FTSE 100 closes higher as UK economy rebounds from July's shock contraction

13 October 2023 , 08:55

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The biggest winners on the FTSE 100 were BP, Hikma Pharmaceuticals, Sage Group, Melrose Industries, and Astrazeneca. (Image: PA Wire/PA Images)

London's top stock index, the FTSE 100, has seen a boost after official figures revealed that the UK economy made a comeback in August, easing fears of an upcoming recession.

Energy stocks and pharmaceutical giants have played a part in lifting the FTSE 100, going against the grain of European markets which had a rather dull day of trading on Thursday.

The index rose by 24.75 points, or 0.32%, to close at 7,644.78.

Fresh data from the Office for National Statistics showed that gross domestic product (GDP) increased by 0.2% in August, compared to a 0.6% drop in July.

Although it's only a slight recovery, this data brings the UK one step closer to dodging a recession this year, which is defined as two consecutive quarters of negative GDP.

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On the other hand, global investors' spirits were dampened after new data from the US showed Consumer Prices Index (CPI) inflation was higher than expected in September.

This further fuels worries that interest rates might need to stay high for longer to keep rising prices under control.

Elsewhere in Europe, Germany's Dax fell 0.23% and France's Cac 40 declined by 0.37%.

Over in the US, the S&P 500 was flat and Dow Jones was down 0.25% by the time European markets closed.

The pound lost ground against the US dollar during the afternoon, and was down by around 0.8% to 1.2213 dollars. Sterling was down by about 0.1% to 1.1575 euros.

The price of Brent crude oil was up by 1.03% to 86.7 US dollars per barrel.

In the world of business, Halfords' shares have rocketed by nearly a fifth due to rumours that a potential buyer is interested in the motoring and cycling retailer. Despite Halfords refusing to comment on these whispers, their share price still closed 18.5% higher.

Meanwhile, The Restaurant Group (TRG), the owner of Wagamama, saw its shares jump by more than a third after agreeing to a £701 million takeover by private equity giant Apollo. This comes after TRG decided to sell off its loss-making restaurant chains Frankie & Benny's and Chiquito to Big Table Group. Apollo praised TRG for being "resilient through macroeconomic cycles" but stated it needed the support of private capital to reach its goals. Its share price ended the day 36.1% higher.

The biggest winners on the FTSE 100 were BP, Hikma Pharmaceuticals, Sage Group, Melrose Industries, and Astrazeneca. On the other hand, Taylor Wimpey, Fresnillo, Barclays, Ocado, and Croda saw the largest drops on the FTSE 100.

* An AI tool was used to add an extra layer to the editing process for this story. You can report any errors to [email protected]

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