The FTSE 100 added 0.75% on Friday, taking the UK index to 7,083, as it recovered from a wave of negative sentiment that knocked it over on Thursday.
“What may spook investors is that usually the concerns have centred around either inflation or the risk of Covid-19 tilting the recovery off course,” said Russ Mould, investment director at AJ Bell.
“This time it appeared both fears were rearing their head at the same time – raising the spectre of stagflation or slowing economic growth accompanied by rapidly rising prices.”
Latest UK GDP figures for May in the UK suggest the speed of recovery is starting to slow down, despite the fourth consecutive month of growth.
“We may get more insight into how central banks are weighing these issues later today with Bank of England chief Andrew Bailey and European Central Bank head Christine Lagarde set to participate in a panel discussion at a big finance summit in Venice,” Mould added.
“The question is whether central bankers feel they can navigate these risks as serenely as a gondola traversing a sleepy Venice canal or if they are worried about a torrent of rising inflation and infections overtaking them.”
FTSE 100 Top Movers
Evraz (4.17%), Land Securities (2.83%) and Burberry (2.72%) headed up the FTSE 100 on Friday on a positive day for the index.
While at the other end, not faring so well, is B&M (-1.97%), Sainsbury’s (-0.8%) and Just Eat (-0.79%).
Land Securities
Land Securities gave an update on its rent collection for the quarter ending in June, confirming that the property development company has collected 81% of £103m it is owed.
Most of the rent collected was from offices, with 95% collected, while regional retail spaces came in at 73%, and the rest of London had a collection rate of 71%.
Flight Bookings
Flight bookings departing the UK surged as the government announced fully vaccinated adults and their children will be able return from ‘amber’ countries without needing to quarantine from 19 July, airlines reported on Thursday.
Passengers, however, will be required to take a Covid-19 test three days before their arrival back in the UK, in addition to a PCR swab a day after they return to home soil.