The FTSE 100 fell 0.2% to 10,874.64 points, while the FTSE 250 edged 0.1% higher to 24,880.50. Both indexes had previously recorded four consecutive weeks of gains, leaving investors assessing whether the recent market strength can be sustained.
The immediate focus is on GDP data, which should provide a clearer assessment of economic activity and help markets evaluate the outlook for household spending, business investment and interest rates.
The data arrive against a complicated monetary-policy backdrop. Recent US employment figures showed an unexpected decline in payrolls in July, reducing some expectations for further US rate increases and contributing to changing global rate expectations.
For UK businesses, the direction of interest rates remains important because borrowing costs influence corporate investment, property activity, household demand and financing conditions. A stronger-than-expected economy could reduce pressure for rapid monetary easing, while weaker activity could reinforce expectations for policy support.
Investors are also monitoring corporate earnings for evidence of how companies are responding to consumer demand, financing costs and changing economic conditions. The performance of domestically focused companies may provide a different signal from the FTSE 100, whose large multinational constituents derive substantial revenue from overseas markets.
The distinction matters for policymakers because financial-market resilience does not necessarily translate into equivalent strength across the wider economy. Equity valuations can remain firm even while households and smaller businesses face tighter conditions.
For investors, the forthcoming GDP figures will therefore serve as an important test of whether Britain's economic momentum is strengthening or losing pace.
What to watch: GDP growth, business investment, household demand and subsequent changes in expectations for Bank of England policy.
