UK economy braces for flat growth as global markets falter

UK economy braces for flat growth as global markets falter

Global markets experienced a downturn on Wednesday, with European stocks and the FTSE 100 opening lower. This follows a warning from the British Chambers of Commerce (BCC) that the UK economy is set to flatline for the next six months. The BCC expects overall growth of 0.4% for this year, with forecasts for the next two years slashed to 0.3% in 2024 and 0.7% in 2025.

Despite avoiding a recession, the BCC stated that the economic stagnation will feel like one for millions of households. This news was further compounded by reports of a sharp drop in orders for British construction firms in August, adding to concerns about a slowing economy.

Following these updates, the FTSE 100 (LSE:FTSE) opened down by 0.58% to 7,394.41 points, while the CAC 40 (Euronext:PX1) in Paris fell by 0.58% to 7,210.13 points. In Germany, the DAX (XETR:DAX) declined by 0.36% to 15,714.78 points.

Across the Atlantic, Wall Street was expected to open lower today as well, according to pre-market estimates. This comes after all main indices closed in red on Tuesday with the Dow Jones ( DJIA :DJI) closing down by 0.56% at 34,641.97 points; the S&P 500 fell by 0.42% to close at 4,496.83 points; and NASDAQ (NASDAQ:IXIC) declined by 0.08% closing at 14,020.95.

Asian markets presented a mixed picture on Wednesday as well. Japan's Nikkei 225 (TSE:N225) rose by 0.62% to close at 33,241.02 points while Hong Kong's Hang Seng Index (HKEX:HSI) lost 0.17%, closing at 18,425.76 points. In mainland China, despite weak demand impacting economic activity and failed stimulus efforts to revive consumption, Shanghai Composite Index (SSE (LON: SSE ):000001) managed to gain slightly by 0.14%, closing at 3,158.75 points.

In currency markets, the pound-to-dollar exchange rate stood at $1.25 while the pound-to-euro exchange rate was at €1.16.

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