London markets closed the week with a spring in their step as revisions to UK GDP figures were enough to send equities higher while the pound also strengthened.
The blue chip FTSE 100 index climbed 0.1 per cent to trade at 7,608.08 while the FTSE 250 rose 1.0 per cent to hit 18,279.42.
The strong start came after revisions from the Office for National Statistics (ONS) showed the UK economy grew slightly faster in the first quarter of this year than previously expected.
Taking into account all of the ONS’s revisions, this means the UK economy is now 1.8 per cent larger than it was pre-pandemic. Previous estimates had suggested that the UK economy had shrunk 0.2 per cent in that period.
“The UK economy has shown signs of life,” Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown said.
“GDP is now 1.8 per cent ahead of pre-pandemic levels as the economy grew 0.2 per cent in the second quarter from the first three months of the year. Crucially, GDP was up 0.6 per cent from the same period the previous year, which was better than expected and has given the pound a shove in the right direction,” she continued.
The pound continued yesterday’s rebound in what has been a difficult month. It rose as much as 0.32 per cent earlier in the day, but ended up only marginally higher at around $1.22.
Over the month as a whole it was still down around 3.2 per cent – putting it on track for its worst month since last September.
JD Sports was the FTSE 100’s top performer, soaring 5.1 per cent after positive results from Nike the evening before while Ocado climbed 4.0 per cent.
Severn Trent was among the FTSE’s top risers, up 4.9 per cent, after it announced a near £13bn investment plan alongside plans to raise an additional £1bn in equity.
Shares in Aston Martin climbed over 10 per cent after the Yew Tree Consortium, backed by billion investor Lawrence Stroll, ramped up its stake to around 25 per cent.
“When an investor already owning more than 20 per cent of a business increases their stake, it sends a major signal to the market that something big could happen,” AJ Bell’s investment director Russ Mould said.
“It could mean one of three things: either they intend to make a takeover bid at some point in the future, trading is going very well so they believe the company will soon be worth a lot more, or the shares are stuck in the mud and they see an opportunity to buy more of them while the market isn’t interested,” Mould continued.
Shell and BP were among the few firms in the red, falling 1.8 per cent and 1.5 per cent respectively. Both have risen over 10 per cent in the course of the month thanks to rising oil prices, but a softening in prices today contributed to a slight dip.