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Stocks rally as UK puts recession fears to rest; economy growing fastest rate in two years

Published 10/05/2024, 12:56
Updated 10/05/2024, 13:10
© Reuters FTSE 100 Live: Stocks rally as UK puts recession fears to rest; economy growing fastest rate in two years
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Proactive Investors -

  • FTSE 100 up 67 points to 8,448
  • UK exits shallow recession
  • GDP rose 0.6% in first quarter

Anglo-American lifts on fresh takeover reports

London's blue chips are continuing to push higher, smashing yet more intra-day records as they look to finish the week at yet another record high.

The FTSE 100 is up around 67 points or 0.8% at 8,448, helped by gains from Standard Chartered (LON:STAN), Kingfisher (LON:KGF) and Glencore (LON:GLEN).

Also rising 2% was Anglo American (JO:AGLJ), the mining company which has been at the centre of takeover interest from industry rivals.

Last month, the group rejected an offer from BHP as management claimed it significantly undervalued the company.

Last week, reports revealed Glencore was mulling a bid.

Now its Rio Tinto (LON:RIO)'s turn, with Australian reports indicating it was also considering tabling an offer.

Rio "management had not ruled out making a play for part or all of the mining group and continued to study the day-to-day situation", the Australian Financial Review reported.

Jaguar Land Rover sees profits soar on record revenues

Jaguar Land Rover posted its largest set of annual profits in nearly a decade after it said it achieved "sustained global demand" for its luxury vehicles.

Pre-tax profits reached £2.2 billion for the year, an improvement on every year since 2015.

It comes as revenues hit all-time highs of £29 billion, driven by a record fourth quarter, which saw sales soar to £7.9 billion.

JLR's total order book reached 133,000 vehicles by the end of its financial year, 76% of which were for Range Rovers, Range Rover Sports and Defender models.

Around 28,700 drivers signed up to the waiting list for Range Rover's new electric vehicle.

Chief executive Adrian Mardell said: "We have delivered a record financial performance for the company, generating free cashflow of £2.3bn, enabling us to reduce net debt to £700m.

"The foundation of this performance was the sustained global demand for our modern luxury vehicles, led by our Range Rover and Defender brands, underpinned by a consistent focus on operational improvement."

Lidl hikes workers pay again

Lidl is hiking its workers' pay for the third time in the last twelve months as it restarts its expansion plan.

Ahead of a planned hiring spree, the German discounter has upped hourly pay from £13.55 to £13.65 in London and from £12 to £12.40 in the rest of the UK.

After increasing salaries in both September and March, Lidl now claims it offers the best hourly pay within the supermarket industry.

Lidl recently restarted its expansion drive, planning to open hundreds of stores within the coming years.

New sites are expected to be opened in areas such as Edinburgh, Leeds and Woking.

The supermarket also offered Brits the chance at a cash reward for recommending a suitable location for a new store.

UK economy "going gangbusters", says ONS

Britain's economy is "going gangbusters" claimed the UK's Office for National Statistics, after it was revealed the country had escaped a short-lived recession.

GDP increased by 0.6% during the first three months of 2024, beating the market consensus of a 0.4% lift.

ONS chief economist Grant Fitzner said: “To paraphrase the former Australian Prime Minister Paul Keating, you could say the economy is going gangbusters."

James Smith at ING added: "The bottom line is that the economy is entering a brighter period. The timing of the March bounce provides a nice starting point for the second quarter, where growth could easily come in at 0.4% or 0.5%."

Oil prices rise

Oil prices have risen for the third consecutive day, bringing the commodity to a one-week high.

It comes as US unemployment data surged to its highest level since August last year, bolstering the argument that the Federal Reserve should cut interest rates this year.

Brent Crude, the international benchmark, lifted 0.55% to US$84.34 per barrel.

West Texas Intermediate, a benchmark for "lighter" oil, jumped 0.68% to reach US$79.80 a barrel.

Also helping improve sentiment were dovish messages from the Bank of England yesterday as it nears an interest rate cut in the coming months.

Read more on Proactive Investors UK

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