FTSE 100 today: Index slips, pound below $1.35; U.K. retail sales miss in June

British stocks and the pound slipped following weaker-than-expected UK retail sales, which rose just 0.9% in June against a 1.2% forecast, signaling a significant Q2 slowdown. Corporate results were mixed, with Marshalls PLC shares plunging 19% after a profit warning lowered its FY25 forecast by 21% below consensus, and Jupiter Fund Management reporting H1 profit and revenue declines. Conversely, NatWest Group posted solid H1 2025 profits of £2.68 billion, while Rightmove PLC beat H1 revenue estimates but cautioned on a H2 slowdown.

Analysis

UK markets are facing pressure from weakening macroeconomic indicators, with the FTSE 100 and British pound both declining following disappointing retail sales data. The 0.9% month-on-month increase in June retail sales fell short of the 1.2% consensus forecast and highlights a significant deceleration in consumer activity, as Q2 volume growth slowed to just 0.2% from 1.3% in Q1. This consumer weakness is directly reflected in corporate performance, creating a bifurcated market. Marshalls PLC (MSLH) exemplified the downturn, with its shares plunging 19% after issuing a severe profit warning that lowered its full-year 2025 forecast by approximately 21% below consensus, citing no expected recovery in the second half. Similarly, Jupiter Fund Management (JUP) reported a decline in profitability, with H1 basic EPS falling to 4.1p from 5.4p year-over-year. In contrast, NatWest Group (NWG) demonstrated resilience, posting a solid £2.68 billion profit for the first half of 2025. Rightmove (RTMVY) also delivered better-than-expected H1 revenue of £211.7 million but tempered optimism by cautioning of a slowdown in H2. Separately, GSK received positive regulatory news with the EU's approval of its drug Blenrep, providing a firm-specific catalyst independent of the broader economic trend.

Key Decisions for Investors

• Investors should exercise caution on UK consumer discretionary and construction-related stocks, as weak retail sales and Marshalls' severe profit warning signal deteriorating demand with no near-term recovery expected.
• The significant divergence in corporate results warrants a selective approach; while the outlook for Marshalls (MSLH) and Jupiter (JUP) is negative, NatWest's (NWG) strong profitability suggests resilience within the banking sector.
• For Rightmove (RTMVY), the combination of a revenue beat and a cautious H2 outlook suggests a 'hold and monitor' stance may be prudent, paying close attention to signs of the forecasted moderation.
• GSK's positive drug approval news underscores the potential defensive characteristics of large-cap pharmaceuticals, which can offer insulation from the cyclical economic headwinds impacting other sectors of the UK market.