The FTSE 100 ended Friday up 0.04% ahead of the holidays. The remarkable rally since early November has been for good reason, as expectations of rate cuts next year seem well founded, although arguably now well priced into markets, Barclays said. Central banks look to have engineered the soft landing that was hoped for, with inflation moderating nicely, and still keeping labor markets healthy, Barclays analysts said in a research note. "This sets us up well for next year, although the strength and speed of the rally have left markets looking short term overbought, cyclicals in particular," the U.K. bank said.


COMPANIES NEWS:

M&C Saatchi to Offload Sweden, Hong Kong Subsidiaries

M&C Saatchi said it will offload overseas subsidiaries as part of its strategy to simplify its operating structure and improve efficiency across the company.

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EnQuest Agrees to Sell 15% of the Bressay Field and EnQuest Producer for GBP46 Mln

EnQuest said it reached agreement with Viaro Energy's subsidiary, RockRose, to sell a 15% working interest in each of the Bressay field and the EnQuest Producer--a floating production, storage and offloading vessel--both located in the U.K. North Sea, for 46.0 million pounds ($58.4 million).

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Unilever to Acquire Haircare Brand K18

Unilever said it agreed to acquire the premium haircare brand K18, without disclosing financial details.

MARKET TALK:

U.K. GDP Data Puts Recession Into View

1017 GMT - The latest U.K. GDP data--which downgraded third-quarter GDP to a contraction of 0.1% on quarter, from 0.0% initially estimated--suggests a winter recession is far more probable, according to Investec economist Ellie Henderson. However, while the story remains that economic growth has been subdued, the 3Q revision is "a matter of semantics" as the original release had already shown a 0.03% contraction, she says in a note. Elsewhere on the release, the Office for National Statistics said real household disposable income rose 0.4% on quarter, and alongside retail-sales growth in November and continued wage rises, the consumer could save the day when it comes to the economy, she notes. That could help the economy out of any recession in 2024, Henderson adds. (edward.frankl@wsj.com)

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Gilt Yields, Sterling Trade Flat After Weaker-Than-Forecast U.K. GDP Data

0944 GMT - Gilt yields and sterling trade flat as market expectations of a Bank of England rate cut in early 2024 are reinforced by weaker-than-expected U.K. GDP data. "There are growing concerns that the U.K. economy is heading towards a technical recession having now logged one of two consecutive quarters of negative growth required to meet the threshold," Interactive Investor head of investment Victoria Scholar says in a note. The report shows U.K. economy contracted 0.1% in the third quarter, lower than the 0.0% consensus forecast by economists in a WSJ survey. U.K. 10-year gilt yield trades flat at 3.524% while the U.K. 2-year gilt yield falls 1 basis point to 4.056%, Tradeweb data show. GBP/USD rises 0.1% to last trade at 1.2698. (miriam.mukuru@wsj.com)

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U.K. 3Q GDP Data Disappoints, But 4Q Indicators Are More Upbeat

0943 GMT - The downward revision of U.K. GDP growth in the third quarter opens up the possibility of a recession in the country, even if signals for 4Q were better, Elizabeth Martins, senior economist at HSBC, says in a note. "Clearly, the U.K. economy has been struggling under the weight of higher costs and higher interest rates," she says. The 3.2% decline in business investment, after a better couple of quarters, is particularly disappointing, Martins says. But data for 4Q is more upbeat, including the 1.3% on-month rise in retail sales published Friday, adding to lower inflation, rising real wages, and the stronger services PMI, consumer confidence and housing market indicators, she says. "With falling inflation and easier financial conditions, we are hoping for a happier economic new year," she concludes. (edward.frankl@wsj.com)


Contact: London NewsPlus, Dow Jones Newswires; Dow Jones Newswires; paul.larkins@wsj.com


(END) Dow Jones Newswires

12-22-23 0800ET