FTSE 100 Recovers as Rate-Cut Hopes Rise and UK Budget Looms
London’s blue-chip index edges up amid growing expectations of U.S. rate cuts and mounting fiscal pressure ahead of Chancellor Reeves’ budget
London’s FTSE 100 index found modest support on Friday as renewed hopes of interest-rate cuts by the Federal Reserve buoyed investor sentiment, even as domestic concerns remain intense ahead of the Rachel Reeves-led UK budget next week.
The blue-chip index trimmed earlier losses, closing higher though still posting a weekly drop of around 1.7 per cent — a steeper decline than seen in April.
Investors were reacting in part to comments by John Williams, a voting member of the Federal Open Market Committee, who signalled that rate-cuts remain on the table, helping lift risk appetite globally.
In the UK market, home-builder and beverages stocks outperformed — the former rising about 3.4 per cent — while aerospace and defence shares lagged, falling roughly 3.2 per cent amid renewed focus on geopolitics.
Despite the uptick, the mood remains cautious: the domestically-oriented mid-cap index extended a losing streak to an eighth session.
At the same time, preliminary figures suggest UK consumer spending, inflation and borrowing remain under pressure — heightening the stakes for Reeves’ budget scheduled for 26 November, which must address a fiscal gap estimated in the tens of billions of pounds.
Markets now face a delicate balancing act: monetary-policy relief from the U.S. has lifted the mood, but the UK’s fiscal position remains fragile and the domestic outlook uncertain.
The coming week will test whether the government can deliver credible support for growth without further unsettling investors and markets.
The blue-chip index trimmed earlier losses, closing higher though still posting a weekly drop of around 1.7 per cent — a steeper decline than seen in April.
Investors were reacting in part to comments by John Williams, a voting member of the Federal Open Market Committee, who signalled that rate-cuts remain on the table, helping lift risk appetite globally.
In the UK market, home-builder and beverages stocks outperformed — the former rising about 3.4 per cent — while aerospace and defence shares lagged, falling roughly 3.2 per cent amid renewed focus on geopolitics.
Despite the uptick, the mood remains cautious: the domestically-oriented mid-cap index extended a losing streak to an eighth session.
At the same time, preliminary figures suggest UK consumer spending, inflation and borrowing remain under pressure — heightening the stakes for Reeves’ budget scheduled for 26 November, which must address a fiscal gap estimated in the tens of billions of pounds.
Markets now face a delicate balancing act: monetary-policy relief from the U.S. has lifted the mood, but the UK’s fiscal position remains fragile and the domestic outlook uncertain.
The coming week will test whether the government can deliver credible support for growth without further unsettling investors and markets.
