UK Stocks Rise On GDP Growth, Oil Price Decline

(RTTNews) - Despite lingering concerns about U.S.-Iran conflict, U.K. stocks advanced on Friday, buoyed by sharply lower oil prices and strong UK GDP growth report.

Data from the Office for National Statistics showed the UK economy expanded unexpectedly in July driven by artificial intelligence and cloud computing gains in the services sector.

Oil prices tumbled after International Energy Agency (IEA) revised downward its global oil demand forecast for the year. The IEA now expects world oil demand to drop by 2.5 million barrels per day this year, as against its previous forecast of a 1.6 million bpd decline. The agency expects oil supply to decline by 5.7 million bpd this year.

Brent crude futures slid to $103.85 a barrel and were down by about 3.5% at $104.10 a barrel a little while ago.

The benchmark FTSE 100 was up 65.60 points or 0.61% at 10,674.52 about a quarter past noon.

Bank stocks moved higher. Natwest Group, Barclays, HSBC Holdings and Lloyds Banking Group moved up 1.3%-2%.

Games Workshop moved up more than 2.5%. Investec, Hiscox, BT Group, Rolls-Royce Holdings, Howden Joinery Group, Computacenter, Informa, Pershing Square Holdings, Aviva, AutoTrader Group, Severn Trent and United Utilities gained 1.2%-2%.

Trainline climbed 2.5%. The British rail ticketing platform announced a £100 million share repurchase program over 12 months.

The Sage Group, LSEG, Compass Group, JD Sports Fashion, Endeavour Mining, BP, Anglo American Plc and Rio Tinto drifted lower.

Data from the government showed UK's GDP grew 0.4% in July, following an increase of 0.3% in June and no growth in May. GDP was expected to remain flat in July.

The dominant service sector expanded 0.4% and construction output grew 0.1% in July. Industrial production moved up unexpectedly by 0.2%, offsetting June's 0.2% decrease. Economists had forecast output to shrink 0.2%.

On a yearly basis, GDP climbed 1.6% in July compared to forecast of 1.2%.

In the three months to July, GDP gained 0.4%, the same pace of expansion as seen in the three months to June. The economy was expected to grow 0.3%.

A separate ONS report showed that the visible trade deficit narrowed to GBP 20.96 billion in July from GBP 23.0 billion in June. At the same time, the surplus on services trade remained broadly unchanged at GBP 17.5 billion.

As a result, the total trade deficit declined to GBP 3.45 billion from GBP 5.54 billion in the previous month.