UK stock markets rise after economic growth beats forecasts

UK investors were in good spirits on Thursday and the pound hit a four-month high, as official data showed the economy was in better-than-expected health.

The Office for National Statistics said the country’s gross domestic product (GDP) edged up by 0.4% in May, following no growth in April.

Some analysts had been forecasting a rise of 0.2% for the month.

Meanwhile, data published in the US showed that inflation eased to 3% in June across the world’s largest economy.

It continued to raise hopes that the central bank has a lid on unruly price rises and can begin cutting interest rates later this year.

London’s FTSE 100 index was up 29.83 points, or 0.36%, to close at 8,223.34, with utilities firms helping to lift it higher.

And the more UK-focused FTSE 250 was up 1.3% on Thursday amid the positive news on the economy.

In Paris, the Cac 40 closed 0.71% higher and in Frankfurt the Dax was up 0.72%.

In New York, the S&P 500 was down about 0.7% and the Dow Jones up 0.3% by the time European markets closed.

The pound jumped 0.5% against the US dollar at 1.291, its highest level since early March.

Sterling was also up 0.15% against the euro at 1.188.

Jet2 said its annual pre-tax profits soared by 43% compared with the previous year (Nick Ansell/PA)
Jet2 said its annual pre-tax profits soared by 43% compared with the previous year (Nick Ansell/PA) (PA Archive)

In company news, shares in Jet2 were given a boost after the holiday company said its profits soared by 43% over the year to the end of March, compared with the previous year.

This was helped by the price of its package holidays jumping by more than a 10th to average £830 over the year, partly from efforts to recoup the impact of cost inflation. Its share price climbed 5%.

It was also a strong session for recruitment firm Hays despite it warning over pressure on its earnings thanks to challenging conditions in Europe.

The company said it had noticed some impact from a period of political uncertainty in the UK and France ahead of general elections.

However, it also revealed cost-cutting measure including trimming back its workforce in recent months. Shares in Hays closed 5% higher.

The biggest risers on the FTSE 100 were Severn Trent, up 98p to 2,715p, Rightmove, up 19p to 559.8p, easyJet, up 15.6p to 493.9p, Schroders, up 11.2p to 388p, and Persimmon, up 41.5p to 1,484p.

The biggest fallers on the FTSE 100 were Vodafone, down 1.22p to 71.22p, Relx, down 52p to 3,543p, DCC, down 80p to 5,610p, Admiral, down 26p to 2,598p, and Darktrace, down 4p to 581.4p.