London close: Stocks mixed after lacklustre UK GDP reading
By Josh White
Date: Thursday 16 Oct 2025
(Sharecast News) - London stocks ended Thursday's session mixed as investors weighed weak domestic growth data against a broadly steady performance from blue-chips.
The FTSE 100 inched up 0.12% to close at 9,436.09, supported by gains in defensive sectors, while the mid-cap FTSE 250 slipped 0.13% to 21,991.36 as underwhelming corporate updates weighed on sentiment.
"London stocks started Thursday flat following GDP data that met expectations, as investors treaded cautiously amidst ongoing inflation worries and mixed corporate updates," said Patrick Munnelly, market strategy partner at TickMill.
"However, optimism resurfaced by the session's end, nudging the benchmark index into modestly positive territory."
AJ Bell's Russ Mould noted that "the FTSE 100 was flat in early trading as strength in utilities and energy was offset by weakness in consumer cyclicals and healthcare," with defensive names once again providing stability.
Traders digested data showing that UK GDP growth remained subdued, reinforcing expectations that the Bank of England will proceed cautiously with further rate adjustments.
Munnelly added that "the UK economy recorded a slight 0.1% growth in July, aligning with analyst forecasts.
"While the minor uptick offers some breathing room for finance minister Rachel Reeves ahead of the November budget, it is unlikely to stave off the anticipated tax hikes investors are bracing for.
"The nation continues to grapple with sluggish economic momentum and the highest inflation rate among developed economies."
In currency markets, sterling was slightly firmer, with the pound rising 0.13% against the dollar to $1.3420 and gaining 0.08% against the euro to €1.1498, as investors looked ahead to further economic indicators due later this week.
UK economy grows modestly, trade balances weaken across Europe
The UK economy posted modest growth in August, supported by steady expansion in the services sector, though trade data highlighted continued external weakness.
According to the ONS, GDP grew 0.3% in the three months to August, matching forecasts and improving on July's 0.2% rise.
On a monthly basis, output increased 0.1% following a small fall in July, while year-on-year growth reached 1.3%.
Services output rose 0.4%, driven by business rental, leasing and healthcare activity, while construction gained 0.3%. Industrial production slipped 0.3%, a smaller fall than July's 1.4% drop.
Liz McKeown, ONS director of economic statistics, said: "Services growth held steady, while there was a smaller drag from production than previously," noting that weakness in wholesalers and consumer-facing services offset some of the gains.
Russ Mould said "Rachel Reeves might be reaching for a buck's fizz after the UK economy showed growth in August after contracting in July.
"However, the celebration may be short lived as a 0.1% expansion is minuscule and lower than the 0.2% growth expected by some economists."
"He added that "we're just six weeks away from the Chancellor's Budget and the nation is eager to know how Reeves plans to get the country moving while also repairing the black hole in public finances."
Analysts said the figures suggested the economy was performing slightly better than expected earlier in the year but remained fragile.
James Smith, developed markets economist at ING, cautioned that the data should be viewed carefully given "volatile monthly figures" but added that "the economy is performing a little better than expected a few months ago," prompting ING to lift its annual GDP forecast to 1.5%.
However, he warned that Chancellor Rachel Reeves faces "a £25bn hole in her budget," exacerbated by higher borrowing costs and policy U-turns ahead of November's fiscal statement.
Mould agreed that "a lot of people view the UK as being in a difficult spot - lacklustre growth and a weak financial position.
"The outlook is far from rosy and there is a big risk that tax tweaks could further dampen consumer and business sentiment."
The ONS also reported that the UK's total goods and services trade deficit widened by £1.7bn to £5.2bn in the three months to August as exports fell more sharply than imports.
Across Europe, trade balances also weakened, while in the United States, manufacturing activity in the Philadelphia region slumped, with the Philly Fed Index dropping to a six-month low.
Meanwhile, G7 leaders were urged to coordinate a united response to China's latest expansion of rare-earth export controls.
Whitbread slumps on guidance cut, Croda in the green
On London's equity markets, Whitbread shares slumped 10.27% on Thursday after the Premier Inn owner cut its full-year profit guidance for Germany and reported lower interim earnings.
Adjusted pre-tax profit for the 26 weeks to 28 August fell 7% year-on-year to £316m, while revenue declined 2% to £1.5bn.
The company said it now expected adjusted pre-tax profit in Germany of up to £5m, down from previous guidance of £5m to £10m, citing softer market conditions and fewer major events in the second quarter.
Russ Mould commented that "Whitbread shareholders will be wondering if Premier Inn's 'good night sleep or your money back' guarantee extends to investors, judging by yet another weak performance."
He said "earnings in reverse, higher net debt, and a downgrade to forward profit guidance is the kind of news that makes investors suffer from insomnia," and noted that "the fact Premier Inn is struggling to make decent progress in the UK suggests market conditions remain unfavourable for the hospitality industry."
Elsewhere, Travis Perkins dropped 3.12% despite reporting a return to underlying sales growth in its third quarter.
Mould observed that "slashing prices is always a gamble for companies. It typically means accepting a lower profit margin and risks causing a reset in the mind of the customer whereby they will expect cheaper goods forever."
He added that the strategy "looks as if the gamble is paying off. Lower prices have led to higher sales volumes in Travis Perkins' merchanting arm," helping the company stabilise operations before the arrival of its new CEO.
Workspace Group also traded lower, slipping 0.74% after reporting a 2.3% fall in like-for-like occupancy, while Coats Group and ITV lost 1.25% and 2.81% respectively after going ex-dividend.
Among the risers, Croda International jumped 8.54% after the speciality chemicals group reaffirmed its full-year guidance alongside stronger third-quarter sales.
Munnelly said "Croda International shone ... emerging as one of the standout performers on the FTSE 100.
"The speciality chemicals company posted impressive third-quarter sales of £425m, reflecting a 6.5% increase on a constant-currency basis.
"Despite ongoing challenges, Croda reaffirmed its full-year outlook for 2025, projecting adjusted pretax profits between £265m and £295m."
Centrica rose 2.97% after Barclays upgraded the stock to 'overweight' from 'equalweight'.
Mould added that "Centrica shares moved higher after a bullish broker note from Barclays which upgraded its rating on the stock from 'equal weight' to 'overweight'.
"The bank was also bullish on European utility EDPR, noting a stronger outlook for the sector driven by power and investment demand growth."
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 9,436.09 0.12%
FTSE 250 (MCX) 21,991.36 -0.13%
techMARK (TASX) 5,548.60 0.20%
FTSE 100 - Risers
Croda International (CRDA) 2,811.00p 8.54%
Centrica (CNA) 174.35p 2.97%
Coca-Cola HBC AG (CDI) (CCH) 3,442.00p 2.83%
Rolls-Royce Holdings (RR.) 1,126.00p 2.47%
Spirax Group (SPX) 6,715.00p 2.33%
Associated British Foods (ABF) 2,192.00p 2.17%
Entain (ENT) 835.00p 2.08%
Next (NXT) 12,915.00p 1.98%
easyJet (EZJ) 481.10p 1.87%
Ashtead Group (AHT) 5,310.00p 1.86%
FTSE 100 - Fallers
Whitbread (WTB) 2,899.00p -10.27%
Metlen Energy & Metals (MTLN) 42.25p -2.76%
Admiral Group (ADM) 3,204.00p -2.40%
Pershing Square Holdings Ltd NPV (PSH) 4,576.00p -2.27%
Phoenix Group Holdings (PHNX) 659.00p -2.15%
Rentokil Initial (RTO) 398.40p -1.82%
CRH (CDI) (CRH) 8,768.00p -1.72%
Mondi (MNDI) 826.20p -1.64%
Prudential (PRU) 1,007.50p -1.61%
Aviva (AV.) 660.40p -1.60%
FTSE 250 - Risers
Wizz Air Holdings (WIZZ) 1,091.00p 5.04%
Aston Martin Lagonda Global Holdings (AML) 62.95p 4.29%
Hochschild Mining (HOC) 433.20p 2.80%
Oxford Nanopore Technologies (ONT) 142.00p 2.45%
Energean (ENOG) 882.00p 2.38%
Primary Health Properties (PHP) 92.20p 2.25%
Victrex plc (VCT) 642.00p 2.05%
Close Brothers Group (CBG) 456.80p 1.92%
PPHE Hotel Group Ltd (PPH) 1,324.00p 1.81%
Taylor Wimpey (TW.) 105.05p 1.72%
FTSE 250 - Fallers
Anglo-Eastern Plantations (AEP) 1,340.00p -4.10%
Senior (SNR) 189.60p -3.28%
Travis Perkins (TPK) 642.00p -3.12%
ITV (ITV) 74.20p -2.81%
Trustpilot Group (TRST) 209.00p -2.79%
AO World (AO.) 95.70p -2.66%
Volution Group (FAN) 667.00p -2.55%
Me Group International (MEGP) 189.80p -2.32%
THG (THG) 43.42p -2.27%
PayPoint (PAY) 735.00p -2.12%
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