London pre-open: Stocks seen down as UK economy continues to stagnate

11th Sep 2024 07:36

(Sharecast News) - London stocks were set to fall at the open on Wednesday as data showed the UK economy continued to stagnate in July.

The FTSE 100 was called to open down around 20 points.

Figures released earlier by the Office for National Statistics showed zero growth in gross domestic product, unchanged on June. Economists had been expecting 0.2% growth.

Liz McKeown, director of economic statistics at the ONS, said: "July's monthly services growth was led by computer programmers and health, which recovered from strike action in June. These gains were partially offset by falls for advertising companies, architects and engineers.

"Manufacturing fell, overall, with a particularly poor month for car and machinery firms, while construction also declined."

In corporate news, Rightmove said it has rejected a £5.6bn takeover proposal from Australian peer REA Group, labelling it "wholly opportunistic" and saying it undervalues the UK property platform's future prospects.

On 5 September, REA proposed 305p in cash and 0.0381 new REA shares for each Rightmove share, which implied an offer value of 698p - a 26% premium to the closing price before REA confirmed speculation about its intentions.

REA said in a statement that the proposal was a "highly compelling proposition", while Rightmove urged its shareholders not to take any action.

Elsewhere, homeware retailer Dunelm reported a rise in full-year profit and sales despite a "softer" market.

In the 52 weeks to 29 June, pre-tax profit increased 6.6% to £205.4m, while sales rose 4.1% to £1.7bn.

Chief executive Nick Wilkinson said: "This strong set of results is testament to the hard work of our adaptable and committed colleagues.

"In a period when consumers faced inflationary pressures and competing demands for their disposable income, we have continued to raise the bar on the relevance and value we offer at Dunelm. The continued delivery of volume-driven sales growth and further share gains in this softer market underlines this, and the strength and resilience of our business model."