LIVE MARKETS-When good news isn't great news for London stocks
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WHEN GOOD NEWS ISN'T GREAT NEWS FOR LONDON STOCKS
Britain's economy slowed less than expected between April and June, but UK stocks -especially domestically focused FTSE 250 .FTMC companies- haven't reacted well to the news.
Official figures showed that after an unusually strong 0.7% expansion in the first three months of 2025, gross domestic product grew 0.3% in the second quarter.
The FTSE 250 is underperforming the broader market down around 0.1%, versus the STOXX 600 index .STOXX up 0.3%.
While the stronger-than-feared- economy offers help to finance minister Rachel Reeves in meeting her budget goals, it also removes some pressure from the Bank of England to cut rates.
"A further reduction in rate cut expectations from the Bank of England could hit domestically focused companies," says Kathleen Brooks, research director at XTB.
Money markets still expect one further interest rate cut by the Bank of England this year, as the central bank is looking closer at inflation and persistent wage growth. But the strongish GDP could open new scenarios, Brooks says.
"We shall have to see if the relatively strong performance of the UK economy in June will be enough to lower expectations further, with the potential for no further rate cuts this year now increasingly likely".
(Joice Alves)
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EARLIER LIVE MARKETS POSTS
EARNINGS GROWTH AND FED CUTS - AN UNUSUAL MIX CLICK HERE
UKRAINE PEACE COULD BE A DOUBLE-EDGED SWORD FOR THE EURO CLICK HERE
STOXX UP, VOLATILITY DOWN CLICK HERE
EUROPE BEFORE THE BELL, CATCHING BREATH CLICK HERE
MORNING BID: BITCOIN JOINS THE RISK-ON PARTY CLICK HERE
UK economy slows less than expected in second quarter
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