FTSE 100 Live Friday
- Monthly GDP in surprise fall
- BP reports production boost
- Heathrow plans £10bn investment
Market update: GDP and tariffs weigh on FTSE 100, BP shares advance
10:01 , Graeme EvansA surprise contraction in UK GDP today provided a downbeat note at the end of a record-breaking week for the FTSE 100 index.
May’s unexpected 0.1% decline means the UK economy is on track for growth of just 0.1% in the second quarter, having started the year with a rise of 0.7%.
The pound fell 0.3% at $1.354 after the GDP setback appeared to boost the chances of another Bank of England interest rate cut next month.
The UK-focused FTSE 250 index fell 0.3% or 71.62 points to 21,623.08, while London’s blue-chip benchmark weakened following a steady start.
The top flight, which closed last night up by 1.2% or 108.64 points at a record 8975.66, fell 24.18 points to 8951.48.
European benchmarks also declined while US futures point to a weak session later as traders react to President Trump’s latest trade threats, including a 35% tariff on Canadian imports from 1 August.
AJ Bell investment analyst Dan Coatsworth said: “Whether this is investors being reminded of headwinds or simply pausing for breath, it’s clear that uncertainty will prevail well into the summer.
“The corporate reporting season begins in earnest next week with the big US banks.
“That will shift the focus to profits and outlook statements, giving valuable insight into how the business world is coping with a multitude of pressures.
“Any corporate optimism is likely to prompt a ticker tape parade on the markets as investors look for confirmation that tariff uncertainty hasn’t caused widespread damage to earnings.”
The best performing stock in the FTSE 100 was BP, which traded near 400p for the first time since April.
The oil major rose 3% or 10.25p at 399p after it said it expects to report higher production figures for the second quarter.
The improved guidance, which follows a shift in its strategy, was offset by a warning that lower oil prices will impact results by up to $800 million (£591 million) compared to the previous quarter.
It also flagged potential after-tax impairments of between $500 million and $1.5 billion but said that net debt is likely to be slightly lower than the first quarter.
Shell shares rose 8p to 2666p, while Endeavour Mining lifted 20p to 2240p after Morgan Stanley backed the gold miner with a new price target of 2890p.
The same firm also said Aviva shares were worth 680p, which helped the insurer improve 5p to 621.4p in today’s session.
Meanwhile, Rolls-Royce lifted another 6p to 981.4p and British Airways owner IAG improved 2.1p to 372.1p after strong results on Thursday by Delta Airlines boosted confidence.
The fallers board was led by medical devices business Smith & Nephew, which retreated 25p to 1130.5p.
UK exports to US returned to growth in May
09:16 , Graeme EvansUK exports to the US returned to growth in May after the two countries agreed a trade deal that softened the blow of President Trump’s tariff hikes.
Goods exports rose by £300 million during the month, the Office for National Statistics (ONS) revealed.
This followed a steep drop in April when exports declined by £2 billion – the largest monthly decrease since records began in 1997.
The overall value of exports from the UK increased by 2.2% in May, at £600 million, with increases both to EU and non-EU countries.
Nevertheless, the total goods and services trade deficit widened by £6.7 billion to £13.2 billion in the three months to May, because of a large rise in goods imports and a fall in goods exports.
Heathrow unveils £10bn investment plan
08:50 , Graeme EvansHeathrow Airport has unveiled a £10 billion investment plan to expand capacity, with the aim of handling an extra 10 million passengers per year by 2031.
The plan forms the core of the airport’s 2027–2031 business proposal, which was submitted to the Civil Aviation Authority today.
Heathrow chief executive Thomas Woldbye said: “We’re making good progress on our strategy to become an extraordinary airport – having become Europe’s most punctual major airport so far this year.”
“But our customers want us to improve our international rankings further, as do we.
“To compete with global hubs, we must invest. Our five-year plan boosts operational resilience, delivers the better service passengers expect and unlocks the growth capacity airlines want with stretching efficiency targets and a like-for-like lower airport charge than a decade ago.”
FTSE 100 stays at record level, aerospace stocks higher
08:25 , Graeme EvansThe FTSE 100 index has held the gains seen during yesterday’s record-breaking performance, with London’s top flight up by 3.66 points to 8979.69.
Rolls-Royce lifted 12p to 987.4p and British Airways owner IAG improved 3.9p to 373.8p after strong results on Thursday by Delta Airlines boosted confidence.
Mining giant Rio Tinto fell back 31p to 4416.5p after yesterday’s market-leading rise of 4%, while Glencore stayed at 310p.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “There remain hopes that despite the trade bluster from Trump, the tariffs won’t weigh on the global economy as much as had been feared, especially as new trading relationships are being forged.
“The defensive nature of the FTSE 100 is also well-positioned for any rotation out of the US, as investors look to diversify and insulate their portfolios against Trump induced turmoil and potential volatility among the tech mega-caps.”
BP production boost offset by lower prices
08:13 , Graeme EvansBP shares have risen 5.7p to 394.5p after the oil major said it expects to report higher upstream production figures for the second quarter.
Earlier this year the business revealed a new growth strategy focused on extracting more oil and gas, following pressure from some investors to boost its profits.
In today’s update, BP also said lower prices received for its oil production were expected to impact results by up to $800 million (£591 million).
It also flagged after-tax impairments of between $500 million and $1.5 billion.
UK economy flatlines after strong start, August rate cut seen
07:42 , Graeme EvansThe latest monthly GDP reading means the UK is on course to post a broadly flat second quarter performance.
The Bank of England had expected quarter-on-quarter growth of 0.25% but Deutsche Bank and Capital Economics believe that a 0.1% rise is now the more likely outcome.
This comes after the first quarter’s 0.7% jump, which was due to activity being pulled forward ahead of the rises in US import tariffs and UK stamp duty charges.
Capital Economics said: “We think GDP will rise by a fairly subdued 1% this year due to the lingering drags from a weakening global economy and the rises in domestic taxes for UK businesses.”
Deutsche Bank said that if the economy does slow to 0.1% in the second quarter this would still mean “pretty healthy” growth across the first half.
However, recent weakness will cement the fears of some on the Bank of England’s monetary policy committee that demand is loosening faster than expected.
Deutsche Bank added: “An August rate cut looks almost certain. And we expect more to come in the fourth quater.”
UK GDP declines for second month in row, trade deficit widens
07:07 , Graeme EvansThe UK economy contracted by 0.1% in May, below City forecasts for growth of 0.1%.
The disappointing GDP print follows a decline of 0.3% in April and the first quarter’s surprise growth rate of 0.7%.
The ONS said monthly services output grew by 0.1% following a fall of 0.3% in April. Production output fell by 0.9% and construction slipped by 0.6% after a stronger performance the previous month.
Separate figures published today showed the UK’s total goods and services trade deficit widened by £6.7 billion to £13.2 billion in the three months to May.
Exports of goods to the US rose by £300 million in May, which following a substantial decrease the previous month remains at a relatively low level.
FTSE 100 set to hold record position, Bitcoin at new record
07:02 , Graeme EvansThe FTSE 100 index is set to consolidate its position at a record high, having closed last night up by 1.2% or 108.64 points at 8975.66.
It had earlier traded as high as 8979.41, surpassing the previous intraday record of 8908.82 as traders took a relaxed view of President Trump’s latest tariff threats.
The Dow Jones Industrial Average rose 0.4% and the S&P 500 lifted 0.3%, while the Nasdaq Composite rose 0.1% to set another all-time high.
Asia markets are enjoying a positive session, led by a rise of 1.7% for the Hang Seng index.
Bitcoin is also in record territory, with the cryptocurrency above $117,000.
