London midday: FTSE flat after retail sales, borrowing data

London stocks were still steady by midday on Friday as investors mulled the latest retail sales and borrowing figures.

The FTSE 100 was flat at 9,836.36.

Danni Hewson, head of financial analysis at AJ Bell, said: "The knife-edge nature of yesterday’s rate decision by the Bank of England is keeping UK stocks in check and stalled the FTSE 100’s push towards the 10,000 mark. Investors have responded to the reality that we could be approaching the end of the current rate-cutting cycle.

"This saw housebuilders lose momentum as hopes for a significant drop in mortgage costs in the coming months begin to fade away. An unexpected drop in retail sales only added to the gloom around the consumer backdrop in the UK."

Data released earlier by the Office for National Statistics showed that retail sales softened in November, undershooting expectations for a small rise, after Black Friday failed to bolster demand.

Retail sales volumes were estimated to have fallen by 0.1% on a seasonally-adjusted basis, following an upwardly revised fall of 0.9% in October. Analysts had been expecting a 0.4% uplift.

In the three months to November, sales rose 0.6%, boosted by strong performances from both clothing shops and computer and telecommunication retailers. However, the three-month rise was below expectations, for a 0.9% increase.

Seasonally-adjusted figures strip out the effect of Black Friday, which this year was on 28 November; last year it fell into the ONS’s December reporting period.

On a non-seasonally adjusted basis, sales volumes jumped 11.9%, compared with a 4.4% rise in October.

The ONS said data suggested that the Black Friday effect was "slightly weaker than usual" this year.

According to its own research into public opinions, less than a third of adults said they planned to shop in the Black Friday sales.

Separate figures from the ONS showed that government borrowing hit a four-year low in November.

Borrowing - which is the difference between total public sector spending and income - came in at £11.7bn, down £1.9bn on November 2024 and the lowest borrowing figure for that month since 2021. Nevertheless, it was above economists’ expectations for a decline to £10bn.

Borrowing in the financial year to November was £132.3bn, up £10bn on the same period a year earlier and the second-highest April to November borrowing on record after that of 2020.

ONS senior statistician Tom Davies said: "Despite an increase in spending, this month’s borrowing was the lowest November for four years. The main reason for the drop from last year was increased receipts from taxes and National Insurance contributions.

"However, across the financial year to date as a whole, borrowing is higher than last year."

Investors were digesting the latest survey from GfK, which revealed that consumer confidence improved a little in December but remained subdued.

The Confederation of British Industry's latest Distributive Trades survey was also in focus. It showed that retail sales fell in December as the sales outlook "darkened".

In equity markets, housebuilders were the worst performers, with Barratt Redrow, Persimmon, Berkeley, Vistry and Bellway all lower.

WH Smith lost ground as it said the Financial Conduct Authority has begun an investigation into the group after accounting failures in its US operations and after it reported a drop in full-year profit before tax and non-underlying items to £108m from £114m.

The company also said it was looking to recover overpaid bonuses from former executive directors following the restatement of profits in the 2023 and 2024 financial years.

Richard Hunter, head of markets at Interactive Investor, said: "The lack of a bounce to the update, when perhaps the bad news should already have been factored in, is proof if it were needed that investor confidence is sorely lacking. The decline follows a precipitous drop when the North American issue was announced, with the shares 37% down since the announcement and 42% lighter over the last year, as compared to a gain of 9.4% for the wider FTSE250.

"The slump has also prevented the group from recapturing its pre-pandemic glories, instead of which the share price is 74% lower than the levels of December 2019. With so much investor confidence damage to repair, a market consensus which has reduced from a previous buy to stand at a hold for the time being is of little surprise."

JD Sports was in the red as Nike shares fell nearly 11% in after-hours trading on the back of weak China sales.

Computacenter retreated as Peel Hunt downgraded the shares to ‘hold’ from ‘buy’.

Market Movers

FTSE 100 (UKX) 9,836.36 -0.01%
FTSE 250 (MCX) 22,253.46 -0.32%
techMARK (TASX) 5,576.80 -0.28%

FTSE 100 - Risers

DCC (CDI) (DCC) 5,010.00p 1.91%
Rolls-Royce Holdings (RR.) 1,160.00p 1.40%
InterContinental Hotels Group (IHG) 10,575.00p 1.15%
Fresnillo (FRES) 3,114.00p 1.04%
Melrose Industries (MRO) 570.80p 0.96%
Admiral Group (ADM) 3,172.00p 0.83%
Reckitt Benckiser Group (RKT) 6,062.00p 0.63%
Smurfit Westrock (DI) (SWR) 2,873.00p 0.60%
Standard Chartered (STAN) 1,783.50p 0.56%
SSE (SSE) 2,163.00p 0.56%

FTSE 100 - Fallers

Barratt Redrow (BTRW) 367.90p -2.88%
Persimmon (PSN) 1,320.50p -2.11%
Berkeley Group Holdings (The) (BKG) 3,884.00p -1.77%
Auto Trader Group (AUTO) 600.20p -1.61%
Marks & Spencer Group (MKS) 327.30p -1.45%
Croda International (CRDA) 2,760.00p -1.39%
JD Sports Fashion (JD.) 85.50p -1.36%
BT Group (BT.A) 183.30p -1.32%
Land Securities Group (LAND) 597.50p -1.24%
The Sage Group (SGE) 1,083.00p -1.19%

FTSE 250 - Risers

W.A.G Payment Solutions (EWG) 99.20p 3.55%
Chrysalis Investments Limited NPV (CHRY) 114.00p 2.70%
Avon Technologies (AVON) 1,794.00p 2.51%
OSB Group (OSB) 629.50p 2.44%
Bytes Technology Group (BYIT) 362.80p 2.14%
Vietnam Enterprise Investments (DI) (VEIL) 754.00p 1.21%
SDCL Efficiency Income Trust (SEIT) 50.60p 1.20%
JPMorgan Emerging Markets Growth & Income (JMGI) 135.00p 1.20%
Syncona Limited NPV (SYNC) 95.00p 1.06%
Paragon Banking Group (PAG) 878.00p 1.04%

FTSE 250 - Fallers

WH Smith (SMWH) 650.00p -5.11%
Currys (CURY) 132.50p -2.65%
Pagegroup (PAGE) 224.80p -2.60%
Vistry Group (VTY) 624.20p -2.59%
Ceres Power Holdings (CWR) 216.40p -2.35%
Ocado Group (OCDO) 247.40p -2.10%
Pinewood Technologies Group (PINE) 359.00p -2.05%
B&M European Value Retail S.A. (DI) (BME) 164.40p -1.97%
Marshalls (MSLH) 180.00p -1.85%
Bellway (BWY) 2,656.00p -1.85%