Household budgets are in focus after October’s retail sales figures showed a sharp fall and Ofgem increased the energy price cap.
The bigger-than-expected 0.7% decline in volumes for last month was blamed on uncertainty ahead of the Budget.
Consumer confidence figures have boosted hopes of a stronger November while Games Workshop and DFS Furniture today posted robust updates.
FTSE 100 Live Friday
- Retail sales fall amid Budget jitters
- Games Workshop beats hopes
- Consumer confidence improves
Euro at two-year low as UK and eurozone activity disappoints
10:17 , Graeme EvansPrivate sector activity showed an unexpected contraction in November, according to the latest S&P Global UK Composite PMI.
The headline reading of 49.9 is marginally below the 50 no change threshold and compared with a figure of 51.8 in October and City forecasts of about 52.
The decline was broad-based after a contraction in manufacturing activity and flat performance in services.
It follows tax hikes announced in the Budget and caution over the potential for new tariffs in a Trump administration.
In Europe, the flash composite PMI fell to 48.1 in November from 50 in October.
The euro fell to $1.035 following the release, its lowest level against the US dollar in two years.
Market update: Games Workshop in strong advance, banking stocks lower
09:54 , Graeme EvansA stronger session for UK stocks was today dominated by Games Workshop after an update by the Warhammer figurines firm boosted shares by 14%.
The company is now worth £4.4 billion - boosting its chances of promotion to the FTSE 100 index - after an updated estimate of results for the six months to 1 December showed core revenues growth of 11% to not less than £260 million.
The advance comes despite comparisons with last year’s launch of Warhammer 40,000, as well as currency headwinds. Licensing revenue of not less than £30 million is sharply higher following the launch of the Space Marine 2 video game.
The company is based in Nottingham but about three-quarters of sales are now generated outside the UK, served by logistics hubs in Tennessee and Sydney.
House broker Peel Hunt said the hobby was in excellent health following the “exceptional” first performance. It retained its Buy rating on the stock, which this morning surged another 1,620p to a record 13,330p.
AJ Bell investment director Russ Mould added: “Games Workshop controls everything from design to sales, allowing efficient cost optimisation and pricing control.
“It continues to be a unique business on the UK market and that has helped it attract a premium valuation.”
The latest progress came during a positive session for the FTSE 250 index, which climbed 156.56 points to 20,506.48, and for the FTSE 100 index after an improvement of 50.82 points to 8200.09.
Retailers were among the best performing stocks, despite figures by the Office for National Statistics showing that October’s sales volumes figure fell by 0.7% amid pre-Budget jitters.
B&M European Value Retail rose 9.3p to 348.3p and Sainsbury’s lifted 6.2p to 253p at the top of the FTSE 100, with B&Q owner Kingfisher also 2.9p higher at 292.,2p ahead of Monday’s trading update.
JD Sports Fashion lost 0.3p to 95.1p after JPMorgan lowered its price target from 171p to 105p in the wake of yesterday’s updated profit guidance.
Other fallers came from the financial sector as the strong run for Barclays ended with a decline of 2% or 6.4p to 256.25p, while Standard Chartered weakened 13.6p to 945.4p and NatWest lost 5.6p to 394.9p.
Among smaller stocks, DFS Furniture rose 2.2p to 135p after reporting that the trading improvement noted in September had continued in recent weeks.
Games Workshop up 14% after “exceptional” performance
09:16 , Graeme EvansGames Workshop has boosted its chances of entering the FTSE 100 index after today’s strong update sent shares up 14% or 1,618p to 13,328.8p.
The company’s new estimate of results for the six months to 1 December showed core revenues growth of 11% to not less than £260 million.
That’s despite tough comparisons with last year’s launch of Warhammer 40,000 and the impact of currency headwinds.
House broker Peel Hunt said the hobby was in excellent health following an “exceptional” performance in the first half of the financial year. It has retained its Buy rating with a new price target of 13,500p.
The FTSE 250-listed shares are up more than 35% this year for a market value of about £4.4 billion.
FTSE 100 opens higher, Games Workshop shares surge
08:19 , Graeme EvansThe FTSE 100 index has risen by 0.7% to 57.34 points to 8206.61.
Stocks in positive territory include BP, Marks & Spencer and the Sunbelt equipment hire business Ashtead.
In the FTSE 250, Games Workshop shares are up 14% or 1670p to a record 13,380p after it said trading has been stronger than it expected.
DFS Furniture shares rose 1.2p to 134p after its brief update, having risen by about 18% since mid-September.
The FTSE 250 index is 87.02 points higher at 20,436.94.
Forecaster backs festive outlook despite tax rises
07:41 , Graeme EvansDespite the tax rises announced in the Budget, Capital Economics said it still expects the retail sector to contribute to above-consensus consumer spending growth of 0.8% in 2024, 1.3% in 2025 and 1.8% in 2026.
The consultancy said this morning: “The bigger-than-expected 0.7% month-on-month fall in October suggests that households’ concerns about tax rises announced in the Budget on 30 October contributed to weaker retail spending at the start of the fourth quarter.
“But despite those tax rises, we still think a solid rise in real earnings in Q4 will support retail sales volumes in the run up to the crucial festive period.”
Games Workshop sales cheer, DFS sees improvement continue
07:34 , Graeme EvansGames Workshop and DFS Furniture today bucked the gloomy official retail sales figures for October by delivering their own robust updates
The Warhammer hobby firm said trading since its last update on 18 September had been stronger than it expected.
Its estimate of results for the six months to 1 December shows core revenue of not less than £260 million compared with £235.6 million the year before.
Pre-tax profit is set to be at least £120 million, up from £96.1 million.
DFS Furniture said an improvement in trading performance noted in September’s annual results had continued into the current financial year.
It said order intake remained in growth over the first 20 weeks of the period, inline with its expectations.
Consumer confidence improves in November
07:26 , Graeme EvansPoor retail sales figures for October have been offset by signs of an improvement in consumer confidence during November.
With nervousness ahead of the Budget and US election out of the way, GfK’s headline score improved by three points to minus 18 in November.
The biggest change in the month concerned major purchase intentions, which jumped by five points to minus 16 in the run-up to Black Friday.
The other four sub-measures, covering personal financial expectations and the wider economy, registered small increases.
GfK’s consumer insights director Neil Bellamy believes it’s too early to expect significant further improvements in the consumer mood.
He added: “As recent data shows, inflation has yet to be tamed, people are still feeling acute cost-of-living pressures, and it will take time for the UK’s new government to deliver on its promise of change.”
The survey was conducted among a sample of 2,001 individuals between 30 October and 15 November.
Energy price cap set for new year rise
07:23Energy bills will rise by 1.2% for the January to March period, regulator Ofgem said today.
The change to the price cap - the maximum rate per unit and standing charge that can be billed to customers for their energy use - will rise by £21 for an average household per year or around £1.75 a month.
For an average household paying by direct debit for dual fuel this equates to £1,738 per year.
Ofgem said: “ Our reliance on volatile international markets and rising tensions around the world continues to have a direct impact on household bills.”
Retailers blame uncertainty as clothing sales slide
07:19 , Graeme EvansNon-food sales volumes fell by 1.4% in October, according to today’s release.
The Office for National Statistics said: “Retailers across a range of industries suggested that low consumer confidence and uncertainty around the Budget announcement affected sales.”
The reporting period covered 29 September to 26 October and unlike previous years did not cover school half term for England and Wales. The Budget took place on 30 October.
The largest subsector decline was within clothing stores, which fell by 3.1% over the month to October. This fall follows growth in previous months attributed to end of season sales and improved weather,
Today’s overall decline of 0.7% followed three months of growth, including 0.1% in September.
Retail sales figures show big October fall
07:05 , Graeme EvansRetail sales volumes fell by a bigger-than-expected 0.7% in October, ONS figures showed today.
The decline compared with the previous month’s 0.1% rise and City forecasts in the region of 0.3% lower.
The performance cuts the annual growth rate to 2.4% from 3.2% in September.
JD Sports Fashion yesterday reported tougher trading conditions in the UK during October, causing it to revise to profits guidance for the year.
FTSE 100 seen higher after strong US session, Bitcoin near $100,000
06:59 , Graeme EvansThe FTSE 100 index is forecast to build on yesterday’s strong session, with futures trading pointing to an opening move higher of 33 points to 8182.
London’s top flight rose 0.8% or 64 points yesterday, supported by stronger oil stocks after the price of Brent Crude rose to $74 a barrel.
On Wall Street, the Dow Jones Industrial Average rose 1.1% and the S&P 500 by 0.5%.
Nvidia shares finished marginally higher after forecast-beating results were offset by disappointment over its current quarter guidance.
Meanwhile, the price of Bitcoin remains just below the $100,000 threshold.
