The Business: Friday July 2014
Company news, markets and financial talking points, available from 8am Monday to Friday
Britain’s economic depression will be declared over today, reports Sky News. The Office for National Statistics is expected to announce that the economy grew by around 0.8% or 0.9% in the second quarter of the year. The increase in GDP will mean that the economy has finally surpassed the size it was at the beginning of the recession in 2008. However, the natural increase in the population since 2008 means that GDP per capita remains around 6% lower than before the recession.
UK retailers enjoyed the strongest quarter in more than a decade between April and June, reports The Guardian. However, the data from the Office for National Statistics showed consumers were less willing to spend towards the end of the period. Retail sales increased by 1.6% in the second quarter compared with the first, which was the strongest rate of quarterly growth since March 2004. The strong performance was powered by late timing of Easter.
The International Monetary Fund has lowered its forecast for global economic growth this year but raised its forecast for Britain. The IMF lowered its global prediction for the year from 3.7% to 3.4% but lifted its forecast for the UK in 2014 from 2.8% to 3.2%. The global reduction reflects a weak start to the year in the United States and a number of downgrades to the outlook for several other significant individual economies.
Shares in B&Q owner Kingfisher have dived by 7.9% inspite of the clement weather, reports The Independent. Sales of outdoor and seasonal products at B&Q fell 8% over the second quarter, despite one of the hottest summers since records began. Overall sales at the chain dropped 3.2% in the 10 weeks to July 12. The chain is blaming the World Cup, which it claims distracted viewers from DIY projects in their homes and gardens.
“I love Apple. I don’t own its shares but I own a lot of their products. I don’t know where they are going to be in three years. It’s a very competitive landscape. They might become obsolete in two to three years, as we’ve seen dozens and dozens of technology companies.” Hedge fund manager Pedro de Noronha warns that the competitive tech industry could swallow anyone up.
Amazon shares have slumped after it reported a $126m loss in the second quarter. The online retail giant has warned that sales could slow in the current quarter, reports the BBC. It forecast third quarter sales of between $19.7bn and $21.5bn, which would mean sales growth of as little as 15% - well down on previous quarters. The warning has frightened investors, causing trading in the US shares to slump by 6%.
FTSE-100: up +0.34 to 6821.46
Dow Jones: down -0.02 to 17083.80
Dax: up +0.42 to 9794.06
Cac-40: up +0.78 to 4410.65
Nikkei: up +1.01 to 15438.82
Hang Seng: down -0.00 to 24141.02
US dollar: buys €0.74210 and £0.58840
Sterling: buys $1.69970 and €1.26150
Oil: $107.20 down -0.8