The FTSE 100 rose 0.3%, climbing above the 7,000 points mark, the CAC was 0.1% higher, and the Frankfurt DAX was 0.7% up
European stock markets mostly slipped into the red on Wednesday as traders discovered that the UK fiscal statement has been moved again from 31 October to 17 November, and will be a full budget.
In London, the FTSE 100 rose 0.3% by afternoon trade, climbing above the 7,000 points mark after spending most of the session in the red. The CAC was 0.1% higher in Paris, and the Frankfurt DAX was 0.7% up on the day.
It came as the full ‘autumn statement’ will be delivered by chancellor Jeremy Hunt and accompanied by separate forecasts from the Office for Budget Responsibility (OBR) later than expected.
Hunt told broadcasters: I want to confirm that it will demonstrate debt falling over the medium term which is really important for people to understand.
But it’s also extremely important that that statement is based on the most accurate possible economic forecasts and forecasts of public finances. And for that reason the prime minister and I have decided it is prudent to make that statement on 17 November when it will be upgraded to a full autumn statement, Hunt said.
The pound continued to rise during the session, to a fresh six-week high, after hitting its highest level against the US dollar on Tuesday. This was above where it was trading before Liz Truss’s and Kwasi Kwarteng’s mini-budget.
Sterling was trading at $1.1564 against the US greenback, up 0.8%. It was also boosted by a weaker dollar, amid expectations that the Federal Reserve may be less aggressive in hiking interest rates in the coming months.
The UK government’s borrowing costs have also fallen back to levels last reached before the budget.
The two-week delay of plans to reveal detail of the UK government’s spending plans on Halloween hasn’t caused investors to take fright, with the markets cutting prime minister Rishi Sunak some slack, given that he’s just a day into the new job, Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said.
The pound has remained above $1.15, retreating only a little from the mornings highs, but sterling is still up overall, she said.
She added: Investors are mindful that it was the unnecessary rush to announce big tax cuts which caused such tumultuous times for the Truss administration and what they crave now is caution and stability. The premium slammed on UK assets by reckless policies of his predecessor appears to be slowly lifting, but hefty challenges for team Sunak remain, as the economy heads into recession and the productivity puzzle remains as cryptic as ever to solve.
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