London’s blue-chip index pushed steadily higher through Friday’s session, rising 87 points to 10,695 after starting the day just 6 points above Thursday’s close.
The FTSE 100 ended a five-day losing streak, supported by easing oil prices and stronger-than-expected UK economic growth data released earlier in the morning.
UK gross domestic product rose 0.4% in July, following a 0.3% rise in June and comfortably beating City forecasts for a flat reading.
Services output increased 0.4%, led by administrative and support services, information and communication, while wholesale and retail trade provided the largest drag on overall growth.
The reading provides a boost for Chancellor John Healey ahead of the 28 October Budget, though rising oil prices and government borrowing costs continue to cloud the economic outlook.
US consumer prices rose 0.4% in the latest month, after rising just 0.1% in July, with annual inflation reaching 3.4%, matching market forecasts and prompting a broadly positive reaction across global markets.
Wall Street opened higher following the CPI release, with the Dow Jones rising 140.4 points or 0.27% to 52,204.46, the S&P 500 gaining 0.59% to 7,636.75, and the Nasdaq Composite climbing 0.80% to 26,289.414.
Treasury bonds rallied after the inflation data, with the two-year yield retreating to 4.594% after earlier rising 8.8 basis points, while the 10-year yield fell to 4.92% after briefly hitting 4.98%, its highest level in three years.
Gold spot rose 0.65% to $4,394.26 an ounce, while Brent crude fell 2.81% to $104.61 a barrel, retreating from Thursday’s surge as hopes of a temporary deal to ease shipping through the Strait of Hormuz eased supply concerns.
Brent crude had reached a four-month high of $109.97 in the previous session but remained on course for a weekly gain of around 10% despite Friday’s pullback.
The International Energy Agency expects global oil supply and demand to fall more sharply than previously forecast, as stalled efforts to end the Iran war delay the return of normal Middle East oil flows into 2027.
National Grid PLC (LSE:NG.) shares rose 8.5p to 1,137p despite a warning from the National Audit Office that Britain’s electricity grid faces delays to vital upgrades that could push up costs for consumers.
Ofgem estimates £70 billion is needed to improve the transmission network between 2025 and 2031, with 64 of the 88 projects deemed necessary by 2030 remaining at an early stage and not expected to meet their deadlines.
Shell PLC (LSE:SHEL, NYSE:SHEL) shares edged up 2.5p or 0.07% to 3,535.5p, while Berkeley Group Holdings PLC (LSE:BKG) called for urgent changes to stamp duty, arguing the tax has become a major obstacle for housebuilders and potential buyers.
Berkeley Group said the tax has contributed to weaker demand for new homes by making purchases less affordable for first-time buyers and discouraging existing homeowners from moving, with shares broadly flat at 3,296p.
Among smaller stocks, C&C Group topped the small-cap risers, climbing 9% to 97p after agreeing to acquire Asahi UK’s wholesale businesses at nominal cost.
Panmure Liberum downgraded Dunelm Group PLC (LSE:DNLM) to sell with a target cut to 590p from 820p, while JP Morgan initiated IWG PLC (LSE:IWG) at overweight with a 260p December 2027 target implying 46% upside.
Jefferies upgraded both Renishaw PLC (LSE:RSW) and XP Power Ltd (LSE:XPP) to buy, betting on a stronger semiconductor cycle, while also lifting Halma PLC (LSE:HLMA) to hold.
Sterling held around $1.352, little changed on the session, after the stronger-than-expected GDP figures gave the pound modest underlying support against the dollar.
On Wall Street Thursday, the Dow Jones had fallen 317 points to 52,064, while the S&P 500 lost 0.6% and the Nasdaq declined 0.7%, as hotter producer-price inflation and rising Treasury yields unsettled investors ahead of the CPI release.