FTSE 100 opened the day at 8,270, briefly fell to an intraday low of 8,195, and was trading at 8,223 at the time of this report. While some recovery occurred, concerns about the UK economy persist, as GDP growth for July fell short of expectations. Experts from Capital Economics believe a mild slowdown in GDP is likely, though they anticipate the Bank of England will keep interest rates unchanged for now. Meanwhile, FTSE 100 company Rightmove has rejected a £5.6 billion bid from Rupert Murdoch’s REA, citing undervaluation and opportunism. This article examines these key developments in the UK market.

FTSE 100 Experiences Volatile Trading

Opening Levels and Intraday Performance
The FTSE 100 index opened at 8,270 but faced immediate downward pressure, hitting an intraday low of 8,195 before recovering to 8,223. The index's fluctuations reflect the mixed sentiment in the market amid concerns over UK economic data and global factors. Traders are cautiously monitoring the movements, as uncertainties in economic growth and future central bank policies contribute to market volatility.

Capital Economics Forecasts Mild GDP Slowdown

Outlook for UK Economic Growth
Capital Economics, a leading investment consultancy, anticipates a mild slowdown in the UK’s GDP growth rate to more normalized levels of 0.3% per quarter. They suggest that while a recession is not imminent, the UK economy is not in an expansionary phase either. The consultancy's analysts noted: “We are maintaining our forecast that the Bank of England will keep interest rates unchanged in September, with a potential cut in rates by November as growth slows.”

GDP Misses Forecast in July

Flat Growth Shakes Confidence
The UK economy registered no growth in July, according to official data, with GDP remaining flat for the second consecutive month. This performance fell short of economists’ expectations, which had forecast a modest increase of 0.2%. The 0.5% growth reported over the three months leading to July also slightly underperformed relative to market forecasts.

Deutsche Bank expressed concern over the results, stating: “The downside risks are building for Q3 GDP growth, particularly in light of the weaker-than-expected July data.” The bank had previously projected a quarterly growth rate of 0.4%.

Rightmove Rejects £5.6 Billion Bid from REA

“Wholly Opportunistic” Offer from Murdoch’s News Corp
The board of FTSE 100 property platform Rightmove unanimously rejected a £5.6 billion takeover bid from Rupert Murdoch’s REA, an Australian subsidiary controlled by News Corp. The board argued that the bid undervalued Rightmove’s long-term growth prospects and was opportunistic, considering the current economic environment.

The rejection highlights Rightmove’s confidence in its future trajectory, despite global economic uncertainties, as it remains focused on independent growth and delivering value to shareholders.