London party

London close: Shares mixed as investors digest Hunt’s budget

The FTSE100 ended the session down 0.06% at 7,346.54, while the FTSE250 added 0.05% to 19,122.31.

The pound was in the red, last trading 0.69% against the dollar at $1.1832, as it weakened 0.24% against the euro to change course. hands at €1.1433.

“Today’s autumn statement was intended to set out a series of measures that would reduce the debt burden, which was one of the benefits of the squeeze needed to bring inflation down,” said GI senior market analyst Joshua Mahony.

“However, despite the introduction of a host of tax measures which will further tighten the purse strings for many, Rishi Sunak has ultimately chosen to counter this with a series of spending commitments which will eventually push Britain’s debt to short term.”

Mahony said the decision to avoid waging war on the economy would hopefully reduce the depth of the recession, although it could ultimately last longer as high inflation depresses real household income.

“The prospect of real disposable income falling for two years underscores the struggles of UK businesses, with the FTSE 250 continuing to come under pressure after yesterday’s drop due to the CPI.”

On the budget, Jeremy Hunt unleashed a £55billion package of tax hikes and spending cuts as he sought to put the ruling Conservative Party in a position to win the next general election in two years’ time .

Seeking to reassure restless and fickle bond traders that the fortunately short-lived Conservative policy of seeking growth through unfunded tax cuts – as enacted during Liz Truss’ disastrous 45-day reign – was now over , Hunt attempted to present his measurements as an equal distribution. tax pain.

Millions of people would be made to pay more taxes by using the “fiscal brake”, with tax thresholds being frozen or lowered.

In this case, high earners would now start paying the 45% tax rate at £125,400 instead of £150,000.

At the other end, those eligible for the £12,570 tax-free allowance would see its current level now frozen until 2028, two years longer than originally planned.

In terms of public spending, with the exception of health and education, ministries would now see their budgets reduced in real terms.

However, the real fallout from Hunt’s ‘tax bomb’ wasn’t timed to kick in until 2024, when either the Tories could have given pre-election tax cuts to help them win another term, or they lose at the ballot box and the opposition Labor Party would be left with the wreckage.

The Office for Budget Responsibility has also confirmed the UK has fallen into a recession set to last more than a year, pushing half a million people into the benefit queue.

As a result, Britons were to see their standard of living fall 7% to their lowest level since records began – wiping out eight years of growth in the process, with wages well below soaring inflation and interest rate.

Put simply, real disposable incomes would be at 2013 levels, the OBR said.

He also said public debt in five years is expected to reach £400billion, or 18% of GDP – more than forecast in the March budget, and partly caused by Truss’ cataclysmic plan to hand out £45billion sterling of unfunded tax cuts. to the rich, triggering higher interest rates and market turbulence.

The economy is expected to contract by 2%, with unemployment rising by 505,000 in the second half of 2024, the OBR said.

GDP would not reach its pre-pandemic level until the end of the same year.

Elsewhere there have been attacks on those making extra income from stock dividends, with the tax-free allowance halved to £1,000 from next April and again to £500 a year later , rendering the advantage virtually worthless, but sparing Hunt’s criticism he had it removed. absolutely.

Capital gains allowances have also been dealt with a sharp knife, more than halving to £6,000 in 2024 and £3,000 the following year.

The Treasury estimated that the two measures combined would yield more than £1.2billion a year from April 2025.

Hunt said he hoped to raise £14billion next year after raising the windfall tax on oil and gas companies and also hitting profits from low-carbon electricity generators – including those who produce from wind, solar and nuclear power.

The existing windfall tax on oil and gas operators in the North Sea, the Energy Profits Tax (EPL), would be increased from 25% to 35% and extended for two years, until March 2028.

In economic news from the continent, eurozone inflation was slightly lower than initially estimated in October, but still at a record high amid soaring energy prices, according to Eurostat figures.

The annual inflation rate stood at 10.6%, down from 9.9% in September, but 0.1 percentage point lower than initial estimates.

Energy inflation rose from 40.7% in September to 41.5% in October. This figure was slightly lower than the initial estimate of 41.9%.

Meanwhile, food, alcohol and tobacco inflation rose from 11.8% to 13.1%.

Across the pond, U.S. jobless claims fell slightly last week, with the Labor Department reporting an initial drop in jobless claims of 4,000 to 222,000, from Barclays‘ scheduled for 230,000.

The four-week rolling average of initial requests meanwhile increased from 2,000 to 221,000.

Elsewhere, U.S. homebuilders launched slightly more new homes than economists expected last month.

The Commerce Department said the annual rate of housing starts fell at a seasonally adjusted monthly pace of 4.2% to 1.425 million, just above expectations of 1.42 million.

Meanwhile, the previous month’s pace was revised to 1.488 million from 1.439 million.

On the London stock markets, Ocado Group slid 9.72% after hedge fund Kintbury Capital said it expected the stock to drop 50% at best.

Security equipment company Halma fell 4.34% despite posting record half-year revenue and profit.

Spirax-Sarco Engineering fell 3.02% even after reiterating its full-year operating profit forecast and signaling continued strong demand despite a weakening outlook for global industrial production.

Hargreaves Lansdown and Rathbones were reversed by 4.8% and 0.5% respectively, after rating downgrades of RBC Capital Markets.

Eastern Mediterranean-focused oil and gas producer energetic was 4.04% lower despite the lifting of the annual production forecast following the commissioning of its Israel Karish gas field.

A.Bell lost 3.89% after the Chancellor took the pruning shears from the tax abatement on dividend income.

On the rise, Burberry group rose 2% after the luxury fashion brand recorded a first-half jump and set new medium-term sales guidance.

In the 26 weeks to October 1, adjusted operating profit increased 6% at constant currencies to £238m, while revenue increased 5% to £1.35bn. pound sterling.

Power generator Drax Group reversed earlier losses to close 5.44% higher, even after Jeremy Hunt announced the introduction of a temporary 45% tax on power generators.

Owner of British Gas Centric also reversed its fortunes, ending the day up 5.43%.

Lloyds banking group increased by 2.99%, Barclays added 1.46% and NatWest was 2.47% higher after Hunt confirmed the reduction of the surcharge on bank profits above £100million.

Mitié Group jumped 4.44% after the contractor raised its full-year operating profit forecast as it posted higher intermediate revenue but lower profit amid fewer tied contracts to covid.

Reporting by Josh White for Additional reporting by Michele Maatouk, Frank Prenesti and Alexander Bueso.

market movers

FTSE 100 (UKX) 7,346.54 -0.06%
FTSE 250 (MCX) 19,122.31 0.05%
techMARK (TASX) 4,335.48 -0.15%

FTSE 100 – Risers

Centrica (NAC) 91.70p 5.43%
Lloyds Banking Group (LLOY) 44.42p 2.99%
Imperial Marks (IMB) 2,109.00p 2.73%
NATWEST GROUP (NWG) 253.00p 2.47%
Legal and General Group (LGEN) 253.60p 2.26%
Burberry Group (BRBY) 2,043.00p 2.00%
British Land Company (BLND) 399.50p 1.99%
3i Group (III) 1,282.50p 1.99%
M&G (MNG) 193.60p 1.98%
Standard Chartered (STAN) 584.80p 1.95%

FTSE 100 – Slaughterhouses

Ocado Group (OCDO) 663.40p -8.62%
Harbor Energy (HBR) 314.00p -5.90%
Hargreaves Lansdown (HL.) 829.40p -4.80%
Halma (HLMA) 2,247.00p -4.34%
Antofagasta (ANTO) 1,322.00p -3.15%
Anglo-American (AAL) 3,142.00p -3.05%
Spirax-Sarco Engineering (SPX) 11,250.00p -3.02%
Smurfit Kappa Group (CDI) (SKG) 3,010.00p -2.65%
DCC (CDI) (DCC) 4,329.00p -2.59%
Endeavor Mining (EDV) 1,611.00p -2.25%

FTSE 250 – Risers

Drax Group (DRX) 601.00p 5.44%
Vietnam Enterprise Investments (DI) (VEIL) 535.00p 5.11%
Kainos Group (KNOS) 1,578.00p 4.50%
Mitie Group (MTO) 77.60p 4.44%
Beazley (BEZ) 627.00p 3.72%
Greencoat UK Wind (UKW) 151.50p 3.20%
Bank of Georgia Group (BGEO) 2,450.00p 3.16%
Shaftesbury (SHB) 388.20p 3.06%
Syncona Limited NPV (SYNC) 178.00p 3.01%
Balfour Beatty (BBY) 308.20p 3.01%

FTSE 250 – Slaughterhouses

WAG Payment Solutions (WPS) 69.00p -10.86%
IP Group (IPO) 65.35p -4.25%
Energian (ENOG) 1,424.00p -4.04%
AJ Bell (AJB) 341.00p -3.89%
Bridgepoint Group (Reg S) (BPT) 206.40p -3.65%
Petrofac Ltd. (PFC) 120.60p -3.46%
National Express Group (NEX) 168.80p -3.10%
Balanced Commercial Property Trust Limited (BCPT) 84.80p -3.09%
Chemring Group (CHG) 293.50p -2.98%
Crest Nicholson Holdings (CRST) 214.80p -2.89%