London pre-open: Stocks seen muted as investors mull GDP
London stocks were set for a muted open on Wednesday as investors mull the latest UK GDP reading.
The FTSE 100 was called to open unchanged at 7,130.
Figures released earlier by the Office for National Statistics showed that the economy grew 0.4% in August following a 0.1% contraction in July. This was a little weaker than consensus expectations for a 0.5% increase and leaves GDP 0.8% below its pre-pandemic level in February 2020.
The service sector grew by 0.3% in August, while manufacturing was 0.5% higher.
Paul Dales, chief UK economist at Capital Economics, said: "The improvement in August probably had a lot to do with the fading of the restraint from July’s ‘pingdemic’, which at one point meant more than 1m people were self-isolating."
In corporate news, house builder Barratt said strong demand for its homes had continued into the current fiscal year despite a reduction in government incentives, adding it was on track to deliver full-year medium targets.
In a trading update covering July 1 - October 10, Barratt said net weekly private reservations averaged 281 down 2.3% year on year, but up 18.1% against a pre-pandemic comparative.
"We have been particularly pleased with the strength of our private reservation rate given the significantly reduced Help to Buy support. In the year to date 21% of our private reservations are using Help to Buy," Barratt said, compared with 51% last fiscal year and 45% two years ago.
Barratt added that it had not experienced any disruption to its building programme as a result of the supply chain crisis currently gripping the UK.