The FTSE 100 closed up 71.78 points at 7995.58, after nudging a record intraday high at 8,044.98 earlier. That was just off its previous intraday record of 8,047.06, set in February 2023.

The British economy expanded by 0.1 per cent in February, in line with expectations, fresh data from the Office for National Statistics shows. 

The ONS has also upgraded January’s growth figure from 0.2 to 0.3 per cent, pointing to signs of a quick exit from the recession of late 2023.

Among the companies with reports and trading updates today is Petrofac. Read the Friday 12 April Business Live blog below.

> If you are using our app or a third-party site click here to read Business Live

FTSE 100 closes up 71.78 points at 7995.58

BP shares rise after reports UAE oil company has pondered takeover

(PA) – Shares in BP jumped on Friday after reports that the state-owned, United Arab Emirates oil company was considering, but had ruled out, a bid for the London-listed energy firm

BP’s shares had gained about 3.1% by mid-morning on Friday, in a day where other companies also fared well as the FTSE 100 pushed close to an all-time high. BP’s rival, Shell, also rose 2.1%.

Reuters reported on Thursday evening that the Abu Dhabi National Oil Company (Adnoc) had decided that ultimately BP was not the right fit and would not match its strategy.

The news agency cited three sources. BP declined to comment to the PA news agency while Adnoc did not immediately respond. Neither company sent a comment to Reuters.

Sources told Reuters that Adnoc and BP had spoken directly in recent months and the UAE oil company had spoken to investment banks about a potential deal.

Many UK companies have been the target of takeovers in recent months, as foreign investors see them as undervalued. Others have chosen to abandon London, or split their listing between London and other markets.

At the moment, two companies are in the running to buy DS Smith, the London-listed packaging giant, for more than £5billion.

Poundland won’t go back to selling items for a pound, boss confirms

The owner of Poundland has confirmed it will not go back to selling items for a pound despite its pledge to ‘protect’ shoppers during the cost of living crisis.

Andy Bond, the executive chairman of Pepco, a £5billion Polish company which owns the discount retailer, said it was ‘too early’ to say whether it would start to reduce prices to ease the burden on cash strapped families.

Founder of health app Zoe announces a series of redundancies

The co-founder of a popular health app backed by Dragon’s Den star Steve Bartlett has announced he is preparing to lay off staff after ‘over-expanding’ his team.

Zoe gives personalised advice on what users should eat, based on the results of gut health and blood fat tests and 14 days of blood sugar monitoring.

Bank of England staff use ‘out-of-date’ software to make economic forecasts

(PA) – The model that the Bank of England uses to make economic forecasts has “significant shortcomings”, a review commissioned by the Bank has found as it recommended dedicating more resources to the job.

A report by former US Federal Reserve chair Ben Bernanke found that Bank staff were using “out-of-date” software which had not been properly maintained.

It found that staff were performing some functions manually which “ideally would be executed automatically.”

The review was called last year after Bank forecasts were repeatedly wide of the mark in a period of economic turbulence.

At a time when the economy is fluctuating it is always harder to accurately predict what will happen next, but the Bank brought in Dr Bernanke after receiving public criticism.

But the review found in part that while the Bank’s forecasts had been off at times, it had done better than some other central banks.

In the critical period between the second quarter of 2021 and the third quarter of 2023, the Bank of England did better than the European Central Bank of Sweden’s Riksbank in forecasting inflation. In the same period it did worse than the central banks of Canada, Norway and New Zealand.

Construction sector hammered by wet weather and high interest rates

The construction industry’s output for the month fell 1.9 per cent in volume terms, holding GDP growth back to just 0.1 per cent after every other sector showed growth, figures from the Office for National Statistics showed on Friday.

FTSE 100 approaches record high

Jason Hollands, managing director of Bestinvest:

‘With the FTSE 100 breaking past the 8,000 level – and at 8,039 points at the time of writing – the blue-chip index is honing-in on a record high if it can hang on to those gains by the end of the day.

‘Some positive headlines for the UK equity market will certainly be welcome news given it has been somewhat unloved in recent times and endured a raft of negative stories about investor outflows and companies switching their listings overseas.

‘Today’s confirmation that UK GDP expanded by 0.1% in February, following on from growth of 0.3% in January, will be seen by many as the key reason for the latest market moves as the data signals that the technical recession that the UK entered at the end of last year is almost certainly over.

‘A good day for shares in housebuilders Taylor Wimpey and Persimmon reflects improving optimism about the domestic economy.

‘However, other factors driving the FTSE 100 bounce are perhaps less cheery in nature. Heightened tensions in the Middle East with the risk of a regional war between Iran and Israel breaking out imminently, have propelled both oil and precious metal prices higher. Among the best performers in the FTSE 100 today are mining and energy stocks.

‘As at midday, Fresnillo – the world’s second largest gold miner and largest silver producer – was the best performing FTSE 100 constituent – rising c5%, followed by major copper producer Antofagasta and Anglo American, the world’s largest platinum producer. Energy is a major sector on the UK market, representing 12.8% of the FTSE 100, and both BP and Shell are on the rise against a backdrop of Brent Crude oil prices exceeding $90 a barrel.’

SMALL CAP MOVERS: Harvest Minerals shows growth thanks to fertiliser

Harvest Minerals rocketed higher at the front end of this week’s session, soaring from 1.3p on Monday to more than 3p on Wednesday.

The 130 per cent share price surge followed a resoundingly positive sales update for its KP Fértil fertiliser product.

Tax rebate firm Brooksdale set to enter liquidation

Controversial tax rebate agent Brooksdale is preparing to enter liquidation, leaving questions for the customers whose tax refunds are currently in its hands.

The firm will hold a virtual meeting of creditors today, 12 April, to discuss and vote on a potential creditors voluntary liquidation, This is Money has learned.

FCA warns lenders to bolster cash reserves amid motor finance probe

The Financial Conduct Authority has warned motor finance providers that they must hold enough cash for potential payouts as it continues to investigate past failings.

In a letter to motor finance firms, published on Friday, the FCA said they need to have ‘adequate financial resources at all times’ in anticipation of meeting the operational costs and payouts related to the historical mis-selling of car loans.

One in five tenants are spending over half of their salary on rent

One in five private tenants are spending more than half of their gross salary on rent, according to data released by the tenant referencing service Canopy.

With an estimated 11.6 million people privately renting across the UK, this would suggest that roughly 2.3 million tenants are spending over half of their pay before tax on rent.

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Recruitment issues for businesses revealed in study

(PA) – One in three businesses are finding themselves short-staffed at least once a week because they do not have enough employees available to work, new research suggests.

A study by recruitment firm Indeed Flex found that among companies finding themselves short-staffed, one of the main problems is employees being off work sick.

A third pointed to problems recruiting enough people to fill the gaps, while a similar number have staff unwilling to work certain days or hours.

One in four of 400 businesses surveyed said have found it hard to fill vacancies this year.

Nearly two in five businesses are using more temporary workers than they were a year ago, the study indicated.

Novo Constare, chief executive of Indeed Flex said: “Employers are fighting hard to fill vacancies, but in such a tight labour market many are forced to leave gaps in their rotas on a regular basis.

“This is a big problem for the UK economy, as it reduces productivity and can lead to workers doing more overtime and ending up feeling burnt out.”

Petrofac may swap a ‘significant proportion’ of debt for equity

Petrofac could exchange a ‘significant proportion’ of its debt for equity as part of a rescue package, the oilfield services group said on Friday.

The London-listed firm is in talks with lenders and investors on ways to restructure its debt and receive further investment, while it negotiates with prospective buyers regarding the disposal of non-core assets.

Peak season for pension withdrawals is the start of new tax year

Peak season for pension withdrawals has arrived, with older people likely to take record sums from their retirement funds after two years of rising household bills.

Spring is popular because people have a new set of allowances at the start of the tax year, and many over-55s choose this period to access their pensions for the very first time.

How Chinese retailer Miniso is looking to take the UK market by storm

While an alarming number of British household names have fallen victim to languishing consumer confidence, a Chinese retailer has quietly built a presence in the UK.

While other Chinese retailers like Shein have shaken up the fast fashion e-commerce model, Miniso has gone head first into retail stores here.

Why is bitcoin halving next week – and how could it impact the value?

The first Bitcoin ‘halving’ event in four years is expected to happen next week and will kickstart a new chapter for the world’s biggest cryptocurrency and the scale at which it is mined.

Why Bond Street is STILL in fashion: Luxury brands flock to London hotspot

Market open: FTSE 100 up 0.8%; FTSE 250 adds 0.9%

London markets have opened strongly this morning, led by a jump in precious metal miners and broader strength across the board, while data shows Britain’s economy grew in February.

Precious metal miners lead sectoral gains with a 3.9 per cent rise as gold prices rise to yet another historic peak.

Industrial metal miners follow with a 2.2 per cent uptick as Shanghai aluminium prices touched two-year highs as funds pumped money into commodities, including metals to hedge against rising inflation.

BP has gained 2.2 per cent after the United Arab Emirates’ state-owned oil company recently considered buying the energy giant, but the deliberations did not progress beyond preliminary discussions.

FCA motor finance probe warning

The City watchdog has told British lenders to ensure they are adequately prepared to meet the potential costs of customer complaints arising from its review into the motor finance industry.

The regulator began looking into potential overcharging in the industry in January, amid rising tensions between thousands of consumers and lenders over commission arrangements.

In a letter to bank bosses on Friday, the Financial Conduct Authority said lenders should assess their ability to meet potential future liablities resulting from any spike in customer complaints.

The watchdog said it planned to set out its next steps in September, but said that some companies were struggling to provide the data it needed and it was prepared to extend its review if necessary.

A judicial review started by Barclays against an ombudsman decision on a motor finance complaint had also created uncertainty and could affect the timing of the review, the FCA added.

‘The ship has turned’: JP Morgan backs Marks & Spencer ‘The ship has turned’: JP Morgan backs Marks & Spencer

Marks & Spencer won a vote of confidence as JP Morgan said ‘the ship has turned’.

It has done better than rivals in winning market share since the pandemic, a bullish bank note said.

GDP on course for 0.3% growth for Q1

James Smith, developed markets economist at ING:

Assuming we get another slight pick up in activity during March, we think the UK economy is poised to grow by 0.3% for the first quarter as a whole. That would mark the end of a very modest technical recession, albeit one where the aggregate figures masked steeper falls in per capita output.

‘We shouldn’t read too much into any given month’s worth of data and it’s worth remembering that the fourth quarter decline in overall GDP was partly down to volatility in this data.

‘October’s manufacturing data, for example, was unusually weak and weighed on overall quarterly activity, but has since by followed by a strong bounce back which includes a 1.2% increase in February alone.’

Petrofac debt restructuring talks

Oilfield services provider Petrofac is still facing challenges in securing new performance guarantees, and that it remains in discussions with lenders over restructuring its debt.

Petrofac told shareholders this morning : ‘The Company has engaged and remains in discussions with its lenders to restructure its debt which would result in a significant proportion of the debt being exchanged for equity in the business.

‘It also continues to be in discussion with prospective investors and certain major shareholders in relation to potential further investment in the Company and remains in negotiations with prospective purchasers regarding the sale of non-core assets, as set out in recent announcements. All options remain under consideration.

‘Management and the Board are focussed on managing the Group’s payment obligations and delivering a solution which supports the provision of guarantees required for its recent contract awards, and which ensures that Petrofac has the appropriate capital structure and liquidity to support the strength of its $8 billion backlog.

‘While the Company continues to face challenges in securing new performance guarantees, it is progressing discussions with credit providers and clients to find solutions with respect to the guarantees required for its recent contract awards.’

Wet weather hammered construction sector

Thomas Pugh, UK economist at RSM UK:

‘The wettest February on record, at least in the south of the country, dampened construction activity (-1.9%), but this was offset by a strong performance from the manufacturing industry, which is continuing to rebound after contracting for much of the last two years.

‘It has been a tough start to the year for the hospitality sector, which has shrunk by almost 2.5% since the start of the year. But this was offset by the rebound of transport after strikes dampened output in that sector and another strong performance from the recreation sector as consumers continue to value activities like concerts.

‘There are good reasons to expect those weaker sectors to rebound over the next few months. Higher consumer spending and confidence will directly benefit the hospitality sector and better weather will allow construction activity to rebound.

‘Overall, today’s data reinforce our view that Q4 last year will represent the nadir of a particularly painful period of stagnation for the UK economy. But we are now at a turning point. Interest rate cuts are likely to come in the Summer and growth should gradually improve in the first half of this year and pick up further after the summer and into 2025.’

Construction weighs on GDP growth

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