London pre-open: Stocks seen up; GDP in focus

28th Mar 2024 07:39

(Sharecast News) - London stocks were set to rise at the open on Thursday following a positive session on Wall Street, as investors digested data confirming the UK fell into recession last year.

The FTSE 100 was called to open around 35 points higher.

Final figures from the Office for National Statistics showed that GDP contracted by 0.3% in the last three months of the year, unrevised from an earlier estimate. This followed a 0.1% contraction in the period from July to September.

Chancellor Jeremy Hunt said in response to the data: "Last year was tough as interest rates had to rise to bring down inflation, but we can see our plan is working.

"Inflation has fallen decisively from over 11% to 3.4%, the economy grew in January and real wages have increased for eight months in a row."

Ashley Webb, UK economist at Capital Economics, said: "Overall, today's data release does not change much. The UK's mild technical recession at the end of last year was as mild as previously thought and the economic recovery is probably already underway.

"And our forecast for inflation to fall further than the consensus and for interest rates to be cut faster and further than current market pricing suggests the economic recovery in 2024 and 2025 will be stronger than most expect."

In corporate news, retailer JD Sports Fashion said it expected full-year profits to be within guidance of £915-935m and said the current year would be "challenging" due to less product innovation and more discounting, but forecast this to moderate with the Paris Olympics and European football finals in the summer.

Keysight Technologies has reached a deal to buy Spirent Communications for £1.16bn, outbidding US peer Viavi Solutions which had already agreed to buy the UK telecoms group earlier this month.

Spirent said it is now recommending a 201.5p-per-share offer from Keysight, which represents a 26.5p or 15% premium to Viavi's offer.

"Accordingly, the Spirent directors have unanimously withdrawn their recommendation of the Viavi offer and intend to adjourn the Viavi offer shareholder meetings," the company said in a statement.