London’s FTSE 100 kicks higher ahead of Truss energy package
London’s FTSE 100 kicked higher today ahead of new prime minister Liz Truss’s expected £150bn cost of living support package. The capital’s premier index climbed 0.29 per cent to 7,259.16 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, added 0.35 per cent to reach [...] The post London’s FTSE 100 kicks higher ahead of Truss energy package appeared first on CityAM.
London’s FTSE 100 kicked higher today ahead of new prime minister Liz Truss’s expected £150bn cost of living support package.
The capital’s premier index climbed 0.29 per cent to 7,259.16 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, added 0.35 per cent to reach 18,877.48 points.
City traders are bracing for Truss to announce a string of measures to help businesses and households through the winter energy crisis.
The new PM will freeze bills at around £2,500 and help firms drowning under enormous energy prices.
The package is expected to be funded through a short-term borrowing splurge, raising fears over the UK’s public finances, which are already riddled with debt taken on to deal with the Covid-19 crisis.
Greater borrowing has sent UK government debt yields on an upward spiral, driven by investors demanding a discount to swallow more bonds. Yields and prices move inversely.
The bond dump also sent the pound briefly to its lowest level against the US dollar since 1985 yesterday.
It slumped again today, weakening around 0.33 per cent against the greenback.
USD/Pound exchange rate this year
A weaker pound tends to lift the FTSE 100 due to a large proportion of the index being made up of exporters.
Truss is also anticipated to cut taxes.
Truss’s “still also set on slashing taxes, and adding a fresh burden to Britain’s debt pile in the hope it’ll kick start growth in the economy,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said.
The package will provide relief for cash-strapped Brits and likely prevent an enormous wave of business insolvencies.
London’s FTSE 100 was also boosted by a trading day on Wall Street which saw all of the US’s main indexes finish higher.
FTSE 100-listed banks dragged the index higher, with high street lenders NatWest and Barclays up more than one per cent.
Oil prices edged lower.
The post London’s FTSE 100 kicks higher ahead of Truss energy package appeared first on CityAM.
