UK Economy Shows Modest Growth in Q3 as European Markets Open Mixed
Latest GDP data confirms 0.1% growth in Q3, with a shift in momentum away from government spending and signs of market resilience across Europe.
UK Economy Holds Steady in Q3
The UK economy expanded by 0.1% in the third quarter of 2025, according to the latest data released on Monday. This matches earlier estimates and reflects a modest but stable rate of growth. However, there was a notable shift in the underlying drivers of growth.
- The updated GDP figures revealed that government investment fell by 1.8%, a significant downward revision from the previously estimated 3.6% growth.
- Private sector activity played a greater role in sustaining economic momentum.
- The UK economy is navigating a challenging environment of inflationary pressures and global uncertainty, with analysts pointing to a “fragile recovery”.
Markets Open Mixed Across Europe
European stock markets started the week with mixed performances:
- Germany’s DAX edged up by 0.1%.
- France’s CAC 40 slipped by 0.3%.
- The UK’s FTSE 100 declined by 0.3% .
This variance reflects broader investor caution as markets digest the latest economic data and central bank commentary.
Saipem Gains on LNG Deal
Italian engineering group Saipem saw its shares rise by around 4% after it announced a significant offshore contract win.
- The contract, part of QatarEnergy’s flagship LNG expansion, involves offshore engineering and construction.
- Saipem is partnering with China’s Offshore Oil Engineering Co. for the project .
This development positions Saipem for further growth in the booming liquefied natural gas (LNG) sector.
Corporate Headlines: M&A and Strategy Moves
- Telecom Italia: The board approved a plan to convert savings shares into ordinary shares and reduce share capital. Shareholder meetings are scheduled for 28 January to vote on the proposal.
- Clearwater Analytics: A consortium led by Permira and Warburg Pincus has agreed to acquire the firm for $8.4 billion including debt, offering $24.55 per share for an equity value of $7 billion.
- GSK (GlaxoSmithKline): The UK pharma giant has reached a pricing agreement with the US government to reduce respiratory drug costs, particularly for Medicaid patients with asthma and COPD. The agreement reflects President Trump’s healthcare affordability push .
Investor Outlook: Stability with Caution
Despite modest growth in the UK and major corporate deals, investor sentiment remains mixed.
- The shift away from government-driven growth may indicate longer-term structural adjustments in the UK economy.
- Globally, energy and healthcare remain resilient sectors, as seen in Saipem’s LNG win and GSK’s pricing agreement.
What It Means for Investors
- UK Equities: Continued growth, albeit slow, could support selective investment in domestic sectors like healthcare and financials.
- European Stocks: Mixed openings point to stock-specific opportunities rather than broad market moves.
- Energy Sector: Saipem’s success highlights the importance of LNG and offshore projects in the energy transition story.
- M&A Activity: The Clearwater deal indicates ongoing strength in the private equity and fintech sectors.
Conclusion
While UK GDP growth remains subdued, the economy is showing resilience through private sector contributions. Market activity across Europe reflects caution but also offers sector-specific optimism. For investors, the evolving macro picture and strategic corporate shifts provide both challenges and opportunities. Staying informed and agile will be key.
Sources: (Investing.com, Bloomberg.com)
