Footsie falls as pound spikes on GDP data

Market report Perry Gourley

London’s blue- chip index fell to a three- week low as better- than- expected UK growth figures sparked a surge in the pound.

The index ended the day down 1.05 per cent or 79.33 points at 7,447.21 – its lowest level since the start of October.

Investors were reacting to official data showing that gross domestic product ( GDP) grew by 0.4 per cent in the first quarter, trumping economists’ predictions for a 0.3 per cent rise.

But David Madden, a market analyst at CMC Markets UK, said the FTSE 100 will see delayed benefits from economic growth.

“Ultimately, a respectable growth rate in the UK economy will assist the equity benchmark in the long run, but for now the pound is putting pressure on it.”

G l a xo S mi t h K l i n e ( G S K ) t u mb l e d 8 3 . 5 p t o 1 , 429p, a s i nvest ors r e acte d t o r e l at ive l y weak sales in the company’s pharmaceuticals division which rose just 2 per cent at constant currencies.

GSK was still able to report a 30 per cent jump in pre- tax profits at constant exchange rates to £ 1.7 billion, as the company continued with its cost- cutting drive.

Lloyds Banking Group shares rose 0.54p to 67.94p after unveiling a hefty rise in pre- tax profits. Marks & Spencer edged lower by 2p to 342.7p amid news that its director of clothing and beauty Jo Jenkins was leaving just weeks after starting the new role to become chief executive of White Stuff. Shares in British American Tobacco rose 18.5p to 4,843.5p after the firm said sales of next- generation products such as e- cigarettes would hit £ 500 million this year. The services group said turnover in the first five months of the year rose by more than 11 per cent compared with the same period last year. The regulatory firm saw its shares tumble after pre- tax losses widened and revenues fell blamed on delayed contract signings.