BUSINESS LIVE: GDP progress stalls; Rightmove rejects £5.6bn REA bid

A former high-flying Glencore executive appeared in court yesterday accused of bribery.

Billionaire Alex Beard, 57, who was head of oil at the Swiss commodities giant for more than a decade, will plead not guilty, his lawyer told London’s Westminster Magistrates Court.

Brussels scored a double victory over US tech giants yesterday as it won major court battles against Apple and Google.

In a boost for EU competition chief Margrethe Vestager, the European Court of Justice (ECJ) ruled against the Silicon Valley titans in two long-running legal disputes.

Apple was first told to cough up £11billion over unpaid taxes in Ireland.

Isaac Stell, investment manager at Wealth Club:

‘The month-on-month GDP figures missed all estimates producing a fairly dismal set of numbers with the services sector managing to mitigate the declines seen in the construction and manufacturing sectors.

‘A reversal in the fortunes for the manufacturing and construction sectors is a blow to the new Labour Government that has growth as a central pillar of its agenda.

‘The usual bright spot was the bounce back in growth for the services sector with the Health sector one of the leading contributors, springing back to life following strike action in June.

‘A notable slowdown in advertising and architects may be indicative of a wider slowdown. With the canaries beginning to look a bit peaky, the Chancellor may need to tread more carefully in October.’

Rightmove has rejected a takeover proposal from Rupert Murdoch-backed REA Group in Australia, claiming it ‘fundamentally undervalued’ the firm.

REA, which is majority-owned by Rupert Murdoch’s News Corp, confirmed it put forward an approach for a cash-and-shares deal which it said would be worth around 705p a share, valuing the entire group at about £5.6 billion.

But Rightmove said that based on REA’s closing share price on 10 September, the proposal would value each Rightmove share at 698p.

Rightmove said: ‘The board carefully considered the proposal, together with its financial advisers, and concluded that it was wholly opportunistic and fundamentally undervalued Rightmove and its future prospects.

‘Accordingly, the board unanimously rejected the proposal on September 10 2024.

‘Rightmove shareholders should take no action in respect of the proposal.’

Lindsay James, investment strategist at Quilter Investors:

‘The UK economy was expected to continue to show modest momentum, but signs suggest that the growth from the first half of the year is now stuttering. July’s estimate has shown the UK economy had no growth, with growth for the previous three months coming in slightly below expectations at 0.5%.

‘Given the mood music emanating from the government and the economic inheritance it has received from the Conservatives, the government needs to be careful not to overcorrect with its narrative around tax rises and the potential this has to put off investment.

‘This month may just be a blip however, given recent positive noises that have been sounded about the state of the wider economy, especially as rate cuts will continue to be delivered over the coming year.

‘Expectations for the UK economy have gradually shifted higher, with the IMF now forecasting UK GDP growth of 0.7% in 2024, up from 0.5% previously, whilst another measurement of economist forecasts has seen it rise from a low of 0.3% in March to 1% currently. The government will hope today’s figure does not dampen those forecasts.

‘This improving economic outlook has been somewhat overshadowed by the weak state of the public finances resulting in the Labour Party receiving a muted welcome from investors keen for economic and political stability in a world where this is currently in shortage – although today’s announcement of investment by Amazon’s cloud business will be welcomed.’

The UK economy unexpectedly stalled in July after failing to show growth on the previous month, fresh data from the Office of National Statistics shows.

Economists had forecast the economy to expand by 0.2 per cent for the month.