With plenty of forewarning, the FTSE shook off the UK’s worst quarterly GDP reading on record this Wednesday – and actually found some reason to celebrate.
Contracting 20.4% from April to June, the UK’s Q2 performance makes it far and away the worst hit country among its G7 peers. It’s not even close. That decline is more than double the hit taken by Germany and the US, and 6.6 percent points higher than the next nation (France, which suffered a 13.8% drop).
It is further economic evidence of the bungling nature of Boris Johnson and his government’s approach to the covid-19 pandemic, one that has cost more lives and jobs than any other nation in Europe. And that’s in a country that doesn’t have to worry about physical borders.
And yet, the FTSE found itself 0.7% higher after the bell, hitting a near 3-week peak of 6190. In comparison, the DAX was flat at 12950, with the CAC adding 15 or so points.
Why? Well though for the overall quarter the economy shrank by 20.4%, the economy grew by 2.4% in May and 8.7% in June. And while that still leaves the UK way off where it was pre-pandemic, it has sparked hopes that the country can turn the ship around.
Looking ahead to the US open and, after a tech sell-off wiped out yesterday’s gains, the Dow Jones is once again set to mount an assault on 28000. The index is currently eyeing a 250 point rise, one that would leave it at 27950 – around 200 points off of Tuesday’s intraday highs.
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