London midday: FTSE falls as GDP misses forecasts,Trump announces Canada tariffs

London stocks had fallen into the red by midday on Friday as the latest UK GDP missed expectations and as Donald Trump ramped up his trade war rhetoric, announcing new tariffs on Canadian goods.

The FTSE 100 was down 0.6% at 8,925.51, having hit record highs on Thursday.

In a letter sent to Canadian Prime Minister Mark Carney and published on his Truth Social account, Trump said he will impose a 35% tariff on Canadian goods from 1 August.

Trump also told CNBC that he plans to impose higher blanket tariffs on most international trade partners. "We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%. We’ll work that out now," he said.

On home shores, figures from the Office for National Statistics showed the economy unexpectedly shrank in May, for the second month in a row, weighed down by faltering performances in manufacturing and construction.

The economy shrank 0.1% on the month following a 0.3% contraction in April. Economists were expecting 0.1% growth.

Monthly services grew by 0.1%, following a 0.3% fall in the preceding month.

But production slid 0.9%, compounding the previous month’s 0.6% decline, while construction all but reversed April’s 0.8% growth, down 0.6%.

In the three months to May, however, real GDP was estimated to have grown 0.5% overall. That was supported by a rise of 0.4% in March, and strength in the service sector.

Liz McKeown, director of economic statistics at the ONS, said: "May’s fall in production was driven by oil and gas extraction, car manufacturing and the often-erratic pharmaceutical industry."

Dan Coatsworth, investment analyst at AJ Bell, said: "The UK economy being stuck in the mud and the threat of high tariffs on Canada won’t be a shock to markets, but they are hard to ignore.

"After a strong start to the week, investors ran out of energy on Friday. European indices were in the red and futures prices imply Wall Street will follow the same path when it opens for trading.

"Whether this is investors being reminded of headwinds or simply pausing for breath, it’s clear that uncertainty will prevail well into the summer.

"The corporate reporting season begins in earnest next week with the big US banks. That will shift the focus to profits and outlook statements, giving valuable insight into how the business world is coping with a multitude of pressures. Any corporate optimism is likely to prompt a tickertape parade on the markets as investors look for confirmation that tariff uncertainty hasn’t caused widespread damage to earnings."

Investors were also mulling the latest BRC-Sensormatic footfall monitor data, which showed that retail footfall eased across UK high streets in June as extreme heat and heavy downpours put off shoppers.

Corporate news was thin on the ground but BP gained even as it said that second-quarter earnings would be hit by weaker oil and gas prices, despite a rise in reported upstream production compared to the previous three months.

Flutter Entertainment ticked higher after it bought Boyd Gaming’s remaining 5% stake in US sports betting firm FanDuel for just under $1.8bn, taking full ownership.

SSP was under the cosh after a downgrade to ‘sell’ from ‘neutral’ at UBS. The bank said that mid-term consensus screens as stretched in light of upcoming headwinds.

Warehouse Reit was in focus after Blackstone Europe took a step closer to securing the property group, which backed an improved £489m takeover bid.

Market Movers

FTSE 100 (UKX) 8,925.51 -0.56%
FTSE 250 (MCX) 21,605.15 -0.41%
techMARK (TASX) 5,144.95 -0.50%

FTSE 100 - Risers

Fresnillo (FRES) 1,501.00p 2.46%
BP (BP.) 397.05p 2.14%
British American Tobacco (BATS) 3,746.00p 1.05%
Aviva (AV.) 622.40p 0.97%
Admiral Group (ADM) 3,266.00p 0.86%
Hiscox Limited (DI) (HSX) 1,236.00p 0.73%
Phoenix Group Holdings (PHNX) 641.00p 0.63%
Entain (ENT) 945.80p 0.57%
United Utilities Group (UU.) 1,100.00p 0.55%
Flutter Entertainment (DI) (FLTR) 21,420.00p 0.47%

FTSE 100 - Fallers

WPP (WPP) 418.90p -3.35%
Ashtead Group (AHT) 4,787.00p -2.70%
JD Sports Fashion (JD.) 88.20p -2.67%
Spirax Group (SPX) 6,195.00p -2.21%
Smith & Nephew (SN.) 1,130.00p -2.21%
Smurfit Westrock (DI) (SWR) 3,467.00p -2.03%
NATWEST GROUP (NWG) 490.30p -1.94%
Whitbread (WTB) 3,024.00p -1.88%
Weir Group (WEIR) 2,578.00p -1.75%
GSK (GSK) 1,429.50p -1.72%

FTSE 250 - Risers

Hochschild Mining (HOC) 277.00p 2.21%
Zigup (ZIG) 336.00p 2.13%
Vietnam Enterprise Investments (DI) (VEIL) 659.00p 1.85%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 450.00p 1.58%
Jupiter Fund Management (JUP) 121.60p 1.33%
Endeavour Mining (EDV) 2,248.00p 1.26%
International Workplace Group (IWG) 217.00p 1.21%
Schroder Oriental Income Fund Ltd. (SOI) 298.50p 1.19%
HICL Infrastructure (HICL) 119.80p 1.18%
Playtech (PTEC) 377.50p 1.07%

FTSE 250 - Fallers

SSP Group (SSPG) 172.30p -8.35%
Morgan Advanced Materials (MGAM) 225.50p -2.38%
Close Brothers Group (CBG) 396.80p -2.12%
Target Healthcare Reit Ltd (THRL) 98.20p -2.00%
Energean (ENOG) 908.50p -2.00%
Ibstock (IBST) 150.00p -1.96%
Marshalls (MSLH) 258.50p -1.90%
Moonpig Group (MOON) 212.50p -1.85%
Keller Group (KLR) 1,382.00p -1.85%
Lion Finance Group (BGEO) 6,970.00p -1.83%