(Sharecast News) - London stocks were set to fall at the open on Tuesday as investors mulled the latest UK GDP data and eyed a potential government shutdown across the pond.
The FTSE 100 was called to open down around 10 points.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "The week started with minor gains in US and European equities, despite fresh tariff threats from Donald Trump and no material progress on talks to avoid a US government shutdown. The S&P 500 and Nasdaq traded flat, just a touch below their all-time highs, while the US 10-year yield fell on safe-haven inflows.
"A shutdown by tomorrow is a real possibility, though it wouldn't be the first nor the last time the US government closes on funding issues. A short shutdown wouldn't have a major impact on US growth expectations or risk appetite.
"What's more worrying for investors is the risk of US data not being released - or being delayed - as government agencies would be mostly closed in case of a shutdown. The lack of data would muddy the Federal Reserve (Fed) outlook. And because the softening Fed outlook and rising rate cut expectations have been a major support to the latest US stock rally, the absence of data could encourage some investors to take profit and move sideways."
On home shores, data from the Office for National Statistics showed that UK economic growth ticked higher in the second quarter, in line with expectations.
GDP was estimated to have grown by 0.3% in the three months to June, following an unrevised 0.7% uplift in the first quarter.
Within that, the dominant services sector rose by 0.4% and construction by 1%, helping to offset ongoing weakness in the manufacturing sector.
Production softened 0.8%.
Year-on-year, GDP rose by 1.4%, marginally ahead of forecasts for a 1.2% increase.
Liz McKeown, director of economic statistics at the ONS, said: "In the latest quarter, we saw an increase in the household saving ratio, very little growth in consumer spending and a slight fall in output for consumer-facing services, despite growth in services overall."
McKeown also addressed recent changes to the methodologies used by the ONS.
She said: "Today's figures include a suit of improvements to our measurement of the economy, including better information on research and development and the activities of complex multinational companies, alongside the usual inclusion of updated and improved data sources.
"Growth for 2024 as a whole was unrevised, though these new figures show the economy grew a little less strongly at the start of the year than our initial estimates suggested, but performed better in the later quarters."
The ONS has come under sustained criticism in recent months after issues in its data gathering emerged, weighing on the veracity of a number of its statistical bulletins.
Elsewhere, the British Retail Consortium warned of more pain ahead for shoppers as price pressures for UK consumers picked up this month as food prices continued to climb and non-food price deflation eased.
The BRC-NIQ Shop Price Monitor released earlier showed that the annual rate of shop price inflation increased to 1.4% in September from 0.9% in August.
While food inflation was unchanged at 4.2% year-on-year - holding steady after seven straight months of increases - non-food deflation eased significantly to -0.1% from -0.8%, with a year and a half of falling non-food prices likely to come to an end.
"DIY and gardening saw rising prices, while some back-to-school categories continued to see reductions as retailers offered promotions on electricals such as laptops ahead of the new academic year," said BRC chief executive Helen Dickinson.
Retailers, who have had to contend with higher national insurance and wage costs since April, are facing a new packaging tax from October which will put further upward pressure on inflation, Dickinson said.
"While retailers continue to absorb higher costs as much as possible and deliver value to customers, any further tax rises in the upcoming Budget would keep shop prices higher for longer. Ultimately, it is British households who will bear the consequences - positive or negative - of the Chancellor's decisions."
In corporate news, real estate investment trust Assura said it had delivered a "strong" trading performance over the first six months of the trading year, despite it being a period of uncertainty for the firm.
Assura reported a like-for-like increase of 5.6% on 25.5m of rent roll reviewed, with a weighted average annual uplift of 2.9%. Assura's portfolio now stands at 602 properties with an annualised rent roll of 179.5m and a weighted average unexpired lease term of 12.3 years.
Legal & General said its chief financial officer of eight years has handed in his resignation.
Jeff Davies, the former EY partner who has been CFO of L&G since 2017, will be leaving the company in December to "pursue a new opportunity", with the head of its Institutional Retirement division, Andrew Kail, named as his replacement.
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