London stocks opened modestly higher, but the uplift owes more to renewed global optimism than excitement about today’s Budget.
The FTSE 100 climbed 27 points, or 0.3%, to 9,637, moving closer to its recent record high of 9,930. Gains were led by mining stocks, buoyed by growing confidence that the US Federal Reserve will deliver a growth-supporting interest rate cut next month.
Investors appear to be looking beyond the Chancellor’s speech, instead drawing confidence from improving sentiment across international markets and expectations of easier US monetary policy.
The more UK-focused FTSE 250 also pushed higher, rising 0.37%, reflecting a cautiously positive mood despite lingering uncertainty around the finer details of fiscal policy due at 12.30pm.
Bond investors brace for underwhelming Budget impact
Bond market investors are not holding out hope for any positive shocks when the Chancellor delivers her speech later today, with sentiment already priced for disappointment.
UK government bonds, known as gilts, have been trading under a cloud for much of the autumn as uncertainty around the Budget weighed heavily on market expectations. According to John Stopford, head of managed income at FTSE 250 asset manager Ninety One, the gilt market has been “fairly pessimistically priced”, reflecting widespread caution over the fiscal outlook.
This subdued positioning suggests investors believe the Budget is unlikely to contain measures that significantly improve the government’s borrowing profile or boost confidence in UK public finances, leaving the bond market braced for more of the same rather than any upside surprise.
