By Barbara Kollmeyer, MarketWatch
London stocks carved out modest gains on Wednesday, as the British Chambers of Commerce called for “swift, substantial and immediate action," to deal with a historic setback revealed in its quarterly economic survey.
The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -0.71% rose 0.2% to 6,184.51, after a 9% gain in the second quarter, the biggest percentage gain since 2010. Positive support came from oil names as crude prices rose. Shares of BP /zigman2/quotes/207305210/composite BP -3.48% /zigman2/quotes/202286639/delayed UK:BP -2.54% rose 2% and Royal Dutch Shell Group /zigman2/quotes/205095589/composite RDS.A -2.25% /zigman2/quotes/207682964/composite RDS.B -2.62% rose 2.5%.
Shares of Smith & Nephew PLC /zigman2/quotes/207176500/delayed UK:SN -0.45% climbed 4% after the medical-technology business said that, while underlying revenue is expected to fall 29% in the second quarter, it was seeing improved performances as the quarter progressed.
Meanwhile, a survey from the British Chambers of Commerce revealed that U.K. economic conditions deteriorated at an unprecedented rate in the second quarter due to the pandemic. Eleven of the 14 key service-sector indicators hit their lowest level in the survey’s 31-year history.
The percentage of companies reporting higher domestic and export sales is now sharply below that of the worst quarter of the 2008-09 recession, while indicators for longer-term business performance dropped to record lows. The survey covered 7,700 firms that employ over 580,000 people in the U.K.
The service sector was hit particularly hard, manufacturing saw demand collapse, and a slump in cash flow remains a big concern, the survey showed. “The government has one chance to jump-start the economy and business confidence over the coming weeks — and they must take it,” said Adam Marshall, director general of the group.
U.K. Prime Minister Boris Johnson on Tuesday presented the outlines of the government’s plan to boost the economy. Critics of the plan noted that much of the £5 billion, or $6 billion, he announced was part of projects already in the pipeline. Chancellor of the Exchequer Rishi Sunak will in a few days outline a budget strategy