Britain’s stock market is shrinking at its fastest pace in history, a Wall Street bank has suggested, as the FTSE 100 hits a fresh record high.

Goldman Sach said the combination of company buybacks and a lack of new stock being issued would drastically reduce the supply of shares available to be purchased by investors.

However, this reduction in the size of the market’s public equity would also mean shareholder returns in the UK are “poised to reach an all-time high,” analysts said.

Analysts predicted the trend should continue, with the latest Deloitte survey of chief financial officers showing that “the majority of UK CFOs think their companies are undervalued and they intend to continue to do buybacks”.

Share buybacks are the process of companies buying back their own shares from the stock market, reducing the supply and increasing the share price for investors.

Goldman’s analysis comes as the FTSE 100 is on track for its strongest week since last summer after a series of eye-catching takeover bids.

Britain’s flagship stock market jumped to 8,146.79 points today, notching up a record high for the fourth consecutive session in a hectic week for merger and acquisition activity.

The index pulled back to close at another fresh record of 8,139.83, beating the previous 8,078.86 high score set on Thursday.

Goldman Sachs analyst Guillaume Jaisson said: “The combination of dividends plus (net) buybacks implies a 5.5pc total yield in the UK.

“It compares with 4.5pc for Europe (excluding the UK) and 3.5pc in the US.

“The yield differential with the S&P 500 is the widest ever which makes UK equities an interesting gateway to Europe and to diversify from the US.”

He added: “In the UK the combination of buybacks and a lack of new issuance has meant that the net supply of public equity is shrinking at its fastest pace in history.”

That’s all from us this week. Have a great weekend and see you on Monday morning with the latest.

“Loyal wingman” fighter drones that will fly alongside British aircraft are a step closer to reality after the technology was successfully tested for the first time.

In the trial, carried out by the Armed Forces and defence company Qinetiq, a crewed plane took remote control of a drone aircraft before sending it on a mission and receiving data back afterwards.

The aircraft also simulated similar actions with a “swarm” of virtual drones.

The blue-chip index finished up 0.75pc at 8,139.83, beating yesterday’s high score of 8,078.86.

George Osborne has insisted a money-printing spree that is set to cost the taxpayer £100bn seemed “sensible at the time”.

The former chancellor said quantitative easing, under which the Bank of England created £895bn of money to buy bonds, “was a necessary policy to get us out of the financial crash, and contributed to the fastest recovery of any G7 economy”.

He added that it was “not my responsibility” to oversee the present status of the scheme, which is costing the Exchequer tens of billions of pounds because of an agreement with the Bank that losses should be borne by the taxpayer.

The policy began in the financial crisis, holding down borrowing costs for the government, injecting liquidity into financial markets and, initially, making a profit for the Bank.

Deputy economics reporter Tim Wallace reports…

That’s all from me after a busy week in which the FTSE 100 has hit new record highs amid a flurry of takeover deals.

Some of you might suggest a way to unwind at the weekend would be a touch of retail therapy.

No doubt, Uniqlo would advise a visit to its first ever store in Scotland, which opened in Edinburgh earlier today, as pictured below.

Adam Mawardi will keep sending you the latest updates into the evening.

Alphabet and Microsoft ignited a rally in technology stocks after publishing results that showed big AI investments were driving growth.

Alphabet rose 10pc, crossing $2 trillion (£1.6 trillion) in market value with a gain of about $180bn as it announced its first ever dividend and a $70bn stock buyback.

The world’s fourth most valuable company have never closed above that level.

Microsoft gained nearly 3pc and was set to add more than $80bn to its market value.

After pouring billions of dollars into the infrastructure needed to support AI applications, both Alphabet and Microsoft reported that their quarterly revenue growth was outpacing expectations as more users turn to services including the Copilot AI assistant and the Gemini chatbot.

AI services accounted for seven percentage points of the 31pc jump in revenue at Microsoft’s Azure cloud-computing platform between January and March, finance chief Amy Hood said.

Britain’s stock market is shrinking at its fastest pace in history, a Wall Street bank has suggested, as the FTSE 100 hits a fresh record high.

Goldman Sach said the combination of company buybacks and a lack of new stock being issued would drastically reduce the supply of shares available to be purchased by investors.

However, this reduction in the size of the market’s public equity would also mean shareholder returns in the UK are “poised to reach an all-time high,” analysts said.

Analysts predicted the trend should continue, with the latest Deloitte CFO Survey showing that “the majority of UK CFOs think their companies are undervalued and they intend to continue to do buybacks”.

Share buybacks are the process of companies buying back their own shares from the stock market, reducing the supply and increasing the share price for investors.

Goldman Sachs analyst Guillaume Jaisson said:

The activist investor Elliott Investment Management is said to have built a roughly $1bn (£799m) stake in Anglo American, adding pressure to the FTSE 100 miner after it rejected a takeover from rival BHP.

Anglo’s shares jumped 5.3pc after the news of the stake emerged, hours after it described the attempted acquisiton by its Australian rival as “opportunistic” and one that “significantly undervalues” the company.

Elliott’s stake puts it among Anglo’s 10 largest shareholders, according to Bloomberg.

It was reported in February that the hedge fund was setting up a company to hunt for mining assets worth more than $1bn.

It comes as copper prices rose above $10,000 for the first time in two years today. A tie up between Anglo American and BHP would have created the world’s largest copper miner.

US stocks opened higher after robust quarterly results from Alphabet pushed its market value over $2 trillion.

The Dow Jones Industrial Average rose 28.9 points, or 0.1pc, at the open to 38,114.7 as key inflation data came in near expectations and calmed jitters around elevated interest rates.

The S&P 500 rose 36.2 points, or 0.7pc, at the open to 5,084.65​, while the Nasdaq Composite rose 209.6 points, or 1.3pc, to 15,821.335 at the opening bell.

The former chief financial officer of Patisserie Valerie along with three other defendants, including his wife, have denied being part of a plot to commit fraud at the collapsed cafe chain.

Christopher Marsh, a former director and chief financial officer of Patisserie Holdings (PHP), the company behind Patisserie Valerie, and his wife, accountant Louise Marsh, were charged by the Serious Fraud Office (SFO).

They appeared in the dock at London’s Southwark Crown Court today alongside Marsh’s former number two, financial controller Pritesh Mistry, and financial consultant Nilesh Lad.

Christopher Marsh, 49, and Louise Marsh, 56, both of St Albans, Hertfordshire, Mistry, 41, of Leicester, and Lad, 51, of Harrow, north-west London, each pleaded not guilty to a charge of conspiracy to defraud.

The charge states they conspired to “dishonestly” agree to “misstate and inflate” the figures for cash on the group’s balance sheet between October 2015 and October 2018.

It is alleged that this put PHP Group’s shareholders and creditors, including banks, at risk.

The charges relate to the financial failure of the the bakery chain, which had 200 stores and tumbled into administration in 2019.

The pound has remained steady against the dollar as the latest US inflation figures were only marginally higher than forecast.

Sterling was little changed at about $1.25 as the Federal Reserve’s preferred measure of price rises was up 2.7pc in March, compared to 2.5pc in February and analyst estimates of 2.6pc.

The pound was up 0.1pc against the euro, which is worth 85p.

US stock indexes have extended gains in premarket trading as the latest indicators of inflation did not throw up any huge surprises.

The personal consumption expenditures (PCE) price index – which is the Federal Reserve’s preferred measure of inflation – rose 0.3pc in March, compared to a 0.3pc increase forecast by economists.

In the 12 months through March, PCE inflation advanced 2.7pc against expectations of 2.6pc.

Excluding the volatile food and energy components, the PCE price index came in at 2.8pc annually, compared to forecasts of 2.7pc.

In premarket trading, the Dow Jones Industrial Average was up 0.3pc, the S&P 500 was up 0.9pc, and Nasdaq 100 futures had gained 1.1pc.

A closely-watched measure of inflation remained persistent last month in a sign that the Federal Reserve will hold off cutting interest rates until after the summer.

The personal consumption expenditures (PCE) price index increased by 2.7pc in the year to March, which was higher than analyst expectations of 2.6pc and ahead of February’s 2.5pc.

The FTSE 100 is on track for its strongest week since last summer after a series of eye-catching takeover bids.

Britain’s flagship stock market jumped to 8,136.52 points today, notching up a record high for the fourth consecutive session in a hectic week for merger and acquisition activity.

It leaves the index up 2.8pc so far this week, which is its strongest performance since July.

It comes after a string of positive company updates in a heavy week for corporate results, and high profile takeover attempts for miner Anglo-American and Hipgnosis Songs Fund.

Cybersecurity company Darktrace became the latest target today after a £4.2bn bid from private equity firm Thoma Bravo, helping lift the midcap FTSE 250 to its best week since January.

Chris Beauchamp, chief market analyst at IG Group, said: “The combination of recovering earnings and reasonable prices continue to make things look quite attractive for the UK market.”

Russia’s central bank has forecast that interest rates will stay high for longer in Russia this year in a blow to Vladimir Putin as his war effort risks fuelling inflation.

The Bank of Russia left interest rates unchanged at 16pc for a third meeting in a row but unexpectedly raised its average key policy rate forecast for the year.

Increasing its prediction from 13.5-15.5pc to 15-16pc, it also raised its inflation forecast and acknowledged for the first time that it may struggle to reach its 4pc target this year.

The bank lifted its inflation forecast to 4.3-4.8pc from 4-4.5pc previously.

In a statement accompanying the decision, the central bank said “tight monetary conditions will be maintained in the economy for a longer period than previously forecast”.

Nicholas Farr, emerging Europe economist at Capital Economics, said:

US stock markets are on track to open higher after strong tech results – but things could change when closely-watched inflation data is released later.

Google owner Alphabet surged as much as 12pc in premarket trading, leaving it poised to add more than $230bn (£184bn) to its valuation, after beating Wall Street estimates in its latest results.

Meanwhile, Microsoft was up 4pc as it also impressed investors with demand for its AI services.

However, it could be derailed by the monthly PCE index, which is the US Federal Reserve’s preferred measure of inflation.

Weaker US economic growth coupled with a higher-than-expected quarterly core PCE reading on Thursday helped send markets tumbling on Thursday.

Ahead of the opening bell, the Dow Jones Industrial Average was up 0.1pc, the S&P 500 was up 0.8pc and the Nasdaq 100 had gained 1pc.

Chinese fast-fashion company Shein will be forced to do more to fight harmful content and counterfeit products after the EU imposed stricter trading conditions on the online retailer.

The European Union designated the business a very large online platform (VLOP), joining a list that includes Facebook, TikTok, X and YouTube.

Under the EU’s Digital Services Act (DSA), it will have to implement measures to “protect consumers from purchasing unsafe or illegal goods, with particular focus on preventing the sale and distribution of products that could be harmful to minors”, the European Commission said.

It comes after Shein said it has around 108m monthly active users in the bloc.

Sixteen tech companies, including Amazon, Apple, Alibaba, Microsoft and three pornography sites, are subject to the DSA, which requires them to provide information on steps taken to counter illegal content and goods sold online.

Billionaire hedge fund tycoon Sir Paul Marshall is stepping down from the board of GB News after three years, the broadcaster has announced.

His resignation coincides with the appointment of businessman and politician Lord Theodore Agnew as the new director of its owner, All Perspectives.

Sir Paul has been among the most active potential suitors to buy The Daily Telegraph since the takeover attempt by UAE-backed fund RedBird IMI was blocked last month. He said:

Lord Agnew, the former Treasury and Cabinet Office minister, said he had “watched and admired the dramatic growth of GB News across its platforms” and was “delighted” to be joining the board.

The owner of the Lounge, Cosy Club and Brightside cafe and restaurant brands has said its revenue hit new highs in the last financial year and it benefitted from easing inflation.

Loungers said that revenue had reached £353.5m in the year to April 21, up 24.7pc on the year before.

The financial year was a week longer than usual, but even excluding that extra week revenue was up 22.2pc, the business said.

The hospitality company said like-for-like sales had risen 7.5pc across the 53-week period, while it had continued to open new sites.

Chief executive Nick Collins said:

European gas prices have swung between gains and losses as traders weigh up the impact of recent cold weather with disruptions to supplies.

The continent’s benchmark contract was last down 0.4pc but had gained as much as 1.9pc today.

So-called Dutch front-month futures are trading around €30 per megawatt hour after gaining nearly 5pc over the last two days.

Traders have started restocking fuel ahead of next winter amid concerns about the potential impact of conflict in the Middle East.

However, Europe ended its last winter with stocks at their highest on record for the time of year, weakening prices.

The yen rose sharply after hitting its weakest level in three decades against the US dollar, putting markets on edge about a possible intervention to strengthen the currency after the Bank of Japan kept interest rates on hold.

In a volatile trading day, the yen rose suddenly to 154.97, after hitting minutes earlier its lowest level of 156.82 per dollar since 1990.

The sudden jump left traders on high alert for signs of intervention.

After a two-day meeting, the Bank of Japan left its short-term interest rate target at 0-0.1pc and made small upward adjustments in its inflation forecast.

Investors had not expected a policy shift but took the decision as confirmation that only small moves lie ahead.

Governor Kazuo Ueda said the weak yen so far has not had a big impact on the inflation trend.

The yen also slid to its weakest level in almost 16 years against the euro, at 168.23, and its softest against the pound since 2008 at 195.09.

Oil is on track for a weekly gain ahead of key US inflation data.

Brent crude, the international benchmark, has gained 0.1pc to more than $89 a barrel and is up more than 2pc this week.

US-produced West Texas Intermediate was up 0.2pc to nearly $84.

The Federal Reserve’s preferred inflation figure is published later and comes hard on the heels of data showing weaker US economic growth.

Other gauges of price rises in the US remained higher-than-expected, suggesting the timing of rate cuts may be pushed back.

Oil prices have risen this year in the face of conflict in the Middle East and supply cuts by the Opec cartel and its allies.

Donald Trump and his allies have reportedly been drawing up proposals that would blunt the Federal Reserve’s independence and give him greater control over the setting of interest rates.

Supporters of the presumptive Republican nominee for the US election in November have drawn up a 10-page document that sets out what his relationship should be with the central bank, according to the Wall Street Journal.

It is thought to recommend subjecting the Fed’s regulations to review by the White House. Allies also want its chairman seek out the president’s views on interest rate policy.

Mr Trump is understood to be frustrated with interest rates at 23-year highs in the US and has repeatedly complained about its chairman Jerome Powell, who he picked to lead the Fed during his presidency.

European private equity group CVC Capital Partnership debuted well above its offer price on the Amsterdam stock exchange in a sign of huge investor demand.

The stock jumped 25pc to €17.55, after it set its initial public offer at €14 per share, implying a market value of €14bn (£12bn).

The firm raised €250m in fresh capital from the share sale, with the rest going to existing holders. If the over-allotment option is exercised in full, the deal size will rise to €2.3bn.

The listing will see some already very wealthy private equity individuals in Europe add to their fortunes.

Co-founder Donald Mackenzie, who stepped down in February from an active role in the firm, is selling as many as 10m shares, worth about €140m at the offering price.

The FTSE 100 hit fresh highs as strong results from Microsoft and Google owner Alphabet boosted the mood among global investors.

The blue-chip index rose as much as 0.7pc to 8,136.52, hitting a record-high for the fourth consecutive day.

The index is set for its biggest weekly gain in more than seven months.

Sentiment in Asian and broader European markets was optimistic after upbeat earnings from Wall Street tech titans Alphabet and Microsoft.

NatWest jumped 3.4pc to touch a more than one-year-high after the British bank’s first-quarter profit fell by a less-than-expected 27pc.

Anglo American slipped 0.8pc after it rejected BHP Group’s £31.1bn takeover proposal, saying the bid significantly undervalued the London-listed miner and its future prospects.

The stock had rallied 16pc following BHP’s offer on Thursday. BHP’s UK-listed stock fell 0.9pc.

The mid-cap FTSE 250 gained 0.8pc, with Darktrace surging by more than 20pc after Thoma Bravo agreed to buy the firm for about $5.3bn (£4.2bn).

British cyber security company Darktrace has agreed to a takeover by private equity firm Thoma Bravo for $5.3bn (£4.2bn) in a further blow to the City.

The deal, which will give shareholders 620p per share, is a significant premium on its closing market valuation of £3.9bn on Thursday.

Darktrace shares rocketed by 16.6pc to the top of the FTSE 250 after the agreement, which comes after Thoma Bravo walked away from talks to buy the company in 2022 after the two sides could not agree on terms.

Darktrace uses artificial intelligence to check for hacks and suspicious data leaks.

Anglo American has rejected the takeover by BHP just as the price of copper has topped $10,000 for the first time in two years.

BHP had proposed a £31.1bn acquisition which would have created the largest copper miner in the world.

The price of copper has risen as much as 1.4pc on the London Metal Exchange to its highest point since April 2022.

The metal is vital in the development of electric cars and renewable technology. Its price has rallied by 17pc this year.

Commuters have been wrongfooted by last-minute strikes announced on the London Underground.

The TSSA rail union announced the sudden strike action on Wednesday, which is expected to cause disruption into the weekend.

The walkouts by customer service managers will mean some stations “may need to close at short notice,” according to Transport for London.

The walkouts will take place today and will mean that TSSA members will not commence work on any shift starting between 00:01 to 23:59.

That means that strike action will run over into Saturday, as any staff will not be carrying out overnight shifts due to have started before midnight on Friday.

Stock markets in London rose as trading began as Anglo American rejected a blockbuster takeover approach by BHP.

The FTSE 100 rose 0.6pc to 8,125.64 while the midcap FTSE 250 gained 0.3pc to 19,668.05.

TotalEnergies has revealed a smaller-than-expected drop in profits in the first three months of the year as oil prices remained resilient in the face of tensions in the Middle East.

However, the French giant has been impacted by falling gas prices after a mild winter which left European stockpiles at record levels for the time of year.

Adjusted net income was $5.1bn (£4.1bn) in the period, down 22pc from $6.5bn (£5.2bn) a year earlier. Analysts had expected profit of $5bn.

Chief executive Patrick Pouyanne said the company’s first quarter results reflect “a context of sustained oil prices and refining margins but softening gas prices”.

Crude prices have been elevated by the conflict in the Middle East as well as the Opec cartel’s decision to reduce production.

The London Stock Exchange will rise in the near future and will remain Europe’s financial hub for years to come, the boss of a Greek industrials conglomerate considering a UK-listing has said.

Mytilineos, which is already listed in Athens, confirmed this week that it is considering a multi-billion pound listing in London within the next 12 to 18 months. It would retain its Greek listing.

In the UK, Mytilineos has built solar farms as well as infrastructure for the National Grid, including high-voltage power lines such as the Eastern Green Link 1 project.

Chairman and chief executive Evangelos Mytilineos said the business, which has a market cap of nearly €5.3bn (£4.5bn), has a close connection with Britain, where it has 10 projects underway.

The consideration of London for a listing is a big boost for the City after a series of high profile exits in recent months.

Construction company CRH, British plumbing company Ferguson and travel agent Tui have all shifted their primary listings out of London in recent years. Paddy Power-owner Flutter is in the midst of a similar move.

Asked why he was considering a listing in London, Mr Mytilineos told BBC Radio 4: “We think one of the main reasons we may prefer the London Stock Exchange, which is not a final decision, is because we think the LSE has seen the worst.

“We see the LSE going up in the next few years.

“We strongly believe that London will still remain the main financial hub in Europe for years to come.”

NatWest Group has become the latest high street bank to report lower profits, after earnings soared in 2023 on the back of higher interest rates.

The group revealed an operating pre-tax profit of £1.3bn over the first three months of the year, down from £1.8bn the previous year.

It is ahead of the £1.2bn profit that analysts were pencilling in for the quarter.

The decline was partly driven by more customers moving money into accounts with higher savings rates, and mortgage rates coming down from the highs hit last year.

Paul Thwaite, NatWest’s chief executive, said: “Though macro-uncertainty continues, customer confidence and activity is improving, with both lending and deposits up in the quarter and impairments remaining low, reflecting our well-diversified business.”

British mining giant Anglo American has rejected a £31.1bn takeover offer by Australian rival BHP.

The FTSE 100 miner said the bid was “opportunistic” and “significantly undervalues Anglo American and its future prospects”.

A string of Anglo’s shareholders and a South African minister had already attacked the approach, which would have created the world’s largest copper miner.

Anglo also controls De Beers, one of the most powerful players in the global diamond market and a South African national champion.

Anglo’s shares surged by 16.1pc on Thursday after news of the bid emerged, valuing the miner at £31.4bn and above the offer price from BHP.

Stuart Chambers, chairman of Anglo American, said: “Anglo American is well positioned to create significant value from its portfolio of high quality assets that are well aligned with the energy transition and other major demand trends.

“With copper representing 30pc of Anglo American’s total production, and with the benefit of well-sequenced and value-accretive growth options in copper and other structurally attractive products, the board believes that Anglo American’s shareholders stand to benefit from what we expect to be significant value appreciation as the full impact of those trends materialises.

“The BHP proposal is opportunistic and fails to value Anglo American’s prospects, while significantly diluting the relative value upside participation of Anglo American’s shareholders relative to BHP’s shareholders.

“The proposed structure is also highly unattractive, creating substantial uncertainty and execution risk borne almost entirely by Anglo American, its shareholders and its other stakeholders.”

Thanks for joining me. British mining giant Anglo American has rejected a blockbuster £31.1bn takeover bid from Australian rival BHP, arguing that it was too low.

“The board has considered the proposal with its advisers and concluded that the proposal significantly undervalues Anglo American and its future prospects,” the London-listed company said in a statement one day after BHP launched its colossal bid, adding that the deal was “highly unattractive”.

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The yen fell amid volatile trade on Friday after the Bank of Japan (BOJ) maintained its accommodative monetary policy stance at the conclusion of its two-day policy meeting, while Asian shares rose in the broader market.

The BOJ kept interest rates around zero on Friday, as expected, while removing a reference to the amount of government bonds it has roughly committed to buying each month.

The central bank also issued fresh estimates projecting inflation to stay near its 2pc target in the next three years, signalling its readiness to raise borrowing costs this year.

Still, the Japanese yen fell to the weaker side of 156 per dollar in a knee-jerk reaction to the decision, and last stood at 156.15 per dollar.

Tokyo stocks closed higher after the Bank of Japan kept its monetary policy unchanged.

The benchmark Nikkei 225 index advanced 0.8pc, or 306.28 points, to 37,934.76 while the broader Topix index added 0.9pc, or 22.95 points, to 2,686.48.

Wall Street stocks retreated Thursday following lacklustre US economic data and and a sharp drop in major Wall Street stocks tumbled after disappointing earnings.

The Dow Jones Industrial Average finished at 38,085.73, down 1.0pc but about 330 points above its session low.

The broad-based S&P 500 declined 0.5pc to 5,048.43, while the tech-rich Nasdaq Composite Index shed 0.6pc to 15,611.76.

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