FTSE 100 Edges Up on Stronger-than-Expected GDP Data Amid Inflation Concerns
Britain's FTSE 100 index rose by 0.26% to 10,664.93 points on Wednesday as investors reacted positively to stronger-than-expected GDP data. This growth is a welcome surprise in the face of geopolitical upheaval and global economic uncertainty.
The Office for National Statistics reported that Britain's economy grew by 0.5% in the second quarter, exceeding initial estimates. This unexpected resilience has helped cyclical stocks, with banks being the biggest boost to the index. Utilities stocks also saw significant gains, rising 2.7%, thanks in part to policy announcements from UK PM Andy Burnham.
However, despite this positive news, the FTSE 100 is still on track for its worst month since March and its seventh consecutive quarterly gain. The blue-chip index has been weighed down by persistent inflation concerns and rising bond yields, which have dampened investor sentiment.
In related news, Bank of England policymaker Alan Taylor stated that it was unclear whether a single rate hike would be practical for taming inflation without fueling unwarranted market speculation of further increases. Traders are currently pricing at least one 25-basis-point rate hike by the BoE this year.