London pre-open: Stocks to rise as Q2 GDP revised upwards

(Sharecast News) - London stocks were set to gain at the open on Wednesday as investors mulled data showing the UK economy grew faster than expected in the second quarter, ahead of a key US inflation reading.

The FTSE 100 was called to open around 65 points higher.

Figures released earlier by the Office for National Statistics showed the economy grew 0.5% in April to June, up from a previous estimate of 0.4%. Economists were expecting growth to be unrevised.

The services sector grew by 0.6%, the construction sector by 0.8% and the production sector by 0.1%.

ONS director of economic statistics Liz McKeown said: "Today's figures include our annual improvements to the measurement of the economy, incorporating new information that provides a better picture of activity across the UK's service sector, alongside the usual inclusion of updated and improved data sources.

"Growth for 2025 as a whole was a little lower than previously estimated, with the profile of growth across the quarters also revised.

"However, stronger services growth in the latest quarter means the economy is now slightly larger than previously estimated."

Looking to the rest of the day, attention will turn to the US PCE reading for August at 1330 BST. Danske Bank said headline inflation likely rose from July (0.2% m/m and 3.7% y/y) driven by higher energy prices in August.

"The US Bureau of Economic Analysis will update its methodology for some PCE subcomponents which should provide relief to core inflation. However, given the strong underlying economy, core PCE could still tick up. We will also receive the final revision of Q2 GDP," it said.

In corporate news, Greggs unveiled plans to overhaul its manufacturing operations, with the potential loss of more than 700 jobs.

The bakery chain said that following a review of where future manufacturing activity should be located, four sites had been flagged for possible closure. It will now enter a consultation period, but confirmed 740 roles were likely to be made redundant over the next two-and-a-half years.

The announcement coincided with an update on third-quarter trading. Total sales rose 7.7% in the 13 weeks to 26 September, or by 3.4% on a like-for-like basis, which Greggs attributed to menu innovation alongside more settled weather. Coupled with "strong" cost control, Greggs added that it now expected a "modestly improved" outcome for 2026.

Private hospitals chain Spire Healthcare, about to be bought by a group of investment firms in a deal worth £1bn, posted lower first-half operating profit of £38.4m, down from £63m a year earlier.

Group revenue remained broadly flat at £792.7m, with accelerated growth in PMI, Self-Pay and Primary Care revenues, partially offsetting lower NHS activity following the previously announced funding-related slowdown in Q1, the company said.

Aerospace and defence engineer Babcock said it had agreed to a twomonth extension to its Future Maritime Support Programme bridging agreement with the UK's Ministry of Defence, ensuring continuity of key naval support work while the two sides finalise a longterm successor deal.

Babcock said the extension, which begins 1 October, will maintain delivery of critical navalbase services and support for Britain's nuclear submarine fleet as negotiations continue on the gateway agreement.