London's FTSE 100 closed 0.11% higher on Thursday, despite fresh data showing Britain's private sector slipped into contraction territory in May for the first time in over a year.
"The belated drop in the UK PMIs in May [signals] an abrupt end to the economy's reported outperformance in April. The slump in the composite PMI from 52.6 in March to 48.5 in April was a major negative surprise (Bloomberg consensus 51.6). If sustained, it would point to [gross domestic product] growth collapsing from 0.6% qoq in Q1 to minus 0.2% qoq in Q2," Berenberg said. "We expect the [Bank of England] to remain on hold not only in June, but for much of the year. If energy prices recede, its next move will probably be to cut."
"The UK economy is facing a perfect storm, as rising political uncertainty adds to the growing impact from the war in the Middle East. Businesses are reporting falling output, surging inflation, supply shortages and job cuts in May," S&P Global Chief Business Economist Chris Williamson said. "Things could well get worse in the coming months, as we have been seeing some support to manufacturing from precautionary stock building which will inevitably fade once warehouses are full."
Meanwhile, in a statement to Parliament, Chancellor Rachel Reeves said the government remains focused on restoring economic stability and supporting growth, while acknowledging that the conflict in the Middle East poses a material challenge to the global and domestic outlook, particularly through higher energy costs.
In corporate news, ConvaTec Group (CTEC.L) declined 4.95% after logging a 4.8% annual gain in organic revenue excluding InnovaMatrix for the four months ended April 30. The medical products and technologies company confirmed its 2026 guidance for group organic revenue growth of 5% to 7% and double-digit growth in adjusted EPS.
On the upside, private equity company ICG (ICG.L) climbed 2.89% after fiscal 2026 profit attributable to equity holders of the parent increased year over year to 478.4 million pounds sterling from 451.2 million pounds amid higher revenue.
"We are experiencing clear demand from institutional allocators globally for our strategies, and are unaffected by challenges being faced by certain evergreen vehicles in the US. I believe ICG is well positioned to continue generating compounding long-term shareholder value," Chief Executive Officer Benoît Durteste said.