European Stock Markets Dip: FTSE 100 Faces Volatility as UK Economy Shrinks More Than Anticipated

European stock markets are facing a rough start today. The Stoxx 600 index dropped by 0.42%, and most sectors are down. Travel companies are hit the hardest, down around 1.5%.

In the UK, exports to the U.S. fell significantly, down £2 billion ($2.71 billion) in April. This is the largest monthly drop since records began in 1997. Experts suggest this decline is linked to new tariffs on British goods entering the U.S. Imports from the U.S. to the UK also decreased by £400 million. The overall trade deficit for the UK has widened, now at £60 billion for the three months ending in April.

UK Chancellor Rachel Reeves described the latest GDP data as "clearly disappointing." The economy shrank by 0.3% in April, underscoring the challenges faced. Reeves expressed determination to boost growth through various initiatives, including investments in infrastructure.

According to a recent survey by Schroders, tariffs are now the top concern for 63% of global investors. These trade tensions overshadow other economic risks, prompting investors to rethink their strategies.

In the U.S.-China trade context, confidence among investors is faltering as the markets closely watch for progress.

As for today, UK GDP figures are expected, and major retailers, including Tesco, are set to report earnings. Traders and businesses alike are eager for signs of economic stability amid rising concerns over trade and growth.

For more insights on international trade and economic dynamics, check out this detailed report.

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