London open: Stocks fall as UK growth slows

(Sharecast News) - London stocks fell in early trade on Friday as data showed that economic growth in the UK unexpectedly slowed in the third quarter. At 0820 GMT, the FTSE 100 was down 0.4% at 8,038.45.

Figures released earlier by the Office for National Statistics showed the economy grew by 0.1% in the last quarter, slightly below expectations.

The ONS said growth in the three months to September had been led by strength in the retail trade, excluding motor vehicles, and new construction work.

Output in the construction sector jumped 0.8%.

The 0.1% uptick was, however, below second-quarter growth of 0.2%. It also missed analyst expectations for a 0.2% improvement.

In September, GDP fell 0.1%. The ONS said a "notable" increase in car sales had been offset by a "slow month for IT companies". Also weighing on growth was the manufacturing sector, with production output down 0.5% .

The services sector, one of the main drivers of economic growth in the UK, was flat.

Liz McKeown, director of economic statistics at the ONS, said: "The economy grew a little in the latest quarter overall, as the recent slowdown in growth continued.

"Retail and new construction work both performed well, partially offset by falls in telecommunications and wholesale. Generally, growth was subdued across most industries in the latest quarter."

Kathleen Brooks, research director at XTB, said: "The risk for the UK economy is that the Q3 data does not take account of the UK Budget, and the hike to employers' national insurance, which won't take effect until next year. The Budget has been criticized for being anti-business, which could threaten the Labour government's professed desire to boost growth.

"Added to this, Trump hasn't taken office in the US yet, and we don't know what his tariff plan will look like, or how his relationship with the UK will evolve. Thus, there are still plenty of headwinds that could hold back UK GDP in future.

"In the short term, Rachel Reeves and co. should focus on boosting GDP per capita, as right now, the population continues to grow, immigration surged in 2023, yet that is not having an impact on our GDP, which is deeply concerning."

In equity markets, Land Securities gained after saying it returned to profit in the six months to 30 September as the property market continued to recover, underpinned by growing demand.

Pre-tax profit came in at £243m, compared with a loss of £193m a year earlier. The company also lifted guidance for EPRA full-year earnings.

InterContinental Hotels was also in the black, boosted by an upgrade to 'overweight' at Barclays.

Premier Inn owner Whitbread fell, however, after a downgrade to 'equalweight' by the same outfit.

Pharma stocks were under the cosh, with GSK and AstraZeneca among the worst performers after US President-elect Donald Trump selected Robert F. Kennedy Jr to lead the Department of Health and Human Services.

Outside the FTSE 350, TT Electronics surged on news it had rejected two takeover offers from Volex.

Market Movers

FTSE 100 (UKX) 8,038.45 -0.41% FTSE 250 (MCX) 20,451.89 -0.35% techMARK (TASX) 4,592.99 -1.06%

FTSE 100 - Risers

Land Securities Group (LAND) 590.00p 1.72% InterContinental Hotels Group (IHG) 9,580.00p 0.93% Reckitt Benckiser Group (RKT) 4,762.00p 0.68% Imperial Brands (IMB) 2,366.00p 0.60% Spirax Group (SPX) 6,705.00p 0.52% SSE (SSE) 1,717.00p 0.41% Sainsbury (J) (SBRY) 240.40p 0.33% Vodafone Group (VOD) 69.50p 0.26% Aviva (AV.) 476.60p 0.25% British American Tobacco (BATS) 2,809.00p 0.21%

FTSE 100 - Fallers

GSK (GSK) 1,313.50p -2.96% Whitbread (WTB) 2,883.00p -1.97% AstraZeneca (AZN) 10,094.00p -1.92% Croda International (CRDA) 3,548.00p -1.69% BAE Systems (BA.) 1,293.50p -1.63% Scottish Mortgage Inv Trust (SMT) 932.20p -1.04% Flutter Entertainment (DI) (FLTR) 20,880.00p -0.95% Smith & Nephew (SN.) 952.00p -0.94% Rolls-Royce Holdings (RR.) 540.20p -0.92% Barclays (BARC) 254.35p -0.88%

FTSE 250 - Risers

Moonpig Group (MOON) 260.00p 3.59% Aston Martin Lagonda Global Holdings (AML) 118.80p 3.13% CMC Markets (CMCX) 330.00p 2.33% Watches of Switzerland Group (WOSG) 453.00p 2.30% Derwent London (DLN) 2,134.00p 2.20% Morgan Advanced Materials (MGAM) 257.00p 1.98% Ibstock (IBST) 190.00p 1.17% Empiric Student Property (ESP) 90.00p 1.12% Assura (AGR) 39.30p 1.08% Hochschild Mining (HOC) 202.00p 1.00%

FTSE 250 - Fallers

Ninety One (N91) 152.00p -4.70% Renishaw (RSW) 3,130.00p -3.10% Safestore Holdings (SAFE) 760.00p -3.00% Close Brothers Group (CBG) 205.00p -2.75% Senior (SNR) 145.00p -2.55% Pagegroup (PAGE) 351.20p -2.28% PZ Cussons (PZC) 77.00p -1.91% Helios Towers (HTWS) 105.80p -1.67% Genus (GNS) 1,770.00p -1.67% Smithson Investment Trust (SSON) 1,456.00p -1.62%