FTSE 100 close: London markets end week higher after boost from US GDP
London markets closed the week higher on Friday after revised US growth figures showed the world’s largest economy was performing better than expected.
The capital’s premier FTSE 100 index rose 0.91 per cent to 7,538.36 while the midcap FTSE 250 climbed 0.90 per cent to 18,434.23.
Investors were buoyed by stronger than expected growth in the US. Revisions from yesterday showed that GDP grew by two per cent in the first quarter, up from a previous estimate of 1.3 per cent.
“The rate of growth still represents a slowdown, but the important fact is that it seems consumers have more momentum left than first thought and this may have an impact on the Federal Reserve’s next interest rate decision,” Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.
The Federal Reserve is attempting to bring inflation down without tipping the economy into recession. A stronger economy points to the potential for more rate hikes.
The latest revisions from the UK meanwhile confirmed that the economy grew at 0.1 per cent in the final three months of last year and first three months of this year.
The statistics showed that the UK was the second worst performing major economy in the first quarter, only beating Germany which fell into recession.
New figures from the Nationwide House Price Index showed that prices edged up month on month, but were down 3.5 per cent compared to last year as rising rates took their toll.
The housing market has been slammed by 13 consecutive interest rate rises, which had put a break on new buyers entering the market.
Robert Gardner, Nationwide’s chief economist, said: “The sharp increase in borrowing costs is likely to exert a significant drag on housing market activity in the near term.”
However, house builders were trading higher with Persimmon up 1.1 per cent, Barratt Developments 0.5 per cent while Taylor Wimpey was up 0.7 per cent and Bellway up 0.3 per cent.
Ocado rose to the top of the FTSE 100, trading over four per cent higher. Its shares slumped midweek after takeover speculation was dashed.
At the other end were United Utilities and telecoms company Airtel Africa, both down over 1.5 per cent.