FTSE 100 falls 0.3% as inflation concerns offset UK growth

  • FTSE 100 ended lower as investors weighed European inflation and stronger UK growth.
  • FTSE 100 fell 30.71 points, or 0.3%, to close at 10,606.00.
  • UK GDP growth was revised to 0.5% quarter-on-quarter in the second quarter.

The FTSE 100 fell 30.71 points, or 0.3%, to 10,606.00 as investors assessed stronger European inflation, lower oil prices and upgraded UK growth. The FTSE 250 rose 0.7% and the AIM All-Share gained 0.2%. Paris and Frankfurt declined after inflation readings in France and Italy, while Germany's annual rate was expected to reach 3.3% in September. JPMorgan analyst Mariana Monteiro raised her forecast for euro-area headline HICP inflation (harmonized consumer-price measure) to 3.9% from 3.6%. US stocks advanced after second-quarter GDP growth was revised to 2.2% and core PCE inflation (the Federal Reserve's preferred price gauge) came in below expectations. Markets reduced the probability of an October Federal Reserve rate increase, although TD Economics economist Ksenia Bushmeneva said another hike by year-end remained the most likely outcome pending Friday's employment report. UK GDP growth was revised to 0.5% in the second quarter. Saga surged 23% after reporting stronger-than-expected results, Greggs gained 8.2% despite a potential restructuring affecting 740 roles, and Tullow Oil plunged 47% after an arbitration ruling in Ghana went against the company.

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