London stocks hit more than three-week low on UK slowdown fears

A man shelters under an umbrella as he walks past the London Stock Exchange in London, Britain, August 24, 2015. REUTERS/Suzanne Plunkett

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  • FTSE 100 down 0.9%, FTSE 250 off 1.3%

June 13 (Reuters) – UK shares fell to their lowest level in more than three weeks on Monday after data showed Britain’s economy unexpectedly shrank in April, adding to worries about a slowdown in growth ahead of a Bank of England policy meeting this week.

The blue-chip FTSE 100 index (.FTSE) dipped 0.9% and the domestically-focussed mid-cap FTSE 250 index (.FTMC) declined 1.3%, touching their lowest levels since May 19.

Gross domestic product (GDP) contracted by 0.3% from March, while over the three months to April, GDP was up by 0.2%, slowing sharply from growth of 0.8% in the three months to March, official data showed.

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Economists polled by Reuters had on average forecast that the British economy would grow by 0.1% in April from March and by 0.4% in the February-April period. read more

The Bank of England (BoE) is expected to raise interest rates by 25 basis points to 1.25% as it battles red-hot inflation. If the BoE opts for a bigger hike, it will stoke recession fears.

Oil majors BP Plc (BP.L) and Shell Plc (SHEL.L) slipped 2% and 2.4% respectively, while industrial miners (.FTNMX551020) shed 1.5%, as commodity prices slid on concerns around demand due to a rise in China’s COVID-19 cases and sluggish global economic growth.

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Reporting by Devik Jain in Bengaluru

Our Standards: The Thomson Reuters Trust Principles.

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