| London close: Footsie down as Sterling snaps back after firmer GDP reading Stocks slumped as the pound rallied after a stronger-than-expected reading on GDP data which some believed that, at the margin, raised the likelihood of a rate hike by the Bank of England next week. The FTSE 100 was down 1.05% to 7,447.21, with the pound up 0.88% against the dollar at 1.3250 and 0.50% firmer versus the euro at 1.1221. Preliminary figures released by the Office for National Statistic earlier showed the UK economy grew slightly more than expected in the last quarter, possibly paving the way for the first rate hike from the Bank of England in over a decade. Gross domestic product grew 0.4% in the third quarter of 2017, up from 0.3% in the first two quarters and ahead of the BoE's and the consensus forecast for the third. Compared to the same quarter last year, UK GDP was 1.5% higher, which again was more than the 1.4% improvement economists had forecast. While still a pretty subdued performance compared to other countries, an outturn over 0.3% was felt by economists as likely to be the final piece of data needed to seal an interest rate hike from 0.25% to 0.5% from the BoE's Monetary Policy Committee when it meets next week. The dominant services sector increased by 0.4% for a second quarter, with a strong performance in computer programming, motor trades and retail trade. A return to growth for manufacturing of 1.0% boosted the total, while construction contracted for the second quarter in a row, falling into recession with a 0.7% fall in output. IG analyst Joshua Mahony said: "A more resilient UK economy helps enable the BoE to implement the Q4 rate hike many predict will come next month, with market expectations now standing at 87% that Carney & co will act. While BoE member Cunliffe tried his best to temper the already sky-high market expectations for next month's meeting, today's GDP figure served to reverse any doubts, with data speaking louder than words." Investors were also digesting the latest mortgage approvals data from UK Finance, which showed banks approved 41,584 mortgages on a seasonally-adjusted basis last month, compared to 41,762 in August but up from a year ago. In corporate news, British American Tobacco was in the black after saying it expects revenue from next generation products to double to over £1bn next year. Shares of Lloyds Banking Group reversed earlier losses to trade a little higher. The stock had been on the back foot earlier as investors chose to focus more on loan impairments and rising consumer credit risk than solid income and profits growth up 8% to £4.62bn and 9% to £2.08bn respectively. Drax dropped sharply after agreeing the sale of Billington Bioenergy, a distributor of wood pellets in the UK heating market. Shares in the AA on the other hand jumped on reports that the company has demanded that former chairman Bob Mackenzie pay pack more than £1.2m in bonuses. Challenger bank Virgin Money was also lower even as it said it is in talks to make former HSBC banker Irene Dorner its next chairman in a move that would assemble the first all-female leadership team at a major British bank. Also on the downside, Metro Bank retreated after it reported a 77% jump in underlying pre-tax profit for the third quarter and announced that chief
financial officer Mike Brierley plans to retire next year Fresnillo was weaker despite posting a rise in the production of silver and gold for the third quarter and saying it remains on course to achieve its output targets for 2017, while Antofagasta was in the red despite cutting cost forecast and reporting a rise in third-quarter copper production. In broker note action, Whitbread was cut to 'equalweight' at Morgan Stanley, while Wizz Air was downgraded to 'hold' at Investec, but Lancashire was bumped up to 'equalweight' at Barclays. | 
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