British shares ended the week higher, with the blue-chip FTSE 100 index up 0.57% at closing on Friday, as investors assessed a fresh batch of UK economic data.
S&P Global Market Intelligence data showed the flash UK Composite PMI Output Index rose to a four-month high of 52.5 in August from 52.2 in July, above the consensus of 51.6. The services PMI increased during the month, while the manufacturing index fell.
"The UK economy picked up a bit more pace in August, adding to signs that we should see solid economic growth of around 0.3% in the third quarter. The expansion is being helped by sunny weather and tech investment, though as expected we have seen some softening of growth in the manufacturing sector as precautionary stock building cools. This reflects easing concerns, for now, over the economic impact of the war in the Middle East. ... The data suggest the Bank of England looks likely to keep a hawkish bias but will stay cautious, holding off any rate hikes until the growth and inflation trajectories become clearer," S&P Global Market Intelligence Chief Business Economist Chris Williamson said.
UK consumer confidence also improved more than expected in August, with the GfK Consumer Confidence Index rising to -14 from -17 in July, beating the consensus of -18, according to market research company Growth from Knowledge.
"There is increased optimism looking ahead to the next 12 months for personal finances (up three points to 4) and more people also think now is a good time to make a major purchase (up five points to -7, the highest since December 2021). There is similar optimism on economic prospects over the next 12 months. While still deep in negative territory, this measure is up five points to -23, the best since August 2024, shortly after Keir Starmer took office," GfK Consumer Insights Director Neil Bellamy said.
Separately, data from the UK's Office for National Statistics showed that monthly retail sales declined 0.5% in July after a revised 0.7% growth in the previous month. Public sector net borrowing, excluding public sector banks, fell to 1.8 billion pounds in July from a revised 12.8 billion pounds earlier, the ONS said.
Looking ahead to next week, investors will focus on the next batch of UK economic data, including the CBI's distributive trades survey and Nationwide's August house price index, alongside July car production figures.
On the corporate front, Standard Life (SDLF.L) secured an investment commitment of up to 200 million pounds sterling from its shareholder MS&AD Insurance Group for a planned UK pension-risk transfer partnership with financial institutions and asset managers, including CVC Capital Partners, Prudential Financial, and Goldman Sachs Group. At closing, shares of the British life insurance group rose 1.04%.