London markets whipsawed today as a rally among airline stocks outweighed recession fears.
The capital’s premier FTSE 100 index jumped 0.18 per cent to drop to 7,209.86 points, while the mid-cap domestically-focused FTSE 250 index, which is more aligned with the health of the UK economy, added 0.1 per cent to close at 18,854.96 points.
More signs of a global economic slowdown initially dragged down London’s top indexes.
Figures published by the British Retail Consortium revealed retail sales dropped 1.3 per cent over the last year, driven lower by elevated inflation eating into household budgets.
Living costs are up 9.1 per cent in the UK, the fastest acceleration since the early 1980s. New GDP figures released today are expected by the City to show the economy flatlined in May.
“This cocktail of worries is preventing the markets from making any tangible progress. Dire retail sales data for June raises the spectre of recession in the UK as cost of living pressures continue to bear down on household finances,” Danni Hewson, financial analyst at broker AJ Bell, said.
But, the likes of British Airways owner IAG, Wizz Air and easyJet all surged more than 2.9 per cent.
Investors were seemingly optimistic that Heathrow’s decision to cap passenger volumes and ask airlines to stop selling tickets will curb travel disruption that has soured sentiment to big carriers.
The pound reversed early losses against the greenback, strengthening 0.13 per cent to buy $1.1904.