Stagnant UK Economy Casts Shadow Over Midcap Stocks
The UK's FTSE 250 index declined as economic data indicated zero growth in Q3, highlighting a broader slowdown. The FTSE 100 remained flat, with economic prospects for 2025 under review. Business confidence hit a low, while Direct Line shares rose after a merger announcement with Aviva.
The UK's midcap FTSE 250 index experienced a decline on Monday, reflecting concerns as fresh economic data revealed the British economy stagnated in the third quarter.
The FTSE 250 fell by 0.3% as of 0920 GMT, while the FTSE 100 saw minor fluctuations, slipping 0.04% after a difficult previous week. The Office for National Statistics revised the UK's GDP growth estimate from 0.1% to 0.0% for the July-September quarter.
While this data stands as a crucial year-end indicator, investors are cautiously evaluating growth prospects for 2025. Moreover, a Lloyds Bank survey showed a dip in business confidence to its lowest point of 2024 in December. In corporate news, Direct Line's shares increased 2.8% following news of a takeover by Aviva in a substantial £3.7 billion deal, but Petrofac shares plummeted 24.5% after announcing a significant restructuring agreement.
(With inputs from agencies.)
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