UK economy back to growth; comment on FSA listing rules

UK economy back to growth, but BoE may keep rates on hold

Sam North, analyst at investment platform eToro, says: ”UK GDP grew by 0.4% month-on-month, double expectations and recovering from a stagnant 0% in April.

“This is the first GDP print under the new Labour government in the UK, albeit it is backward-looking. The next GDP release will be particularly interesting as it will be the first proper release under the new administration.

“Additionally, England reaching the Euro 2024 final could have a positive impact on economic sentiment and consumer spending. This set of robust data has led to a modestly hawkish reaction in the financial markets, with a slight uptick in GBP/USD and a dip in bond futures.

“The market’s reaction suggests that the data may influence the BoE to maintain or tighten monetary policy, especially given ongoing concerns about services inflation and wage pressures. However, the extent of this adjustment is expected to be limited as market participants await upcoming key economic indicators, including the CPI, wage data, and retail sales figures.”

Comment on FCA’s new stock listing rules – eToro

Dan Moczulski, Managing Director UK, eToro comments: “Any policy change that can incentivise or encourage more firms to list in the UK should be welcomed with open arms. There is a lot of talk about growth from our new government right now. To deliver it, we need a thriving capital market. This requires an environment where companies see the UK as an attractive place to list, and where investors want to invest. 

“The virtuous cycle is clear: more companies listing in the UK attracts more investors, both domestic and global, boosts share prices, and generates more wealth, which in turn encourages even more companies to list. This is arguably the holy grail for our economy in terms of growth. While Jeremy Hunt set his sights on this goal, it’s now up to Rachel Reeves to make it a reality. Hopefully these new rules can help generate momentum for further policy initiatives, laying the foundation for a more dynamic and prosperous UK capital market.”