FTSE 100 live: London markets rise after UK GDP contracts by less than expected
London markets rose this morning, despite housebuilders slumping, after official figures showed that the UK economy contracted by less than expected.
The FTSE 100 was trading 0.18 per cent higher at 7,429.68 while the midcap FTSE 250, which is more aligned with the health of the domestic economy, climbed 0.13 per cent to 18,604.03.
Sentiment was lifted as GDP contracted 0.1 per cent in May, a much smaller drop than the City expected and down from a 0.2 per cent expansion in April. The contraction largely came as a result of an extra bank holiday in May for the king’s coronation.
Danni Hewson, AJ Bell head of financial analysis, said: “It could have been much worse. Those three lovely, long bank holidays might have been a delight for many of us, but we knew it would come at the expense of economic growth.”
“The fact the contraction came in at just 0.1 per cent demonstrates the resilience of the UK economy which has been battered by inflation, interest rate hikes and strike action. But there’s no point looking at the picture through rose-tinted glasses because it’s crystal clear that resilient is a far cry from robust,” Hewson continued.
Medtech company ConvaTec topped the FTSE 100, rising 1.6 per cent. Resource giants also performed well, with Glencore rising 1.1 per cent, Rio Tinto 1.0 per cent and Antofagasta 0.8 per cent.
Housebuilders propped up the index after a trading update from Barratt spooked the market. The firm warned of a “deterioration” in demand for homes as a tumultuous mortgage market continues to pile on misery for housebuilders.
Barratt’s net private reservation rate – the number of people putting their names down for a new home – slid 32.1 per cent with the figure slowing more significantly in mid May to the end of June.
Barratt was down 4.7 per cent while Taylor Wimpey fell 3.9 per cent and Persimmon dropped 2.6 per cent.