The FTSE 100 ended Friday up 1.86% at 7,281.1 and the FTSE 250 was up by 1.94% at 18,853.22, both boosted by a buoyant day of trading where investors in Britain and the U.S. regained confidence in the wake of a promising jobs report in America.
The August report showed the U.S. labour market in good health, with 315,000 new jobs and a jobless rate of 3.7% compared to 3.5% the month before, which remains near a 50-year low.
Joshua Mahony, a senior market analyst at online trading firm IG said in a client note, “Another bout of Friday volatility has swept over financial markets from the US, with the latest jobs report helping to reverse some of the damage done by Jerome Powell last week. While many have questioned whether this raft of employment data had the ability to shift markets in the face of an inflation-focused Federal Reserve, the jump in unemployment and lower-than-expected wage growth figure did help ease market concerns.”
The British pound slid to a new low against the dollar – it’s lowest level since 1985, and a reflection of the multiple problems facing the British economy.
Gas prices have surged in Europe in the wake of Vladimir Putin’s decision to shut down the Nordstream oil pipeline, and investors in Europe await a decision from the European Central Bank on interest rates.
Liz Truss, set to become Britain’s Prime Minister today, is already facing criticism over her plans for the financial markets. Investors fear that the Reaganite raft of tax cuts offered by Truss could aggravate Britain’s current inflation problem and worsen a recession which the Bank of England has predicted will last for the whole of 2023.
Shell stock (GB:SHEL) rose on Friday in the wake of the news that Ben van Beurden is preparing to step down after almost a decade.
Housebuilders such as Barratt (GB:BDEV) fell on Friday after HSBC analysis suggested that house prices in London could fall as much as 15%, and that demand for UK housing could slump as much as 20%.
British business news today
Kwarteng pledges that Truss will be ‘fiscally responsible’ PM (FT)
Tech raises alarm over power cuts (Times)
Tumbling pound risks humiliation for Britain (Telegraph)
