FTSE 100 LIVE: Stocks slip as UK economy grows just 0.1% and trade deficit widens

The FTSE 100 (^FTSE) and European stocks were lower on Thursday as traders digested the latest gross domestic product (GDP) figures which showed that the UK economy expanded by 0.1% in August.

Although it comes as welcome news for chancellor Rachel Reeves, Britain is now thought to have shrunk by 0.1% in July, revised down from the initial estimate of no growth.

The Office for National Statistics (ONS) also reported that GDP grew by 0.3% in the three months to August 2025 compared with the three months to May 2025, a slight increase following growth of 0.2% in the three months to July 2025.

Production grew by 0.4% during the month, while services showed no growth in August, and construction fell by 0.3%.

The pound (GBPUSD=X) rose against the dollar on the back of the news, rising from the two-month low hit earlier this week. However, the US greenback remains weak after US president Donald Trump said the US was locked in a trade war with China.

Separate data this morning also revealed that the UK's trade deficit has widened, partly due to a drop in exports to the European Union and the US. Britain's trade deficit widened to £3.4bn in August from £3bn in July.

This came in better than consensus forecasts, which was for a £4.8bn deficit.

Excluding precious metals, the trade deficit widened to £2.5bn, from £1.6bn, better than the £3.1bn forecast. Underlying trade, which excludes erratic factors and precious metals, widened sharply to £1.7bn from £0.4bn.

New trade data shows that UK exports to the US fell by £700m in August, due to “falls in exports of machinery and transport equipment, chemicals and material manufactures.”

Shipments to Europe also fell, with UK exports to the EU decreasing by £800m in August 2025, due to a £500m fall in exports of machinery and transport equipment, and a £200m fall in chemical exports.

London’s benchmark index (^FTSE) was 0.2% lower in early trade Germany's DAX (^GDAXI) dipped 0.4% and the CAC (^FCHI) in Paris headed 0.2% into the red The pan-European STOXX 600 (^STOXX) was hovering over the flatline Wall Street is set for a positive start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the green. The pound was 0.2% up against the US dollar (GBPUSD=X) at 1.3418

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9 mins ago

LaToya Harding

UK economy grew 0.1% in August

The UK economy expanded by 0.1% in August, in line with market expectations, providing chancellor Rachel Reeves with a modest boost as she prepares for a challenging November budget.

The monthly GDP data, released by the Office for National Statistics (ONS), mirrored the forecast from economists polled by Reuters. It also marked a slight improvement over July, when the economy contracted by 0.1%, a figure that was revised down from an initial reading of zero growth.

Looking at a broader time frame, the economy grew 0.3% in the three months to August compared to the previous quarter, a rate that remained unchanged from the growth recorded in the second quarter of the year.

ONS director of economic statistics Liz McKeown said:

Production grew by 0.4% in the month, whereas services showed no growth and construction fell by 0.3% in August.

This data comes at a critical moment for Reeves, who is facing the dual challenge of repairing the public finances while fostering economic growth ahead of her budget announcement on November 26. The chancellor is expected to implement tax increases to address a significant fiscal shortfall, estimated by economists to be between £20bn and £30bn. 31 mins ago

LaToya Harding

Asia and US overnight

Stocks in Asia were mixed overnight, with the Nikkei (^N225) rose 1.3% on the day in Japan, while the Hang Seng (^HSI) fell 0.2% in Hong Kong.

The Shanghai Composite (000001.SS) was 0.1% up by the end of the session and in South Korea, the Kospi (^KS11) added 2.5% on the day, hitting a record high, after the International Monetary Foundation (IMF) raised its 2025 growth forecast for the country.

Elsewhere, Australian shares rose to a new record after the country’s seasonally adjusted unemployment rate jumped to a near four-year high in September at 4.5%. That compares with the 4.3% estimated by Reuters-polled economists and the 4.2% rate in August.

Meanwhile, employment rose by 14,900 in September, missing expectations for a 20,000 rise. The weak jobs reading paves the way for further interest rate cuts.

Across the pond on Wall Street, the S&P 500 (^GSPC) rose 0.4%, after gaining as much as 1.2% intraday, and the tech-heavy Nasdaq (^IXIC) was 0.7% higher. The Dow Jones (^DJI) was marginally lower by the close, down 0.04%.

It came after major banks reported earnings beat, but as Washington’s government shutdown entered its third week, and escalating trade tensions with China continued. 53 mins ago

LaToya Harding

Coming up

Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what's moving markets and all that's happening across the global economy.

To the day ahead now, we’ll get UK August monthly GDP, Italy’s August trade balance, Eurozone August trade balance, Canada September existing home sales, housing starts.

Central bank speakers include the Fed’s Waller, Barr, Bowman and Miran, and the ECB’s Lagarde, Kocher, Wunsch and Lane. Notable earnings for today include Charles Schwab and Interactive Brokers.

Here's a snapshot of what's on the agenda:

7am: Trading updates: Whitbread, Robert Walters, Page Group, Croda, GB Group, Sabre and Canal+, Travis Perkins, Videndum, XPS Pensions Group 7am: UK GDP report for August 7am: UK trade report for August 10am: Eurozone trade data for August 1pm: IMF Seminar: Debate on the Global Economy: “Shaping Economic Policies Amid a Shifting Global Landscape”

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