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Q2 GDP and market open

ended 11. August 2023

What's happening in the FTSE since market open following this morning's GDP data, showing Q2 growth of 0.2% and growth in June of 0.5%. And why's it happening?

2 responses from the Newspage community

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Most UK gilt rates are higher this morning on fears the latest GDP data will make it more likely the central bank will continue to hike rates in their failed attempts to control prices. The FTSE retracted at open, but this is mainly down to sluggish growth in China and the concentration of world miners on the London market.
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John Choong
Senior Equity Research Analyst at Investing Reviews
The FTSE 100 opened in the red this morning as markets were spooked by strong services data in the GDP figures. This may spur more rate hikes than markets expected, with the Bank of England handed more room to do so without triggering a recession given the economy's strength. As such, housebuilder stocks, which are sensitive to interest rate futures, are on the decline again with gilt yields taking a jump. Curiously, bank stocks are just treading above water, which may scratch a few heads. Nonetheless, this is due to strength from UBS, which is trading higher on the back of news that its takeover of Credit Suisse won't require government support. That said, GDP is a lagging indicator. Investors and lenders should note that inflation figures for the past quarter have already been released. Therefore, next week's unemployment and wage data will be crucial in determining where inflation is headed, and more importantly, how hawkish the Monetary Policy Committee will be at its next meeting.