The FTSE 100 is expected to open marginally lower on Thursday, 24 September 2026, at around 10,702, after closing at 10,705.26 on Wednesday.
Markets are contending with a renewed sell-off in US government bonds, higher oil prices and uncertainty over the UK government’s fiscal strategy ahead of the 28 October Budget. US Treasury yields surged on Wednesday after stronger-than-expected business activity, with several maturities reaching their highest levels since 2007.
In the UK, Chancellor John Healey is reportedly considering operating with a smaller fiscal buffer than the £23.6 billion projected in March, potentially reducing the scale of tax increases or spending reductions required to meet the government’s fiscal rules. Reports suggest Treasury and Downing Street are considering the size of the buffer, although no final headroom target has been agreed.
For markets, a smaller buffer would reduce the government’s protection against future economic shocks. The immediate test would therefore be the reaction of the gilt market: investors may tolerate less headroom, but a material loss of confidence could push government borrowing costs higher.
Energy is adding another pressure point. Brent crude was around $103 a barrel early Thursday, remaining sharply above the sub-$99 levels seen earlier this week. Higher oil supports heavyweight producers such as BP and Shell but increases inflation risks and costs for consumers, transport companies and retailers.
Wall Street closed lower on Wednesday as rising yields weighed on equities, with the Dow down 0.7%, S&P 500 down 0.9% and Nasdaq down 1.1%. Meanwhile, the US and China agreed to extend their existing trade truce from 10 November 2026 to 10 January 2027, allowing more time for negotiations.
UK consumer sentiment has also deteriorated ahead of the Budget. BRC-Opinium data showed expectations for the economy falling to -34 in September from -28 in August, while expectations for personal finances dropped to -15 from -9.
For London investors, Thursday’s key tension is therefore between higher oil, rising global bond yields and UK fiscal uncertainty. Energy shares could provide some support to the FTSE 100, but another rise in borrowing costs would put pressure on rate-sensitive sectors and increase scrutiny of the government’s Budget plans.
