On Friday, the UK’s FTSE 100 experienced a slight dip, declining by 0.2% by 0716 GMT. This drop followed five consecutive days of gains, setting the stage for a solid weekly performance. Despite the minor setback, the FTSE 100 was poised for its most substantial weekly increase since early May, driven by a renewed global risk appetite. Earlier in August, concerns over a potential slowdown in the United States had triggered a sharp decline in stocks, but this week’s recovery has helped alleviate those fears.
The release of U.S. retail sales data on Thursday contributed to easing recession concerns in the world’s largest economy, allowing the UK’s benchmark index to regain levels last seen before a significant selloff on August 2, following disappointing U.S. payrolls data. Alongside the FTSE 100, the domestically-focused FTSE 250 also saw a slight decline of 0.2%.
Most sectors in the market were in the red, with homebuilders like Persimmon leading the declines. However, the travel and leisure sector provided some optimism, bucking the overall negative trend. Meanwhile, British retail sales increased by 0.5% in July, matching expectations, after a weak performance in June had negatively impacted economic growth.
The pressure on British consumers from high inflation over the past two years is starting to ease. This improvement is partly due to the Bank of England’s recent decision to cut interest rates for the first time from their 16-year peak. While the 0.5% rise in retail sales at the beginning of the third quarter is encouraging, economist Alex Kerr of Capital Economics cautioned that it might not be as positive as it seems. Nevertheless, with inflation continuing to fall, rising real incomes are expected to boost consumer spending growth for the remainder of the year.
In corporate news, Entain saw a 1% increase in its share price after Goldman Sachs upgraded the gambling company’s stock from “sell” to “neutral.”
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