CLOSING UPDATE –
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FTSE 100 closed down 0.08% and the FTSE 250 was 1.24% lower, amid continued investor worries over rate rises, inflation and Kwasi Kwarteng’s ‘mini budget’
Company insolvencies in Britian have hit a 13-year high, according to the Office for National Statistics, with many insolvencies due to rising energy prices.
MORNING 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.
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.”
Deutsche Bank sounded the alarm over Britain’s long-term prospects, saying that Britain won’t recover to pre-pandemic levels before 2024.
Deutsche’s chief UK economist, Sanjay Raja, said, “Easier fiscal policy should support real disposable incomes by a little more than we anticipated this year and next – despite price pressures expected to be a little more persistent over the next two years Tighter financial conditions, however, will offset much of gains in fiscal policy.
“Household spending and business investment are likely to track a little lower than we previously anticipated, especially with unemployment expected to rise from next year.”
Shares in Shell (GB:SHEL) fell more than 3% after the company warned on its third-quarter results.
British business news today
Bank of England says £65 billion gilt intervention staved off ‘spiral’ (FT)
Risk of three-hour daily blackouts this winter says National Grid (Telegraph)
Bank of England warned about pensions (Times)
