London open: FTSE gains as UK exits recession

At 0820 BST, the FTSE 100 was up 0.4% at 8,412.99 - hitting another record high - while sterling was 0.1% firmer versus the dollar at 1.2532.

Figures released earlier by the Office for National Statistics showed that GDP grew by 0.6% in the first quarter of this year, ahead of expectations for 0.4% growth.

This means the UK is no longer in recession following two consecutive quarters of declines at the end of last year, when GDP shrank by 0.1% in the third quarter and 0.3% in the fourth.

Output in the services sector grew 0.7%, while production sector output grew 0.8% and the construction sector saw a 0.9% fall.

ONS director of economic statistics Liz McKeown said: "After two quarters of contraction, the UK economy returned to positive growth in the first three months of this year.

"There was broad-based strength across the service industries with retail, public transport and haulage, and health all performing well. Car manufacturers also had a good quarter. These were only a little offset by another weak quarter for construction.

"In the month of March the economy grew robustly led, again, by services with wholesalers, the health sector and hospitality all doing well."

Ruth Gregory, deputy chief UK economist at Capital Economics, said: "The 0.6% q/q rise in GDP in Q1 confirmed that the recession ended at the start of this year and lends support to our view that the recovery will be stronger than most forecasters anticipate.

"Even so, at this stage we doubt the recovery will be strong enough to prevent inflation from falling further and the Bank from cutting rates to 3.00% next year."

In equity markets, British Airways and Iberia owner IAG flew a little higher as it said it was "well positioned" for the summer after posting a huge rise in first quarter profit on the back of strong leisure travel demand, especially over the Easter holidays.

Operating profit before exceptional items in the three months to March 31 surged to €68m from €9m a year earlier. Passenger capacity grew 7% over the period.

Property portal Rightmove was under the cosh, however, as it reiterated its revenue and profit guidance for the full year, but upgraded its customer growth expectations after a strong start to the year.

Market Movers

FTSE 100 (UKX) 8,412.99 0.38%
FTSE 250 (MCX) 20,589.25 0.28%
techMARK (TASX) 4,747.75 0.46%

FTSE 100 - Risers

Fresnillo (FRES) 597.50p 3.02%
CRH (CDI) (CRH) 6,608.00p 2.54%
Antofagasta (ANTO) 2,270.00p 1.79%
Vodafone Group (VOD) 69.08p 1.47%
Glencore (GLEN) 469.85p 1.36%
Flutter Entertainment (DI) (FLTR) 16,260.00p 1.34%
Burberry Group (BRBY) 1,175.00p 1.21%
Anglo American (AAL) 2,768.50p 1.19%
Persimmon (PSN) 1,422.00p 1.10%
InterContinental Hotels Group (IHG) 7,868.00p 0.98%

FTSE 100 - Fallers

Rightmove (RMV) 561.60p -1.96%
Melrose Industries (MRO) 589.20p -1.07%
Scottish Mortgage Inv Trust (SMT) 890.60p -0.38%
Admiral Group (ADM) 2,741.00p -0.25%
Haleon (HLN) 327.40p -0.18%
3i Group (III) 2,815.00p -0.18%
Aviva (AV.) 487.80p -0.16%
RS Group (RS1) 822.00p -0.06%
Smurfit Kappa Group (CDI) (SKG) 3,764.00p -0.05%
WPP (WPP) 830.80p -0.05%

FTSE 250 - Risers

Ninety One (N91) 182.00p 4.72%
Bridgepoint Group (Reg S) (BPT) 239.80p 4.72%
AJ Bell (AJB) 362.00p 3.72%
Keller Group (KLR) 1,172.00p 3.53%
Oxford Instruments (OXIG) 2,475.00p 3.34%
Genuit Group (GEN) 466.50p 2.41%
Crest Nicholson Holdings (CRST) 204.20p 2.41%
Hochschild Mining (HOC) 167.00p 2.33%
QinetiQ Group (QQ.) 374.80p 2.24%
Baillie Gifford US Growth Trust (USA) 202.50p 2.17%

FTSE 250 - Fallers

Auction Technology Group (ATG) 486.50p -2.89%
IntegraFin Holding (IHP) 287.50p -2.54%
CMC Markets (CMCX) 257.00p -2.47%
Pagegroup (PAGE) 443.40p -2.46%
Assura (AGR) 41.74p -2.29%
Mobico Group (MCG) 60.10p -2.28%
TR Property Inv Trust (TRY) 321.00p -2.13%
Hilton Food Group (HFG) 920.00p -2.13%
Genus (GNS) 1,852.00p -2.11%
Quilter (QLT) 111.20p -1.94%