The FTSE 100 experienced a positive session on Thursday, buoyed by unexpected growth in the UK economy and robust trading updates from major companies. The index closed up 30.41 points, or 0.3%, finishing the day at 10,589.99. The FTSE 250 followed suit, gaining 113.91 points, a 0.5% increase to close at 22,779.50, while the AIM All-Share rose by 1.84 points, or 0.2%, to 797.86.
Strong UK Economic Data
In a surprising turn of events, UK economic growth accelerated in February, defying expectations with a monthly GDP increase of 0.5%. This follows a revised growth figure of 0.1% for January, previously reported as stagnant. Analysts had anticipated only a 0.1% uptick. Sanjay Raja, Deutsche Bank’s chief UK economist, stated that the robust figure indicates the UK entered the current energy crisis with better momentum than initially thought. However, he cautioned that this upward trend may not be sustainable.
“Households are likely beginning to feel the impact of rising energy costs from the Iran crisis, which will affect disposable incomes and discretionary spending,” Raja noted. He highlighted that pump prices have surged over 20% since the onset of the oil shock and warned of similarly steep increases in dual fuel bills during the summer months. As a result, he expects growth to slow down significantly in the second quarter of 2026 and beyond.
Market Responses and Corporate Highlights
The positive economic news coincided with comments from Bank of England Governor Andrew Bailey, who indicated that the central bank would not hastily increase interest rates in response to the energy crisis. Addressing the situation at the International Monetary Fund’s spring meeting in Washington, Bailey remarked, “There are many uncertainties surrounding this issue. We are not going to rush to judgments.”
In European markets, the Cac 40 in Paris closed flat, while the Dax 40 in Frankfurt gained 0.4%. Across the Atlantic, US markets also saw gains, with the Dow Jones increasing by 0.1%, the S&P 500 rising 0.3%, and the Nasdaq Composite advancing 0.4%. The S&P and Nasdaq reached new record highs, partially driven by optimistic sentiments surrounding potential resolutions to the US-Iran negotiations.
Despite these gains, oil prices resumed their upward trajectory, with Brent crude trading at $98.39 per barrel by Thursday afternoon, up from $95.40 the previous day. US Defence Secretary Pete Hegseth stated that the blockade on Iranian ports would persist until an agreement is reached, which has added to market uncertainty.
Notable Performers on the FTSE
Several companies on the FTSE 100 made headlines with their impressive performances. Intertek surged 9.0% after rejecting a £5,150 per share bid from EQT Fund Management, asserting that the offer undervalued the company. The stock has seen a remarkable increase of over 25% in the past week following Intertek’s announcement of a strategic review and the potential sale of its Energy & Infrastructure business.
Ladbrokes owner Entain also performed well, up 6.0%, as it confirmed its annual guidance, citing strong momentum in its UK & Ireland and Australian segments. Tesco reported a 4.7% increase in its shares after surpassing profit expectations, with its pre-tax profit for the year ending February 28 rising to £2.4 billion, up from £2.22 billion the previous year.
Conversely, budget airline easyJet faced challenges, with its shares dropping 5.0% after projecting a larger-than-expected loss due to escalating fuel costs.
Looking Ahead
As the markets prepare for Friday’s economic calendar, which includes eurozone trade figures and a trading statement from discoverIE Group, investors will be closely monitoring ongoing developments in energy prices and geopolitical tensions.
Why it Matters
The current landscape reveals a fragile balance between recovery and rising costs for UK households. The latest GDP figures provide a glimmer of hope, but the impending energy crisis poses significant risks to consumer spending and overall economic growth. As companies navigate these challenges, their performance will be crucial in determining market stability in the coming months. The resilience shown by major players like Tesco and Intertek highlights the potential for growth amidst adversity, but the spectre of rising energy prices looms large, underscoring the need for ongoing vigilance in both economic policy and corporate strategy.
