Business information dwell: FTSE 100 closes flat and River Island announce 33 store closures

Good morning and welcome to the final day of the working week – following on from yesterday’s interest rates call, today we’ll see how the markets react as the US stock market reopens and how the several ongoing geopolitical issues affect business confidence.

We start with UK retail data – which wasn’t great last month.

The early data out today shows retail data falling sharply in May – with the Office for National Statistics labelling the 2.7 per cent drop as “dismal”.

ONS senior statistician Hannah Finselbach said: “Retail sales fell sharply in May with their largest monthly fall since the end of 2023.

“This was mainly due to a dismal month for food retailers, especially supermarkets, following strong sales in April. Feedback suggested reduced purchases for alcohol and tobacco with customers choosing to make cutbacks.

“The falls were consistent across all sectors with clothing and household goods stores reporting slow trading due to reduced footfall. There was also decreased demand for DIY items as consumers took advantage of the good weather over the previous few months.

“Looking at the wider picture, retail sales are still up across the latest three-months as a whole.”

British homebuilder Berkeley Group Holdings has reported end-of-year pre-tax profits of £528m and announced that their new executive chairman will be Rob Perrins, the veteran CEO known in the industry as “Rob the Builder”, who succeeds Michael Dobson to become executive chairman.

As Dobson steps down in September, Perrins, who has caught the attention of deputy prime minister Angela Rayner in her mission to build 1.5m houses, will steer the company through a new strategic phase.

A statement from Berkeley thanked the outgoing chair, as Perrins prepares to accelerate investment through a new “company 10-year strategy”.

Reporting their end-of-year financials on Friday, the group highlighted more than 4,000 homes being delivered – 92 per cent of which were on brownfield land typically previously used for industrial or commercial purposes.

More here:

The FTSE is in the green this morning; not enormous rises but welcome ones all the same for investors.

While the benchmark FTSE 100 is up 0.38 per cent, the UK’s smaller businesses are shining slightly brighter today, with the FTSE 250 up 0.51 per cent and the AIM also up 0.21 per cent.

European markets are up too, with Germany’s DAX leading the way with a 0.9 per cent rise in early trading.

Government borrowing last month jumped to the highest level for May outside the pandemic era despite a boost to the tax take after the Chancellor’s national insurance hike.

The Office for National Statistics (ONS) said so-called compulsory social contributions, largely made up of national insurance contributions (NICs), jumped by £3.9 billion or 14.7% to a record £30.2 billion in April and May combined.

It followed the move by Rachel Reeves in April to increase NICs for employers, which has seen wage costs soar for firms across the UK as they also faced a rise in the minimum wage in the same month.

In spite of this, borrowing still surged to £17.7 billion last month, the second highest figure on record for May, surpassed only at the height of Covid.

In my corner of south-west London, it is impossible to avoid Berkeley Homes. Their boards are everywhere, popping up with new developments of apartments and houses.

For the SW postcodes read right across London, Birmingham and the south-east. Berkeley has got them cornered and as today’s company figures show, it is powering ahead, leading an industry that has been struggling with red tape, rising costs, shortage of suitable sites and an uncertain market.

Chris Blackhurst writes on Berkeley’s new chief and Labour’s 1.5m homes bid:

The FTSE remains firmly in the green this morning but bigger factors still lie ahead.

“Markets recovered some ground as the US appeared to temporarily pull back from the prospect of intervening directly in the Israel-Iran conflict,” says AJ Bell investment analyst Dan Coatsworth.

“Trading in Asia was mixed as China kept interest rates unchanged, while the US market was closed yesterday for the Juneteenth federal holiday. Early on Friday, futures prices implied modest weakness when Wall Street opens later on.

“Airlines, banks and other financials were among the stocks leading the way in London. Among the laggards, housebuilders were weak after Berkeley’s full-year results disappointed, and Shell and BP surrendered some of their recent gains as oil prices eased back from the highs seen earlier this week.

“While the immediate prospect of a US intervention in Iran may have diminished, the fact this is reportedly a two-week hiatus means it will remain a live issue for the markets going into next week. A meeting of European ministers with their Iranian counterparts to try and formulate a deal today could be crucial.”

A new partnership between the UK and Bahrain has been signed, which will see £2bn of investment from the Bahrain private sector in industries such as financial services, clean energy and technology.

“This £2bn commitment is yet another major vote of confidence in the UK economy, backing the key growth sectors we’ve identified in our upcoming modern Industrial Strategy,” business minister Jonathan Reynolds said in a statement.

A proposed UK-Gulf Cooperation Council free trade agreement, while a defence cooperation accord was also signed.

The price of gold has been rising this year reaching new highs, but it’s down a little over 1 per cent today and has dropped from $3450 on Monday to $3373 today. Not exactly a collapse and it’s still up 3 per cent on the month, but perhaps an indication of declining fear in the markets just now.

Brent Crude Oil remains just above $77 however and that’s a key figure to watch over the coming weeks.