Investing.com — British stocks gained on Friday as stronger-than-expected UK GDP data outweighed a sharp escalation in the Middle East, where Houthi forces seized full control of Yemen’s Red Sea coastline.
The rose 0.4%, while Germany’s added 0.8% and France’s gained 0.8%. Sterling gained 0.1% to $1.3520 against the dollar.
Britain’s economy grew 0.4% in July, extending June’s 0.3% gain and beating expectations for zero growth, the Office for National Statistics said.
Annual growth hit 1.6%, the fastest since February 2025. ONS Director of Economic Statistics Liz McKeown said “ongoing strength in the services sector was only partially offset by falls in both production and construction,” adding that artificial intelligence appeared to be lifting software development.
ING’s James Smith cautioned the figures overstate underlying momentum, roughly half of June’s rise came from IT, just 7% of the economy, and that UK GDP has a well-worn seasonal habit of running hot in the first half of the year and cooling in the second.
Houthi fighters completed an 18-hour offensive to take full control of Yemen’s Red Sea coastline, including the strategic Bab al-Mandeb strait, after seizing the port of Mocha.
Saudi forces responded with air raids on Mocha’s airport, Houthi-affiliated broadcaster Al-Masirah reported, while satellite imagery cited by Reuters showed smoke near Saudi Arabia’s East-West pipeline, a key artery now used to divert crude away from the Strait of Hormuz.
Iran’s Revolutionary Guard Corps said its navy struck a U.S. “Saildrone-type” unmanned vessel in the Strait of Hormuz, saying it had “thwarted its aggressive mission.”
The claim followed a resolution by the UN’s nuclear watchdog, the IAEA, accusing Iran of “noncompliance” with its nonproliferation commitments and referring the matter to the UN Security Council, the first such resolution in 20 years.
Iran’s UN envoy, Gholamhossein Darzi, dismissed the accusations as “political and not technical in nature.”
Preliminary ship-tracking data showed Strait of Hormuz transits fell to seven on Thursday from 11 the previous day, well below the 10-day average of 15, Reuters reported.
Oil prices fell on Friday, paring some of the previous session’s sharp gains. was down 3.12% at $104.28 a barrel, while fell 3.17% to $99.19.
Brent and WTI had jumped 6.3% and 6.7%, respectively, on Thursday. slipped to $4,371.80, while rose 0.3% to $4,330.
ING expects the Bank of England to hold rates at 3.75% next Thursday, arguing energy-driven inflation hasn’t yet broadened into second-round effects, with food inflation down to 1.3% from 3.6% in January, though a November hike “is not impossible.”
UK round up
warned that weak buyer sentiment and political uncertainty are weighing on housing demand, while calling for urgent stamp duty and regulatory reforms to boost transactions and homebuilding.
’s H1 revenue and net ticket sales beat forecasts, while slower segment growth was offset by reaffirmed FY2027 guidance and a new £100 million buyback.