FTSE 100 Rises as UK Economy Beats Forecasts With 0.4% July Growth

London stocks closed higher on Friday after UK economic growth significantly exceeded expectations. The FTSE 100 rose by 0.39% to close at 10,650.44, while the FTSE 250 gained 0.38% to 23,975.73.

The stronger-than-expected data added to debate over the future direction of Bank of England interest rates. Financial markets are now pricing in as much as one percentage point of Bank of England interest-rate increases over the next year.

UK mortgage rates have climbed to their highest levels in around five months, reaching a five-month high amid rate rise fears. This is partly due to rising oil prices and resilient economic growth fueling expectations that the Bank of England may raise interest rates.