BUSINESS LIVE: Retail price inflation flat; Aldi UK and Lidl GB's festive sales are soaring

Marks and Spencer have teamed up with a scientific nutrition company to sell a milk drink that helps people improve their diets.

M&S Food and Zoe hope to cash in on the increasing demand for products that support digestion and raise awareness of the role of the gut in staying healthy.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, comments on the markets at the start of a new year:

'The FTSE 100 has started the first session of the new year with a narrow lead, thanks to encouraging data on the Chinese economy and oil price rises amid fresh geopolitical concerns.

Concerns that the conflict in the Middle East is becoming increasingly complex have resurfaced amid increased tensions in the Red Sea. The US-led naval force destroyed boats whose crews appeared to be trying to board a container ship.

This adds to concerns about potential supply issues in the region rising again, putting upward pressure on Brent Crude, which is hovering above $78.

The gains have put energy giants Shell and BP in the spotlight, trading higher in early trading. However, uncertainties about future oil demand are keeping much higher prices in check for the time being.

The FTSE 100 has started 2024 on a green note, with energy stocks and retailers leading gains, as investors look ahead to this week's economic data and its potential impact on the Bank of England's interest rate trajectory.

Energy stocks rose 0.1 percent after oil prices rose 1 percent on possible supply disruptions in the Middle East and expectations of an economic stimulus from the world's largest crude importer, China.

Marks And Spencer added 1.7 percent after Exane BNP Paribas upgraded the retailer's share rating from neutral to outperform.

Shares in HSBC fell 0.4 percent after subsidiary HSBC Continental Europe completed the sale of its retail banking business in France to Credit Commercial de France.

Data on manufacturing and services activity and house prices will be on investors' radar all week to assess the strength of the UK economy, which may be in recession.

Richard Hunter, head of markets at Interactive Investor:

'In Britain, the tepid performance that dogged yields for much of the year also saw some improvement as the possibility of rate cuts in 2024 eased some of the pressure that had been put on investors.

'The more domestically focused FTSE250 had a strong finish, ending 2023 with a 4.4% lead despite being below the waterline for most of the year.

'The more recent revelation that Britain could already be in recession after a contraction in growth in the third quarter, coupled with a sharp fall in inflation in November, adds to the possibility of sharp rate cuts will have to come into focus at the Bank of England as the year progresses.

'The main index also saw the benefit of December's momentum, opening the year slightly higher and contributing to the 3.8% gain achieved in 2023. The FTSE100 remains a long way from February's record highs of over 8,000, although the coming reporting season could bring further relief.

'Over the coming weeks, attention will focus on retailers and supermarkets as they provide updates on trading over the festive period. Indeed, these stocks have helped propel the index in early trading, with prices rising in anticipation of a successful holiday season.”

More bank branches will close this year as lenders continue to withdraw from the high street.

Lenders have already announced that at least 189 branches will close by 2024, figures show.

Investors are in for another turbulent year.

Politics will dominate 2024 to a remarkable extent, especially as the tragic conflicts in Ukraine and Gaza remain unresolved.

Microsoft's boss has made a dramatic U-turn after previously claiming Britain was 'bad for business'.

Brad Smith launched a scathing attack in April last year after British regulators stopped the tech giant from buying Call of Duty maker Activision for £60 billion.

At the time, the Competition and Markets Authority (CMA) warned that the deal would result in Microsoft gaining a “stranglehold” on the fast-growing cloud gaming industry.

Aldi's UK arm reported an 8 per cent increase in sales in the four weeks to December 24, reaching £1.5 billion in sales for the period for the first time.

Meanwhile, smaller rival Lidl GB recorded an even better rise of 12 percent over the same period.

Both chains said they recorded their busiest ever trading day on Friday, December 22, with more than 2.5 million customers passing through Aldi's doors on the day.

Annual UK retail price inflation remained flat month-on-month at 4.3 percent in December, but shoppers could look forward to a slowdown in the pace of food price increases.

While non-food inflation rose from 2.5 to 3.1 percent in December, marking the end of Black Friday discounts, food price inflation fell from 7.7 to 6.7 percent this month.

Chief Executive of the British Retail Consortium, which collects the data, Helen Dickinson said:

'Overall retail price inflation remained stable in December. Households had reason to celebrate as food inflation fell for the eighth month in a row thanks to efforts by retailers to drive down prices in the run-up to Christmas.

'There was reason to cheer when the prices of wine, port and sherry fell this month. Non-food products had a tougher December, with price inflation rising again as retailers invested in Black Friday discounts in November and ahead of January sales.

'Retailers will continue to do everything they can to keep prices low in 2024, but there are obstacles in the way. New border controls for EU imports, hundreds of millions extra on business rates from April. The government should think twice before imposing new costs on retail businesses, which would not only hold back vital investment in local communities but also drive up prices for struggling households.”

Interest rates appear likely to fall this year, providing a boost to millions of borrowers worried about mortgage payments.

According to financial market bets, the Bank of England will cut interest rates six times in 2024, taking rates from 5.25 percent today to 3.75 percent by Christmas in 15 years.

That would be a major incentive for borrowers who need to take out a new mortgage and for first-time buyers on the housing market.