FTSE 100 rises despite more predictions of faltering UK growth
London’s blue-chip index made gains as economists pared back forecasts for the UK amid Donald Trump’s tariffs.
The FTSE 100 rose on Monday, clawing back some of the losses of recent weeks in spite of gloomy predictions for the UK economy.
London’s blue-chip index rose 28 points to finish the day at 8,680, a 0.6% rise.
The gains came despite economists paring back estimates for UK growth, as Donald Trump’s mounting trade war is set to drag on countries around the world including the US.
The Organisation for Economic Co-operation and Development (OECD) cut its predictions for UK growth to 1.2% in 2026, down from 1.3% in its previous predictions.
But the US is also in line for economic woes from Mr Trump’s trade policies, with the OECD trimming its growth forecast to 1.6% in 2026 down from the 2.1% previously pencilled in.
The OECD said in its interim economic outlook report that “consumers face much of the burden of higher tariffs” as it cautioned over a “significant” impact on living standards.
Germany’s Dax index rose 0.6% and France’s Cac 40 gained 0.5%.
Stateside, the S&P 500 was up 0.2% and the Dow Jones had risen 0.5% as UK markets closed.
Sterling was up 0.4% against the dollar at 1.2990, while it was 0.1% up against the euro at 1.1892.
In company news, defence firm Qinetiq told shareholders on Monday morning that its UK intelligence business and US arm have been knocked by contract delays this year.
The Farnborough-based company added that it is launching a restructuring of its US business to help drive growth.
It said its underlying profit guidance for this year will face a hit of up to £30 million due to its struggles in the US.
Shares plunged 19% on Monday.
Meanwhile, building materials firm Marshalls revealed a slump in sales last year after weaker demand for landscaping.
Bosses said they expect a market recovery later in 2025 as they cheered UK Government plans to increase housebuilding.
The firm also revealed stronger profits as it was boosted by cost-efficiency efforts over the past year.
Shares fell 2.7% after bosses pointed to a “challenging” construction market in the UK.
The biggest risers on the FTSE 100 were Phoenix Group, up 56p to 580p, JD Sports, up 1.94p to 74.54p, Entain, up 16p to 653.8p, M&G, up 5.3p to 221.4p, and Fresnillo, up 21.5p to 938p.
The biggest fallers on the FTSE 100 were Tesco, down 15p to 324.2p, Marks & Spencer, down 13.7p to 320.7p, Games Workshop, down 240p to 14660p, BAE Systems, down 20.5p to 1636.5p, and Melrose Industries, down 6.4p to 521.6p.