- FTSE 100 finishes higher
- Hunt declares Spring Budget
- Stronger UK GDP growth expected
The FTSE 100 closed at 7,679.31 after gaining just over 33 points or 0.43% on the day.
Top of the risers was ConvaTec Group, up 6.1% after the medical products group raised medium term revenue guidance.
British Airways owner IAG flew 4.8% higher after getting a double-upgrade from JP Morgan.
Housebuilders, such as Persimmon and Berkeley, were among the fallers as the Budget did not deliver the assistance for the sector that some investors seemed to have hoped for.
What’s good for some is bad for other, UK home builders are sinking after no stamp duty cut and no extra support to build homes. The focus instead the markets is on self invest platforms,
— kathleen brooks (@KATHLEENBROOKS) March 6, 2024
Meanwhile, the mid caps of the FTSE 250 were up 1.05% to 19,473.22.
Mr Kipling maker Premier Foods PLC was top of the leaderboard there, up 11.5% on the back of a pension boost that the board said will boost cash flow available and "presents us with enhanced capital allocation options to deliver on our growth ambitions".
Travel group TUI AG (LSE:TUI) rose 9% and animal genetics specialist Genus PLC 7.6%.
4.10pm: A Budget for just a few months
More thoughts on the Budget from Berenberg economist and occasional Telegraph columnist Kallum Pickering, who calls it "a budget for a few months".
"In all likelihood, much of the UK government’s updated five-year fiscal plan set out by Conservative Chancellor Jeremy Hunt today will not see the light of day.
"Opinion polls show Labour holds a stable 20ppt lead over the Conservatives ahead of a likely general election in the autumn."
Will today's announcements mean anything for 2024 economic performance? Tax cuts "may lift output and inflation marginally, but it is no game-changer", and overall Hunt gave with one hand and took away with another, Pickering said.
"A likely Labour government is set to inherit an economy that is on track to enjoy more growth at less inflation, as well as a gradual decline in borrowing that would produce a growing primary surplus (borrowing ex-interest costs) over the coming years. While this bodes well for Labour’s likely coming term in office, there are serious challenges ahead," he concluded, with UK potential growth probably half of what it was when Tony Blair arrived in 1997.
"Stretched public services, high debt and mediocre growth is a complicated puzzle for the next government to solve. It will require difficult and unpopular tax and spending decisions and suggests a dose of caution that the story can play out quite as well as after the 1997 vote."
3.57pm: UK economic forecasts improve
The Office for Budget Responsibility has raised forecasts for UK economic growth on the back of Chancellor Jeremy Hunt’s budget.
In data released on Wednesday, economists said UK gross domestic product (GDP) would likely climb 0.8% this year, rather than 0.7% as previously anticipated.
Consumer price index inflation is expected to be lower for the year meanwhile, at 2.2%, rather than 3.6%.
The March 2024 forecast at a glance#Budget2024 pic.twitter.com/PvBgK91T81
— Office for Budget Responsibility (@OBR_UK) March 6, 2024
Pantheon economists commented that “fiscal policy is no longer an increasing drag on growth,” after the statement.
“The underlying OBR fiscal forecasts barely changed at the crucial five-year forecast horizon, meaning that Mr Hunt used up some of his small remaining headroom to pay for tax cuts and covered the rest with a range of tax changes,” they said.
“We think [...] today’s measures from Mr Hunt will add around 0.1% to GDP growth over the next year, but have little effect on the two-year ahead inflation forecast.”
3.44pm: FTSE 100 rallies after Budget, energy firms boosted
London’s blue-chip index gained ground in the wake of Jeremy Hunt’s Spring Budget, with energy firms being boosted late on in the day.
Shares in oil firms Shell and BP climbed 1.6% and 1.7% respectively after the announcement, while Centrica rose by 2% and SSE climbed 0.5%.
Hunt did indeed extend the energy profit levy, which takes North Sea firms’ tax burden to 75%, but also extended tax breaks which allow such companies to claim back much of what is paid through investments.
Funding was also unveiled for the green energy sector, including larger amounts for the UK’s latest offshore wind contract for difference bidding round, after last year's failed to attract any investment.
“The government has listened to the energy industry about the need to deliver on the country’s ambitions for low carbon power, with plans to deliver greater capacity from established renewables technologies like solar, onshore and offshore wind, as well as investing in new, emerging technologies like tidal, geothermal and floating offshore wind," industry body Energy UK commented.
“It's particularly welcome that the government has recognised the economic and market conditions facing offshore wind developers."
The FTSE 100 climbed 31 points to 7,678 in the meantime.
2.32pm: Tourist tax to stay in 'staggering' decision from Hunt
Sir Rocco Forte, chairman of Rocco Forte Hotels, provided some unambiguous opinions on Chancellor Jeremy Hunt's decision to keep the tourist tax.
Here is what he told the Evening Standard: "It is quite staggering that the Prime Minister and the Chancellor have ignored the pleas of over 500 leading businesses representing the retail, hospitality, tourism and arts sectors and refused to scrap the tourist tax.
"The case for reintroducing tax-free shopping in the UK is clear and overwhelming. As things stand, every country in the EU offers sales tax rebates to tourists while we don’t, meaning the whole tourist economy in the UK is operating with one hand tied behind its back."
1.20pm: Great British ISA and AstraZeneca investment announced
The lead index remained buoyant in afternoon trades during Chancellor Jeremy Hunt’s Spring Budget speech.
Hunt has announced a £5,000 increase in ISA allowances through a ‘Great British ISA’ restricted to UK-listed stocks only.
This brings the yearly tax-free allowance for ISA customers up to £25,000 per year.
Hunt has positioned this increased this ISA allowance as a way of bolstering investment in UK companies.
Hunt also announced that British pharma giant AstraZeneca plans to invest £650 million in UK life sciences investment, Jeremy Hunt announced.
Under levelling-up plans, AstraZeneca will develop a vaccine manufacturing facility in Liverpool.
AstraZeneca’s share was unbudged at 10,034p.
The FTSE 100 was last seen 18 points higher at 7,664.
12.20pm: Housebuilders higher as lead index gains pace
The FTSE 100 hit an intraday high of 7,676 by midday, 30 points higher from the opening bell.
With markets eagerly awaiting the chancellor’s imminent Spring Budget, there is little else moving the dial.
House builders Persimmon PLC (LSE:PSN) and Taylor Wimpy plc added over 2% apiece after construction sector data showed improved demand in February.
“A stabilisation in house building meant that UK construction output was virtually unchanged in February,” S&P economics director Tim Moore commented.
“This was the best performance for the construction sector since August 2023 and the forward-looking survey indicators provide encouragement that business conditions could improve in the coming months.”
11.15am: LSEG repurchases shares from former Refinitv owners
The London Stock Exchange Group PLC (LSE:LSEG) has repurchased £500 million of its shares from Blackstone and Thomson Reuters (NYSE:TRI)-led consortium York Holdings through an off-market purchase.
York Holdings, which also includes Singapore’s sovereign wealth fund, also announced an off-market placing of £1.4 billion in LSEG shares to entities unaffiliated with LSEG.
It represents a major drawdown of LSEG shares held by York Holdings, from 27% 12 months ago to 6% today.
The consortium was a previous owner of Refinitiv, which LSEG bought out in 2021 for $27 billion before retiring the Refinitiv brand in 2023.
Since then, LSEG shareholders have been concerned about the effects of a ‘share overhang’, where a significant portion of a company's shares are held by shareholders planning to sell them in the future but have not yet done so.
But the market was buoyed with this latest overhand reduction with LSEG shares rallying 2.3% to 9,248p at the time of writing.
The FTSE 100 is currently 20 points higher at 7,666.
11.02am: Rumours build of May 2 election
A general election as early as May 2 could be on the cards, rumours swirling around Westminster suggested on Tuesday.
Speculation has mounted over when the government will call the next election, which has to take place by early next year, with labour and conservatives now both pointing toward May.
“We know there’s going to be an election this year,” Treasury Select Committee chair told LBC Radio on Tuesday.
“I’ve been operating on the assumption that there was a possibility that it could be on the 2nd of May.
“I think that’s the earliest date. And the Prime Minister, whose decision it is, has indicated it’s going to be in the second half of this year.
“And so I think the latest date is going to be in sort of mid-November. So sometime in that window, we will have a general election, I think.”
Chancellor Jeremy Hunt is due to unveil his Spring Budget in Parliament later on Tuesday, with a 2p national insurance cut widely expected and speculation appearing in the morning that income tax could be reduced by 1p too.
Were an election to take place in May, such cuts would feed through to paychecks around the same time.
Labour frontbencher Darren Jones, the shadow chief secretary to the Treasury, also said on Tuesday that an early election could be on the cards.
“I think May 2 is on,” he told Sky News, “If you look at where the Budget is, if you look at where the government is trying to land on the Rwanda legislation which is important for them for various internal reasons.
“If you look at the fact there are rumours the prime minister has cleared his grid for April and May, there is no international travel booked in.
“We know they are ready for a May election and at some point Rishi Sunak is going to have to take a decision to go or not go.”
10.41am: Government sells off more of NatWest
The taxpayer’s stake in NatWest has been wound down once again as the market hopes for more information of an upcoming retail offer in today’s Spring Budget.
Just over another 1% was sold off, taking the Treasury’s stake in the lender from 32.88% to 31.85%.
Government-owned shares in the bank have repeatedly been sold off in recent months, with a larger retail offering of the remaining stake expected later this year.
Jeremy Hunt revealed news of the retail offering in the Autumn Statement last year, as pressure built over the de-banking scandal which ensued after Nigel Farage’s account at NatWest-owned Coutts was closed.
10.04am: Spring Budget income tax cut back on the cards
Chancellor Jeremy Hunt could well cut income tax alongside national insurance in Today’s Spring Budget, reports have said.
According to Politico, one cabinet minister said they expect Hunt to unveil a surprise 1p cut to income tax in the statement.
This would be alongside an expected 2p cut to national insurance as the government looks to tempt voters in what is most likely its final budget before the next election.
Hunt had reportedly ruled out an income tax cut earlier in the week over fears it would be too expensive and risk putting the government’s battle against inflation in jeopardy.
9.47am: Construction sector sees improved demand in February
Britain’s construction sector enjoyed stronger demand in February, aiding the rate of new business growth to its fastest since May 2023.
At 49.7 in February, S&P Global’s UK Construction Purchasing Managers Index (PMI) was up from 48.8 in January.
Housebuilding saw a near-stabilisation of business activity, the financial information firm noted, while residential and commercial construction also saw improving market conditions.
“A stabilisation in house building meant that UK construction output was virtually unchanged in February,” S&P economics director Tim Moore commented.
“This was the best performance for the construction sector since August 2023 and the forward-looking survey indicators provide encouragement that business conditions could improve in the coming months.”
Total new orders expanded for the first time since July last year, while optimism was at its highest since early 2022 in the face of possible interest rate cuts soon.
Employment marked the weak spot however, according to S&P, with staffing numbers dropping for the second consecutive month and at the fastest rate since late 2020.
“A recent soft patch for work on-site, alongside strong wage pressures, had led to cost-cutting measures including the non-replacement of voluntary leavers,” S&P’s report said.
9.28am: Spring Budget cuts could ‘seriously’ affect public services - analyst
Cuts widely expected to be unveiled in today’s Spring Budget could seriously hamper Britain’s public services, commentators have warned.
Chancellor Jeremy Hunt is anticipated to unveil handouts in the statement, which will likely be the government’s last before the next general election, including cuts to national insurance and a sustained freeze on fuel duty.
However, questions have been raised over where funding will come from to cover the £15 billion cost to the Treasury from the 2p and 5p reductions on each respectively.
Commenting on expected spending cuts elsewhere, Tax Natives’ money expert, Andy Wood, warned of further “understaffing, reduced resources, and longer wait times,” in Britain’s public services.
“These cuts don't just affect numbers on a budget spreadsheet; they affect real people and their ability to access necessary services when they need them most,” he said.
In the longer term, “further cuts may force the government into a corner, leaving them with limited options such as raising taxes or borrowing more to fill the gaps,” he added.
“While reducing spending is one way to balance the budget, weighing the potential consequences carefully is essential.”
9.12am: Challenger, Active Energy lead junior market risers
Challenger Energy and Active Energy led the risers on London’s junior market on Wednesday morning, as the AIM index as a whole climbed 5 points to 3,556.
Challenger Energy Group PLC (AIM:CEG, OTC:BSHPF) soared over 50% after unveiling a farm-out deal with Chevron for the junior explorer’s project offshore Uruguay.
This will see it paid US$12.5 million of cash upfront, alongside other funding for the exploration project, with Chevron taking on a 60% interest.
Active Energy Group PLC (AIM:AEG, OTCQB:ATGVF) gained over 20%, after confirming US$1.65 million had been received from a settlement agreement with Player Design Inc.
And finally, Eco (Atlantic) Oil & Gas Ltd was among other big risers early on, after unveiling its own farm-out agreement with TotalEnergies and Qatar Energy, through which it will receive up to US$32.1 million of value in relation to the Orange basin, offshore South Africa.
The FTSE 100 climbed 18 points to 7,664 in the meantime.
8.50am: The morning so far
Stocks stayed afloat this morning as the market awaits Chancellor Jeremy Hunt’s high-stakes Spring Budget, scheduled for 12.30pm.
In what is likely to be the Tories’ last chance to woo voters before the next general election, National Insurance contributions are expected to be lowered with income left unchanged.
A raft of manufacturing incentives, technology reforms, artificial intelligence spending and stamp duty cuts are also in the pipeline.
On the company news front, insurance big cap Legal & General Group PLC (LSE:LGEN) matched expectations with a full-year dividend per share of 20.34p, marking a 5% increase from the previous year.
Today’s full-year results underscored increased pension-based operating profits by 10% in 2023 to generate £886 million in a year that saw record appetite for de-risking among legacy pension providers.
DS Smith was silent on its possible merger with Mondi PLC (LSE:MNDI) in a bare-bones trading update that said like-for-like corrugated box volume performance “continues to improve compared with the first half of our financial year, with flat like-for-like volumes in the period since 1 November 2023”.
According to the group, gross profit margins of the business, which operates in Michigan, Colorado, Virginia and New Jersey, are slimmer than the wider group's, 888 said on Wednesday.
In the cryptocurrency world, bitcoin bulls are having another punt at touching the $69,000 all-time high, with the pair rallying 5.8% to $67,400 at the time of writing.
The benchmark cryptocurrency briefly hit the ATH yesterday before retreating nearly 7%.
The FTSE 100 index was last seen 27 points higher at 7,673.
8.32am: William Hill owner mulling sale of US business
William Hill owner 888 Holdings PLC (LSE:888) is exploring the sale of the company’s US business-to-consumer wing as part of a wider strategic review.
Gross profit margins of the business, which operates in Michigan, Colorado, Virginia and New Jersey, are slimmer than the wider group's profile, while market access and licence fees are causing “significant direct costs” from operating in the market.
“In the US, the intensity of competition and requirement for scale means huge investment is required to reach profitability,” chief executive Per Widerström commented.
Shares were pushed 3.3% higher to 85.65 on the news.
8.23am: Bitcoin retreats from ATH
Bitcoin (BTC) fell back sharply on Tuesday after briefly touching the $69,000 all-time high.
By the midnight bell, the BTC/USD pair had slipped to nearly 7% to close at $63,700.
Bitcoin bulls appear to be having another punt again though, with the pair rallying 5.8% to $67,400 at the time of writing.
Bitcoin’s remarkable 52% rally year to date is largely the result of the flurry of spot-bitcoin exchange-traded funds approved for trading on the US markets in January.
Back to UK stocks, the FTSE 100 lead index is up 15 points to 7,661 as the market awaits Chancellor Jeremy Hunt’s Spring Budget.
8.15am: Quick US recap
The Nasdaq closed 1.7% lower on Tuesday at 15,939 points as investors pulled back on tech stocks, specifically Apple and Tesla.
Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB) closed 1.6% lower after sweeping outages hit Facebook and Instagram.
The Dow Jones and S&P 500 both finished the day 1% lower at 38,585 and 5,078 points respectively.
US JOLTs job openings are due today at 4pm UK time, with 8.9 million new ads expected for the January print, down from over nine million in December.
Back in the UK, the FTSE 100 added 12 points to 7,659 in opening exchanges.
7.49am: DS Smith silent on Mondi bid
FTSE 100 packaging business DS Smith gave us a bare-bones trading update this morning.
It stated that like-for-like corrugated box volume performance “continues to improve compared with the first half of our financial year, with flat like-for-like volumes in the period since 1 November 2023”.
Chief executive Miles Roberts said: "I am pleased with a continuing resilient performance, despite tough economic conditions.
“Our strong customer relationships, quality and service has led to a number of recent FMCG customer contract wins, underpinning our confidence in the outlook for volume growth going forward.
“While markets remain challenging, we continue to focus on providing value-added solutions to our customers and on driving operational efficiency and cost control across the Group and view the future with confidence."
There was no word on the ongoing merger discussion with Mondi PLC (LSE:MNDI) after the latter sweetened the deal on the first of this month.
DS Smith shares opened 1% higher on Wednesday, while the FTSE 100 index opened flat at 7,644.
7.37am: L&G hits divi target
Matching expectations, insurance big cap Legal & General declared a full-year dividend per share of 20.34p, marking a 5% increase from the previous year.
Today’s full-year results underscored increased pension-based operating profits by 10% in 2023 to generate £886 million in a year that saw record appetite for de-risking among legacy pension providers.
L&G announced a firm-wide operating profit of £1.67 billion for 2023, basically flat from £1.66 billion in 2022, while profit before tax nearly halved to £561 million.
This was attributed to “unrealised mark-to-market impact of higher rates on asset valuations, the cost relating to our announced Modular Homes closure and the write-down of our investment in Onto”.
7.13am: FTSE 100 to open higher
The FTSE 100 should open slightly higher this Wednesday in a trading session that brings up Chancellor Jeremy Hunt’s (probably) last Budget before the next general election.
National Insurance contributions are expected to be lowered with income left unchanged, while a raft of manufacturing incentives, technology reforms, artificial intelligence spending and stamp duty cuts are in the pipeline.
Hunt is scheduled to speak at 12.30pm.
Insurance and asset-management large cap Legal & General Group PLC (LSE:LGEN) will publish its full-year results today, with pension risk transfers (PRTs) top of the attention pile.
As for the all-important dividends, L&G has guided 5% per-year dividend growth until full year 2024.
Year-end results Capital plc, interims for Galliford Try Holdings PLC (LSE:GFRD) and a trading update from DS Smith are also due.
In the cryptocurrency markets, bitcoin bulls will be hoping to regain the all-time high after briefly touching it yesterday.
FTSE futures have the lead index opening 11 points higher at 7,657 after closing slightly higher on Tuesday.