Disappointing GDP data weighs on London as markets close lower

Markets across Europe tipped into the red on Friday as a slowdown in UK economic growth impacted the FTSE.

London stocks had the weakest performance of the day as a disappointing GDP reading of 0.1% growth in October combined with projections from Deutsche Bank that the economic recovery will be thwarted by new Plan B measures.

Oliver Males, financial analyst at Spreadex, said: “Economists had forecast 0.4% growth, but the ongoing supply chain issues and staff shortages have obviously negatively impacted this figure.

“Adding to the pessimism was Heathrow’s warning of further restrictions badly affecting the travel industry once more, as demand for November has already dropped 60%.

“The UK market in particular has now fallen lower after a leading economist, Sanjay Raja, from Deutsche Bank, announced that Plan B will see GDP growth dip into negative territory for at least December and January.”

The FTSE 100 closed 29.48 points, or 0.4%, lower at 7,291.78 on Friday.

Elsewhere in Europe, the major markets softened towards the end of the session as rising coronavirus case numbers continued across the continent.

The German Dax decreased by 0.07% and the French Cac increased by 0.3%.

Across the Atlantic, the Dow and S&P moved higher on the opening bell amid relief that inflation figures came in within expectations to show a 6.8% rise.

Meanwhile, sterling made gains as the inflation figures drove weakness in the dollar.

The pound moved 0.27% higher versus the US dollar at 1.326, and increased 0.11% against the euro at 1.171.

In company news, Primark owner Associated British Foods (ABF) nudged higher after it said the budget fashion brand had traded better than expected over the last three months.

The firm said it had used its position as a major customer for its suppliers to overcome some of the squeezes on global supply chains, so it has most of the products it needs for Christmas.

It saw shares close 10p higher at 1,944p as a result.

Photo booth owner Photo-Me made gains after telling shareholders it had performed better than expected in the final three months of its financial year, after strong photography performance and customers turning to its laundry service.

The business’s shares rose by 6.6p to 64.6p after it reported that revenue will be slightly ahead of the £210 million previously expected during the year.

British American Tobacco (BAT) was among the FTSE’s leaders, building on its strong performance from earlier in the week after it held firm on guidance for more than 5% revenue growth.

Shares in the tobacco firm were 68p higher at 2,759p.

The price of oil continued its rebound for this week, having fallen to a three-month low last week over concerns about the impact of the Omicron variant of coronavirus.

Brent crude increased 0.7% at 74.46 dollars per barrel when the London markets closed.

The biggest risers on the FTSE 100 were BAT, up 68p at 2,759p; London Stock Exchange, up 100p at 6,742p; BT, up 1.8p at 178.45p; and Croda, up 100p at 10,410p.

The biggest fallers were Darktrace, down 17.4p at 397p; Entain, down 50.5p at 1,633p; Ocado, down 48p at 1,585p; and Kingfisher, down 8.5p at 332.9p.