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LONDON (Alliance News) - UK stock indices are higher Friday, despite life insurers providing a drag for the second time in as many weeks, while growth in UK GDP in 2013 has been confirmed at 2.7%.
By mid-morning Friday the FTSE 100 is up 0.4% at 6,614.00, the FTSE 250 is up 0.1% at 16,220.50, and the AIM All-Share is up 0.5% at 852.95.
In Europe, major indices also are higher, with the CAC 40 up 0.6%, and the DAX 30 up 1.0%.
The has been little reaction to the UK GDP data, which, as expected, confirmed fourth-quarter growth of 0.7%.
The UK's huge current account deficit has garnered more attention so far Friday. The latest numbers from the Office for National Statistics reveal a deficit in the fourth quarter of GBP22.4 billion, considerably larger than the GBP14 billion expected by economists, although slightly narrower that the GBP22.8 billion recorded in the second-quarter.
"This looks like a domestic recovery and it is quacking like one. Hence the UK?s colossal balance of payments deficit is showing no signs of closing," said Berenberg chief UK economist Rob Wood.
The pound has softened very slightly against the dollar following the UK data releases, although continues to hold above USD1.66.
The euro has been knocked further against other major currencies following the release of disappointing Spanish inflation data, which showed harmonised prices falling at 0.2% year-on-year in February - the first fall in prices since 2009.
With some economists expecting further monetary easing from the European Central Bank to boost the economy and combat disinflation, the euro fell to a monthly low of USD1.3703 after the Spanish numbers.
The eurozone economic sentiment indicator grew faster than expected in March, recording 102.4, up from 101.2 in February, and beating economist expectations of 101.4. The reading has done little to boost the euro however.
The main risk event for the euro Friday, which could have a wider market impact, is German CPI still to come at an unusual afternoon slot of 1300 GMT. Annual CPI is expected to have slowed slightly to 1.1% in March, from 1.2% in February, while monthly CPI is also expected to have slowed also to 0.4% from 0.5% previously.
The harmonised index, which the ECB tends to look closest at for policy decisions, is expected to remain stable on an annual basis in March, at 1.0%.
"March inflation data are critical for ECB?s next actions," said Lloyds Bank interest rate strategists in a morning note to clients. "Any (HCPI) print below 0.8% today will allow the market to turn dovish again," the strategists say.
Within UK equities, the Life Insurance sector is underperforming the market for the second time in as many weeks, with the FTSE 350 sector currently down 4.6%. After the Chancellor George Osborne effectively killed the annuity market with a pensions shake up announced in last week's budget, the Financial Conduct Authority is now reportedly looking to investigate as many as 30 million policies sold by the insurers in the years prior to 2000.
The story has sent all the life insurers lower, with Resolution Limited leading the FTSE 100 lower, down 11%, and Phoenix Group leading the FTSE 250 lower, down more than 11%. Aviva is down 5.7%, Legal & General 5.5%, Prudential 3.2%, and Partnership Assurance 3.0%
The mining sector is posting some of the best gains Friday, with the FTSE 350 sector index up 1.6%. Randgold Resources is up 1.6% after reporting that its attributable mineral resources increased by 5% to 28.6 million.
As well as the German CPI data, US personal consumption and spending numbers are also still to come Friday. Due at 1230 GMT the numbers are expected to show stable consumption growth of 1.1% in February.
By Jon Darby; jondarby@alliancenews.com; @jondarby100
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