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The FTSE 100 closed at a new record on Thursday, and was above 9,300 for the first time, as it was buoyed by better-than-expected economic data. The FTSE 100 index closed up 21.06 points, 0.2%, at 9,309.20. The FTSE 250 ended down 68.04 points, 0.3%, at 21,817.84 and the AIM All-Share finished 0.88 of a point lower, 0.1%, at 758.86. The Cboe UK 100 ended up 0.1% at 932.68, the Cboe UK 250 was 0.3% lower at 19,151.17 and the Cboe Small Companies firmed 0.2% to 17,151.56. Trading received a lift from some better economic data after a run of downbeat news. UK public sector borrowing was better than expected last month, although the data is unlikely to end talk of tax rises in the autumn budget. Net borrowing, the difference between total public sector spending and income and excluding public sector banks, was £1.05 billion in July, well below the £22.56 billion in June, and the £3.37 billion 12 months earlier. It was also better than the £2.0 billion market consensus. The Office for National Statistics, which reported the data, said it was the smallest July borrowing figure for three years. June’s net borrowing figure was upwardly revised from £20.68 billion. However, Pantheon Macroeconomics analyst Elliott Jordan-Doak said: ‘The chancellor will still have to raise taxes in October.’ ‘The big picture remains that the public finances are in chronically weak condition. The chancellor faces surging gilt yields and a likely productivity downgrade from the [Office for Budget Responsibility] in the October forecast round.’ ‘The public finances are unsustainable in the long-run and delaying action now increases the risks of needing to make sharper adjustments in the future, which would be more disruptive for economic activity,’ he added. One area believed to be under consideration by Rachel Reeves is the taxation of UK residential property. Simon French, chief economist at Panmure Liberum, said this should ‘surprise no-one as the UK public sector finances are in a perilous state, UK residential property is worth £9 trillion, and UK property taxation is currently a messy blend of both regressive and inefficient levies.’ He sees the net economic impact of tax reform as ‘potentially positive, but with considerable transition and political risk.’ French expects there will be ‘many, many more such stories before the Red Box gets brandished.’ In better news for the chancellor, economic activity in the UK was better than expected in August although an ongoing fall in employment continued to be a weak spot. The S&P Global flash UK purchasing managers’ composite output index rose to 53.0 points in August, a 12-month high, from 51.5 in July, easily beating the FXStreet-cited consensus of 51.6 in August. Chris Williamson, chief business economist at S&P Global Market Intelligence said: ‘The flash UK PMI survey for August indicated that the pace of economic growth has continued to accelerate over the summer after a sluggish spring, the rate of expansion now at a one-year high. The services sector has led the expansion, but manufacturing also showed further signs of stabilising.’ Matthew Ryan, head of market strategy at Ebury, said Britain‘s economy is ‘riding a wave of unexpected vigour’, although he is ‘very sceptical that this solid performance will last.’ ‘A hotter than usual summer is likely to be buoying the services sector, notably helping to prop up retail, tourism and hospitality activity. This will likely prove to be no more than a temporary sugar rush, however, rather than a sustained boom. We expect growth to moderate during the rest of the year,’ he added. The pound eased to $1.3426 late on Thursday afternoon in London, compared to $1.3468 at the equities close on Wednesday. The euro fell to $1.1619, lower against $1.1661. Against the yen, the dollar was trading higher at JP¥148.21 compared to JP¥147.15. In Europe, the CAC 40 in Paris ended down 0.4%, while the DAX 40 in Frankfurt closed up 0.1%. In New York, the Dow Jones Industrial Average was down 0.2%, as was the S&P 500 and the Nasdaq Composite. The yield on the US 10-year Treasury was at 4.34%, widened from 4.29%. The yield on the US 30-year Treasury was 4.94%, stretched from 4.90%. Across the pond, figures showed US business activity grew at the fastest rate recorded in the year so far during August. According to a flash estimate from S&P Global, the composite purchasing managers’ output index rose to an eight-month high of 55.4 points for August from 55.1 in July. In addition, investors are eyeing a speech on Friday by Federal Reserve Chair Jerome Powell at the Jackson Hole economic policy symposium. Goldman Sachs does not expect Powell to ‘decisively’ signal a September rate cut, but believes the speech ‘should make it clear to markets that he is likely to support one.’ In London, shares in WH Smith plunged 42% after an accounting error forced the travel retail firm to slash profit guidance for its North American business. The Swindon, England-based company now expects headline trading profit from the North America division to be around £25 million for the financial year ending August 31, down from previous expectations of around £55 million. In financial 2024, headline trading profit in the North American business was £54 million. AJ Bell investment analyst Dan Coatsworth said the update is ‘nothing short of a disaster’. ‘The North American business is crucial to the company’s growth ambitions and the loose thread of an accounting error in this part of the group will create concern about a potential greater unravelling to come,’ he added. Hays fell 1.7% as it reported a plunge in annual profit, confirming the bad news the company gave to the market in a profit warning back in June. The London-based recruiter had said it expected annual profit to be below market consensus, as it grappled with challenging market conditions, amid ‘low levels of client and candidate confidence’. Hays said operating profit before exceptional items was £45.6 million in the financial year to June, down 57% from £105.1 million. This was in line with the guidance the company provided back in June. Elsewhere, Renishaw jumped 6.9% as it forecast annual adjusted pretax profit will be towards the top of expectations. The Gloucestershire, England-based provider of manufacturing technologies, analytical instruments, and medical devices expects full-year adjusted pretax profit to be towards the top of the £109 million to £127 million market range and revenue around the middle of the £700 million to £720 million range. In addition, Renishaw said Allen Roberts will step down as group finance director after more than 46 years at the firm. A barrel of Brent traded at $67.13 late Thursday afternoon, up from $66.70 on Wednesday. Gold edged up to $3,343.46 an ounce against $3,341.46. The biggest risers on the FTSE 100 were Endeavour Mining, up 58.00 pence at 2,550.00p, BAE Systems, up 32.50p at 1,759.50p, Babcock International, up 17.00p at 996.50p, NatWest, up 9.00p at 562.60p and Prudential, up 15.00p at 1,007.00p. The biggest fallers on the FTSE 100 were Legal & General, down 6.20 pence at 254.40p, Schroders, down 7.40p at 390.60p, Persimmon, down 20.50p at 1,103.00p, Croda International, down 46.00p at 2,512.00p and Barratt Redrow, down 6.70p at 371.10p. The global economic calendar on Friday has retail sales data in Canada, UK consumer confidence figures and a German GDP report. There are no significant events scheduled in Friday’s local corporate calendar. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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