BUSINESS LIVE: GDP beats estimates at 0.7%; B&M names new CEO; United Utilities profits surge

Monzo customers who send a payment in error will now be able to claw it back before any money leaves their account… if they act quickly.

The digital bank has launched a new feature called ‘undo payments’ allowing customers to reverse an incorrect payment.

United Utilities has revealed profits doubled last year, as households in the North West prepare for a large increase in water bills over the next five years.

The water company revealed its underlying profits climbed by 48.8 per cent to £338.3million in the year ending March, from £227.3million in the prior 12 months.

Two major car manufacturers have revealed they’re producing new, cheaper EV batteries that will help reduce the price of electric cars in the coming years.

Volkswagen and America’s General Motors – which owns Cadillac and Chrysler – both say they have developed EV batteries that use less expensive, and fewer, precious metals without compromising efficiency or range.

BMW is understood to be ‘assessing’ the future of dozens of jobs at its Swindon Plant.

The update comes days after the group axed 180 temporary agency roles at its Oxford Plant.

British Gas is offering some of its customers a huge discount on their bills if they can shift their electricity usage to certain days.

The energy giant is rewarding customers for shifting their usage to times when there’s less demand, or more renewable electricity available on the grid.

The FTSE 100 has swung into positive territory in late morning trading, having traded as much as 0.6 per cent lower earlier in the day, weighed by lower oil prices.

US benchmark crude oil is down $2.37 to $60.78 per barrel, while Brent crude has given up $2.32 to $63.70 per barrel, as investors weigh the potential for a US-Iran nuclear deal.

The blue-chip index is led by defence stocks, while strong trading updates from Aviva and National Grid also helping to drive gains.

The FTSE 250 is down 0.1 per cent.

UK investor strategist at Saxo Markets Neil Wilson said:

‘The FTSE 100 edged down half a percent in early trade on Thursday after losing a bit of ground on Wednesday, slipping further below the 8,600 level, dragged down by an almost 7% fall for 3i Group after its earnings and a sharp decline in heavyweight stocks BP and Shell as oil price tumbled on a possible US-Iran nuclear accord.

‘No one cares about backward-looking GDP figures for the blue chips – it’s all about oil and basic resources today.’

Kallum Pickering, chief economist at Peel Hunt:

‘Momentum is likely to soften appreciably in the second quarter as the April rise in employer National Insurance and household energy prices hampers domestic demand, while rising global trade uncertainty impairs activity in trade-oriented industries.

‘Early indicators for 2Q are mixed—while weakening PMI data highlight the risk that GDP growth may stall, healthy gains in BRC retail sales suggest a degree of consumer resilience.

‘In the end, the fate of the UK economy in the near term hinges more on the willingness than the ability of consumers and businesses to continue to spend and invest.

‘Households benefit from strong real wage growth, high saving rates and low levels of debt, while businesses enjoy high cash balances and manageable debt levels.

‘However, after years of unusual shocks, consumers and businesses are skittish. The worry is that, as we saw in 2H24, rising uncertainties may trigger a lurch towards more precautionary behaviour again.’

Burberry plans to cut a up to 1,700 jobs worldwide as part of efforts to slash staff costs and return the luxury fashion brand to a profit.

The retailer said it was upping its cost-cutting target to £100million of savings per year by the 2027 financial year after posting a £3million reported operating loss for the year to the end of March.

Holidays giant Tui has suffered a slowdown in summer bookings due to weaker demand in Europe.

Shares in Europe’s largest travel agent tumbled 10.9 per cent as boss Sebastian Ebel warned of a ‘challenging’ year ahead.

James Smith, developed markets economist, UK, at ING:

‘The UK economy roared back to life in the first quarter after stagnating through the second half of last year. Or did it? We’re not sure the data is an accurate guide to what’s going on beneath the surface.

‘On the face of it, Britain is booming. Output rose by 0.7% during the first quarter, having seen essentially no growth through the second half of last year.

‘Is this a Trump effect? Maybe a bit. At least some of the 1Q bump was presumably linked to front-loading.

‘But we think there is a more basic problem emerging here, which is that every year since 2022, GDP growth has been stronger through the first half of the year (particularly 1Q) than in the second. Indeed, last year’s first quarter was even stronger than this year’s.

‘Remember that GDP data is supposed to be adjusted for seasonal patterns, but the extreme volatility during Covid has made that task harder. In addition, the period of high inflation does seem to have changed some pricing habits, in that a lot of price rises are now more concentrated in the first few months of the year.

‘What could be happening is that the deflator, which adjusts the GDP data for price changes, isn’t fully accounting for those seasonal inflation shifts, and perhaps we’re seeing less accurate seasonal adjustment in general.

‘All that aside, the UK outlook does look ‘ok’, even if first-quarter GDP probably heavily overstates the underlying pace of growth.

‘Uncertainty surrounding global trade is a headwind, though the direct impact of tariffs on the UK looks negligible. Remember too that government spending is rising significantly this year and that will be a firm tailwind.’

Rob Morgan, chief investment analyst at Charles Stanley:

‘The economic tectonic plates are still shifting rapidly with potential for reverberations across the globe. While there has been some relief from the temporary rollback of reciprocal tariffs from the US administration, and the UK was first out of the gates with a trade deal, it is barriers between the US and other trading partners, notably China and Europe, that will be of greater impact on the UK’s open economy.

‘Here, things hang in the balance. The agreement between Washington and Beijing to lower tariffs is welcome, but it is only a temporary deal. There’s no guarantee the lower regime established will be rolled over into a new reality.

‘Tariffs pour cold water on economic growth, making businesses delay investments and consumers to be more cautious with their spending. The uneven path to agreements could be set to weigh on global growth for months to come.

‘Meanwhile, the UK’s own trade deal has brought a degree of certainty, but domestic pressures in the form of increased employers’ National Insurance contributions and minimum wages could increasingly weigh on business activity.

‘These kicked in from April, so we’ll see more of the impact in coming months. Again, there is likely to have been a degree of ‘front running’ of activity that flattered the first quarter numbers at the expense of subsequent ones.

‘Overall, it seems likely there will be a loss of impetus for the rest of the year following this strong start.’

Aviva saw general insurance premiums jump 9 per cent in the first quarter, thanks to strong growth in both personal and commercial lines in Britain, driven by the Probitas deal and new businesses.

The life and general insurer, which operates in Britain, Ireland and Canada, said it was confident of meeting its 2026 outlook.

Aviva’s bid to become the largest home and motor insurer in Britain through a £3.7billion takeover of smaller rival Direct Line suffered a potential snag on Wednesday, after UK’s competition watchdog launched a review of the deal.

‘The acquisition of Direct Line is firmly on track… and we expect to complete the deal in the middle of the year,’ CEO Amanda Blanc said.

Discount retailer B&M has named retail industry veteran Tjeerd Jegen as its new chief executive.

Jegen has held several leadership roles, including CEO of Tesco’s Malaysia unit in 2010 and head of supermarkets and petrol at Australia’s Woolworths from 2011 to 2015.

It follows the retirement of former CEO Alex Russo at the end of April.

Jegen said: ‘I’m honoured to join one of Europe’s leading value retailers at such a pivotal time.

‘Value retail plays a crucial role in the lives of millions of consumers, and I’m passionate about working with the team to drive growth through great products, operational excellence, and a strong customer focus. I look forward to working with the team to build on the company’s strong foundations and take it to the next level’

Anna Leach, Chief Economist at the Institute of Directors, said:

‘All in all, it is no bad thing that the UK seems to have entered the April turmoil in good economic shape.”

‘UK growth seems unlikely to maintain its Q1 strength over the rest of this year. Tariff turmoil and its impacts on consumer and investment spending will push down on activity in coming months as it delays decision-making and increases the desire for precautionary saving buffers.

‘While consumer spending should continue to be supported by real earnings growth and further falls in interest rates, the labour market is softening rapidly amidst significant increases in employment costs.

‘The sharp rise in uncertainty pushes down further on investment appetite among businesses already seeing profits pressured by rising costs.

‘But amidst the noise, there are a number of notable policies expected from the UK government in the coming weeks: industrial strategy and the 10 year infrastructure plan provide opportunities to cut through and enable businesses to see a sense of direction for the UK economy.’

Thomas Pugh, economist at RSM UK:

‘On the quarterly spending measure, there was a surge in business investment, which grew by 5.9% and net trade added 0.4ppts.

‘However, the strength of both of these categories is probably due to firms bringing forward activity ahead of US tariffs and April tax increases.

‘Indeed, despite the relatively strong performance of consumer-facing industries in Q1, household spending only rose by 0.2% q/q and government spending contracted by 0.5%.

‘The big, and obvious, question now is how will the recent tariff developments impact that positive momentum.

‘There has been a clear hit to consumer confidence and business sentiment, which will translate into a sharp slowdown in growth in Q2.

‘There is a real risk of a contraction in Q2 as it looks like much of the strength in Q1 was due to firms bringing forward activity.’

The British economy grew by more than expected in the first quarter of 2025 thanks to a boost from the services and production sectors, according to the Office for National Statistics.

GDP expanded by 0.7 per cent in the first three months of the year, beating forecasts of 0.6 per cent and recording its fastest rate in a year.

March showed the strongest outperformance of economists’ expectations, with the economy expanding by 0.2 per cent compared to forecasts of zero growth.