13th Mar 2026 17:15
(Alliance News) - Stock prices in London closed in the red on Friday, as January's UK gross domestic product reading disappointed and uncertainty around ongoing developments in the Middle East persisted.
The FTSE 100 index closed down 44.00 points, 0.4%, at 10,261.15. The FTSE 250 ended down 97.64 points, 0.4%, at 22,071.10, and the AIM all-share closed down 7.64 points, 1.0%, at 759.38.
The Cboe UK 100 was down 0.3% at 1,018.98, the Cboe UK 250 was down 0.8% at 19,316.38, and the Cboe small companies was 0.3% lower at 17,592.70.
For the week, the FTSE 100 was down 0.2%, the FTSE 250 fell 1.9% and the AIM all-share dipped 3.0%.
In European equities on Friday, the CAC 40 in Paris closed down 0.9%, while the DAX 40 in Frankfurt ended 0.6% lower.
The pound fell to USD1.3233 on Friday afternoon from USD1.3353 at the equities close on Thursday. The euro stood lower at USD1.1437 from USD1.1522. Against the yen, the dollar was trading higher at JPY159.58 compared to JPY159.21.
Stocks were under pressure on Friday as investors continued to closely watch developments in the Middle East.
US President Donald Trump voiced confidence that the Iranian people would rise up to replace their government following American and Israeli military strikes – but added in an interview that it may not happen straight away.
"I really think that's a big hurdle to climb for people that don't have weapons. I think it's a very big hurdle... It'll happen, but it probably will be, maybe not immediately," Trump told Fox News Radio.
"We're going to be hitting them very hard over the next week," Trump said.
Meanwhile, European countries including France and Italy have started talks with Iran to try to guarantee safe passage through the Strait of Hormuz, the Financial Times reported.
The officials said no European navies are prepared to escort ships through the strait, fearing an attack which could escalate the war.
Britain is not involved in any talks about access to the strait, according to UK officials, the FT reported.
Brent oil was higher at USD101.57 a barrel on Friday afternoon from USD98.65 late Thursday.
Meanwhile, analysts said stalling UK GDP growth was "not what the doctor ordered" ahead of the looming threat of soaring energy prices, but noted that underlying growth continues to edge higher.
According to the Office for National Statistics, gross domestic product showed no growth month-on-month in January 2026, following a rise of 0.1% in December and 0.2% in November. The FXStreet-cited consensus had pencilled in 0.2% monthly growth.
"Our expectations for a strong start to the year have diminished. And with the Iran conflict bubbling in the background, further headwinds will drag UK growth lower. With energy prices rapidly rising, higher oil and gas prices will squeeze real disposable incomes, constraining spending and investment. Hiring plans will likely be shelved too. And higher uncertainty will dampen animal spirits," said Deutsche Bank analyst Sanjay Raja.
Stocks in New York were lower. The Dow Jones Industrial Average was down 0.1%, the S&P 500 index was 0.4% lower, and the Nasdaq Composite fell 0.8%.
The yield on the US 10-year Treasury widened to 4.29% on Friday from 4.25% on Thursday. The yield on the US 30-year Treasury stretched to 4.91% from 4.88%.
US growth was markedly slower than expected in the final stretch of last year, in a period mired by the lengthy government shutdown.
Gross domestic product rose 0.7% on an annualised basis quarter-on-quarter, the Bureau of Economic Analysis said, slowing from a 4.4% rise in the third quarter. The pace of growth for the fourth quarter was halved from the 1.4% estimate in February.
"Real GDP was revised down 0.7 percentage point from the advance estimate, reflecting downward revisions to exports, consumer spending, government spending, and investment. Imports decreased less than previously estimated," the BEA said.
The final quarter represented the weakest reading since a 0.6% decline in the first quarter of 2025, and also follows growth of 3.8% in the second.
Back in London, shares in Admiral climbed 1.9% after RBC raised its rating on the stock to 'outperform' from 'sector perform'.
The bank upped its price target for the Cardiff-based insurer to 3,560 pence from 3,100p.
Miners weighed on the FTSE 100, as Fresnillo ended 6.2% lower, Antofagasta closed down 5.5% and Anglo American lost 2.4%.
Shares in Berkeley closed down 1.5% as it said it continues to perform well as its 2026 financial year ends, and is "working hard" to overcome challenges from the uncertain macroeconomic environment.
Reflecting on the four months ended February 28, Berkeley reaffirmed its pretax profit forecast of GBP450 million for the year ending April 30. It expects "a similar level" for financial 2027, and also reiterated its target of an approximate GBP300 million net cash position.
However, Berkeley said it was aware of the risk that the Middle East conflict could cause conditions to deteriorate further, with the potential for increased inflation and "higher for longer" interest rates, as the situation "is weighing heavily on risk sentiment".
Shares in Trainline bounced back 6.9% after falling on Thursday, and led the FTSE 250 index.
Among small caps, Catenai jumped 14% after it said it invested a further GBP250,000 in Alludium Ltd, a developer of a no-code artificial intelligence agent operating system.
BSF Enterprise plunged 51% after confirming that its proposed GBP15 million equity fundraise and capital reorganisation have been terminated.
The company said its GBP300,000 convertible loan note will be extended by 12 months and that it is in discussions with alternative funding partners.
Gold fell to USD5,043.40 an ounce on Friday from USD5,131.30 at Thursday's close.
The biggest risers on the FTSE 100 were Metlen Energy & Metals, up 1.25p at 37.70p, Tesco, up 13.40p at 488.90p, Imperial Brands, up 74.00p at 3,201.00p, Hikma Pharmaceuticals, up 28.00p at 1,237.00p, and Rightmove, up 10.40p at 464.00p.
The biggest fallers on the FTSE 100 were Fresnillo, down 224.00p at 3,406.00p, Antofagasta, down 205.00p at 3,503.00p, Rolls-Royce, down 68.00p at 1,215.50p, Spirax Group, down 360.00p at 6,815.00p, and IMI, down 124.00p at 2,640.00p.
On Monday's economic calendar is US industrial production data.
Central bank meetings will dominate the rest of next week, with rate holds expected in the US, Japan, UK, eurozone, Canada and Switzerland.
On Monday's UK corporate calendar are full year results for insurance, savings and retirement products firm Standard Life, landscaping products maker Marshalls, and limestone and minerals company SigmaRoc.
By Michael Hennessey, Alliance News reporter
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