Wall Street stocks climbed on Thursday even as the US economy contracted more than had been estimated in the first quarter of this year.

According to the Bureau for Labour Statistics, the US economy shrank at a 0.5% annualised rate between January and the end of March, more than the 0.2% rate of decline estimated a month ago. This was the equivalent of a 0.125% quarter-on-quarter contraction.

Meanwhile, the FTSE 100 (^FTSE) and European stocks finished higher as the ceasefire between Iran and Israel offset warnings about UK growth from the Bank of England (BoE).

“We’re going to talk to [Iran] next week,” US president Donald Trump said at a press conference on Wednesday during the NATO summit at The Hague, without providing further details on the timing.

“We may sign an agreement. I don’t know, to me, I don’t think it’s that necessary," he added.

His comments came on day two of a ceasefire between Israel and Iran, which ended 12 days of a conflict that was threatening to escalate into a wider regional war and upend energy and oil markets.

Meanwhile, Bank of England governor Andrew Bailey has warned that UK growth is likely to slow to a “more moderate pace” in the coming quarters.

Speaking at the British Chambers of Commerce, he said: "First, the unexpected strength in the first quarter was driven by strong outcomes for volatile components of GDP in the monthly figures for March.

"This was possibly a result of front-loading of activity ahead of increases in stamp duty land tax and vehicle excise duty, and with a temporary boost to trade ahead of the imposition of new tariffs on exports to the United States. Consistent with this, monthly GDP contracted by 0.3% in April.

"Second, looking at the expenditure components of GDP, while business investment was strong in the first quarter, businesses tell us that heightened uncertainty and a weak demand outlook are weighing on investment intentions. That could point to slower investment over coming months – although how it pans out remains to be seen."