The FTSE 100’s early promise faded on Friday amid downbeat economic growth figures and fresh US tech weakness.

The FTSE 100 index closed down 54.1 points, 0.6%, at 9,649.03.

It had earlier traded as high as 9,761.47.

The FTSE 250 ended 24.45 points higher, 0.1%, at 21,876.55, and the AIM All-Share ended up 3.70 points, 0.5%, at 751.36.

For the week, the FTSE 100 fell 0.2%, the FTSE 250 declined 0.9% and the AIM All-Share dropped 0.2%.

The mood was knocked by news that the UK economy shrank in October, according to figures from the Office for National Statistics.

Gross domestic product is estimated to have fallen by 0.1% in October, the same as in September, missing the FXStreet-cited market consensus for a 0.1% rise.

Services output fell by 0.3%, while construction output fell by 0.6%.

Production output, however, climbed 1.1%.

Citi analyst Callum McLaren-Stewart called the data “an unsurprising surprise”.

“A miss in October is perhaps not the most surprising outcome.

“Pre-budget uncertainty, and particularly the degree of speculation ahead of the event, can likely explain the miss relative to forecasts,” he said.

“For households, the prospect of income tax increases (which was still very much live during October) would likely have put the brakes on consumer spending,” the Citi analyst said, while, on the business side, “the associated lack of clarity around which sectors were to be taxed, will have likely delayed/slowed investment decisions”.

Berenberg analyst Andrew Wishart fears some of the slowdown in the UK economy could be due to underlying issues and not just budget uncertainty.

“We suspect that deteriorating fundamentals rather than a budget-related setback in confidence are to blame, so a recovery seems unlikely in the near term,” Mr Wishart said.

The data was seen as cementing a quarter-point interest rate cut at next week’s Bank of England Monetary Policy Committee meeting.

“Not that it was in any doubt at all, but today’s data essentially guarantees that the Bank of England will slash rates again next week.

“The focus will instead be on the guidance for rates in 2026.

“Any dovish undertones that hint at further easing ahead could bode ill for the pound,” Ebury analyst Matthew Ryan said.

Mr McLaren-Stewart agrees the data “clearly supports the consensus case for a cut”.

“However, we anticipate the (BoE) will be obliged to cut lower than currently priced in 2026, necessitating a terminal rate below 3%, supported by weaker GDP outlook,” he added.

Sterling fell back after the figures, after rallying in recent days.

The pound was quoted lower at 1.3356 US dollars at the time of the London equities close on Friday, compared to 1.3416 US dollars on Thursday.

The euro stood at 1.1739 US dollars, down against 1.1746 US dollars.

Against the yen, the dollar was trading higher at 155.69 yen compared to 155.24.

In Europe on Friday, the CAC 40 in Paris closed down 0.1%, while the DAX 40 in Frankfurt ended 0.5% lower.

Stocks in New York were lower at the time of the London equity close.

The Dow Jones Industrial Average was down 0.7%, the S&P 500 index was 1.4% lower, while the Nasdaq Composite was down 2.1%.

Technology stocks were firmly in the red once more as Broadcom slid 11% after results failed to match lofty expectations, while Oracle fell a further 4.6%.

The yield on the US 10-year Treasury was quoted at 4.19%, stretched from 4.12% on Thursday.

The yield on the US 30-year Treasury was at 4.86%, widened from 4.77%.

Supporting the dollar and pushing yields higher, comments from two officials who voted against the Federal Reserve’s decision to lower interest rates this week.

Chicago Fed President Austan Goolsbee had joined Kansas City Fed President Jeffrey Schmid in pushing to keep rates unchanged instead at the central bank’s two-day policy meeting, which ended on Wednesday.

“I believe we should have waited to get more data, especially about inflation, before lowering rates further,” said Mr Goolsbee in a statement Friday.

In a separate statement, Mr Schmid, who also pushed for no rate cut at the Fed’s October meeting, said: “Right now, I see an economy that is showing momentum and inflation that is too hot, suggesting that policy is not overly restrictive.”

In addition, Federal Reserve Bank of Cleveland President Beth Hammack said she would prefer interest rates to be slightly more restrictive to keep putting pressure on inflation, which is still running too high.

Back in London, InterContinental Hotels Group rose 2.3% as Jefferies upgraded to “buy” from “hold”‘, but Whitbread dropped 2.2% as the broker moved the Premier Inn owner the other way, to “hold” from “buy”.

Elsewhere, 1Spatial soared 45% after agreeing in principle to a proposed £87.1 million offer from VertiGIS, a portfolio company of London-based private equity firm Battery Ventures.

The Cambridge, England-based location master data management software company said the cash bid would value each 1Spatial share at 73 pence.

VertiGIS confirmed that it has completed commercial due diligence, has a clear understanding of the 1Spatial business and requires only limited confirmatory diligence to proceed to making a firm offer.

But Card Factory plummeted 27% after cutting its profit guidance as it said weak high-street retail footfall hurt its UK store sales performance.

The Wakefield, England-based greeting cards, gifts and celebration merchandise retailer said it expects adjusted pretax profit of between £55 million and £60 million for financial 2026, which ends on January 31, if current trading trends persist.

This is lower than the company’s previous guidance, which was for mid-to-high single-digit-percentage growth in adjusted pretax profit from £66.0 million in financial 2025, roughly £70 million.

Card Factory attributed weak consumer confidence to the lower high street footfall, which has persisted into its “most important” trading period.

Brent oil was quoted at 61.30 dollars a barrel at the time of the London equities close on Friday, up from 60.91 late on Thursday.

Gold was quoted at 4,291.08 dollars an ounce on Friday, higher against 4,254.97.

The biggest risers on the FTSE 100 were Burberry, up 54.50 pence at 1272.5p, Ashtead Group, up 128.0p at 5,138.0p, BT Group, up 3.7p at 180.5p, Intercontinental Hotels Group, up 185.0p at 10,235.0p and Fresnillo, up 46.0p at 2,904.0p.

The biggest fallers on the FTSE 100 were St James’s Place, down 49.0p at 1,316.5p, British American Tobacco, down 146.0p at 4,238.0p, Anglo American, down 80.0p at 2,817.0p, Weir, down 80.0p at 2,856.0p and Imperial Brands, down 86.0p at 3,179.0p.

Monday’s economic calendar has CPI figures in Canada.

Later in the week, interest rate decisions are due in Europe, Japan and the UK. In addition, US nonfarm payrolls figures will be released, plus UK and US inflation and retail sales data.

Next week’s UK corporate calendar has delayed full-year results from travel retailer WH Smith and half-year numbers from electricals retailer Currys.

Contributed by Alliance News.

Gatwick Airport is increasing the price of its drop-off zones by £3, bringing the minimum charge to £10.

The fee to allow drivers to stop outside the terminal for 10 minutes is to increase on 6 January.

The airport said the increase was “not a decision we have taken lightly” and blamed “a number of increasing costs, including a more than doubling of our business rates”.

Rod Dennis, RAC senior policy officer, said: “The words ‘Happy New Year’ are unlikely to be uttered by drivers dropping off friends and family at Gatwick in January.”

He added: “A more than 40% increase in the cost to drop-off is the largest we’ve ever seen and represents a doubling of the fee since it first came in.”

Southend Airport charges £7 for drop-off of up to five minutes, but that increases to £15 for between five and thirty minutes.

A drop-off fee of £5 was introduced at Gatwick in March 2021.

That increased to £6 in 2024, with the cost rising again to £7 in May.

A Gatwick spokesperson said: “This increase in the drop-off charge is not a decision we have taken lightly, however, we are facing a number of increasing costs, including a more than doubling of our business rates.

“The increase in the drop-off charge will support wider efforts to encourage greater use of public transport, helping limit the number of cars and reduce congestion at the entrance to our terminals, alongside funding a number of sustainable transport initiatives.”

They added that passengers can be dropped off without charge in long-stay car parks and catch a free shuttle bus to terminals.

Blue Badge holders remain exempt from the charge.

A government spokesperson said: “Airports are responsible for setting their own parking terms but must follow consumer law and justify their charges.

“We’re delivering a £4.3bn support package to cap business rates bill increases at 30% before other reliefs for the largest properties, including airports.

“Without intervention those would be up to 500%.”

Drop-off fees are also rising at Heathrow from 1 January from £6 to £7.

London City, the UK’s last major airport without a drop-off fee, is to introduce one later this month.

Out of mainland Europe’s biggest 10 airports, only one, Schiphol in Amsterdam, charges to drop-off, according to RAC research.

The UK’s ban on new petrol and diesel cars will have to be delayed after it emerged the EU is poised to push back its own crackdown, senior industry figures have suggested.

At the heart of the warning is concern that a U-turn on the continent would mean not enough electric vehicles being built in the next half decade to allow Britain to push ahead with its plans.

The EU was set to ban new petrol and diesel cars from 2035, five years after a similar ban is due to be brought in in the UK, but that measure is set to be watered down as early as next week following pressure from carmakers and powerful countries in the bloc, such as Germany and Italy.

German chancellor Friedrich Merz on Friday said he “supported” a climbdown, saying the “reality is that there will still be millions of combustion engine-based cars around the world in 2035, 2040 and 2050”.

Amid concerns over the future of one of Europe’s most important sectors, and a growing threat from China, Manfred Weber, the president of the EPP, the largest party in the European Parliament, said this sent an important signal “to the entire automotive industry and secures tens of thousands of industrial jobs”.

The UK’s net-zero policies, led by environment secretary Ed Miliband, include a ban on the sale of pure petrol and diesel cars from 2030. Dr Andy Palmer, a former chief executive of Aston Martin, said the UK would have to follow the EU’s lead because of the high number of vehicles traded between the two areas.

“It becomes very difficult because if the EU drops their ban the factories there won’t ramp up their EV (electric vehicle) production in the way forecast. There wouldn’t be enough EVs to meet the demand required in the UK,” he told the Times. Other industry sources told the paper that a review of the mandate which sets out the proportion of vehicles manufacturers sell that must be green due for 2027 would have to be brought forward.

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But supporters of the vehicles called on the EU to stick to its current plan.

Chris Heron, the secretary-general of E-Mobility Europe, the trade body, said: “Europe must keep a clear investment signal for the shift to electric vehicles. Weakening the 2035 target would be a worrying backwards step, dragging us back to yesterday’s technologies and undermining the industries investing in Europe’s electric future”

A government spokesman said: “We remain committed to phasing out all new non-zero emission car and van sales by 2035. More drivers than ever are choosing electric, and November saw another month of increased sales with EV’s accounting for one in four cars sold.”

Major carmakers, including Volkswagen, Renault, Mercedes-Benz and BMW, have argued in favour of the EU dropping the ban. They warn that consumers are not taking up EVs in the numbers anticipated when the 2035 date was approved in 2022.