European stock markets faced a significant downturn in trading on Wednesday, with The Stoxx Europe 600 dropping 1.08%. The Swiss Market Index fell 1.05%, France's CAC down 1.01%, London’s FTSE decreased by 0.53%, and Germany's DAX closed lower at 0.96%. In a notable economic update, the UK government upgraded its growth forecast for 2024 and 2025 in its annual budget disclosed on Wednesday.
The Office for Budget Responsibility anticipates a GDP growth of 1.1% for 2024, an increase from the previous estimate of 0.8%. The forecast for GDP growth in 2025 is now set at 2%, slightly higher than the earlier projection of 1.9%. However, a weaker GDP growth trajectory is expected between 2026 and 2028.
According to preliminary estimates from Eurostat, the euro area saw a seasonally adjusted GDP growth of 0.4% in Q3, while the European Union recorded a growth of 0.3% from the previous quarter. Year-on-year, the GDP for both regions rose by 0.9% in Q3. Germany's economy experienced a GDP growth of 0.2% in Q3, relative to both Q2 and the same quarter last year, adjusted for price, seasonal, and calendar impacts, as reported by the Federal Statistical Office.
The FSO also forecasted an inflation rate of 0.4% in Q3 compared to the previous quarter and 2% in relation to the year-ago quarter. France's GDP rose by 0.4% in Q2, following a 0.2% growth in the previous quarter, largely driven by the excitement around the Paris Olympic and Paralympic Games, according to the National Institute of Statistics and Economic Studies.
In Spain, the inflation rate for October is estimated at 1.8%, an increase from the previous quarter's 1.5%, resulting in an annual inflation of 2.5%. The National Statistics Institute of Spain attributes this rise primarily to increasing fuel prices. On the corporate front, British pharmaceutical giant GSK reported its Q3 core earnings on Wednesday, tallying 0.497 British pounds ($0.65) per share, a decrease from 0.504 pounds a year earlier.
Analysts surveyed by Capital IQ were expecting earnings of 0.43 pounds. Additionally, GSK's turnover, or sales, for the quarter ending September 30 was reported at 8.01 billion pounds, down from 8.15 billion pounds in the previous year; analysts had anticipated sales of 8 billion pounds. As a consequence, shares of GSK fell 2.8% in London trading.
In the automotive sector, European automaker Stellantis, through its Chrysler brand, announced the recall of 33,777 model year 2025 Ram 1500 pickup trucks owing to issues regarding the vehicle's electronic stability control system, as revealed by documents on the US National Highway Traffic Safety Administration's website.
Meanwhile, AstraZeneca disclosed on Wednesday that Leon Wang, the President of AstraZeneca China, is currently under investigation and is cooperating with inquiries led by Chinese authorities. The British pharmaceutical firm stated, "Our China operations continue under the leadership of the current General Manager of AstraZeneca China," and emphasized its intention to "fully cooperate" with the investigation if requested..