Poor GDP data tips markets to close lower

Markets across Europe tipped into the red yesterday as a slowdown in UK economic growth impacted the FTSE.

London stocks had the weakest performance of the day as a disappointing GDP reading of 0.1% growth in October combined with projections from Deutsche Bank that the economic recovery will be thwarted by new plan B measures.

Oliver Males, financial analyst at Spreadex, said: “Economists had forecast 0.4% growth, but the ongoing supply chain issues and staff shortages have obviously negatively impacted this figure.

“Adding to the pessimism was Heathrow’s warning of further restrictions badly affecting the travel industry once more, as demand for November has already dropped 60%.

“The UK market in particular has now fallen lower after a leading economist, Sanjay Raja, from Deutsche Bank, announced that plan B will see GDP growth dip into negative territory for at least December and January.”

The FTSE 100 closed 29.48 points, or 0.4%, lower at 7,291.78.

Elsewhere in Europe, the major markets softened towards the end of the session as rising coronavirus case numbers continued across the continent.

The German Dax decreased by 0.07% and the French Cac increased by 0.3%. Across the Atlantic, the Dow and S&P moved higher on the opening bell amid relief that inflation figures came in within expectations to show a 6.8% rise.

Sterling made gains as the inflation figures drove weakness in the dollar. The pound moved 0.27% higher versus the US dollar at 1.326, and increased 0.11% against the euro at 1.171.