The British economy shrugged off Budget uncertainty in November and grew by a faster than expected 0.3%, according to latest official figures.
The pace of GDP growth was the fastest recorded since the 0.4% seen in April and will be seen as a boost for Rachel Reeves after a tough year for the Chancellor.
Meanwhile, the FTSE 100 index continues to trade in record territory.
FTSE 100 Live Thursday
- Tayor WImpey margin pressure
- Dunelm lowers guidance
- GDP beats November forecast
Market update: Schroders up 8% as FTSE 100 hits new record, Ashmore up 16%
10:04 , Graeme EvansThe FTSE 100 index moved above 10,200 for the first time, with NatWest among the frontrunners after figures showed a pick up in the UK economy.
GDP’s 0.3% November advance was the fastest pace since 0.4% in April, a welcome rebound after pre-Budget uncertainty left October’s figure 0.1% lower.
Among UK-focused stocks on the front foot, lender NatWest rose 10.6p to 640.6p, Tesco lifted 4.3p to 425.6p and Marks & Spencer added 3.6p to 359.2p.
Asset manager Schroders led the top flight, up 8% or 32p to 449.4p, after its 2025 profit guidance of £745 million came in about 12% higher than City forecasts.
Management and performance fees boosted the fourth quarter performance, alongside good cost discipline.
The FTSE 100 index recovered from a slow start to stand 0.4% or 41.11 points higher at a fresh record of 10,225.46.
BP and Shell weighed on the performance, dropping 8.5p to 435p and 16p to 2723p respectively after Brent Crude fell 3% to $64.41 a barrel.
Low-cost airline easyJet also dropped 1.9p to 480p after Deutsche Bank downgraded its recommendation to Sell.
The FTSE 250 index rose 0.6% or 133.41 points to 23,090.72, led by emerging markets asset manager Ashmore after it reported “meaningful” net inflows across fixed income and equities investment themes in the December quarter.
Shares extended their recovery from November’s 153p by surging 16% or 29.9p to 212.4p.
Dunelm shares fell 16% or 190p to 980p after the homewares retailer said 2025/26 profits will be at the lower end of City expectations.
It reported a 3.6% rise in sales to £926 million in the first half, but with trading more challenging around Black Friday and the festive period.
Taylor Wimpey fell by 4% earlier in the session after it reported a lower new year order book and warned that its profit margin is set to contract for another year.
The former FTSE 100 company added that demand remains muted, particularly among first time buyers. Shares later steadied to stand 1.2p lower at 102.65p.
Pub businesses cheer strong festive trading
09:25 , Graeme EvansThe shares of pub companies Mitchells & Butlers and Fuller Smith & Turner have risen after they reported strong Christmas trading figures today.
All Bar One and Toby Carvery owner M&B told shareholders it saw an “exceptionally strong” festive period as customer demand grew further.
Like-for-like sales rose by 7.7% between December 14 to January 3, compared with a year earlier.
Fuller’s also hailed “outstanding” trade as it reported 8.2% like-for-like sales growth over the past five weeks, covering Christmas and New Year.
The news comes amid a whirlwind period for the pub sector, with the Government expected to announce more financial support for the industry following criticism over upcoming increases in business rates for most pubs.
Mitchells & Butlers rose 3.5p to 278.5p in the FTSE 250, while Fuller’s lifted 12.2p to 722.2p in the FTSE All-Share.
Dunelm lowers profit guidance after tough December, shares down 16%
08:53 , Graeme EvansDunelm shares today slumped 16% after the homewares retailer said 2025/26 profits will be at the lower end of City expectations.
It reported a 3.6% rise in first half sales to £926 million, with a 6.2% jump in the first quarter followed by a 1.6% improvement in the second quarter amid a challenging period around Black Friday and into December.
Growth in the second quarter was driven by core categories such as bedding and towels, offset by softer trading in furniture due to some availability challenges.
Dunelm said customers have since responded well to offers in its winters sale, leading to overall growth higher than in the second quarter.
The City had expected profits of between £214 million and £227 million for this financial year, up from the £211 million achieved in 2024/25.
Clo Moriarty, who was appointed in October, said the UK retail environment remains variable and that the company had acted on some “clear lessons from the first half”, including targeted steps to improve availability.
Shares fell 190p to 980p, leaving them at their lowest level since April.
House broker Peel Hunt reiterated its Buy recommendation and 1,375p target price following the update.
It said: “Dunelm remains one of our top picks in the sector. The core proposition continues to resonate strongly with consumers, underpinning our confidence in future growth.”
Builders struggle after Taylor Wimpey update, Dunelm down 15%
08:19 , Graeme EvansThe FTSE 100 index has posted a weaker-than-expected performance after adding 1.86 points to last night’s record close of 10,184.35.
Housebuilders Persimmon and Barratt Redrow fell 2% after Taylor Wimpey warned that its profit margin is likely to weaken this year. The former blue-chip dropped 4.9p to 99p.
Low-cost airline easyJet fell 1.3p to 480.6p after Deutsche Bank downgraded the stock to a Sell recommendation.
On the risers board, NatWest lifted 6p to 636p and British American Tobacco advanced 50p to 4290p.
In the FTSE 250, Dunelm shares fell 15% or 178.1p to 991.9p after the homewares retailer said 2026 profits will be at the lower end of City expectations.
GDP rebounds in November but headwinds persist
08:01 , Graeme EvansThe 0.3% improvement in November GDP suggests the economy is heading into 2026 with a little more momentum than the City had thought.
A 25.5% month-on-month surge in vehicle manufacturing, as production resumed at Jaguar Land Rover following September’s cyber attack, boosted growth.
Services activity also rose by 0.3%, which was better than the City consensus of 0.1%.
Capital Economics believes November’s performance is more likely to be a rebound rather than a sign that the economy is fundamentally stronger than it thought.
The consultancy added: “With the economy still contending with the lingering drags from high interest rates, high taxes and weak overseas demand, we doubt this pace of growth will be sustained.”
Deutsche Bank said the UK should dodge a fourth quarter contraction, something it had feared last month. However, today’s figure is likely to raise the bar for a February interest rate cut by the Bank of England.
The bank added: “Geopolitical uncertainty has already ramped up to start the year. And macro data continue to paint a gloomy picture of the labour market.
“Political uncertainty may also rear its head again in spring as we march towards the local elections.
“But it’s certainly not all doom and gloom. We see some strong tailwinds emerging. Inflation looks set to drop meaningfully – even reaching near target by spring, boosting real disposable incomes.
“Easy credit and financial conditions will also be supportive of growth. And policy will grease the wheels of the economy, with more Bank of England rate cuts likely through the year.”
Ofwat launches South East Water investigation
07:40 , Graeme EvansSouth East Water is under investigation by the industry watchdog after repeated outages since November have left tens of thousands of households and businesses without supply across Kent and Sussex.
Ofwat said it had launched a probe into whether the supplier had complied with its customer service standards obligations and offered appropriate support to affected customers during supply failures.
The latest incident has seen thousands of properties in Kent and Sussex left without drinking water for the sixth day running, with South East Water blaming the outage on Storm Goretti causing burst pipes and power cuts.
Taylor Wimpey profit margin set to fall, sees planning progress
07:34 , Graeme EvansHousebuilder Taylor Wimpey today reported a lower order book and warned that its profit margin is set to contract for another year.
The former FTSE 100 company said demand remains muted, particularly among first time buyers.
It ended last year with an order book worth £1,86 billion, which excluding joint ventures represents 6832 homes. This compares with figures of £2 billion and 7312 at the end of 2024.
Revenues for last year increased to £3.8 billion from £3.4 billion in 2024, driven by higher volumes, average selling prices and land sales.
It expects to deliver an operating profit of about £420 million, up from £416.2 million in 2024, on an operating profit margin of about 11% compared with 2024’s 12.2%.
Overall pricing in the order book is currently around 0.5% lower year-on-year, while the company is experiencing low single digit build cost inflation.
It added: “Taking these factors into account, we expect group operating profit margin to be lower in 2026 than in 2025 and, given the lower opening order book, for performance to be more second half weighted in 2026 than in prior years.”
Chief executive Jennie Daly welcomed recent planning reforms as she said the company had seen increased momentum in its recent planning permissions.
She added: “However, while affordability is slowly improving, demand continues to be muted - particularly among the important first time buyer category - which will constrain overall sector output.
“Against this backdrop, we remain focused on unlocking value and maximising shareholder returns in the medium term."
UK GDP ahead of forecast in November
07:12 , Graeme EvansThe UK economy grew by a better-than-expected 0.3% in the Budget month of November, the Office for National Statistics said today.
The improvement following a decline of 0.1% in October compared with City forecasts for a figure of 0.1%.
Services and production both grew in November by 0.3% and 1.1% respectively but . construction fell by 1.3%.
The ONS said the economy grew by 0.1% across the three months to November.
ONS director of economic statistics, Liz McKeown added: “The economy grew slightly in the latest three months, led by growth in the services sector, which performed better in November following a weak October.
“This was partially offset by a fall in manufacturing, where three-monthly growth was still affected by the cyber incident that impacted car production earlier in the autumn. However, data for the latest month show that this industry has now largely recovered.
“Construction contracted again, registering its largest three-monthly fall in nearly three years.”
FTSE 100 record run set to continue, oil price falls
06:59 , Graeme EvansThe price of oil today ended its five-day advance after comments by President Trump eased fears of an imminent US intervention in Iran.
Brent Crude fell 3% or $2 to $64.56 a barrel in Asia trading hours, while safe haven asset gold declined by 0.4% to $4608 an ounce.
The FTSE 100 index is set to build on last night’s record closing high of 10,184.35, with London’s top flight seen opening about 0.5% higher.
The gains follow a weak session on Wall Street after the S&P 500 index fell 0.5% and the Nasdaq Composite lost 1%. The Dow Jones Industrial Average dropped 0.1%.
In Asia, the Nikkei 225 and Hang Seng index are down by about 0.3%.
