FTSE 100 avoids steep drop after GDP figures disappoint

The FTSE 100 managed to bounce back on Wednesday from the hit it took earlier in the day after the news that the economy had shrunk more rapidly than expected in July.

By the end of the day a strong performance from banks Barclays and HSBC, as well as some housebuilders, helped the FTSE finish more or less flat

It closed down just 0.02%, a 1.54 point drop that left the index at 7,525.99.

The index had earlier fallen as low as 7,490 after data from the Office for National Statistics revealed that the UK’s gross domestic product (GDP) fell by 0.5% in July, following a similar-sized rise the month before.

Economists expected GDP to have fallen during the month but only by 0.2%.

Shares had also been led downwards by oil giant BP, whose boss resigned on Tuesday evening in a shock move.

Questions still remain over Bernard Looney’s departure. The company said that he had in 2022 disclosed “a small number of historical relationships with colleagues”.

But Mr Looney later admitted he had not been entirely transparent and stepped down from his role.

The pound remained more or less flat against the dollar, ending the day at around 1.249.

Germany’s Dax and France’s Cac 40 both closed down 0.4%. In New York the S&P 500 gained 0.3% while the Dow Jones was up 0.2%.

In company news Redrow said that its earnings might more than halve due to a challenging property market.

The housebuilder said that pre-tax profit was down 4% to £395 million in the year to the start of July with profits also down slightly.

But it warned that worse was to come. Next year profit is expected to drop to between £180 million and £200 million.

The biggest risers on the FTSE 100 were Melrose Industries, up 21.9p to 501.2p, Aviva, up 17.2p to 393.5p, Persimmon, up 41p to 1,064p, Taylor Wimpey, up 2.85p to 118p, and Berkeley Group, up 99p to 4,100p.

The biggest fallers on the FTSE 100 were Ocado, down 32.6p to 769p, IAG, down 4.55p to 153.8p, BP, down 14.6p to 508.2p, JD Sports, down 3.45p to 137p, and Halma, down 49p to 2,115p.