UK stocks post worst quarter since 2016
Listed British firms posted their weakest performance in three years over the last quarter as the economic slowdown took its toll.
Brexit uncertainty and trade tensions weighed on the UK's biggest public companies, according to the Share Centre's Profit Watch UK report for the three months to June.
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The retail stockbroker's analysis revealed that a third of FTSE 350 firms posted lower sales in the second quarter of the year.
Firms saw revenues inch up 1.6pc, but growth was largely sustained by the devaluation of the pound, amid traders' concerns over the increased likelihood of a no-deal Brexit.
Average bottom lines also improved, moving 3.1pc higher, although analysts at the Share Centre again highlighted that this was "only made possible by a lower exchange rate", which boosted the value of revenues and profits from overseas.
Without this, sales and profits would have been slightly lower year-on-year, it said.
However, strong growth in revenues and profits among the UK's 40 largest listed companies helped to boost the figures, with smaller firms reporting a decline in revenue for the first time in five years.
"The slowdown in the world economy, compounded by a deteriorating picture at home, meant UK plc posted its weakest set of growth results in three years in the second quarter of 2019," the report said.
"The top-line performance was poor for larger and smaller companies alike."
UK shares plunged to their lowest level in more than a month on Friday after US President Donald Trump threatened to impose a 10pc tariff on $300bn (€270bn) of Chinese imports from September 1.
"Anyone trying to determine the next move in stock markets would be justified in feeling like they've just experienced a bit of whiplash," said CMC Markets analyst Michael Hewson, referring to the new threat to Chinese trade.
A Brexit-induced warning on targets also knocked shares in Royal Bank of Scotland, the parent of Ulster Bank.