Business news live: FTSE 100 closes higher as airline share prices begin recovery over oil fears

Good morning, welcome to Thursday’s edition of the business live blog.

Coming up we’ve got all the day’s main lines from UK plc and around the stock markets, but the opening news is the UK economy shrinking by 0.3 per cent.

The UK economy shrunk by more than expected in a major blow to Rachel Reeves, just one day after she unveiled her spending review.

The Office for National Statistics (ONS) said that gross domestic product (GDP) fell by 0.3 per cent in April, compared with growth of 0.2 per cent the previous month and marking the biggest contraction since October 2023.

It was also worse than the 0.1 per cent contraction expected by most economists.

After trading up for most of the day, a dip late on saw US stocks end in the red for Wednesday, with the Nasdaq down 0.5pc, the S&P 500 down 0.27pc and the Dow basically flat.

Asia then followed in kind, the Nikkei 225 ending 0.65pc in the red and the Hang Seng down almost a full 1 per cent.

Not much market movement so far, following a big spending review yesterday and that economic news this morning.

The FTSE 100 is flat, with both the 250 and the AIM down around 0.3 per cent.

Halma has popped up eight per cent so far to help the FTSE 100 stay just about above the red – more on them coming now.

Halma, the FTSE 100 maker of safety equipment, has posted a bumper set of results which sent its share price flying 8.6 per cent in early trading.

CEO Marc Ronchetti lauded revenue growth of 11 per cent to £2.25bn and announced an increase of 7 per cent to the dividend – a 46th straight year of growing the shareholder payout.

Halma has a market cap of around £11.5bn and shares are trading at around £32.84 following the morning rise.

A falling UK economy was “inevitable” in April, said Danni Hewson, AJ Bell head of financial analysis.

The UK showed 0.3 per cent decline in GDP with the services sector in particular declining 0.4 per cent.

“It’s hard not to look at today’s headline fall in economic growth as anything other than inevitable. Company after company had warned the chancellor that the decisions taken during last year’s Budget would impact business growth and create huge uncertainty about existing staffing levels,” Ms Hewson said.

“The latest jobs figures highlighted the fall in payrolled employees and rising unemployment earlier this week, and all those bill rises in April delivered another knock to consumer confidence, with the latest BRC retail sales figures showing spending on big ticket items has been reigned back.

“Rachel Reeves has said she is determined to deliver growth, and her spending plans have been given a cautious welcome by business groups up and down the country – but the caution speaks volumes.

“The next five months looks set to see the UK become something of a petri dish, where speculation and rumour fester as concern about rising debt levels feeds expectation that further tax hikes are inevitable.”

High street discount chain Poundland is set for a “restructuring” process after it was sold to investment firm Gordon Brothers.

The parent firm, Pepco Group, which has owned the brand since 2016, said it has completed the sale of the business for a “nominal” fee.

It comes after an auction by Poland-based Pepco to sell Poundland after a sharp downturn in trading over the past year.

Poundland’s more than 800 stores and roughly 16,000 employees will be transferred to the ownership of Gordon Brothers, which owns brands including Laura Ashley, as a result.

However, as part of the deal, Poundland is set to undergo a restructuring plan.

Donald Trump last night said he’d be sending out letters to trade partners in two weeks, informing them of trade tariffs on a take-it-or-leave-it basis.

That has partly contributed to shares falling overnight and in Europe today, but it has also seen gold rise once more.

Gold is up around 0.8 per cent to $3,369.

FTSE 100 shares remain mostly flat, now just 0.07 per cent in the red, but Tesco is one of the London Stock Exchange-listed companies which is thriving this morning.

“Having narrowly missed closing at a new record high last night, the FTSE 100 held firm at the market open as strength in energy and tech was offset by weakness in banking shares,” says AJ Bell investment director Russ Mould.

“Escalating tensions between the US and Iran helped oil prices to a two-month high and gave heavyweight stocks BP and Shell a lift. Precious metal miners were also in demand as investors sought out safe-haven gold-related stocks in the hope of protection against renewed uncertainties in the world.

“Tesco has successfully fought off discount rivals Aldi and Lidl and protected its dominant UK market position, yet at no point can it take its foot off the pedal. The moment Tesco relaxes is the point at which rival operators pounce on the opportunity to eat some of its lunch.

“Its first quarter trading update implies that Tesco is still at the top of its game, achieving moderate but resilient sales growth and continuing to grow its market share. There’s clear momentum in the business with sales of its premium products doing well, plenty of product innovation, non-food sales look encouraging, and it is now selling clothes online.”

Most of the major European markets and indices are in the red this morning.

Germany’s DAX is the biggest faller, more than 1.0 per cent down so far, with France’s CAC 40 at 0.4 per cent in the red and the Ibex 35 0.7 per cent down.

The UK’s FTSE 250 is similarly half a percent down, but the FTSE 100 remains bolstered to the flat line by the likes of BT, BP, Halma and Tesco.