FTSE 100 Live: Recession warning, Balfour Beatty gets £1.2bn contract

EY downgrades UK outlook, FTSE 100 seen higher

The S&P 500 index rose 1.9% on Friday, led by a recovery for tech stocks after a strong earnings update by Netflix was accompanied by fresh hope that the Federal Reserve might yet opt for a 0.25% rates increase at its meeting next month.

The FTSE 100 index finished 0.3% higher on Friday but dropped 1% over the week as investors increasingly worried about the outlook for the global economy.

Those recession fears were highlighted today when EY Item Club forecast a 0.7% contraction for the UK this year, compared with the 0.3% it predicted in October. This will be followed by growth of 1.9% in 2024, down from the 2.4% increase seen previously.

Key events for investors to look out for this week include Thursday’s release of the fourth quarter GDP figure from the US economy, as well as the Federal Reserve’s preferred measure of inflation on Friday.

CMC Markets expects the FTSE 100 to open 12 points higher at 7,782 this morning, with little direction coming from Asia as many markets are closed for the Lunar New Year holidays.

Fuller’s says strikes cost £4 million

Pub chain Fuller’s said it took a £4 million pound hit from strikes as it warned profits would come in lower than expectations.

Like-for-like sales in the 43 weeks to 21 January climbed 20% to hit 97% of pre-pandemic levels.

In a trading update the firm said: “Due to the impact of the train strikes, our sales compared to the same four weeks in 2019 have declined by 5%.

“Since the start of October, we estimate that industrial action has reduced our sales by some £4 million and the consequent impact on profitability means that we now expect to report earnings below market expectations for the full year.”

Balfour Beatty secures major roads contract

Balfour Beatty has been awarded a £1.2 billion contract by National Highways to deliver the ‘Roads North of the Thames’ package of works for the proposed Lower Thames Crossing.

The Lower Thames Crossing will create a new connection under the River Thames to increase capacity and ease congestion in the South of England.

Balfour Beatty will be responsible for the design and delivery of over 10 miles of new highways, connecting the M25 at Junction 29 and the A13 with the Lower Thames Crossing tunnel at Tilbury, Essex.

Completion is due between 2029 and 2030, with Balfour Beatty expected to directly employ a workforce of about 2,000 at the construction peak.

Chief executive Leo Quinn said: “The Lower Thames Crossing is a significant scheme – one that will stimulate local, regional and national economic growth, create employment opportunities and new, sustainable methods of construction for the future of our industry.”