FTSE 100 LIVE: Stocks slump as UK GDP contracts 0.3% in April

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a day ago

The FTSE 100 (^FTSE) and European stocks were lower on Thursday as the UK economy shrank more than expected in April, in a blow to chancellor Rachel Reeves who is seeking growth to power her spending plans.
According to the Office for National Statistics (ONS) gross domestic product (GDP) contracted by 0.3% during the month, worse than analysts' fears that the economy would shrink by 0.1%.
It follows a 0.7% expansion during the first three months of the year.
The ONS said services output fell by 0.4%, after growth of 0.4% in March, and was the largest contributor to the fall in GDP in the month. Production output also decreased, by 0.6%, but construction output rose by 0.9% in April.
It comes as April began with US president Donald Trump announcing a slew of tariffs on US trading partners and was also the month when UK employers started paying higher national insurance contributions.
Reeves has made growing the British economy one of her main missions as she aims to shore up public finances.
On Thursday she said: "Our number one mission is delivering growth to put more money in people's pockets through our Plan for Change, and while these numbers are clearly disappointing, I'm determined to deliver on that mission.
'In yesterday's spending review we set out how we'll deliver jobs and growth — whether that's improving city region transport, a record investment in affordable homes or funding Sizewell C nuclear power station. We're investing in Britain's renewal to make working people better off.'
London's benchmark index (^FTSE) was hovering near the flatline in early trade.
Germany's DAX (^GDAXI) dipped 1.1% and the CAC (^FCHI) in Paris headed 0.7% into the red.
The pan-European STOXX 600 (^STOXX) was down 0.6%.
Wall Street is set for a negative start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red.
The pound was 0.1% down against the US dollar (GBPUSD=X) at 1.3538.
Follow along for live updates throughout the day:
The UK economy shrank by more than expected in April, according to official figures, with the figures coming a day after chancellor Rachel Reeves unveiled a raft of pledges in the government spending review.
The Office for National Statistics (ONS) said that the UK's gross domestic product (GDP) — the standard measure of an economy's value – shrank by 0.3% in April, which was more than the 0.1% contraction expected by economists.
The fall followed growth of 0.2% in March and a 0.7% rise in GDP in the first quarter.
The largest contributor to the fall in GDP in April was a 0.4% fall in services output, the ONS said. Production output fell by 0.6% in April, while construction output grew by 0.9% that month.
The fall in UK economic growth came as an increase in employer national insurance contributions and the national minimum wage, which were announced in the autumn budget, came into place in early April.
The ONS said that GDP was estimated to have grown by 0.7% in the three months to April, compared to the three months to January, which was largely driven by growth in the services sector.
Liz McKeown, director of economic statistics at the ONS, said:
Asian shares were trading mostly lower on Thursday as markets struggled to gain traction, grappling with tariff uncertainty and geopolitics.
The Nikkei (^N225) fell 0.7% on the day in Japan, while the Hang Seng (^HSI) dipped 1.2% in Hong Kong. The Shanghai Composite (000001.SS) was flat by the end of the session.
In South Korea, the Kospi (^KS11) added 0.5% on the day, which has posted a 7th consecutive gain, leaving the index on track for its highest closing level since January 2022.
Across the pond on Wall Street, investors appeared not to react much to the results of the latest round of China-US trade talks.
The Dow Jones (^DJI) finished a day of choppy trading little changed, at 42,865.77, while the S&P 500 (^GSPC) fell 0.3%, ending at 6,022.24, and the tach-heavy Nasdaq (^IXIC) lost 0.5%, closing at 19,615.88.
In the bond market, the yield on benchmark 10-year US Treasury notes fell to 4.427% from 4.471% late on Tuesday.
Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what's moving markets and happening across the global economy.
In the day ahead we have data releases including the US PPI release for May, the weekly initial jobless claims, and UK GDP for April.
Central bank speakers include the ECB Vice President de Guindos, as well as the ECB's Schnabel, Muller, Escriva, Simkus, Knot, Panetta, and Patsalides. Finally, there's a 30-year Treasury auction taking place.
Here's a quick snapshot of what's on the agenda:
7am: Trading updates: Tesco, Halma, Norcros, Crest Nicholson, Idox
7am: UK GDP report for April
7am: UK trade balance for April
1.30pm: US weekly jobless claims report
1.30pm: US PPI index of producer prices for MayThe UK economy shrank by more than expected in April, according to official figures, with the figures coming a day after chancellor Rachel Reeves unveiled a raft of pledges in the government spending review.
The Office for National Statistics (ONS) said that the UK's gross domestic product (GDP) — the standard measure of an economy's value – shrank by 0.3% in April, which was more than the 0.1% contraction expected by economists.
The fall followed growth of 0.2% in March and a 0.7% rise in GDP in the first quarter.
The largest contributor to the fall in GDP in April was a 0.4% fall in services output, the ONS said. Production output fell by 0.6% in April, while construction output grew by 0.9% that month.
The fall in UK economic growth came as an increase in employer national insurance contributions and the national minimum wage, which were announced in the autumn budget, came into place in early April.
The ONS said that GDP was estimated to have grown by 0.7% in the three months to April, compared to the three months to January, which was largely driven by growth in the services sector.
Liz McKeown, director of economic statistics at the ONS, said:
Asian shares were trading mostly lower on Thursday as markets struggled to gain traction, grappling with tariff uncertainty and geopolitics.
The Nikkei (^N225) fell 0.7% on the day in Japan, while the Hang Seng (^HSI) dipped 1.2% in Hong Kong. The Shanghai Composite (000001.SS) was flat by the end of the session.
In South Korea, the Kospi (^KS11) added 0.5% on the day, which has posted a 7th consecutive gain, leaving the index on track for its highest closing level since January 2022.
Across the pond on Wall Street, investors appeared not to react much to the results of the latest round of China-US trade talks.
The Dow Jones (^DJI) finished a day of choppy trading little changed, at 42,865.77, while the S&P 500 (^GSPC) fell 0.3%, ending at 6,022.24, and the tach-heavy Nasdaq (^IXIC) lost 0.5%, closing at 19,615.88.
In the bond market, the yield on benchmark 10-year US Treasury notes fell to 4.427% from 4.471% late on Tuesday.
Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what's moving markets and happening across the global economy.
In the day ahead we have data releases including the US PPI release for May, the weekly initial jobless claims, and UK GDP for April.
Central bank speakers include the ECB Vice President de Guindos, as well as the ECB's Schnabel, Muller, Escriva, Simkus, Knot, Panetta, and Patsalides. Finally, there's a 30-year Treasury auction taking place.
Here's a quick snapshot of what's on the agenda:
7am: Trading updates: Tesco, Halma, Norcros, Crest Nicholson, Idox
7am: UK GDP report for April
7am: UK trade balance for April
1.30pm: US weekly jobless claims report
1.30pm: US PPI index of producer prices for May