The United Kingdom's economy exhibited unexpected resilience as it grew by 0.1% in the fourth quarter, surpassing economists' predictions of a 0.1% contraction. This unexpected growth comes on the heels of a stagnant third quarter and modest monthly GDP data. The British economy's performance was buoyed by a rise in the consumer price index, which climbed 0.5% for the month, elevating the annual inflation rate to 3%, marginally above the Dow Jones estimate of 2.9%.
In contrast, Unilever experienced a setback with a 7% decline due to weaker-than-anticipated sales growth figures. Meanwhile, the British pound appreciated by 0.5% against the dollar following the economic data release and remained stable against the euro.
In the broader European economic landscape, attention is focused on forthcoming data releases, including Germany's latest inflation rate and the UK's fourth-quarter GDP. Traders are monitoring earnings from major companies like Siemens, Nestle, Swisscom, Pernod Ricard, Orange, Unilever, Legrand, Ferrovial, Barclays, British American Tobacco, Commerzbank, Thyssenkrupp, and Moncler.
Barclays posted a promising rise in full-year pre-tax profit, slightly outperforming analyst expectations. The bank also announced a £1 billion share buyback initiative. Despite these positive developments, GDP per capita in the UK showed a slight decline over the year, as noted by ING developed markets economist James Smith.
"Fourth-quarter UK GDP wasn't as bad as it could have been, though the details weren't great … all of the increase in GDP across 2024 can be put down to population growth. GDP per capita actually fell slightly across the year," James Smith commented.
Elsewhere in Europe, Siemens CEO Roland Busch emphasized the need for regulatory reform to stimulate economic growth.
"We are overregulating in Europe, that is my belief. We should innovate and then regulate. We should pull it back," stated Roland Busch.
Busch also highlighted the necessity for Germany to revitalize its economic momentum after experiencing contraction and minimal growth rates.
"We have to change something. We have to get this German economy back into a growth momentum, we cannot live with the contraction or very, very low growth," he added.
Nestle's CEO Laurent Freixe provided insights into the company's strategic outlook amid economic uncertainties.
"From 2025, we expect our actions to drive an improvement in organic sales growth, with a lower underlying trading operating profit margin in the short term as we invest for growth. While there is macroeconomic uncertainty, we have lots of opportunities ahead of us, and we have the strategy, the resources and the people and team to deliver," said Freixe.
In October, Nestle adjusted its full-year outlook due to sluggish underlying sales growth, projecting 2024 organic sales of approximately 2% and an operating profit margin around 17%.
On the global front, U.S. President Donald Trump announced discussions with both Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy about their mutual desire for peace. These talks hold potential implications for international markets and geopolitical stability.
As companies adjust their workforce strategies in response to evolving market conditions, some are making job cuts while selectively increasing staffing in international areas. This approach aims to maintain a constant global headcount of approximately 36,700 employees.