FTSE 100 Live: Stocks to drop as oil surges; economic growth set to vanish
Welcome back to City AM’s FTSE 100 liveblog. The UK’s blue-chip index is set to drop, according to IG futures. The Office for National Statistics (ONS) will release its gross domestic product (GDP) figures for July this morning, with economists expecting to see recent growth grind to a halt. The UK’s economy grew by 0.3 [...]
The FTSE 100 stock index is expected to decline as oil prices surge, potentially leading to a slowdown in economic growth, according to IG futures. The Office for National Statistics is set to release July's gross domestic product (GDP) figures, with economists anticipating a halt in recent growth. While the UK's economy expanded by 0.3 percent last year, aided by hospitality and leisure firms benefiting from the World Cup and record summer temperatures, soaring energy prices and weakened consumer confidence have threatened this growth.
Deutsche Bank economists expect the economy to "slow from its current torrid pace of growth," noting that the real income shock from the Middle East has yet to be fully reflected in the data. Further indications of decelerating growth could prompt the Bank of England to raise interest rates at their upcoming Monetary Policy Committee meeting.
Danni Hewson, head of financial analysis at AJ Bell, highlighted that three rate setters have already advocated for a preemptive move, which has been bolstered by Brent crude prices surpassing $100 a barrel, marking the highest level since May. The surge in oil prices could weaken domestic demand as households and businesses grapple with maintaining recent confidence gains.
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