By Devik Jain and Sruthi Shankar (Reuters) -British stocks ended lower on Monday as data showed the economy slowed more than expected in February, intensifying worries about a cost-of-living squeeze. Gross domestic product rose by 0.1% in February, missing the 0.3% rise forecast by economists in a Reuters poll and down from a 0.8% increase […]
By Devik Jain and Sruthi Shankar
(Reuters) -British stocks ended lower on Monday as data showed the economy slowed more than expected in February, intensifying worries about a cost-of-living squeeze.
Gross domestic product rose by 0.1% in February, missing the 0.3% rise forecast by economists in a Reuters poll and down from a 0.8% increase in January.
London’s leading share index closed 0.7% lower, pulling back from its strongest level in nearly two months, while the domestically focused FTSE 250 midcap index declined 0.3%.
“The winding down of the UK’s booster vaccine and Covid-19 test campaigns weighed on growth in February and will continue to do so for the next few months,” James Smith, economist at Dutch bank ING said in a note.
“Combined with the cost-of-living crisis, falling confidence, and the presence of an extra bank holiday, we expect second-quarter growth to come in slightly negative.”
Still, the FTSE 100 has risen more than 3% so far this year, outpacing its global peers on the back of gains in heavyweight commodity and banking stocks as oil and metal prices rallied on the Russia-Ukraine conflict and interest rate hikes from the Bank of England to tame inflation.
Meanwhile, the pound flattened to $1.3033 by market close, not far from its lowest level against the dollar since November 2020. A weaker pound tends to boost the FTSE 100, which houses many international players that earn in dollars. [GBP/]
However, concerns related to the domestic economy have been reflected in the mid-cap index, which is down more than 10% in 2022.
Among individual stocks, Ascential climbed 2.1% after the events and analytics company confirmed a media report that it was in the early stages of evaluating the merits of a break-up of some of its businesses.
Energy services provider John Wood Group surged 12.7% after Jefferies upgraded the stock to “hold” from “underperform”.
Weir Group slipped 3.2% after the engineering firm acquired Carriere Industrial Supply.
(editing by Uttaresh.V, Subhranshu Sahu and Alex Richardson)
