London midday: FTSE steady after retail sales, consumer sentiment data

The FTSE 100 was flat at 7,539.69.

Figures released earlier by the Office for National Statistics showed that retail sales unexpectedly rose in July, boosted by online shopping.

Retail sales were up 0.3% following a 0.2% fall in June, and versus expectations for a 0.2% decline. On the year, however, retail sales were 3.4% lower, compared to expectations for a 3.3% decline.

Sales volumes were 2.3% above their pre-coronavirus February 2020 levels, but down over the past year.

The data showed that non-store retailing - namely online retailers - saw sales rise 4.8% on the month in July thanks to a range of promotions.

Helen Dickinson, chief executive of the British Retail Consortium, said: "The summer sunshine brought a slight uplift in sales. Summer clothing, air conditioning appliances and outdoor foods all benefitted from record temperatures, but most retailers will still be seeing falling volumes in the face of rising inflation.

"Consumer confidence has hit new lows as inflation soared past 10% and talk of a recession has grown. The Bank of England expects inflation to reach over 13% in October when energy bills rise again, further limiting discretionary spending for struggling households. For many businesses, 2022 is proving to be every bit as challenging as the pandemic."

Elsewhere, the latest survey from GfK showed that consumer confidence fell to a fresh record low in August amid surging inflation.

GfK’s consumer sentiment index dipped three points from July to -44.0 – the lowest level since records began in 1974.

Joe Staton, client strategy director at GfK, said: "These findings point to a sense of capitulation, of financial events moving far beyond the control of ordinary people. With headline after headline revealing record inflation eroding household buying power, the strain on the personal finances of many in the UK is alarming. Just making ends meet has become a nightmare and the crisis of confidence will only worsen with the darkening days of autumn and the colder months of winter."

AJ Bell financial analyst Danni Hewson said: "The consumer backdrop feels increasingly gloomy and that’s bad news because consumer spending is such an important contributor to the UK economy.

"The Bank of England faces the unenviable task of trying to get inflation down without inflicting too much pain on businesses and households and the seeming impossibility of this task is raising the spectre of prolonged stagflation - a slowing economy and surging prices.

"That’s reflected in weakness in the pound, which is actually good news for a globally-orientated FTSE 100 as it flatters the relative value of overseas earnings."

Corporate news was thin on the ground, but outside the FTSE 350, Joules shares tumbled after the fashion retailer warned that it expects to deliver a pre-tax loss for the full year, "significantly" below current market forecasts, following recent soft trading.

Market Movers

FTSE 100 (UKX) 7,539.69 -0.03%
FTSE 250 (MCX) 20,021.61 -0.57%
techMARK (TASX) 4,340.87 -0.04%

FTSE 100 - Risers

AstraZeneca (AZN) 11,172.00p 1.43%
Admiral Group (ADM) 2,329.00p 1.30%
Relx plc (REL) 2,447.00p 1.20%
Reckitt Benckiser Group (RKT) 6,592.00p 1.20%
BP (BP.) 446.40p 1.00%
GSK (GSK) 1,415.40p 0.96%
Unilever (ULVR) 3,972.50p 0.88%
Shell (SHEL) 2,234.50p 0.77%
Avast (AVST) 692.20p 0.73%
Pearson (PSON) 880.00p 0.62%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 115.48p -2.65%
Howden Joinery Group (HWDN) 642.20p -2.52%
SEGRO (SGRO) 1,030.00p -2.46%
Kingfisher (KGF) 242.20p -2.34%
Persimmon (PSN) 1,701.50p -2.27%
Entain (ENT) 1,341.00p -2.26%
Antofagasta (ANTO) 1,146.50p -1.97%
Anglo American (AAL) 2,853.00p -1.86%
Glencore (GLEN) 489.75p -1.71%
Rolls-Royce Holdings (RR.) 82.26p -1.60%

FTSE 250 - Risers

Network International Holdings (NETW) 241.40p 2.72%
C&C Group (CDI) (CCR) 189.10p 2.05%
Shaftesbury (SHB) 460.00p 1.55%
HGCapital Trust (HGT) 385.50p 1.45%
Fidelity China Special Situations (FCSS) 244.00p 1.24%
UK Commercial Property Reit Limited (UKCM) 74.90p 1.22%
Bridgepoint Group (Reg S) (BPT) 260.40p 1.17%
Wetherspoon (J.D.) (JDW) 557.00p 1.09%
Plus500 Ltd (DI) (PLUS) 1,806.00p 0.95%
Impax Environmental Markets (IEM) 482.50p 0.94%

FTSE 250 - Fallers

Ferrexpo (FXPO) 142.00p -5.27%
Marshalls (MSLH) 400.40p -5.12%
easyJet (EZJ) 390.80p -4.38%
TUI AG Reg Shs (DI) (TUI) 138.90p -3.61%
Investec (INVP) 433.90p -3.60%
Aston Martin Lagonda Global Holdings (AML) 492.90p -3.47%
Tullow Oil (TLW) 48.08p -3.18%
4Imprint Group (FOUR) 3,855.00p -3.14%
Pets at Home Group (PETS) 346.00p -3.03%
Genuit Group (GEN) 404.50p -3.00%