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* Travel stocks gain as UK plans to scrap quarantine
* Vectura Group surges on takeover offer from Philip Morris
* UK economy grows slower-than-expected in May from April
* FTSE 100 up 0.5%, FTSE 250 adds 0.4% (Updates prices, adds comment)
July 9 (Reuters) – London’s FTSE 100 gained on Friday as a weaker pound helped support export-focussed stocks, but was set to end the week lower on signs that the pace of economic recovery could be slower than expected.
The blue-chip FTSE 100 rose 0.5%, powered by Glencore, Rio Tinto, Unilever and GlaxoSmithKline.
Britain’s economy grew by a slower-than expected 0.8% in May from April, official data showed. A Reuters poll of economists had pointed to month-on-month growth of 1.5% in gross domestic product.
“With the government’s overwhelming desire to get back to normal and completely relax all restrictions in the face of rapidly accelerating virus cases, there is a growing risk that the economy will continue to print lower growth numbers in the months ahead,” said Charles Hepworth, investment director at GAM Investments.
Travel stocks gained 0.9% after three straight sessions of declines, as Britain plans to scrap quarantine for fully-vaccinated arrivals in the coming weeks.
The domestically focussed mid-cap index was up 0.4%.
The FTSE 100, which has gained nearly 9.5% so far this year on availability of cheap funds, is set to drop for the second straight week as a jump in coronavirus infections raised concerns about the pace of economic recovery.
Among stocks, Vectura Group jumped 12.8% to the top of the mid-cap index after cigarette maker Philip Morris said it would buy the pharmaceutical company in a deal valuing it at 1.05 billion pounds ($1.44 billion).
British jet and auto parts supplier Senior fell 0.7% even after it forecast 2021 performance to be slightly ahead of its previous expectations, encouraged by signs of a recovery in the aerospace division.
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