FTSE 100 ends day slightly down after UK economic growth flatlines

The FTSE 100 had a mixed day on Wednesday, finishing slightly down after news of flatlining economic growth in the UK and softening US inflation.

The blue-chip index fell 12 points, or 0.15%, to end the day at 8,194.

The session came after the Office for National Statistics said gross domestic product (GDP) recorded no growth in July.

However, analysts were broadly aligned in saying it would not prompt the Bank of England into a surprise second consecutive rate cut later this month.

Rob Wood, chief UK economist at consultancy Pantheon Macroeconomics, said: “There is not enough in today’s GDP release to force the MPC to rush to another cut next week; we still expect rate setters to wait until November to cut Bank Rate again.”

Later, the US registered a further slowdown in price growth for August, with inflation falling to its lowest level since February 2021 as the Federal Reserve gears up for its own rate cut.

Danni Hewson, AJ Bell head of financial analysis, said: “After a couple of months of nervousness about the state of the US economy and questions about whether a bigger cut might be required to stir the pot, the cooler than expected CPI print (inflation reading) seems to have sealed the deal.”

At the end of the day in Europe, Frankfurt’s Dax index rose 0.34%, while the Cac 40 in Paris had closed down 0.14%.

In New York a little while after markets had closed in Europe the S&P 500 was trading down 0.97%, while the Dow Jones was 1.30% lower.

On currency markets the pound was trading 0.43% lower against the dollar at 1.3024 and had dropped 0.38% against the euro at 1.1825.

In company news, Rentokil downgraded its sales and profit expectations following slower-than-expected activity, and revealed plans to scale back its workforce in the US.

The Crawley-based company, which is listed on the London Stock Exchange and is the world’s largest pest control firm, said it was hoping to cut costs after overspending.

The firm told investors that its sales performance in July and August was lower than anticipated.

Shares plummeted 19.68% on Wednesday.

Meanwhile, Rightmove said it rebuffed a takeover proposal from Rupert Murdoch’s REA Group in Australia, valuing the UK online property portal at more than £5 billion.

REA, which is majority-owned by the business magnate’s News Corp, confirmed it had put forward an approach for a cash-and-shares deal, which it said would be worth around 705p a share, valuing Rightmove at about £5.6 billion.

Rightmove shares rose at the open but finished just 0.12% up.

Brent crude oil futures were up 1.821% to 70.450 US dollars as markets were closing in London.

The biggest risers on the FTSE 100 were Entain, up 27.6p to 706.6p, Intermediate Capital, up 48p to 2152p, Prudential, up 11.8p to 613.2p, Endeavour Mining, up 30p to 1616p, and BT, up 2.6p to 142.65p.

The biggest fallers on the FTSE 100 were Rentokil, down 95.4p to 380.1p, Vistry, down 25p to 1343p, Howden Joinery, down 17.5p to 938.5p, Mondi, down 25.5p to 1401p, and Berkeley Group, down 88p to 4889.5p.