Economic news

UK's FTSE 100 Scales over Four-Year Peak on Sinancials Boost

  • UK economy unexpectedly rose in November
  • FTSE 100 on track for second straight weekly gains
  • Earnings from big U.S. banks awaited
  • FTSE 100 up 0.5%, FTSE 250 adds 0.4%

Jan 13 (Reuters) - UK's FTSE 100 climbed to its highest since May 2018 on Friday, as risk sentiment rose after surprise growth in the domestic economy in November and a boost from a slowdown in U.S. inflation.

The blue chip FTSE 100 rose 0.5%, with the index on track to rise for the second straight week in a chipper start to the year.

Financial stocks led gains on Friday, with HSBC and exchange operator London Stock Exchange Group gaining 1.7% and 1.4%, respectively.

Britain's economy unexpectedly eked out a modest growth in November, lifted by higher spending in pubs and bars from World Cup cheerers and video game sales that reduced the chances of slipping into recession.

The data shows a shift in where spending has been taking place, said Craig Erlam, senior market analyst at Oanda.

"That could mean that the UK technically just about avoids recession, but it does not really change anything."

Mortgage costs for first-time home-buyers in Britain have risen to their highest since 2008, Nationwide Building Society said.

Meanwhile, risk appetite got a boost on Thursday when data showed U.S. consumer prices fell for the first time in two-and-a-half years in December, bolstering hopes of the Federal Reserve moving to smaller interest rate hikes in its February meeting.

Fourth quarter earnings from big U.S. banks such as Bank of America and JP Morgan Chase & Co are on the radar on Friday.

The more domestically-focussed FTSE 250 midcap stocks gained 0.4%, while C&C Group slumped 10.1% after a dour full-year profit outlook.

888 Holdings fell 4.7% after the bookmaker said its CEO Yariv Dafna will step down from the role, while the group reported a 3% fall in quarterly revenue.

Reporting by Shashwat Chauhan in Bengaluru; Editing by Dhanya Ann Thoppil and Shailesh Kuber

Source: Reuters

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