By Reuters
UK shares fell to their lowest level in more than three weeks on Monday after data showed Britain’s economy unexpectedly shrank in April, adding to worries about a slowdown in growth ahead of a Bank of England policy meeting this week.
The blue-chip FTSE 100 index dipped 0.9% and the domestically-focussed mid-cap FTSE 250 index declined 1.3%, touching their lowest levels since May 19.
Gross domestic product (GDP) contracted by 0.3% from March, while over the three months to April, GDP was up by 0.2%, slowing sharply from growth of 0.8% in the three months to March, official data showed.
Economists polled by Reuters had on average forecast that the British economy would grow by 0.1% in April from March and by 0.4% in the February-April period.
The Bank of England (BoE) is expected to raise interest rates by 25 basis points to 1.25% as it battles red-hot inflation. If the BoE opts for a bigger hike, it will stoke recession fears.
Oil majors BP Plc and Shell Plc slipped 2% and 2.4% respectively, while industrial miners shed 1.5%, as commodity prices slid on concerns around demand due to a rise in China’s COVID-19 cases and sluggish global economic growth.