CLOSING UPDATE – The FTSE 100 closed down 0.78% and the FTSE 250 closed marginally up at 0.40%, with oil prices rising and the Pound falling once again.
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Once again, the pound fell against the dollar, as investor concerns over Kwasi Kwarteng and Liz Truss’s tax-cutting ‘mini budget’ continued – with Sterling falling more than 1% to $1.12.
Joshua Mahony, senior market analyst at online trading group IG said, “Sterling has been under pressure over the course of the day, with dollar strength helping to weaken GBPUSD after a week of upside. With sterling having recovered from the volatility driven by Kwarteng’s mini budget, the focus returns to the question of when the dollar dominance will resume.”
MORNING UPDATE – The FTSE 100 index was down 0.5% and the FTSE 250 ended down 1.5%. Prime Minister Liz Truss aimed to reassure markets with a speech where she claimed she had three priorities for Britain – “growth, growth and growth” – on the final day of the Conservative party conference.
She claimed her Conservative party faced an “anti-growth coalition” of rival political parties, anti-Brexit activists and environmental campaigners.
She said, “I know what it’s like to live somewhere which is not feeling the benefits of economic growth.
“I’ve seen the boarded-up shops and people with no hope turning to drugs.”
The pound reversed earlier gains to drop nearly 1% against the dollar, trading at $1.1375.
Meanwhile a report from EY suggested that the British stock market is on course for its worst year in a decade, as listings dry up. Just eight IPOs (initial public offerings) took place in London between July and September, raising £565 million – a drop of 86% from last year’s figure.
EY’s Scott McCubbin said: “The London IPO market has experienced a challenging 2022. Ongoing geopolitical tensions and economic instability, compounded by inflationary pressures, have meant many businesses have delayed their IPO plans until they believe inflation has peaked and stability returns to the market.
“While the overall IPO outlook for the remainder of 2022 remains subdued, companies who may have paused their IPO are now re-evaluating those plans to ensure they can adapt to the new macroeconomic landscape and are ready for the recovery in 2023.”
Energy companies gained as OPEC agreed a cut in oil production to support the price, despite Joe Biden visiting Saudi Arabia. Shares in Shell (GB:SHEL) rose 1.62% on the news.
British business news today
Truss attacks ‘anti-growth coalition’ (FT)
Electric car sales slow due to charging costs (Telegraph)
Britain facing recession as services sector grinds to halt (Times)
