UK shares rise on strong economic growth

The blue-chip FTSE 100 index closed 0.46% higher, while the mid-cap FTSE 250 gained 1.33%

UK shares edged up on Thursday, as strong first-quarter economic growth offered some respite to investors shaken by escalating political uncertainty in the ​country.

The blue-chip FTSE 100 index closed 0.46% higher, while the mid-cap FTSE 250 gained 1.33%.

Data showed Britain’s economy grew unexpectedly in March, suggesting it was in better shape than many feared after a sluggish fourth quarter last year.

However, some analysts warned that stockpiling of goods due to supply chain disruptions stemming ​from the Middle East war could have inflated the figures.

We need to be ​cautious about judging the genuine trend, said Rob Wood, chief UK ⁠economist at Pantheon Macroeconomics.

Economists also said issues related to measuring post-pandemic shifts in ​spending may be contributing to the pattern of strong first-quarter growth.

George Brown, senior economist ​at Schroders, said that economic strength may wane as the year progresses.

UK GDP has developed a habit of starting the year well, only for momentum to slow due to residual seasonality. That ​should mean the Bank of England talks tough but stops short of the ​hikes markets are pricing in.

Market participants expect the central bank to raise rates at least two times this year, ‌according ⁠to data compiled by LSEG.

Long-term British borrowing costs surged to their highest in nearly 30 years earlier this ​week.

Among individual stocks, Legal and General added 6.16% and was ​among the ⁠top percentage gainers on the FTSE 100, after the Financial Times reported possible buying interest was building in the company.

Auto stocks rose 3.23%, outweighing a 3% decline in the ⁠investment ​banking index, dragged by a 12.76% drop in 3i ​Group.