The UK economy remains in the slow lane after figures today showed August GDP advanced by just 0.1%.
On the corporate front, Premier Inn owner Whitbread reported a return to UK sales growth but said costs were also higher than expected.
The FTSE 100 index has struggled for momentum, while the gold price continues to trade at a record level.
FTSE 100 Live Thursday
- GDP weak run continues
- Whitbread profit falls
- Nestle job cutting plan
Market update: Whibread down 8% in weaker FTSE 100, Videndum up 27%
10:18 , Graeme EvansThe revival of Whitbread shares came to an abrupt halt today as the Premier Inn hotels owner dived 8% at the bottom of a lacklustre FTSE 100 index.
Whitbread fell 253p to 2971p despite reporting stronger domestic leisure demand over the summer.
Rising UK costs and weaker profit guidance in Germany clouded the picture as adjusted profit fell 7% to £316 million. The decline followed a poor first quarter and a planned reduction in revenues at its Beefeater food division.
The shares, which were 2357p in April, continue to retain support in the City after Peel Hunt reiterated its Buy recommendation and 3500p target price.
Sentiment towards Whitbread shares wasn’t helped by today’s GDP figures, which showed growth of 0.1% in August after a downwardly revised 0.1% fall in July.
Budget uncertainty and car industry disruption due to the JLR cyber attack mean economists are not expecting much change in the picture over the rest of 2025.
Marks & Spencer was among the biggest fallers in the FTSE 100, declining 6.2p to 391.6p alongside weakness for ex-dividend stocks Persimmon and Games Workshop.
AstraZeneca fell 174p to 12,470p after Deutsche Bank switched to a Sell recommendation in the wake of a strong run for the drugs giant.
London’s top flight continued its downbeat week with a decline of 16.44 points to 9408.31, while the UK-focused FTSE 250 index faded 50.91 points to 21,970.05.
At the top of the FTSE 100, speciality chemicals firm Croda International jumped 6% or 153p to 2823p after reassuring investors with unchanged guidance in its third quarter update.
British Gas owner Centrica picked up 3.35p to 173.45p, boosted by the comments of analysts at Barclays as they upgraded to an Overweight recommendation.
In the FTSE 250 index, Travis Perkins recovered from initial weakness to stand 2.5p higher at 644.5p. The builders merchant and Toolstation owner returned to growth in the third quarter following a 1.8% like-for-like sales rise.
Videndum jumped 27% in the FTSE All-Share, up 10p to 47p as the provider of equipment and software to the content creation market said a US-led surge in demand left its order book 40% higher than a year earlier.
KitKat business Nestle to cut 16,000 jobs
09:11 , Graeme EvansNestle is to cut around 16,000 jobs worldwide over the next two years.
The group, which makes household food brands such as KitKat, Nescafe and Cheerios, had about 270,000 staff last year.
The Swiss firm said it wanted to focus on being a more efficient organisation, including automating more of its work processes.
Chief executive Philipp Navratil said today: “The world is changing, and Nestle needs to change faster.
He added: ““The actions we are taking will secure Nestle’s future as a leader in our industry.
“Collectively, they will enable us to improve our overall performance and deliver shareholder value.”
FTSE 100 lower as Whitbread falls 8%, AstraZeneca downgraded
08:27 , Graeme EvansWhitbread shares have fallen 8% or 267p to 2957p after the Premier Inn owner scaled back profit guidance for its Germany business.
Hargreaves Lansdown analyst Derren Nathan said: “Whitbread is a smooth operator but it can’t rely on a busy events calendar to prop up performance indefinitely.
“Its efficiency and growth initiatives should hold it in good stead, but a weaker-than-expected performance in its fledgling German operation and economic uncertainty in the UK mean the immediate path ahead is becoming difficult to plot.”
AstraZeneca shares also weakened 122p to 12,522p, reflecting the impact of a Sell downgrade by analysts at Deutsche Bank.
The FTSE 100 index slipped 9.25 points to 9415.50, with ex-dividend stocks Persimmon and Smiths Group among the other fallers.
Speciality chemicals firm Croda International posted one of the best performances, lifting 36p to 2706p after reiterating guidance in its third quarter update.
GDP weakness set to continue, economists warn
08:07 , Graeme EvansBudget uncertainty and disruption in the car industry due to the JLR cyber attack will weigh on GDP over the rest of 2025, economists have warned.
Following today’s lacklustre 0.1% reading for August, Deutsche Bank sees third quarter growth of 0.2% – roughly half the pace pencilled in by the Bank of England.
It added: “We expect some turbulence to continue as we approach year-end. Indeed, the UK economy has yet to see the full ramifications of the US trade war.
“Budget uncertainty is hitting its peak too – likely dampening discretionary household and business spending.”
Capital Economics said August’s figures showed growth is still being hampered by high interest rates, higher taxes and soft overseas activity.
The consultancy said: “There is little reason to think GDP growth will accelerate much from here.
“The disruption to the auto sector caused by the Jaguar Land Rover cyber-attack probably meant the economy went backwards in September, sentiment is still weak, and taxes may rise by a further £27 billion in the Budget on 26th November.
“But with inflation still high and rising, we doubt the soft GDP news will tempt the Bank of England to cut interest rates again this year.”
Whitbread reports Premier Inn sales upturn, costs higher than expected
07:31 , Graeme EvansPremier Inn owner Whitbread today said the UK market returned to growth in the second quarter as it reported a 7% decline in half-year profits to £316 million.
UK total accommodation sales were flat in the 26 weeks to 28 August, reflecting the impact of a soft first quarter.
The figure in the first six weeks of the third quarter is up 3% versus ago, with a strong performance in London due to a number of major events in the period.
Whitbread reported higher than expected cost inflation in the UK, which is said will be partially mitigated by increased efficiencies of between £65 million and £70 million.
As a result, net inflation remains within its previously guided range of 2% - 3% on its £1.7 billion UK cost base.
In Germany, a lower number of high-impact events meant the group reported a softer market performance in the second quarter. This has led to the trimming of profit guidance to up to £5 million, from up to £10 million previously.
Chief executive Dominic Paul said: "In the UK, with a return to market growth, we sustained our outperformance versus the market through the strength of our guest proposition and commercial programme.”
He added that the company remains on track to reach its UK target of at least 98,000 open rooms by 2030.
UK GDP edged higher in August - ONS
07:06 , Graeme EvansThe UK economy registered growth of 0.1% in August, having contracted by a downwardly revised 0.1% in July.
The latest GDP estimates by the Office for National Statistics result in a three-month average growth rate of 0.3% and a year-on-year rate of 1.3%.
Production grew by 0.4% in August , whereas services showed no growth and construction fell by 0.3% in the month.
Liz McKeown, ONS director of economic statistics, said: “Economic growth increased slightly in the latest three months. Services growth held steady, while there was a smaller drag from production than previously.
“Continued strength in business rental and leasing and healthcare were the main contributors to services growth, partially offset by weakness in some consumer facing services, while wholesalers also fared poorly.”
FTSE 100 set for weak start, gold sets new record
06:59 , Graeme EvansThe latest strong banking sector results supported US markets last night as the S&P 500 rose 0.4% and the Dow Jones Industrial Average finished flat.
The FTSE 100 index closed down 28.02 points at 9424.75 in yesterday’s session and is forecast to slip by another 0.3% at today’s opening bell.
Asia markets are mixed, with the Nikkei 225 up 1.2% and the Hang Seng index down by 0.8%.
The price of gold scaled a new record above $4240 an ounce earlier today before settling near $4200. Brent Crude is up 0.8% to $62.39 a barrel.
The pound stood at $1.3419 prior to the release of monthly GDP figures.
