro area shrank by 0.1% in the first quarter of this year, downgraded from a previous estimate that the economy stagnated.
Euro area #GDP -0.1% in Q1 2023, +1.0% compared with Q1 2022 https://t.co/CybdBFvQxH pic.twitter.com/jkkFXaUBaC— EU_Eurostat (@EU_Eurostat) June 8, 2023
That follows a 0.1% contraction in GDP in the fourth quarter of last year, meaning the eurozone has shrunk for two quarters in a row – the standard definition of a recession.
European markets shrugged off the numbers with the CAC 40 up 0.2%, and the Dax in Frankfurt up 0.1%.
Both are outperforming the FTSE 100 which is down 10 points at 7,613.
Government blocks Royal Mail plans to axe Saturday deliveries
Royal Mail’s hopes of ending Saturday deliveries have been delivered a blow by ministers as regulators investigate whether to fine the company for breaching its obligation to deliver six days a week.
Royal Mail, owned by International Distributions Services PLC (LON:IDSI), had warned that its poor financial performance will continue unless ministers let the company abandon Saturday letter deliveries.
It argued that the decline of letters means its current programme of deliveries is financially unviable.
However, business minister Kevin Hollinrake told the company today that the Government has no plans to review its so-called universal service obligation.
"We currently have no plans to change the minimum requirements of the universal postal service as set out in the Postal Services Act 2011 (the Act), including 6-day letter deliveries," he said.
"Postal services have long played, and continue to play, a key role in our society," he added, noting "the ability to send and receive letters and parcels is important both socially and economically."
"This is particularly true for consumers who might be more vulnerable, such as those who are geographically or digitally isolated from their friends and family."
Storm clouds gathering over property market - RICS
The Royal Institution of Chartered Surveyors (RICS) is warning that expectations of further interest rate rises from the Bank of England may put renewed downward pressure on the market in the months ahead.
RICS Senior Economist, Tarrant Parsons said: "“However, it seems storm clouds are gathered, with the UK’s stubbornly high inflation likely undermining the recent improvement in activity by prompting the Bank of England to take further action through interest rate rises, leading to higher mortgage rates and ultimately reducing affordability and buyer demand."
Parsons warned that expectations of further interest rate hikes will hit demand and affordability.
RICS’s monthly health check on the property sector found some improvement in market conditions during May, with the first rise in new instructions since early 2022. House prices continue to fall in much of England, although Scotland and Northern Ireland have witnessed an uplift.
Derren Nathan, head of equity research, Hargreaves Lansdown (LON:HRGV) said the report "mirrors the gloom seen in yesterday’s house price data by Halifax although there were a few glimmers of hope."
"The fall in buyer enquiries was the lowest seen over twelve months although was still down 18%. The rate of decline in agreed sales also fell sharply," he noted.
Yesterday, Halifax reported that house prices experienced their first annual fall in more than a decade last month.