FTSE 100 LIVE: London muted as UK economy beats growth forecasts

South East Water is under investigation by the industry watchdog after repeated outages since November have left tens of thousands of households and businesses without supply across Kent and Sussex.

Ofwat said it had launched a probe into whether the supplier had breached its licence condition by failing to comply with customer service standards obligations and offered appropriate support to affected customers during supply interruptions.

The latest incident has seen thousands of properties in Kent and Sussex left without drinking water for the sixth day running, with South East Water (SEW) blaming the outage on Storm Goretti causing burst pipes and power cuts.

As of Thursday morning, water had been restored to 16,500 properties in East Grinstead, but 8,500 customers in Kent remain without water, SEW have said.

Around 6,500 of those still affected are in Tunbridge Wells on a “booster system”, which the company said it now has a “new recovery plan” for.

Tunbridge Wells also suffered a sustained outage in November and December, with around 24,000 properties in and around the Kent town left without drinkable water for almost two weeks.

Ofwat has already launched an investigation into SEW’s supply resilience, looking at whether it has failed to develop and maintain an efficient water supply systems, which is ongoing.

Lynn Parker, Ofwat senior director for enforcement, said:

A poll of UK surveyors has found that confidence is returning to the UK housing market, with expectations for sales and prices turning higher in December.

The latest RICS UK Residential Market Survey found that sales expectations over the next three months had hit the highest level since October 2024.

Looking further ahead, a net balance of +34% of respondents expected sales volumes to rise over the next year, more than double the level seen in November.

Surveyors point to easing interest rate expectations and the clearing of budget-related uncertainty as key drivers behind the turnaround in mood.

But, RICS’s measure of buyer demand and agreed sales remained in negative territory during the month.

Tarrant Parsons, RICS’s head of market research & analysis, said:

Today’s ONS data means an interest rate cut from the Bank of England next month is less likely. Traders are betting there is a 6% chance of a reduction in borrowing costs in February, down from 7% on Wednesday.

Money market pricing indicates policymakers are expected to cut rates in April, although the chances of this were reduced from 93% yesterday to 91% today.

Suren Thiru, economics director at ICAEW, said:

Meanwhile, Andrew Wishart, senior UK economist at Berenberg, said:

Today’s GDP report also revealed that the UK economy grew by 0.1% over the three months to November.

Economists welcomed the news, with Ben Caswell, senior economist at the National Institute of Economic and Social Research, suspecting that Rachel Reeves’s commitment to expanding her budget fiscal headroom helped lift confidence.

He said:

The UK economy returned to growth in November, despite uncertainty in the run up to chancellor Rachel Reeves delivering the autumn budget.

The UK’s gross domestic product (GDP) is estimated to have grown by 0.3% in November, according to Office for National Statistics (ONS) data released on Thursday. This was better than forecasts for 0.1% growth and followed an unrevised fall of 0.1% in October.

Services output increased by 0.3% in November and production grew by 1.1%, though construction output fell by 1.3%.

In the three months to November, the ONS data showed that UK GDP grew by 0.1%, after showing no growth in the previous three months, which was revised up from a fall of 0.1%.

Liz McKeown, director of economic statistics at the ONS, said:

Stocks in Asia were mixed overnight, but tech ‍shares were met with more selling. The Nikkei (^N225) slipped 0.4% on the day in Japan, where it looks increasingly as though prime minister Takaichi is going to call a snap election. That hasn’t been officially confirmed, but Hirofumi Yoshimura, who is the leader of the Japan Innovation Party, said that Takaichi had told colleagues that she’d be dissolving the lower house soon after it reconvenes on 23 January.

Meanwhile the Hang Seng (^HSI) fell 0.3% in Hong Kong and the Shanghai Composite (000001.SS) was also 0.3% down by the end of the session.

In South Korea, the Kospi (^KS11) added 1.6% on the day, on track for another record high this morning.

Currencies paused for breath after the yen dropped to its weakest point since July 2024 against the US dollar overnight and then bounced back sharply amid warnings of possible intervention by Japanese authorities.

Japanese bond yields eased back from record peaks following a spike driven by speculation – which was later confirmed – that the government will call snap elections, a scenario that is expected to lead to bigger fiscal stimulus.

Across the pond, Wall Street declined last night after fourth-quarter results from some US banks, including Bank of America (BAC) and Wells Fargo (WFC), disappointed investors.

The S&P 500 (^GSPC) fell 0.5% during the session thanks to a slump for tech stocks, with the Magnificent 7 down 1.56%, in contrast to most of the S&P’s constituents which rose yesterday, with 318 moving higher.

The tech-heavy Nasdaq (^IXIC) was 1% lower at the closing bell and the Dow Jones (^DJI) lost 0.1%.

Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what’s moving markets, and what’s happening across the global economy.

Looking at the day ahead, data releases include the UK GDP and Euro Area industrial production for November. Then in the US, we’ll get the weekly initial jobless claims, the Empire State manufacturing survey for January, and the Philadelphia Fed’s business outlook for January.

From central banks, the ECB will publish their Economic Bulletin, we’ll hear from ECB Vice President de Guindos, the ECB’s Panetta, and the Fed’s Bostic, Barr, Barkin and Schmid. Finally, earnings releases include Goldman Sachs, Morgan Stanley, and BlackRock.

Here’s a snapshot of what’s on the agenda:

• 7am: Trading updates: Taylor Wimpey, Dunelm, Safestore, Ashmore, Rathbones, Oxford Instruments, Hostelworld, Robert Walters, Fuller, Smith & Turner, CAB Payments, Brooks Macdonald

• 7am: UK GDP report for November

• 7am: UK trade report for November

• 9am: German full year GDP report

• 1.30pm: US initial jobless claims report