Weak UK growth figures reinforce concerns that the troubles of mainland Europe will hamper UK growth. London shares ended Friday on a negative note amid fresh jitters about the Ebola virus and weak Chinese property data. The FTSE 100 Index closed 30.42 points lower at 6388.73 as a New York doctor who recently returned from Ebola-hit Guinea in West Africa became the fourth case of the virus in the US.
The first decline in average home prices in 70 major Chinese cities last month since November 2012 also rattled markets.
Traders in Europe sat on the sidelines ahead of the expected publication at the weekend of the European Central Bank’s stress tests on Eurozone banks.
The British banks may have passed the European stress test but the margin by which Lloyds passed was too close for comfort.
It hardly instills confidence in the UK financial sector when the big five banks are given the all clear but the sector still finishes lower.
Meanwhile, ECB president Mario Draghi called on Europe’s leaders to do more to reform their economies to avoid a relapse into recession.
The IFO institute’s gauge of German business confidence had dropped to a 22-month low in October, with the business climate index falling from 104.7 to 103.2, well below the 104.5 consensus forecast. Unfortunately, the October Ifo data suggests that the risks to our near-term calls remains to the downside.