Title: European Stocks Edge Higher; U.K. GDP Falls By Less Than Expected
Aug 12, 2022 03:54AM ET
European stock markets rose on Friday in cautious trading after the UK economy contracted in the second quarter.
As of 04:00 GMT, Germany's DAX was trading 0.7% higher, France's CAC 40 was up 0.6%, and Britain's FTSE 100 was trading 0.5% higher.
The UK economy contracted in the three months to June for the first time in five years, with gross domestic product falling by 0.1%, slightly better than the 0.2% expected but a sharp fall from the 0.8% growth recorded in the previous quarter.
The economy has now grown for five quarters in a row since the second wave of the COVID-19 pandemic, but the Bank of England forecasted last week that it will enter a long recession later this year as global inflation puts severe pressure on discretionary spending.
For most of this week, global equities traded on a positive note, helped by U.S. inflation indicating easing pressures, which raised expectations that the Federal Reserve would raise interest rates by a less aggressive 50 basis points in September instead of the 75 basis points as expected earlier in the week.
That optimism has been tempered, however, as Fed officials have since come out with a firm stance that monetary policy needs to be tightened until inflationary pressures have fully abated.
Inflation data from France and Spain offered different pictures, with the French CPI rising 0.3% m-o-m in July, while the Spanish CPI fell by the same amount.
Later in the session, euro area industrial production data for June is expected to show a slowdown in growth.
In corporate news, Flutter shares rose 7.7 after the world's largest online betting firm said it expects a turnaround in the second half of the year after reporting a 20% drop in first-half revenue.
Roche shares rose 1.1 percent after the Swiss drugmaker announced that its Xofluza drug had been approved by the US Food and Drug Administration to treat flu in children.