Weekly review
By Josh White
Date: Friday 01 Aug 2025
(Sharecast News) - The FTSE 100 ended the week down 51.73 points, or 0.57%, closing at 9,068.58 on Friday.
Equity view
British Airways owner International Consolidated Airlines Group posted a strong set of H1 results on Friday, with "robust" travel demand and operational improvements boosting profitability. IAG said revenue had risen 8% year-on-year to €15.91bn in the six months ended 30 June, while operating profits before exceptional items surged 43.5% to €1.88bn. Adjusted earnings per share jumped nearly 70%.
IMI has reiterated its full-year guidance after a broadly stable first half, with the engineering business hailing "strong momentum" heading into the second half. The company, which builds products used in fluid and motion control applications, reported revenues of £1.09bn for the six months to 30 June, down 1% on last year due to currency movements.
Educational publisher Pearson said it was on track to meet full year forecasts with strong second-half growth as it reported a 2% rise in adjusted half-year operating profit and sales. The company said earnings for the first six months of the year came in at £242m, while sales on an adjusted basis were also up 2% at £1.72bn. Pearson added that it expected stronger sales growth in H2 and the fourth quarter in particular.
Melrose's share price jumped on Friday after the aerospace technology firm delivered a solid first-half report, with adjusted operating profits up by nearly a third. "We delivered a strong performance in the first half with a 29% improvement in profit and cash flow significantly stronger than last year despite the backdrop of supply chain and tariff disruptions," said chief executive Peter Dilnot.
Consumer goods giant Unilever reported a 3.4% rise in underlying sales for H125, driven by balanced volume and price growth, despite turnover dipping 3.2% to €30.1bn due to adverse currency movements and disposals. Unilever's personal care unit led the charge with 4.8% growth, buoyed by strong performances from its Dove deodorants, while ice cream sales increased 5.9% ahead of its planned demerger in November.
Aerospace and defence engineer Rolls-Royce has raised its full-year guidance after a strong first half, in which underlying revenues grew by double-digits and operating profits surged by 50%. The company now expects to book an full-year underlying operating profit of £3.1bn-3.2bn for 2025, up from previous guidance of £2.7bn-2.9bn, while the free cash flow target has been upped to £3.0bn-3.1bn from £2.7bn-2.9bn.
Multinational engineering company Weir Group said on Thursday that it had delivered a "strong" H1 performance, with both revenue and profits improving. Weir said adjusted operating profits were up 17% to £237m, while margins climbed 220bps to 19.8%, driven by strong aftermarket demand and operational efficiency.
Energy giant Shell reported better-than-expected second quarter earnings but still sharply lower than a year ago on the back of weak oil and gas prices. Adjusted earnings came in at $4.26bn for the three month period, beating average estimates of $3.74bn in a company-compiled poll, but down 24% on 2024's $6.3bn. For the half year earnings were down 30% to $9.8bn.
Glencore reported lower first-half copper production and targeted $1bn in cost savings by the end of next year after a review of its industrial asset portfolio. The miner and commodities trader said output was down 26% to 343,900 metric tons, mostly due to declining grades, and tightened its 2025 forecast to 850,000 to 890,000 tonnes from 850,000 to 910,000.
Tritax Big Box REIT said it has signed an agreement for lease with an unnamed data management company for its recently completed logistics facility at Symmetry Park, Rugby. The 15-year lease has open market rent reviews every five years, with expected yield-on-cost towards the upper end of the company's 6-8% guidance.
Enterprise software group Sage said on Wednesday that total revenues had grown in Q3 and reiterated its FY guidance despite ongoing macroeconomic uncertainty. Sage said Q3 total revenues were up 9% at £1.86bn, driven by continuing growth across the Sage Business Cloud portfolio, with North American revenue up 11% at £846m, while UKIA and European revenues grew 9% to £539m and 6% to £477m, respectively.
Housebuilder Taylor Wimpey has cut its annual profit guidance by £20m and reduced its interim dividend after swinging to a big loss in the first half due to one-off exceptional charges. Group operating profits are now expected to come in at £424m over 2025, down from April's guidance of £444m, due to charges relating to principal contractor remediation works on a historical site.
Derwent London said it had sold an office building in London for £55.5m to a local government pension scheme. The final sum will exclude transaction costs and a £1.3m surrender premium in relation to the basement space. The sale is scheduled to complete in early Q4 2025.
Drugmaker AstraZeneca said on Tuesday that "strong growth momentum" had continued in H1, with "excellent R&D pipeline delivery" in the year-to-date. Astrazeneca said total revenues were up 9% in the six months ended 30 June at $28.04bn, with growth reported across all major geographic regions, while gross profits grew 10% to $23.33bn and operating profits rose 23% $7.18bn and pre-tax profits shot up 26% to $6.52bn.
WH Smith said it had sold its online greeting cards business, funkypigeon.com, to Card Factory for £26m as it continued its pivot towards travel retail.Net cash proceeds, when adjusted for transaction costs, are anticipated to be £21m and will be used to improve the Group's net debt position. "The group is now a pure play global travel retailer, well positioned to capture the substantial global growth opportunities in its key markets and drive enhanced shareholder value," the company said on Tuesday.
Recruiter SThree reported a fall in first-half profit and revenue on Tuesday amid "persistent" challenging market conditions, but backed its expectations for the year. In the six months to the end of May, pre-tax profit declined 74% from the same period a year earlier to £10.1m, while revenue was down 15% to £648.8m.
IT support and services firm Computacenter said on Monday that it continues to expect FY25 adjusted operating profits to be ahead of FY24 after delivering "strong revenue growth" in H1. Computacenter stated that its increased revenues were primarily driven by growth in its high-volume technology sourcing business, resulting in "good growth" in gross profits.
GSK has entered into a partnership with Chinese pharmaceutical outfit Hengrui Pharma to jointly develop up to 12 medicines, in a deal that could be worth up to $12bn. The British company said in a statement on Monday that the agreement provides it with new growth opportunities beyond 2031. Hengrui will lead the development of 12 programmes across respiratory, immunology and inflammation (RI&I) and oncology up to completion of phase I trials, including in patients outside of China. GSK will then have the exclusive option to further develop and commercialise each programme worldwide if it wants.
Rail and coach ticket marketplace operator Trainline said on Monday that it had bolstered its financial footing with a fresh refinancing deal, swapping out its existing £325.0m revolving credit facility for a more flexible £450.0m package. Trainline said its new unsecured facility, arranged with both existing and new lenders, included an accordion feature allowing for a further £150.0m boost if needed, and runs for an initial three-year period with options to extend twice by a year.
FirstGroup said on Monday that it has bought Tetley's Coaches, a Leeds-based coach and bus operator that has been in operation for over 75 years, for an undisclosed sum. Tetley's Coaches operates from a large depot which it owns in Central Leeds, adjacent to the group's existing First Bus Hunslet Park depot.
Economic news
Activity in the UK manufacturing sector improved in July, although it remained in contractionary territory, according to a survey released on Friday. The S&P Global manufacturing purchasing managers' index rose to a six-month high of 48.0 from 47.7 in June. However, it was below the flash estimate of 48.2 and remained below the 50 mark that separates contraction from expansion for the tenth month.
UK house prices bounced back in July, according to figures released on Friday by Nationwide. House prices rose 0.6% on the month following a 0.9% decline in June. On the year, prices increased 2.4% in July following 2.1% growth the month before. The average price of a home stood at £272,664 last month, up from £271,619 in June.
Santander UK announced it was cutting more than 2,000 jobs and closing more branches on Wednesday as part of a sweeping cost-reduction programme, coinciding with a 5% fall in first-half pre-tax profit to £764m. The cuts, driven by a push for greater automation and simplified operations, reflected the bank's ongoing transformation amid changing customer behaviour and mounting competitive pressures.
Mortgage approvals rose in June, according to the latest Money and Credit report released on Tuesday by the Bank of England. Net mortgage approvals for house purchases ticked up to 64,200 from 63,300 in May. The figure for May was revised from 63,000. Economists were expecting it to remain broadly unchanged.
The EY ITEM Club has lifted its UK GDP projections for 2025 but expects growth to "remain subdued" next year, owing to economic disruption from global trade turmoil, macro uncertainty and weakness in the labour market. In its Summer Forecast, the economic forecasting group said it now expects the UK economy to grow by 1.0% this year, up from an earlier prediction of an 0.8% expansion.
UK retail sales continued to struggle in July as rising prices and economic uncertainty weighed on household demand, although the pace of decline slowed from June, according to a survey released on Monday by the Confederation of British Industry. The retail sales volume balance was -34%, up from -46% a month earlier, but marking the tenth consecutive month of decline.
International events
The annual rate of inflation across the eurozone unexpectedly held steady in July, according to figures out on Friday from Eurostat, staying in line with the European Central Bank's 2% target level. The year-on-year change in the consumer price index was 2.0% last month, in line with June, Eurostat reported in its preliminary estimates for July.
Economic activity in the Chicago area picked up in July, according to data released on Thursday. The MNI Chicago business barometer rose 6.7 points from June to 47.1 in July. This was the largest increase in thirteen months, taking the index to the highest since March 2025 and beating expectations for a reading of 42.
US inflation showed renewed momentum in June, with the Bureau of Economic Analysis reporting a 0.3% monthly increase in its personal consumption expenditures price index, the Federal Reserve's preferred inflation measure. On a year-on-year basis, headline PCE inflation reached 2.6%, while core inflation stood at a slightly firmer 2.8% clip, suggesting that inflation remains sticky despite the central bank's prolonged rate pause. Core PCE, which excludes volatile food and energy components, also rose 0.3% month-on-month.
Americans lined up for unemployment benefits at an accelerated pace in the week ended 26 July, according to the Labor Department. Initial jobless claims increased by 1,000 to 218,000 from the prior week's unrevised level, while continuing claims were unchanged from the previous week's downwardly revised 1.94m print.
The eurozone jobless rate stayed at a record-low rate in June, with the number of young unemployed people across the single-currency region dropping to a two-year low. The euro area seasonally adjusted unemployment rate was 6.2% last month, according to figures out on Thursday from Eurostat.
The Bank of Japan held its benchmark interest rate at 0.5% on Thursday, while raising its inflation forecasts more than expected, in a sign it could be edging closer to another rate hike. Its decision, which was unanimously supported by the bank's nine-member board, came alongside a quarterly outlook report that showed improved confidence in both price and growth trends, and a more tempered view on trade-related risks.
The US central bank kept policy unchanged at its meeting on Wednesday and sounded a largely neutral tone. On the one hand, the economy had "moderated" over the first half of the year, whilst on the other the jobs market remained "solid" and inflation "somewhat elevated", the Federal Reserve said in its policy statement.
US pending home sales decreased in June, according to the National Association of Realtors, missing estimates of a 0.3% increase. Based on signed contracts, pending home sales dropped 0.80% month-on-month in June, taking a bite out of May's 1.8% increase. On an annualised basis, pending home sales decreased 2.8%.
The United States economy expanded significantly more than expected in the second quarter, according to preliminary estimates from the Bureau of Economic Analysis on Wednesday, bouncing back after the first annualised decline in GDP in three years. US GDP increased at a seasonally adjusted annual rate of 3.0% during the April to June period, well ahead of the 2.5% expansion expected by economists.
Private sector employment in the US rose more than expected in July, according to figures released on Wednesday by ADP. Employment rose by 140,000 from June, versus expectations for a 78,000 increase. Meanwhile, the June figure was revised to show that 23,000 jobs were shed, rather than 33,000.
US mortgage applications decreased in the week ended 25 July, according to the Mortgage Bankers Association of America. Last week's decline extended the prior week's 10% dive, with mortgage applications registering a 3.8% fall despite a drop in benchmark mortgage rates.
The eurozone economy managed to defy forecasts and expand by 0.1% in the second quarter, according to official flash data published on Wednesday. Economists had anticipated zero growth after a 0.6% expansion in the first three months of the year.
German retail sales increased more than expected in June, up 1% compared with the previous month, according to official data published on Wednesday. The figure compared with forecasts of a 0.5% increase. On an annual basis, sales rose 4.9% in June compared with May's 2.6% revision.
House prices in the United States fell slightly in May, easing after the largest monthly fall in nearly three years, according to data out on Tuesday from the US Federal Housing Agency. The seasonally adjusted monthly house price index, which tracks changes in single-family home values from all 50 states, was down 0.2% after a 0.3% fall in April, which was revised higher than the earlier estimate of -0.4%.
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