FTSE 100 live: Recession confirmed as London in green off Centrica’s back

London’s FTSE 100 continued this week’s gains in early trading despite the confirmation the UK is going through a recession.

The capital’s premier bluechip index sat at 7,584.96, 0.22 per cent up, and FTSE 250, which is more aligned with the domestic market, was at 0.25 per cent, at 19,051.99.

Markets were mulling the results of the latest Office for National Statistics data, showing the UK slipped into a recession at the end of last year after a poor performance from the dominant service sector pushed the economy into contraction.

The UK economy shrunk 0.1 per cent in December meaning it contracted 0.3 per cent over the fourth quarter of last year, a worse performance than economists had expected.

Chancellor of the Exchequer Jeremy Hunt said that low growth was “not a surprise…while interest rates are high”, giving rise to more speculation about when rates might start to come down.

Richard Hunter, head of markets at Interactive Investor, said the market impact of the GDP print was “limited not only due to the better-than-expected inflation number yesterday, but also because some of the UK market’s recent lethargy has been based on anaemic or negative growth over recent months”.

“In addition, the economy is estimated to have grown by 0.1 per cent for the year as a whole. The indicator is also akin to driving in the rear-view mirror and as such does not indicate the current state of play. The GDP print for January is not due for release until March and the Bank of England has indicated that it expects the economy to pick up this year.

“In the meantime, the news also raises the possibility of interest rate cuts to bolster a struggling economy, although inflation including the impact of currently strong pay rises are complicating the central bank’s decision on timing, with no easing expected until June at the earliest.”

The biggest riser on FTSE 100 was British Gas owner Centrica, which issued a “strong 2023 financial result” today, as the company’s retail division saw a sharp jump in profits for the year.

In the company’s annual results, it revealed operating profit for 2023 came in at £2.8bn, down on 2022’s figure of £3.3bn.

British Gas Energy saw profits skyrocket from £72m to £751m, slightly exceeding analyst expectations of £747m.

This offset a decline in profit from the group’s other businesses, namely Centrica Energy, which deals in energy trading and asset management, where profits almost halved from £1.4bn in 2022 to £774m.

Following the open, its shares rose sharply, being around 4.2 per cent in the green after 9am.

Ithaca Energy, which is listed on the FTSE 250, saw its shares rise by more than three per cent after it said today that its full-year earnings would be in line with its guidance, as the firm grapples with a sinking stock price.

The North Sea oil and gas producer said 2023 production had been 70.2 thousand barrels of oil equivalent per day, matching expectations of 78-74.

Coca-Cola HBC was another key riser, up by a tick under three per cent, after its positive results this week.

The biggest faller on FTSE 250 was Genus, an animal genetics firm, whose shares tumbled as it warned that full-year profits would be below expectations. By just after 9am it had crashed by more than 26 per cent.

Close Brothers’ shares also plummeted by 11.66 per cent, after it announced the firm will not pay any dividends on its ordinary shares for the current financial year as it prepares for potential financial impact as a result of a review by the watchdog.