UK stocks fell on Thursday after Labour minister Stephen Kinnock conceded that the British economy is in a state of “stagnation”, following disappointing growth figures.
The FTSE 100 and FTSE 250 each slipped 0.2%, after data from the Office for National Statistics (ONS) showed that GDP grew by just 0.1% in August, following a 0.1% contraction in July. The figures reinforced concerns that the UK economy is struggling to gain momentum amid weak demand and rising business costs.
Whitbread shares tumbled as much as 9.7% after the Premier Inn and Beefeater owner reported a 7% decline in half-year profits, blaming lower food and beverage sales.
Across Europe, markets were also subdued. The CAC 40 in Paris slipped 0.1%, while Germany’s DAX fell 0.2%.
In corporate news, Nestlé surged 7.6% after reporting better-than-expected sales growth, with its new chief executive announcing 16,000 job cuts as part of a global restructuring plan. Meanwhile, French spirits group Pernod Ricard dipped 0.8% after confirming a 7.6% fall in first-quarter sales, driven by weak consumer demand and destocking in China and the US.
Minister Admits UK Stagnation ‘Will Take a While to Overcome’
Care minister Stephen Kinnock has admitted that Britain’s economic stagnation “is going to take a while to overcome”, following new data showing the UK economy grew by just 0.1% in August.
Speaking to Sky News, Mr Kinnock said:
“The global economy is facing serious headwinds. We are coming through a period of 14 years of Conservative neglect and incompetence. Stagnation is going to take a while to overcome.”
However, he highlighted signs of improvement, noting that the UK recorded the highest growth in the G7 during the first half of this year, adding that there were “some green shoots of recovery”.
Mr Kinnock also stressed that the Government remains focused on addressing the challenges ahead:
“We are by no means complacent. We know that we’re facing some serious challenges, but we’re beginning to get on top of the situation and rebuild.”
His comments follow Office for National Statistics (ONS) figures released on Thursday showing the UK economy barely expanded in August after a 0.1% contraction in July, reinforcing concerns that growth remains sluggish despite signs of resilience in some sectors.
