UK GDP Expands 0.2%; Service Index Rises

Arthi Gupta
26 Aug, 2011
New York City

The UK indexes edged lower after economic growth slowed to 0.2% in the second quarter and service output increased in June. Home prices in England and Wales declined in July. Daimler and Rolls-Royce received final approval for Tognum acquisition.

[R]3:40 PM London – The UK indexes edged lower after economic growth slowed to 0.2% in the second quarter and service output increased in June. Home prices in England and Wales declined in July. Daimler and Rolls-Royce received final approval for Tognum acquisition.[/R]

Stocks in London declined after the latest quarterly economic growth was slower than the first quarter. The market indexes were also lower after Fed Chairman Bernanke offered no new stimulus plan but cited strong long term prospect for the U.S. economy.

In London, FTSE 100 Index declined 84.43 or 1.6% to 5,042.17 and the pound edged higher to $1.6296. For the week, the FTSE 100 Index closed flat.

UK GDP Expands

The UK economic growth slowed to 0.2% in the second quarter after rising 0.5% in the first quarter according to the second estimates published by the Office for National Statistics showed today.

On a yearly basis, gross domestic product rose 0.7% in the second quarter. The statistics office confirmed the preliminary estimate published on July 26.

UK Service Index Rises

The UK seasonally adjusted index of services increased 1.6% from a year ago in June compared to the 1.3% growth in May, data released by National Statistics showed today. The latest gain was the biggest since January, when the index rose 1.8%.

On a monthly basis, the services output declined 0.1% in June.

England/Wales Home Prices Fall

Home prices in England and Wales decreased for the seventh consecutive month in July, data released by Land Registry showed today.

The home price index dropped 2.1% from a year ago in July, after falling 2.8% in June.

The average home price in England and Wales declined to £163,049 in July from £160,945 in June. In July 2010, the average property price was £166,607.

On a monthly basis, home prices in England and Wales increased 1.3% in July, reversing the 0.3% fall recorded in June.

Daimler, Rolls-Royce Secure Final Approval for Tognum

Daimler AG and Rolls-Royce Holdings plc obtained the approval of all the relevant regulatory authorities for the acquisition of Tognum AG through their joint venture, Engine Holding GmbH.

Gainers & Losers

Beacon Hill Resources Plc surged 49.41% to 12.70 pence after the Mozambique coal miner announced the receipt of an unsolicited, indicative, non-binding approach for the entire issued and to be issued share capital of the company at a price of 16.25 pence per share payable in cash from a third party.

Goodwin Plc plunged 13% to 1,150 pence after the company engaged in mechanical and refractory engineering said fiscal year 2011 revenue declined 0.1% to £92.91 million compared with £93.0 million in the previous year. Pre-tax profit in the period decreased 38.4% to £8.20 million from £13.31 million last year.

Independent News & Media Plc rose 3.70% to €0.28 after the newspaper and media company reported first-half revenues fell 12.3% to €284.6 million from €324.5 million a year ago. Pre-tax loss in the period was €16.4 million compared to a profit of €21.4 million last year.

London & Stamford Property Plc fell 1.87% to 115.40 pence after the property investment company said it exchanged contracts with Kilmorie Investments LLP to buy the long leasehold interest in 74 private residential units and 30 car parking spaces at the Oval for £24.4 million pounds.

San Leon Energy plc declined 2.60% to 18.75 pence after the oil and gas exploration company agreed to acquire all of the issued and outstanding shares of Realm Energy International Corp.