The UK economy grew by 0.2% between April and June following a rebound from an extra Bank Holiday for the King’s Coronation.
Growth in June was stronger than expected at 0.5%, showing a recovery from May when the economy lost one working day due to the national holiday.
Chancellor Jeremy Hunt said: “The actions we’re taking to fight inflation are starting to take effect, which means we’re laying the strong foundations needed to grow the economy.
“The Bank of England are now forecasting that we will avoid recession, and if we stick to our plan to help people into work and boost business investment, the IMF have said over the longer-term we will grow faster than Germany, France and Italy.”
Mike Randall, CEO of Simply Asset Finance, said: “Modest growth in June reflects a positive outlook for businesses as we creep closer to the Bank of England’s end of year growth forecast.
“After the latest BDO business trends report indicated that employers’ hiring intentions had dropped in June for the first time in six months, a slight increase in GDP will be welcome news for businesses looking to build their business and expand their workforces.”
Property stocks close lower
British Land was hit hardest and was the biggest faller on the FTSE 250 (down 5.3% or 17.75p) at 316.75p as property stocks took the brunt of weaker sentiment over rate rises. Great Portland Estates, which invests in properties in central London, fell by 3%, or 13p, to 415.5p.
Investors also sold out Entain shares in reaction to the gambling group’s £585 million provision for a settlement with HM Revenue & Customs. It closed 67,5p, or 4.9%, lower at 1312.5p.
The FTSE 100 index dropped by 94.4 points (1.2%) to close at 7,524.16 as market jitters wiped out previous gains and left the index down 0.5% or 40.21 points, over the week.
Rising producer prices weighed on growth stocks, in turn sending the S&P 500 and Nasdaq into the red, though the Dow Jones industrial average rose 0.3%.
While overall passenger numbers remain below pre-pandemic levels, 7.6 million people travelled through Heathrow in July, averaging nearly a quarter of a million passengers a day.
Poor weather in Britain over July led to seek some summer sun. Over 73,000 passengers flew to Turkey in July, the busiest month ever for the destination. Departures to Gibraltar, Portugal and Italy have also all been close to record levels, proving popular destinations for sun seekers. The Big Apple tops the charts as the most popular destination.
This October will see British Airways services to Riga and Belgrade commence, whilst Virgin will connect to Dubai after a four-year hiatus. Lufthansa will start serving Salzburg and Friedrichshafen in time for Christmas festivities.
Car insurance rises
Motorists are paying more to insure their vehicles as rising repair costs and other inflationary pressures force up the price of premiums.
An analysis of 28 million policies found the average premium in the three months to the end of June was £511, which was 21% higher than this time last year.
The Association of British Insurers (ABI) said sustained cost pressures were behind the record highs.
The industry paid out £2.4bn in all motor insurance claims – covering theft, vehicle repairs, and personal injury – in the first quarter of this year, up 14% from the same period last year, the organisation said.
Wilko stays open
High Street homeware retailer Wilko will stay open while the administrators at PwC consider interest from potential buyers of some of its branches.
The chain collapsed after failing to find a rescuer to save its 400 shops and 12,500 workers. It has ten branches in Scotland.
The stores will stay open for now, without any immediate job losses, and staff will continue to be paid.