Wall Street surged higher on Thursday, with the FTSE 100 ( ^FTSE ) and European stocks also in positive territory, as the US economy grew faster than rival Western economies in the second quarter of this year.

The figures were a confirmation that real US GDP increased at an annualised rate of 3% in the April-June quarter. This is the equivalent of quarterly growth of 0.75%, faster than the UK’s 0.6%, or the 0.2% recorded in the eurozone.

The US Bureau of Economic Analysis reported that the increase in GDP was due to higher consumer spending, private inventory investment, and non-residential fixed investment.

Meanwhile, UK consumer confidence was hit by budget pessimism. The British Retail Consortium (BRC) warned that “negative publicity surrounding the state of the UK’s finances appears to have damaged confidence”.

Consumers’ assessment of the state of the economy and their personal finances dropped in September compared to August amid the chancellor’s warnings of “tough decisions” and Sir Keir Starmer’s promise of a “painful” budget to come next month.

The BRC’s measure of households’ assessment of the general economic situation over the next three months sank to -21 this month from -8.

Older people’s confidence in economic outlook has taken a particular blow, the BRC said.

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