The FTSE 100 (^FTSE) underperformed against its European peers on Thursday, while Wall Street advanced despite warnings that the US government gridlock could slow economic growth.

As the federal government enters day two of a shutdown, Treasury secretary Scott Bessent told CNBC’s Squawk Box: “This isn’t the way to have a discussion, shutting down the government and lowering the GDP. We could see a hit to the GDP, a hit to growth, and a hit to working America.”

The US’s gross domestic product (GDP) grew at an annualised rate of 3.8% in the third quarter, growing for the second straight quarter after growth contracted in the first quarter. But on Wednesday, US senators failed to advance a plan to fund the government after another round of votes.

Yahoo Finance’s Ben Werschkul noted that the White House also appears poised to use the shutdown as an opportunity to expand president Donald Trump’s powers to potentially fire government workers or cut programs.

Meanwhile, data from Eurostat, the EU’s statistical office, showed that the eurozone unemployment rate rose from 6.2% in July to 6.3% in August.

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While the number of unemployed people was 11,000 higher than in July, it was 15,000 lower than in August last year, and 136,000 lower than in June.

Elsewhere, UK financial services activity steadied after a sharp fall. According to the latest CBI financial services survey, business volumes declined with a weighted balance of -36%, down from -24% in June.

Despite the deterioration in activity, sentiment was broadly flat, rising to +3 after a sharp fall of 52% in the previous quarter.

Firms expect conditions to improve next quarter, with volumes growth forecast at 37%. Profitability fell at a slower rate in the third quarter, coming in at -13% compared with -24% in June, however, it is expected to jump in Q4 (+26%).

Headcount slipped 24%, but firms see the pace of reduction slowing to -7%. The survey also revealed that firms plan to increase IT investment over the next year, with uncertainty about demand cited as the biggest factor limiting investment. The share of firms highlighting this rose to 69%, the highest since 2012.

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London’s benchmark index (^FTSE) was 0.2% lower by the end of the session.

Germany’s DAX (^GDAXI) rose 1.2% and the CAC (^FCHI) in Paris likewise headed 1.1% into the green.

The pan-European STOXX 600 (^STOXX) was up 0.5%.

The tech-heavy Nasdaq Composite (^IXIC) led the way higher, rising 0.6%. The S&P 500 (^GSPC) added 0.3%. The Dow Jones Industrial Average (^DJI), which includes fewer tech stocks, wavered along the flat line.

The pound was 0.5% against the US dollar (GBPUSD=X) at 1.3411.