London pre-open: Stocks seen flat; UK economy unexpectedly expands in Q4

(Sharecast News) - London stocks were set for a steady open on Thursday as investors mulled the latest UK GDP data.

The FTSE 100 was called to open flat at 8,807.

Figures released earlier by the Office for National Statistics showed that the economy unexpectedly grew in the fourth quarter.

Gross domestic product rose 0.1% in the three months to December, beating expectations for a 0.1% contraction.

ONS director of economic statistics Liz McKeown said: "The economy picked up in December after several weak months, meaning, overall, the economy grew a little in the fourth quarter of last year.

"Across the quarter, growth in services and construction were partially offset by a fall in production. GDP per head, in contrast, fell back slightly in the quarter."

Paul Dales, chief UK economist at Capital Economics, said the 0.1% quarter-on-quarter rise in GDP in Q4 "leaves the economy all-but stagnating" as businesses adjust to higher taxes and more uncertainty from overseas.

"We aren't expecting the economy grow much at all in the coming quarters," he said.

"After stagnating in Q3, the economy was saved from the same fate in Q4 (or worse) by a 0.4% m/m rise in GDP in December (consensus +0.1%, CE -0.1%).

"That's pretty much the only growth there's been for a while as it explains all of the 0.4% rise in GDP since Labour came to power in July and the 0.3% gain since last April."

In corporate news, Barclays saw profit before tax jump over the last three months of 2024 to reach �1.7bn, versus �0.1bn one year before.

Net interest income for the quarter printed at �3.5bn (consensus: �3.29bn), while the profitability of its investment bank hit �2.61bn (consensus: �2.47bn).

That came on the back of a 24% year-on-year surge in group income to �7.0bn. Total operating expenses meanwhile fell by 7% to �4.6bn.

For 2025, the lender said that it was targeting a return on tangible equity of approximately 11%, group net interest income of around �12.2bn and a cost-to-income ratio of roughly 61%. Its target for 2026 RoTE was pegged at over 12%. An additional share buyback programme of �1bn was announced.

Multinational consumer goods company Unilever said it expected a slow start to the current financial year with "subdued" market growth in the near term and announced a �1.5bn share buyback after a 12.6% rise in annual profit to �11.2bn.

"We expect the market and our growth to improve during the year as price increases, reflecting higher commodity costs in 2025. We expect a more balanced split between volume and price," the company said.

It added that the ice-cream business would be separated via a demerger and listed in Amsterdam, London and New York following a full review of options.

Relx reported solid financial growth for 2024, with revenue rising 7% on an underlying basis to �9.43bn and adjusted operating profit increasing 10% to �3.2bn.

The FTSE 100 information and events firm said adjusted earnings per share grew 9% at constant currency to 120.1p, while it completed �1bn in share buybacks, five acquisitions totalling �195m, and seven disposals for �95m.

Looking ahead, Relx said it expected continued strong underlying growth in revenue, adjusted operating profit, and adjusted earnings per share in 2025.