British gross domestic product marked its slowest rate of growth since 2012, with a reading of 0.1%, compared with expectations of 0.3% and with a rate of 0.4% in the fourth quarter of 2017.
French growth slowed in the first quarter, to a rate of 0.3%, raising questions over the long-term strength of the eurozone’s recovery.
Also from France, inflation steadied at a rate of 1.6% in April, said statistics agency Insee, as strong price rises in energy and food offset a slowdown in services prices and a decline in manufactured goods prices.
What are strategists saying?
“Before 1Q GDP today we penciled in Bank of England (BoE) rate hikes in May this year and February next year. Today’s GDP release was the final nail in the coffin for that call. We now pencil in a 25bp rate hikes in November 2018 and one in May 2019,” said economists at Bank of America in a note.
“We have long argued that rates hikes were unnecessary or at the least not warranted by the data flow, and that would keep the BoE from hiking more than once a year. We remain comfortable being in the ‘one hike a year with chance of delay’ camp," they added.
Stocks in focus
Electrolux AB shares /zigman2/quotes/203332100/delayed SE:ELUX.B -0.82% sank 11% as the household appliance producer’s first-quarter net profit fell 46%, missing forecasts. The company booked hefty restructuring charges in its North American appliances business and felt pressure from raw-material costs and currency headwinds.
RBS /zigman2/quotes/209265718/delayed UK:RBS -1.73% /zigman2/quotes/203233010/composite RBS -1.31% fell 1.5%, even as the U.K.- majority owned lender posted a threefold rise in first-quarter net profit to £792 million.
“RBS shares are in the red after investors continue to fret about the looming fine from the U.S. Department of Justice,” said David Madden, market analyst at CMC Markets, in a note.”RBS won’t be able to restart paying a dividend until after the DOJ fine has been paid, and until then the stock is likely to be held back.”
Banco Bilbao Vizcaya Argentaria SA /zigman2/quotes/209653399/delayed ES:BBVA +0.12% , or BBVA, rose 2.2% after the Spanish lender posted a roughly 12% rise in first-quarter net profit to €1.34 billion euros ($1.63 billion).