The UK economy expanded by 0.1 per cent in the first quarter of 2023 according to data released by the Office for National Statistics.
The economy has proved more resilient than many economists anticipated only a few months ago, and today’s figures come in the wake of increasingly optimistic Bank of England forecasts. The central bank now expects the UK economy to dodge a contraction this year, and forecasts 0.9 per cent growth by 2024.
Though the economy expanded over the quarter as a whole, March data was more disappointing, with the economy contracting by 0.3 per cent month-on-month. Economists speculate that the drag on household incomes from rising inflation and interest rates, as well as unseasonably bad weather, could have dampened activity.
Analysts at Capital Economics said that though the UK has avoided recession for now, “with the full drag from higher interest rates yet to be felt it is too soon to sound the all-clear”. HT
Read more: Bank of England raises rates despite inflation optimism
Haleon’s share sell-off begins
GSK (GSK) has sold 240mn ordinary shares in Haleon (HLN) – the consumer health business it spun off almost a year ago – at a price of 335p per share. The sale raised gross proceeds of around £804mn. Prior to this, GSK held around 13 per cent of Haleon’s stock, either directly or via its pension fund.
Pfizer (US:PFE) holds an additional 32 per cent, though the US group also plans to begin selling down its stake in the next few months. GSK’s shares were up 2 per cent by mid-morning, while Haleon’s had risen 1 per cent. JJ
Read more: Haleon benefits from brand recognition
London loses a potential gold listing
London has for a long time been the favoured listing of Africa-focused miners, given the investors’ understanding of the region. But AngloGold Ashanti (US:AU) has decided New York’s “deeper pools” of capital warrant it being the best place for its primary listing, even though the South African company will also shift to a plc and move its corporate registration to the UK. The company highlighted the UK as a “leading, low risk jurisdiction”.
It was a possibility it would pick London as the primary listing, and its $11bn (£9bn) market capitalisation would have made it the top gold miner on the exchange. AH
Read more: Four questions every gold investor should answer and Gold miner consolidation ‘needs to happen’: Centamin boss
Eurocell hit by DIY slump
Shares in window maker Eurocell (ECEL) slumped by 12 per cent after the company issued a profit warning.
Group sales for the first four months of the year were down 2 per cent. Although it said it has gained market share, volumes fell by 6 per cent. The worsening outlook for both the new build and home improvement markets means it expects pre-tax profit will be below the current analyst consensus of £22mn, compared with the £26.2mn last last year.
Broker Berenberg cut its earnings per share forecast by 18 per cent this year and by 8 per cent next. However, with Eurocell shares now trading at just over 7-times the broker’s forecast EPS of 15.2p for 2023, it argued that “a significant amount of near-term market weakness is priced in”. MF
