FTSE 100 closes lower on UK growth

The blue-chip index ended down 0.3 per cent, while the domestically focused midcap FTSE 250 reversed early losses to close up 0.1 per cent, holding near recent seven-week highs

The FTSE 100 closed lower on Monday, after three straight days of gains, as data confirmed Britain’s economy grew at a sluggish pace last quarter.

The blue-chip index ended down 0.3 per cent, while the domestically focused midcap FTSE 250 reversed early losses to close up 0.1 per cent, holding near recent seven-week highs.

Official data showed GDP grew just 0.1 per cent in the third quarter, in line with estimates, with April-June growth revised down to 0.2 per cent from 0.3 per cent. The figures suggest higher taxes and sticky inflation are weighing on activity, despite increased household spending and reduced savings.

Meanwhile, finance minister Rachel Reeves asked the Office for Budget Responsibility (OBR) to publish an interim economic and public finance forecast on March 3.

Among sectors, consumer staples lagged, with beverage stocks down 2.8 per cent. Spirits maker Diageo dropped 3.6 per cent, the biggest drag on the blue-chip index, after Bernstein cut its target price to 2,310 pence from 2,420 pence.

Gold miners kept losses in check, benefitting from gold surging to an all-time high of $4,440.21/oz. Endeavour Mining and Fresnillo increased between 1.9 per cent and 2.8 per cent.

Despite Monday’s decline, the FTSE 100 is on track for its best year since 2009 with a 20.7 per cent year-to-date jump, buoyed by defence and financial stocks.

Among individual stocks, Rank Group shed 5.1 per cent after the British gaming company said its Spanish units had been victims of a 7.1-million-euro ($8.3 million) payment fraud.

Trading volumes usually taper off towards year-end with traders away on holidays and markets closed on December 25 and December 26.