Top European markets have ended the week in the red, with sentiment slipping as new figures showed UK economic growth slowed to a near-standstill in the third quarter.
London’s FTSE 100 struggled to maintain gains from earlier in the day and closed 7.58 points lower, or 0.09%, at 8,063.61.
It came as Chancellor Rachel Reeves said she was “not satisfied” with official data showing that the UK economy grew by 0.1% between July and September, the months after Labour won the general election.
In September, gross domestic product (GDP) contracted by 0.1%, according to estimates from the Office for National Statistics (ONS).
The ONS said growth was subdued across most industries in the third quarter, with some experts suggesting that businesses had been holding back on spending decisions until after the autumn Budget.
James Smith, a developed market economist for ING, said: “For all the post-Budget excitement about the prospect of faster UK growth, the latest GDP figures appear to provide a bit of a cold shower.
“Activity fell in September, and that meant that GDP growth across the third quarter was a pretty lacklustre 0.1%.”
However, he said it was important not to “overthink” the recent GDP figures, adding: “The Bank of England has made it abundantly clear that it is not putting much weight on them.”
It was a weaker day of trading for top stock markets elsewhere in Europe. In Paris, the Cac 40 dropped 0.58%, and in Frankfurt, the Dax closed 0.27% lower.
Over in the US, the S&P 500 moved 1.2% lower as the index weakened following a rally over the past week. The Dow Jones was also down about 0.7% on Friday afternoon.
The pound was down about 0.3% against the US dollar at 1.262, and was down 0.5% against the euro at 1.197.
In company news, Lord Nat Rothschild’s Volex group made a potential offer worth £250 million to buy Woking-based manufacturer TT Electronics.
He said he was troubled by “missteps” taken by the London-listed firm’s leadership team, taking aim at its acquisition strategy for resulting in “very disappointing outcomes”.
Volex, which provides power products for equipment such as hospital ventilators, electric cars and laptops, said it had submitted two takeover proposals, but that TT Electronics had rejected both.
TT Electronics’ share price soared 40.5% on the news, while Volex was down 10.8% at the close.
Elsewhere, housebuilder MJ Gleeson said there was a “lack of conviction” in the housing market through autumn, adding that it expects full-year results to be in line with expectations.
The Sheffield-based developer said that despite the weak momentum, it hoped the Bank of England’s recent quarter-point interest rate cut would boost buyer confidence.
Ahead of its annual general meeting, MJ Gleeson said net reservation rates from July to October were higher than the previous year, at 0.53 per site per week, but that it continues to see margin pressure because of higher build costs. Shares fell 2.7% on Friday.
The biggest risers on the FTSE 100 were Land Securities, up 25p to 605p, easyJet, up 19.4p to 536.8p, Fresnillo, up 19p to 648p, Lloyds, up 1.44p to 56.48p, and British American Tobacco, up 64p to 2,867p.
The biggest fallers on the FTSE 100 were B&M European, down 20.4p to 378.4p, GSK, down 52.5p to 1,301p, Croda, down 116p to 3,493p, AstraZeneca, down 314p to 9,978p, and Relx, down 108p to 3,531p.