The FTSE 100 is set to open lower on Thursday even as UK annual growth reached a 13-month high. Fresh US strikes on Iran and cautious Federal Reserve signals kept London’s blue-chips under pressure ahead of the GDP print.
London’s blue-chip index is called around 45 points lower on Thursday, even as UK annual growth reached its fastest rate in more than a year. Traders returned to their desks with fresh GDP data to weigh this morning.
UK growth speeds up but momentum eases
The Office for National Statistics reported that monthly GDP edged up 0.1% in May after a 0.1% fall in April, lifting annual growth to 1.3% — the fastest rate for 13 months. Over the latest three months, GDP rose 0.7%, ahead of expectations for 0.5%.
Services carried the expansion. A 0.3% rise in the services sector drove the gain, partly offset by declines in production and construction. ONS director of economic statistics Liz McKeown said the pace eased slightly as the latest two months showed a weaker picture.
Iran strikes and Fed caution weigh
Geopolitics stayed in focus after US Central Command confirmed another wave of strikes against Iranian military capabilities linked to threats against shipping through the Strait of Hormuz. President Donald Trump warned the attacks could be widened unless Tehran returned to negotiations.
Yet oil held steady, with Brent crude down 0.4% at $84.59 despite the overnight action. Fed Governor Lisa Cook added to the caution, saying she would be prepared to support tighter policy if inflation fails to ease.
Wall Street’s lead offers little support
Overnight, US stocks closed higher after another softer-than-expected inflation reading. The Dow Jones gained 0.3%, the S&P 500 rose 0.4% and the Nasdaq added 0.6%, with Apple climbing to a record high after reports it had secured approval to launch its generative AI features in China.
In Asia, markets were mixed as chip stocks came under pressure. Korea’s Kospi fell 6.3% and Japan’s Nikkei dropped 3.2%, while Hong Kong’s Hang Seng rose 1.5%.
Sources: Yahoo Finance UK, Share Talk
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