FTSE 100 Stay: ‘2024 looking increasingly concerning’; shares up on US debt deal hope
FTSE closes at 7,627.20
The FTSE 100 closed at 7,627.20, because of a late rally on stories a US debt deal is shut.
However the index remains to be down 1.7% for the week.
Miners made up extra of the highest risers, with Rio Tinto gaining 3.6% to 4,929p.
Vodafone was the most important faller, down 1.8%.
London shares comply with Wall Street up
Shares in London have climbed following stories the US is near a debt ceiling deal.
The FTSE 100 is now up 0.8% to 7633.47, having been down barely within the late morning.
West End Final: The return of business coverage is an enormous deal
“The chancellor committed news this morning, when he essentially said the quiet part out loud, that sometimes a recession is necessary to bring inflation down,” writes Jack Kessler. “That comment, while certainly noteworthy, drew attention away from a potentially much more consequential announcement.
“The Treasury has revealed a life sciences package worth £650m which it hopes will boost the sector, one of the UK’s most successful, worth more than £94bn to the economy in 2021.
“Whisper it quietly, but is this the return of industrial policy (at least, beyond the five ‘e’s, whatever they are?)”
US shares rise amid debt deal hopes
US shares soared after markets opened on Wall Street, amid better optimism the White House and Congress can strike a deal tht would forestall default.
The S&P 500 is up 1% to 4194, whereas the Dow Jones is up 1.1% to 33112. The Nasdaq is up 1.4% to 12875, having now gained nearly 400 factors since markets opened yesterday.
AI hopes continued to drive shares up, with tech companies Adobe, Broadcom and Micron Technologies among the many prime risers
Half-term getaway hit as BA flight cancellations attain 175
Half-term vacation plans for hundreds of households have been thrown into disarray after British Airways’ flight cancellations attributable to an IT failure reached 175.
Most of the affected flights have been on short-haul routes to and from Heathrow Airport.
British Airways stated the “technical issue” was resolved on Thursday night time, however disruption continued into Friday due to plane and crew being out of place.
US shares set to open barely greater on cautious debt deal hopes
US shares are set to open barely greater with buyers cautiously optimistic that the nation’s politicans will have the ability to work out a deal that can forestall a default.
Dow Jones futures are up 0.2% to 32866 and S&P 500 futures are additionally up 0.2%, to 4168. Nasdaq futures are up by 0.4% to 14025 after large positive factors yesterday.
The deadline for a deal on the nation’s debt ceiling is getting ever-closer with the Treasury’s money steadiness falling under $50 billion, however buyers are hopeful of progress.
But Richard Hunter, head of markets at Interactive Investor, warned that the deadline to work out a deal could be earlier than the Treasury exhausts its remaining funds.
“Time is running out even to push through any such reform in the required timeframe,” he stated.
UK bond yields highest in G7
The UK’s 10-year bond yields are the best within the G7, as markets proceed to fret in regards to the extent of rate of interest hikes that will likely be wanted to deliver inflation again below management.
Worryingly the UK’s 10Y sovereign yield is now’s now the best within the G7. This did not even occur in the course of the #minibudget in late 2022. On one degree this reinforces Sunak/Hunt considerations on the time over inflation & juicing demand, however for this to occur on their watch is awkward pic.twitter.com/SHQa6jj1m2
— Simon French (@shjfrench) May 26, 2023
Central London prime workplace rents get large enhance from Elizabeth line
Prime workplace rents alongside the Elizabeth line’s central London part have leapt, in some instances by 20% since pre-pandemic, as companies search for essentially the most commuter-friendly areas analysis reveals.
The information is available in the identical week Transport for London stated 150 million journeys have been taken throughout the Elizabeth line in its first yr since opening in May 2022.
‘2024 is looking increasingly concerning’
Oxford Economics’ UK team warned that, while the economy appears resilient in the short term, there could be trouble on the way in 2024.
“The near-term outlook for activity continues to look reasonably good,” Andrew Goodwin and Edward Allenby said. “April saw a rebound in retail sales, while there was another decent outturn for the composite PMI in May.
“But the outlook for the latter part of this year and into 2024 is looking increasingly concerning.
“Our modelling suggests that this is the period when the maximum impact of past monetary tightening will bear down on activity. With further increases in interest rates and a slower fall in inflation adding to the headwinds to growth, we plan to significantly revise down our 2024 forecast when we publish our next update.”
The Standard View: Hunt speaks the uncomfortable truth on inflation
It is not something you hear a Chancellor say every day, not least 12 to 18 months out from a general election. Asked if he was “comfortable with the Bank of England doing whatever it takes to bring down inflation, even if that potentially would precipitate a recession”, Jeremy Hunt replied: “Yes”.
This is all the more remarkable given that recent economic forecasts from the Bank and the International Monetary Fund have suggested that Britain will avoid a contraction. However, that was before this week’s inflation figures