London close: Stocks mixed on US jobless claims, UK data
By Josh White
Date: Thursday 21 Aug 2025
(Sharecast News) - London stocks ended mixed on Thursday as traders digested a surprise increase in US initial jobless claims, a series of domestic data releases, and looked ahead to the Federal Reserve's Jackson Hole symposium.
The FTSE 100 index rose 0.23% to close at 9,309.20 points, while the FTSE 250 slipped 0.31% to 21,817.84 points.
"It's not too often that the FTSE 100's lack of technology exposure is a virtue but it has been this week," said AJ Bell Investment Analyst Dan Coatsworth.
"Amid selling in Europe and the US, the UK's flagship index tested new highs above 9,300.
"Old world economy stocks like banks, energy companies and insurers have been to the fore - with their generous dividends in demand with investors."
In currency markets, sterling was last down 0.33% on the dollar to trade at $1.3413, while it edged 0.04% higher against the euro, changing hands at €1.1555.
US jobless claims rise sharply, UK consumer confidence edges higher
US jobless claims rose sharply in the week ended 16 August, pointing to softening conditions in the labour market.
The Labor Department said initial claims climbed to 235,000 from 224,000 the previous week, far above expectations for 225,000.
Continuing claims also rose, increasing by 30,000 to 1.97m, the highest level since November 2021.
The four-week moving average ticked up to 221,750, while the insured unemployment rate held steady at 1.3%.
Patrick Munnelly, market strategy partner at TickMill, noted that "the July minutes revealed a more cautious tone regarding Federal Reserve easing, despite two dissenting voices advocating for a rate cut dominating market sentiment.
"The majority expressed concerns about how tariffs might impact the inflation outlook, with underlying inflation continuing to overshoot expectations."
He added that while some members saw inflation risks moderating once tariff effects are stripped out, "the overall sentiment seemed to favour a 'wait-and-see' approach," with attention now turning to Jerome Powell's Jackson Hole remarks.
On home shores, UK consumer confidence edged higher in August but remained historically weak, according to the British Retail Consortium.
The net balance of expectations for the economy over the next three months improved to -32% from -33% in July, though sentiment has stayed below the -30% mark for six of the past seven months.
"While consumer confidence in the economy crept up this month, it remains 24 pts lower than a year ago, with older generations seeing the biggest falls," said Helen Dickinson, the BRC's chief executive, warning that rising prices and persistent food inflation would continue to weigh on household finances.
UK business activity meanwhile expanded at its fastest pace in a year.
The S&P Global flash composite purchasing managers' index (PMI) rose to 53.0 in August from 51.5 in July, led by a stronger services sector.
Manufacturing output remained weak, with firms citing soft demand and policy uncertainty.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said growth had accelerated but warned that "the demand environment remains both uneven and fragile" and that payrolls were being cut amid cost pressures and policy concerns.
Manufacturers separately reported falling output and weaker orders in the three months to August, according to the Confederation of British Industry.
The CBI's Ben Jones said rising costs and trade frictions were "hitting orders and weighing on output", calling for the Autumn Budget to deliver measures to support industry and competitiveness.
Public finances offered some relief, with UK government borrowing in July falling to £1.1bn, well below forecasts of £2.6bn and the lowest July figure in three years.
Higher income tax receipts helped reduce the monthly shortfall, though borrowing in the financial year to date remains among the highest on record.
PwC's Nabil Taleb said the Chancellor faced pressure to find new revenue sources while "treading carefully around the impact on living standards."
On the continent, eurozone construction output fell for a second consecutive month in June, down 0.8% after a 2.1% drop in May.
The decline was led by a 1.8% fall in building construction, while civil engineering activity rose slightly. Spain and Slovenia posted the steepest falls, while Slovakia and Portugal recorded the strongest gains.
WH Smith sinks on profit warning, Ithaca Energy still buoyant
On London's equity markets, WH Smith plunged 42.34% after slashing its North America profit outlook, citing a £30m overstatement of expected trading profit.
"The latest update from WH Smith is nothing short of a disaster," said Coatsworth.
"The North American business is crucial to the company's growth ambitions and the loose thread of an accounting error in this part of the group will create concern about a potential greater unravelling to come."
He added that investors would be left "sobbing into their cornflakes" after profit guidance for the American division was cut by more than 50%, leaving management facing "huge embarrassment" as it works to rebuild credibility.
Dividend-related trading weighed on Legal & General, Schroders, Mondi, Imperial Brands and Entain, which fell between 0.64% and 2.38% as the stocks went ex-dividend.
Recruiter Hays also dropped 1.65% after halving its annual dividend alongside a sharp fall in full-year profits.
"If a recruiter is cutting jobs, you know we're not in a healthy jobs market," said Coatsworth.
"Hays is desperately trying to right-size the business to contend with the difficult backdrop as profit slumps and the permanent recruitment market struggles."
On the upside, Ithaca Energy jumped 8.74% as it continued to benefit from this week's higher production guidance and rising crude prices.
Premier Foods gained 1.18% after acquiring convenient meals brand Merchant Gourmet for £48m.
"Hot on the heels of inflation figures which showed a drop in demand for eating out, Premier Foods has cooked up a new plan to capitalise on the home dining trend," said Coatsworth.
"It's a smart acquisition and helps to diversify Premier Foods' portfolio, adding a new flavour to its smorgasbord of goodies."
Engineering group Renishaw climbed 7.23% after forecasting full-year adjusted pre-tax profit towards the top end of its guidance range and announcing the retirement of long-serving finance director Allen Roberts.
Whitbread added 1.09% after Citi raised its price target on the Premier Inn owner to 3,800p from 3,600p, citing a "compelling investment case" following strong recent gains.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 9,309.20 0.23%
FTSE 250 (MCX) 21,817.84 -0.31%
techMARK (TASX) 5,420.12 1.07%
FTSE 100 - Risers
Smurfit Westrock (DI) (SWR) 3,238.00p 2.73%
BAE Systems (BA.) 1,759.50p 1.88%
Flutter Entertainment (DI) (FLTR) 21,940.00p 1.76%
Babcock International Group (BAB) 996.50p 1.74%
NATWEST GROUP (NWG) 562.80p 1.63%
Prudential (PRU) 1,007.00p 1.51%
Fresnillo (FRES) 1,671.00p 1.46%
Rolls-Royce Holdings (RR.) 1,040.50p 1.41%
Anglo American (AAL) 2,181.00p 1.39%
Whitbread (WTB) 3,141.00p 1.09%
FTSE 100 - Fallers
Legal & General Group (LGEN) 254.40p -2.38%
Schroders (SDR) 390.40p -1.86%
Persimmon (PSN) 1,104.50p -1.82%
Croda International (CRDA) 2,506.00p -1.80%
Barratt Redrow (BTRW) 371.70p -1.77%
St James's Place (STJ) 1,295.00p -1.63%
Rentokil Initial (RTO) 359.50p -1.50%
Mondi (MNDI) 1,057.00p -1.49%
JD Sports Fashion (JD.) 91.94p -1.48%
Taylor Wimpey (TW.) 98.78p -1.42%
FTSE 250 - Risers
Ithaca Energy (ITH) 214.00p 8.74%
Renishaw (RSW) 3,180.00p 7.23%
Diversified Energy Company (DEC) 1,185.00p 4.59%
Bytes Technology Group (BYIT) 397.80p 2.90%
Helios Towers (HTWS) 127.20p 2.75%
QinetiQ Group (QQ.) 480.40p 2.52%
AO World (AO.) 92.00p 2.35%
Endeavour Mining (EDV) 2,544.00p 2.33%
Avon Technologies (AVON) 1,970.00p 2.27%
Pollen Street Group Limited (POLN) 836.00p 2.20%
FTSE 250 - Fallers
WH Smith (SMWH) 640.00p -42.34%
NextEnergy Solar Fund Limited Red (NESF) 69.60p -4.92%
SSP Group (SSPG) 157.40p -4.08%
Foresight Solar Fund Limited (FSFL) 82.80p -3.16%
Pagegroup (PAGE) 253.80p -3.13%
Crest Nicholson Holdings (CRST) 168.50p -2.77%
Ibstock (IBST) 138.20p -2.68%
Caledonia Investments (CLDN) 382.00p -2.31%
Plus500 Ltd (DI) (PLUS) 3,064.00p -2.05%
Shaftesbury Capital (SHC) 148.40p -1.98%
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