London open: FTSE falls as retail sales miss forecast, consumer confidence dips

London stocks fell in early trade on Friday as investors mulled a dip in UK consumer confidence and a smaller-than-expected rebound in retail sales.

At 0830 BST, the FTSE 100 was down 0.3% at 9,109.71.

Figures from the Office for National Statistics showed that retail sales bounced back in June, albeit less than expected, boosted by warmer weather.

Retail sales rose 0.9% on the month following a 2.8% drop in May, which was revised down from a 2.7% decline. The increase was below economists’ expectations for 1.2% growth, however.

Food stores sales volumes rose 0.7% in June following a 5.4% fall the month before. This was mainly thanks to improved supermarket sales, with some retailers mentioning that warm weather had lifted drinks sales.

Hannah Finselbach, senior statistician at the ONS, said: "Following a poor May, it was an improved month for retail sales with growth across all main sectors. The warm weather in June helped to brighten sales, with supermarket retailers reporting stronger trading and an increase in drink purchases."

Elsewhere, the latest GfK survey showed that consumer confidence dipped in July, with the long-running consumer confidence index one point lower at -19.

Neil Bellamy, consumer insights director at GfK, said the data suggests that some people may be "sensing stormy conditions ahead".

"With speculation growing over possible tax rises in the Autumn Budget, and price pressure contributing not just to higher inflation already but also to the likelihood of worse inflation to come, the news is worrying," he said.

In equity markets, NatWest ticker higher as it lifted its guidance for the year and announced a £750m share buyback. In the six months to 30 June, operating pre-tax profit rose 18% to £3.6bn, beating the £3.46bn average forecast by analysts.

The bank, reporting first results since its return to private ownership, lifted its dividend by 58% to 9.5p a share.

It said it now expects to achieve a return on tangible equity of 16.5%, from previous guidance of up to 16%. It also forecast annual income to be above £16bn, up from earlier guidance of £15.2bn - £15.7bn.

Close Brothers rose as it sold its Winterflood execution services and securities business to Marex Group for £103.9m in cash as it slims down its portfolios to focus on the group's core lending activities.

Pub group Mitchells & Butlers advanced after saying it was confident that full-year results would be at the top end of consensus expectations as it continues to perform ahead of the market.

Wizz Air flew higher after an upgrade to ‘overweight’ by Barclays, while Softcat gained after an upgrade to ‘buy’ from ‘hold’ at Panmure Liberum.

On the downside, Marshalls tumbled as it warned on profits following a weaker-than-expected performance from its landscaping products business.

Property portal Rightmove fell as it posted a jump in first-half profit and revenue but warned of slower growth in the second half.