London midday: Stocks gain on encouraging UK data, ahead of payrolls

(Sharecast News) - London stocks had edged higher by midday on Friday as investors mulled encouraging UK data releases and eyed the latest US non-farm payrolls report. The FTSE 100 was up 0.3% at 9,226.33.

The non-farm payrolls report for August is due at 1330 BST, along with the unemployment rate and average earnings.

Russ Mould, investment director at AJ Bell, said: "Equity markets were quiet at the end of the week, albeit there is still a chance for a last-minute wobble if US jobs data delivers a shock.

"Non-farm payrolls are expected to have grown by 75,000 in August, slightly above July's 73,000 figure. Investors are looking to see if the jobs market is hot or cold, as that will play a key role in the Fed's decision making on interest rates. Hot gives the Fed less reason to cut, cold does the opposite.

"Constant movement regarding tariffs in recent months have been a nightmare for businesses trying to plan for their future. Ongoing uncertainty has the potential to put a freeze on hiring, thereby depressing the labour market.

"This situation isn't 'new' news to investors, but they are watching every data point like a hawk to see if things are getting worse or better."

On home shores, delayed data from the Office for National Statistics showed retail sales rose by more than expected in July.

Retail sales volumes are estimated to have risen by 0.6% in July, following an 0.3% increase in June. Analysts had been expecting a smaller 0.2% rise.

Year-on-year, sales were 1.1% higher, marginally below forecasts for a 1.3% uplift.

Both the warm summer weather and women's Euro 2025 football tournament helped bolster sales.

Clothing sales were particularly strong, jumping 2.5% over the month and by 5.5% over the year, the largest annual rise since January 2023.

On a three-month basis, however, the quantity of all goods bought fell by 0.6% when compared with the previous quarter, to April.

Falls in food, sports equipment, games and toys and household goods were attributed for the three-month decline.

The July data had initially been slated for publication on 22 August. But the ONS halted the release after it discovered an error in how it accounts for seasonally-adjusted sales.

The issue affected seasonally-adjusted data between January and May 2025, when some holiday effects - such as Easter moving - and "phase shift effects" were not properly accounted for.

The ONS said it had now corrected the error and had conducted a detailed annual review of all seasonally-adjusted parameters and settings.

The review has led to changes to this year's data, including June's 0.9% monthly growth rate being revised to 0.3% and May's 2.8% slide corrected to a more modest 1.0% decline.

James Benford, director general of economic statistics at the ONS, said: "The new figures published today show a similar pattern of three-month on three-month growth, but with less volatile month-on-month changes."

He continued: "I apologise for the delay to this release and for the errors in how we have been seasonally adjusting these data.

"Our economic statistics and surveys improvement plans will put more resources into improving the quality of statistics."

The issue was the latest in a series of problems that have undermined some of the ONS's key economic statistics this year, resulting in criticism from policy makers in both government and at the Bank of England.

Separately, figures from Halifax showed that house prices rose in August for the third month in a row, to a fresh record high.

House prices ticked up 0.3% on the month following a 0.4% jump in July. On the year, prices were up 2.2% in August, easing from 2.5% growth the month before.

The average price of a home stood at £299,331 last month, up from £298,400 in July and marking a new record high.

Amanda Bryden, head of mortgages at Halifax, said: "The story of the housing market in 2025 has been one of stability. Since January, prices have risen by less than £600, underlining how steady the market has been despite wider economic pressures.

"Affordability remains a challenge, but there are signs of improvement. Interest rates have been on a gradual downward path for nearly two years, and many of the most competitive fixed-rate mortgage deals now offer rates below 4%."

In equity markets, housebuilder Berkeley gained as it reiterated its full-year profit guidance after "stable" trading over the first four months of its financial year.

The company said it is on target to hit the pre-tax earnings guidance of £450m for the 12 months to 30 April 2026, 85% of which is already secured through exchanged sales contracts, with a similar profit expected next year.

Asset manager Ashmore tumbled as it reported a 3% fall in assets under management driven by net outflows of $5.8bn amid market turmoil highlighted by US tariffs. AuM came in at $47.6bn, resulting in a 15% fall in pre-tax profit to £108.6m for the year to 30 June.

Admiral was knocked lower by a downgrade to 'sell' from 'reduce' at Peel Hunt, which cited a weaker outlook for UK motor underwriting margins.

HSBC gained after an upgrade to 'outperform' by BNP Paribas Exane, but NatWest was hit by a downgrade to 'underperform' by the same outfit.