The FTSE 100 and European stocks were lower as official figures showed the UK economy stagnated in the third quarter and Federal Reserve chair Jerome Powell delivered a hawkish-toned speech on inflation.
The FTSE 100 (^FTSE) slipped 0.53% to 7,416 points at the open, while the CAC 40 (^FCHI) in Paris lost 0.49% to 7,078 points. In Germany, the DAX (^GDAXI) retreated 0.30% to 15,306. The Stoxx 600 (STOXX) lost 0.41% at the open, hurt by higher bond yields.
Across the pond, US stocks slid after Powell said in a speech on Thursday that the central bank thinks more may be needed to bring down inflation.
Read more: UK economy flatlines but avoids recession
“The Federal Open Market Committee is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2% over time; we are not confident that we have achieved such a stance,” he said.
The Dow Jones (^DJI) slipped 0.65% to close at 33,891 points. The S&P 500 (^GSPC) lost 0.81% to finish at 4,347 points and the tech-heavy NASDAQ (^IXIC) slid 0.94% to 13,521 points.
S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the green as trade began in Europe on Friday.
Back in the UK, gross domestic product (GDP) rose by 0.2%, showing no change from August’s figures, according to the Office for National Statistics (ONS).
In Asia, the Hang Seng (^HSI) in Hong Kong tumbled 1.80% to 17,196 while the Shanghai Composite (000001.SS) slipped 0.47% to 3,038 points. Tokyo’s Nikkei 225 (^N225) also finished in the red, losing 0.24% to 32,568 points.
Read more: Interest rates: No more rises needed to tackle inflation, says BoE chief economist
Meanwhile, Brent crude (BZ=F) recovered slightly after falling more than 4% this week to levels not seen since July amid a worsening outlook for the global economy that has cut expectations for crude consumption.
West Texas Intermediate (CL=F) rose 0.25% trading at $7593 per barrel. Brent crude futures climbed 0.32% to $80.27 per barrel.
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NatWest has said it will not pay £7.6m in potential payments to former chief executive Alison Rose after she left the company in July amid the fallout over the debanking row with Nigel Farage.
Rose will be paid a little over £1.7m for serving out her notice period. The ex-chief executive, who stepped down after talking to a BBC journalist about Nigel Farage’s bank account, will not be given “good leader status” by the bank, it said.
It said that the £4.7m in awards that were due to vest after Rose left in July would lapse, and that she would also not be entitled to a bonus or variable remuneration worth up to £2.9m.
The bank said that “no finding of misconduct” had been made against Alison.
Rose said that she had accepted the decision of the NatWest board, and that she was “pleased” that the bank had cleared her of misconduct.
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UK housebuilder Redrow (RDW.L) has warned that full-year sales and profits would likely be at the lower end of guidance due to a subdued autumn housing market..
The business has had to adapt to a “more difficult trading environment” in terms of build rate and operating costs, Redrow chairperson Richard Akers said.
The housebuilder said the value of net private reservations in the first 18 first weeks ended 3 November 2023 was 25% below the prior year at £384m while gross private reservations per outlet per week for the period were 0.49 compared to 0.63 last year.
The average selling price of private reservations in the period was 2.5% lower at £471,000.
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Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK GDP figures:
“No growth is not exactly the kind of headline any government wants but with this last lot of GDP figures the UK economy has at least avoided falling into a technical recession this year.
“And despite strikes on the railways and by junior doctors, September did deliver a sliver of growth as this year’s Covid vaccine programme was rolled out and the unseasonably warm weather helped reinvigorate the ailing construction sector.
“But cost of living pressures are still strangling consumer facing services with retailers punished further by high temperatures, which meant no one was buying winter woollens, and though summer’s last hurrah did tempt us to get out and about, budget constraints have hampered any chance of a post-pandemic recovery.
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Shares in drinks company Diageo (DGE.L) have tumbled over 10% to the bottom of the FTSE 100, after it issued a profits warning.
The spirits giant said it has suffered a steep slowdown in growth in its Latin America and Caribbean division as customers there buy less and trade down to cheaper brands.
The company said it expects lower growth and profits in the second half of the year.
Diageo makes Johnnie Walker whiskey, Tanqueray gin, Smirnoff vodka, Captain Morgan rum, Guinness stout and Baileys, among other drinks.
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The UK’s economy has slid into stagnation as official figures show the economy flatlined in the third quarter of the year.
Gross domestic product (GDP) rose by 0.2%, showing no change from August’s figures, according to the National for National Statistics (ONS). GDP measures the value of goods and services produced by the economy.
Despite the weak figures, the UK economy managed to avoid a recession this year, which is defined as two consecutive quarters of negative GDP. Economists had predicted that the economy would shrink by 0.1%.
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The former boss of NatWest is set to have much of her £10m pay-off taken away by the banking giant, according to a report, after she admitted being the source of a BBC article.
The bank is on Friday expected to announce that it will not pay Dame Alison Rose most of the discretionary parts of her pay package, Sky News said.
The announcement comes a little under four months since Dame Alison stepped down as chief executive of the bank, which also owns Coutts.
Watch: Fed chair Powell’s comments spark stock sell-off
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