Retail sales boost the LSE

The rally continues for British shares, lifted by high hopes of rate cuts from the Bank of England after new data showed Britain is in recession. Wall Street's AI-led rally yesterday is also contributing to the upbeat sentiment.

ONS figures published yesterday show the UK economy fell into a technical recession in Q3. GDP fell for the second consecutive quarter in Q4. The FTSE 100 ended Thursday’s session 0.4% higher and was up 0.7% this morning.

The pound rose this morning, after data showed UK retail sales grew at their fastest pace since April 2021 in January - gaining 3.4%, while 1.5% was expected by economists.

NatWest Group reported higher-than-expected profits for the fourth quarter but anticipates a decrease in income for 2024 due to the likelihood of lower interest rates. Similarly, Italian energy company Eni experienced a 23% drop in operating profit for the fourth quarter, affected by weaker oil and natural gas prices.

Segro reported a lower full-year 2023 attributable loss and an increase in revenue year over year. The company proposed a final dividend of 0.191 pound per share, reflecting continued rental growth and positive expectations for the investment market business in 2024.

Things to read today:

• Why NATO members are sounding the alarm over Russia's aggressive posture (Financial Times).
• How the decisions that led to the creation of Israel have left the region in a state of eternal conflict (New York Times).
• Stagnating UK Economy Is Crying Out For Rate Cuts (Bloomberg)