London’s FTSE 100 nudged higher today after fresh figures showed the UK economy unexpectedly stalled in February, while Tesco clocked decent gains despite posting a big profit slump.
The capital’s premier index edged 0.24 per cent higher to close at 7,843.39 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, zipped 0.35 per cent to just over the 19,000 point mark.
Investors seemingly were not wholly spooked by numbers from the Office for National Statistics (ONS) this morning showing UK GDP flatlined in February, below the City’s expectations of 0.1 per cent growth.
The ONS lifted its January output calculations to 0.4 per cent growth from 0.3 per cent, narrowly putting the UK on track to swerve a technical recession – two back to back quarters of contraction – in the first half of this year.
Experts projecting that the country was on course to suffer a long, sharp recession this year have been forced to revisit their projections after a batch of decent economic data since the start of 2023.
“The economic data since the end of last year has shown much greater resilience than many had feared at the end of last year,” Michael Hewson, chief market analyst at CMC Markets UK, said.
Nonetheless the International Monetary Fund said earlier this week it reckons UK GDP will shrink 0.3 per cent this year, making the country the worst performer in the G7 economic growth league.
Britain’s largest supermarket Tesco said today profits for the year fell nearly seven per cent to £2.6bn, mainly caused by higher costs and customers trading down to discounters Aldi and Lidl in response to the inflation crunch.
The supermarket’s shares still jumped around 0.5 per cent and were trading near the top of the FTSE 100 during opening exchanges.
Interest rate sensitive stocks held back gains on the premier index, likely because investors’ bets on the Bank of England lifting rates for the twelfth time in a row to 4.5 per cent at its next meeting on 11 May have been fortified by signals from Governor Andrew Bailey and other rate setters that they are focussed on tackling inflaiton.
Housebuilder Persimmon shed more than three per cent to anchor the FTSE 100 after new data from the Royal Institution of Chartered Surveyors showed demand is slipping in the property market.
Lloyds Bank finished near the bottom of the premier index, tumbling around 2.5 per cent.
The pound strengthened around 0.30 per cent against the US dollar, while oil prices were lost around 0.4 per cent.