London’s FTSE 100 closed 1.07% higher on Thursday, lifted by a surprise economic expansion in the UK during August alongside a wave of corporate trading updates.
Britain’s gross domestic product grew 0.1% month over month in August, following a stronger 0.4% gain in July, according to the Office for National Statistics.
Analysts had forecast a 0.1% decline for the month, making the positive reading a notable beat against market expectations.
On a yearly basis, the British economy expanded 2.1%, surpassing the revised 1.8% prior reading and the market consensus forecast of a 1.7% rise.
Berenberg noted the significance of the acceleration, saying: “Following three years over which growth has averaged 1.1%, the acceleration through the 2% threshold gives the data some wow factor.”
The bank added: “The sector breakdown suggests that AI is behind much of the upswing. … The rest of the economy is decidedly sluggish.”
Analysts reiterated their view that the Bank of England is likely to raise interest rates only once on November 5, barring a renewed surge in energy prices.
ONS data also showed UK industrial production rose 0.8% on a monthly basis in August, while manufacturing production climbed 1.2%, both exceeding estimates of a 0.1% decline.
Antofagasta (ANTO.L) was among the worst performers on the blue-chip index, falling 3.84% after copper, gold, and molybdenum production all declined year over year in the third quarter.
RBC Capital Markets flagged the disappointment, saying: “We expect a negative reaction to today’s results with Q3 production coming in lighter at [152,000 tonnes], -2% vs company consensus of 155kt.”
RBC further noted that “guidance for 2026 (625-655kt vs RBCe at 637kt) has been maintained,” but added that “very little airtime in the release has been given to the strike at Centinela.”
Dunelm Group (DNLM.L) stood out as a clear bright spot, surging 8.80% after total sales for its fiscal first quarter rose 1.1% year over year to 433 million pounds sterling.
The home furnishings retailer said it expects its adjusted pretax profit for fiscal 2027 to remain broadly in line with the previous year, reassuring investors about near-term earnings stability.
ITV (ITV.L) ended the session 0.69% lower after UK Secretary of State for Digital, Culture, Media and Sport Lisa Nandy signalled she is considering a public interest intervention in Sky UK’s planned acquisition of ITV’s media and entertainment business.
Nandy cited potential implications for media plurality and freedom of expression in news media as key factors driving her consideration of the intervention.
