London’s FTSE indices opened flat on Thursday, with investors pausing after a three-day rally as they digested fresh UK GDP data. Across the Atlantic, US markets signalled a lower open, with futures pressured by stronger-than-expected inflation figures that could complicate the Federal Reserve’s interest rate outlook.
London trading opens flat amid GDP data
The FTSE 100 index slipped 0.06% in early trade, while the more domestically focused FTSE 250 edged down 0.1%. Investor sentiment was cautious following the release of the latest GDP figures, which showed the UK economy slowing less than anticipated. The data strengthened expectations that the Bank of England will keep interest rates steady for the remainder of 2025.
Defence and aerospace shares led gains, with the sector up over 2% in early dealings, while energy stocks fell 1.3% and miners lost around 1% amid weaker commodity prices. Centrica rose 2.5% after announcing, alongside Energy Capital Partners, the acquisition of National Grid’s liquefied natural gas terminal for about £1.5 billion.
US futures under pressure after hot inflation reading
In the US, futures pointed to a cautious start to trading. Contracts tied to the Dow Jones Industrial Average and the S&P 500 both slipped around 0.4–0.5%, while Nasdaq 100 futures saw a similar decline. The weakness followed the release of the Producer Price Index, which came in higher than expected, signalling persistent inflationary pressures.
The data dampened optimism that the Fed might move swiftly towards interest rate cuts, despite growing market speculation about a potential reduction in September. Traders are also awaiting weekly jobless claims for further clues on the health of the labour market.
In pre-market trading, Coherent plunged nearly 20% after weak guidance, while Tapestry dropped more than 8%. On the upside, Equinox Gold rose 4.6% and QXO gained 3.4%, offering some support to sentiment.
Cautious outlook ahead
Both London and US markets appear set for a measured session, with inflation data in focus and central bank policy paths under scrutiny. In the UK, the combination of steady economic growth and sector-specific volatility is shaping trading patterns, while in the US, the prospect of prolonged elevated interest rates is weighing on risk appetite.
Market participants will be watching upcoming data releases closely, particularly in the US, where signs of cooling inflation or a softening jobs market could reignite expectations for a rate cut later in the year. Until then, analysts expect trading to remain range-bound, with sector moves driven by commodity price fluctuations and company-specific developments.
REFH – Newshub, 14 August 2025
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