Economic news

FTSE 100 Slips ahead of Hunt's Budget Plan

  • Budget plan to be delivered at 1130 GMT
  • Mitie tumbles after lower half-yearly profit
  • FTSE 100 down 0.6%, FTSE 250 off 0.4%

Nov 17 (Reuters) - The UK's blue-chip index slipped for a third straight session on Thursday as investors awaited Finance Minister Jeremy Hunt's new budget aimed at stabilising the public finances and restoring investor confidence.

The FTSE 100 dropped 0.6% to touch one-week lows, while the mid-cap FTSE 250 fell 0.4%, also hovering near one-week lows.

Hunt will bury Britain's failed "Trussonomics" experiment by cutting spending and raising taxes, an abrupt policy reversal from the unfunded tax cuts promised by former Prime Minister Liz Truss that sent British markets in a tailspin. The plan is due to be announced at about 1130 GMT.

"That is going to put an added drag on demand in the UK and is undoubtedly going to deepen the recession that the UK is already in," said Stuart Cole, head macro economist at Equiti Capital.

Data on Wednesday showed surging household energy bills and food prices pushed British inflation to a 41-year high in October, piling pressure on the Bank of England to keep on raising rates.

But the scale of austerity due to be announced later in the day could mean borrowing costs need to go up by less.

Among individual stocks, Royal Mail's parent company International Distributions Services slipped 1.8% after it reported a first-half loss as higher costs and disruptions due to postal workers' strikes strained its finances.

Mitie tumbled 9% after the outsourcer posted a lower half-yearly profit and put forward a support plan for employees amid a cost-of-living crisis that has squeezed Britons.

Halma dropped 4.5% after the technology company reported a drop in its half-year statutory pretax profit.

Reporting by Shashwat Chauhan in Bengaluru; Editing by Savio D'Souza

Source: Reuters

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree