- FTSE 100 rises 17 points to 9,244
- Kingfisher soars and Raspberry Pi drops on respective results
- UK PMI survey gloomy, OECD forecasts UK with highest inflation in G20
4.06pm: FTSE lagging mainland counterparts, Wall Street mixed
As we trundle round the final corner, the FTSE 100 and 250 engines seem to be running out of fuel, while European indices are growing stronger.
London's blue-chip index and mid-cap gauges are running 0.2% and 0.6% above their starting lines, respectively.
Retailers are leading the way, with Kingfisher up 14% after its results earlier, dragging others in the sector with it.
Smiths Group, after hitting an all-time high earlier on the back of its results, is now down 4% as investors take profits.
Falls for giants such as AstraZeneca and British American Tobacco are also weighing.
On the FTSE 250, Raspberry Pi Holdings PLC (LSE:RPI) results were a big focus, with the shares sliding to start but ending the day in the green, despite analysts cutting forecasts.
In Frankfurt, the DAX has chugged up 0.6%, led by Adidas, with VW and Porsche bouncing back, while in Paris the CAC 40 is purring at a 1.1% lead, with luxury names LVMH and Kering near the top of the leaderboard.
US stocks are still mixed, with the Dow up 0.4%, the S&P down 0.1% and the Nasdaq 0.3% lower.
3.16pm: US PMI softens
The US PMI flash survey, like its UK counterpart, has come in lower for the first part of September.
Manufacturing PMI fell to 52.0 from 53.0 and services PMI dropped to 53.9 from 54.5.
On inflation, companies reported input costs rising to a near 27-month high (in part due to tariffs), though firms struggled to pass these on.
With both figures above the 50 growth/contraction level, Chris Williamson, chief business economist at S&P Global Market Intelligence, says the survey points to "further robust growth of output", pointing to the economy expanding at a 2.2% in the third quarter.
However, the month saw growth slowing from its recent peak back in July, he says, with companies easing back on hiring.
"Softening demand conditions are also becoming more widely reported, curbing pricing power," he says.
"Although tariffs were again cited as a driver of higher input costs across both manufacturing and services, the number of companies able to hike selling prices to pass these costs on to customers has fallen, hinting at squeezed margins but boding well for inflation to moderate."
3.06pm: HMRC gets tax recovery powers back
Yesterday, with £42.8 billion in unpaid tax owed to it, the UK tax authority said it was relaunching its programme to recover tax owed directly from debtors' bank accounts.
HMRC confirmed that the direct recovery of debts programme, which was paused during the pandemic, has officially restarted in a "test and learn" phase, requiring banks and building societies to pay directly from a debtor’s account, including funds held in cash ISAs
It will apply where tax debtors owe £1,000 or more, subject to a number of safeguards such as only those who have passed the timetable for appeals and have repeatedly ignored attempts to make contact.
Every debtor will receive a face-to-face visit from HMRC agents before their debts are considered for recovery through DRD, to confirm it is their debt and to discuss options to resolve the debt.
Dawn Register, a tax dispute resolution partner at BDO, said these are "draconian" powers, but the relaunch of the programme "underlines how important it is not to stick your head in the sand and ignore HMRC demands".
She recommends that anyone struggling financially to pay their tax, they should export 'Time to Pay' options to allow them to pay in instalments.
"HMRC needs to strike the right balance between supporting businesses and individuals in genuine financial difficulty, while being assertive with those who can afford to pay but choose not to."
2.37pm: Markets on the fence
The FTSE 100 and other European benchmarks were starting to pick up their feet before the US open, and have slightly paused now.
Initial trades on Wall Street are producing a mixed picture, with the Dow Jones up 0.3% and the Nasdaq down close to 0.2%, with the S&P 500 roughly flat.
1.34pm: Gold buyers may be 'fickle'
With gold glittering at another all-time high, at $3780 an oz, the drivers of the moves change regularly, says John Reade, senior market strategist at World Gold Council.
"Currently the main driver of gold’s strength is from Western investors piling into gold-backed ETFs, with about 98 tons of inflows so far in September, the largest since April, primarily into US-listed products.
"We believe that this demand has been supported by OTC investors through bullish derivative structures and some increased US gold futures buying."
Conversely, says Reade, Chinese retail demand has significantly slowed down, he says, after playing a significant role in the first half of the year with sluggish Chinese ETF inflows and reduced trading volumes in recent weeks.
However, China has today been reported by Bloomberg to be positioning its central bank as a new custodian of foreign reserves for ‘friendly’ countries.
Essentially, says Kernny Polcari at Slatesone Wealth, the People's Bank of China want friendly countries "to buy gold and then ship and store it in China. (Really?)"
"In addition, the move and excitement in gold has created a massive momentum play and you can come up with any number of reasons why the metal continues to surge. It is now nearly 8% above the nearest trendline – a level that has proven to be a headwind, but that doesn’t mean they won’t continue to push it," he says.
Reade adds that Indian demand has remained strong, with post-monsoon buying ahead of festivals and weddings lifting the Indian premium into positive territory, currently around $7/oz.
"We believe Western investors have stepped up their interest for two reasons. Firstly, there is growing evidence that a slowing US economy will allow the US Federal Reserve to lower interest rates further, with the futures market expecting cuts at each of the two remaining meetings this year," he says,
"Secondly, increased rhetoric against the Fed and its independence made by the US administration is leading to concerns about the stability of the US dollar and the Treasuries market."
While moves in the gold price are strong, Reade says they are "rather narrow", adding that Western investors and speculators, as the drivers of the recent price gains, are prone to being more fickle than other buyers of gold.
"Profit-taking and price corrections may become more prominent in the gold market for the balance of this year, even if further gains could be on the cards."
12.33pm: FTSE underperforming European peers, US futures flat
The FTSE 100 is just above flat, as a big 14% gain for Kingfisher, feeding to a 3% rise for Howden Joinery, is being offset by falls for drugs and defence heavyweights and other 'defensives'.
Giants AstraZeneca, BAE Systems and British American Tobacco are all down over 1%.
Utilities and life insurers are also lower, which often signals bond market movements, where a quick look shows yields slipping on both sides of the Atlantic.
European benchmarks are a little more bullish than yesterday, with the DAX and CAC indices up 0.3% and 0.7%, while having retreated from earlier levels like the Footsie.
US futures are not showing evidence of much confidence heading into Wall Street's Tuesday session, with all the three major indices all moving less than 0.1% either way.
11.38am: EU seeing solid services, low inflation
As well as the weak UK PMI, eurozone manufacturing data was also softer, but services was solid.
The EU manufacturing PMI fell to its lowest point in three months, while service sector business activity picked up significantly, remaining at a level associated with modest growth.
It "rounds out a decent quarter for the eurozone economy despite significant global turmoil", says Bert Colijn, chief economist at ING.
"From a country perspective, France stands out negatively," he adds, where PMIs dropped to the lowest level since April, with declines in both manufacturing and services.
"That stands in contrast to Germany, where services activity picked up according to the PMI. With heightened political uncertainty, the French economy appears to be mirroring this sense of instability."
Unlike in the UK, the outlook on inflation remains benign, according to the survey, as input cost inflation eased a bit, which was also reflected in selling prices.
"And don’t expect much of a resurgence of wage pressure either, as employment remains muted – also confirmed by today’s PMI.
"Eurozone inflation has been very stable around the 2% target in recent months, and we don’t expect too much deviation in the months ahead either."
11.21am: PMI is bad, but take with a pinch of salt
The drop in the UK composite PMI to 51.0 in September's flash reading is the lowest level since May and "suggests that July’s stagnation has continued", says economist Thomas Pugh at RSM UK.
"This is more bad news for Rachel Reeves after dismal borrowing figures last week.
"However, the PMI isn’t weak enough to push the Bank into more rate cuts this year, especially as both input and output prices remain elevated," he says.
While the flash PMI survey is "effectively signalling stagnation" in the UK economy, he says this is taken "with a pinch of salt, as the PMI has significantly underplayed the strength of the economy so far this year".
With speculation and news stories based on thinktank proposals about tax rises in the Budget, Pugh says there is a risk that business confidence will drop further, which in turn feeds into lower new orders and employment, exacerbating the economic woes facing the chancellor.
He says the lower input and output price balances are a relative bright spot, but as they are still around their 2024 averages, "won’t be enough to let the hawks on the MPC relax".
Elliott Jordan-Doak at Pantheon Macroeconomics says the flash PMI suggests a "very mild deceleration in price pressures", while on the job market, other data suggests that the worst is over "and that solid GDP growth will underpin a recovery in the demand for labour".
He adds: "Big picture, we think the economy is ticking along at a solid pace. Granted, the drop in the PMI could be sending an early-warning signal that pre-Budget uncertainty is weighing on activity.
"That represents a downside risk to our growth forecast, and would be a repeat of last year’s drop in confidence and activity as tax-hike speculation abounded.
"But many of the PMI’s balances in August were running at recent highs, so a slight month-to-month drop is likely noise rather than signal."
That is a point backed up by Matt Swannell, chief economic advisor to the EY ITEM Club, who says the PMIs "looked implausibly strong in August".
He agrees with Pugh that individual monthly moves should be taken with a pinch of salt "as they can be heavily influenced by business sentiment.
"Just as some of last month's strength might have reflected positive headlines on US trade deals, some of this month's shift may be a response to concerns related to tube strikes and the growing inevitability of tax rises in the Autumn Budget."
While they are not a good predictor of GDP, monthly official data continues to be distorted by residual seasonality, he says, predicting that growth is likely be "modest over the next few quarters as consumer spending power is squeezed, taxes are increased again at the upcoming Autumn Budget, and a substantial minority of households continue to refinance their mortgages onto much higher interest rates".
He sees no change to interest rates at the next MPC meeting, in November.
11.09am: CBI industrial trends improve
The CBI Industrial Trends survey's total orders balance improved to -27 in September, from -33 in August. This was also above the consensus forecast of -30.
Manufacturing output volumes fell in the three months to September at a slower pace to the three months to August. Manufacturers expect output volumes to decline again in the next three months.
Expectations for average selling price inflation eased in September to their weakest since October 2024 and now stand below the long-run average.
10.48am: Raspberry Pi a 'mixed bag'
Raspberry Pi’s interim results "don’t paint the greatest picture for one of the UK’s most notable tech hopes", says Robinhood UK analyst Dan Lane.
He concedes that this is compared to a tough comparative period in the first half last year, and adds that "there’s a lot more to feel positive about today".
While DRAM (dynamic random-access memory) supply and pricing has become a wider concern, he says "the wells are full" at Raspberry Pi, enough to hit this year’s sales goals.
"If volumes lift as expected, the second half of the year should contribute a lot more meaningfully to profits," he says, noting healthy cash levels and gross margin holding up.
"With cost pressures potentially down the line in the DRAM world, management will need to try to buoy operating margins too."
Investor support has been high for Raspberry Pi, whether it likes it or not, he says with the wider tech sector also "waiting to see how the UK market warms to small and mid-cap tech IPOs".
The company's valuation "is a real issue", he says, with sales needing to start justifying the price tag soon.
10.24am: OECD forecast tweaks
OECD has upgraded its forecast for global growth, now predicting it will ease to 3.2% this year from 3.3% in 2024, which is up from its previous forecast of 2.9% for 2025.
US growth is projected to fall sharply from 2.8% in 2024 to 1.8% in 2025 and 1.5% in 2026, owing to higher tariff rates, moderating net immigration and reductions in the federal government workforce, the OECD says.
China's growth is seen decelerating from 4.9% in 2025 to 4.4% in 2026, as higher tariffs take effect and fiscal support fades.
Euro area GDP growth is predicted to experience a smaller but steady slowdown, from 1.2% in 2025 to 1.1% in 2026 with increased trade frictions and geopolitical uncertainty somewhat offset by stronger public investment and easier credit conditions.
For the UK, growth of 1.4% is seen for this year, up from 1.0% last year, before slipping back to 1.1% next year.
The UK is facing the highest inflation of any major economy, the OECD report has highlighted, expected to be 3.5% by the end of the year. This was largely known, though.
9.54am: Alarm bells from PMI
Alongside the 'flash' PMI release, Chris Williamson, chief business economist at S&P Global Market Intelligence, which carries out the survey, says it "brought a litany of worrying news, including weakening growth, slumping overseas trade, worsening business confidence and further steep job losses."
One slice of good news is on inflation, with the survey of purchasing managers indicating that price pressures are moderating in September.
"Companies reported one of the smallest increases in prices charged for goods and services seen since the pandemic," he says.
But the weakening of business activity growth is "consistent with the economy almost stalling", while respondents' answers point to around 50,000 job losses in the three months to September.
"Alarm bells should be ringing that the economy is faltering," Williamson says, which he says could help shift the policy debate at the Bank of England back towards further cuts.
"However, amid talk of further tax rises being needed in the Budget later this year, it’s not surprising to see that business expectations have worsened again in September, and in the absence of an improvement in confidence, it’s unlikely that the economy will make any strong gains in the months ahead irrespective of the outlook for interest rates."
9.36am: PMI disappoints
The UK preliminary services PMI for September comes in worse than expected at 51.9, which is down from the 52.2 final reading for last month and below the consensus estimate of 53.5.
Also weaker is the flash manufacturing PMI at 46.2, down from 47.0 and below the 47.1 expected.
The composite PMI reading is 51.0, down from 53.5.
9.14am: Kingfisher commended
Kingfisher’s first half numbers "showcase commendable operational execution in a tough retail environment", says market analyst Adam Vettese at eToro.
Underlying like-for-like sales climbed 1.9%, helped by double-digit growth in trade and e-commerce channels, while margin improvements and tight cost control lifted adjusted pre-tax profit by over 10%.
After launching a £300 million share buyback programme in March, the cash performance in the first half has led a decision to accelerate the current share buyback programme, with completion now expected by next March.
"Management’s decision to upgrade full-year profit guidance and accelerate the share buyback programme underlines confidence in their financial position and strategic momentum," says Vettese.
"However, overall revenue growth remains muted, with continued weakness in France and Poland weighing on the top line. Cost pressures, particularly around wage and regulatory headwinds, present an ongoing challenge even as offsetting savings are delivered."
8.53am: Gold up, oil down
Gold gained more ground, hitting a fresh all-time high above $3,755, on the back of a weaker dollar.
Oil prices have fallen for the fifth consecutive session, with Brent down 0.2% to $66.44 a barrel.
This is driven by concerns about oversupply, says market analyst Victoria Scholar at Interactive Investor.
She says the market focus this morning is also on PMI figures, with some trickling out so far, including a disappointing reading from France, where September’s manufacturing and services numbers both fell short of expectations.
Matt Britzman at Hargreaves Lansdown says gold's rise "reflects a market betting that monetary policy will loosen faster than the economy can cool".
On oil, he says prices are not far off three month lows on news that Iraq could soon restart exports from Kurdistan, adding to expectations of rising global output.
"Even as NATO warned of escalating risks in Eastern Europe and Middle East tensions remained high, traders appear more focused on the near-term reality of abundant barrels than on potential flashpoints."
8.31am: Reeves should raise income tax but cut NI
One of the big finance stories this morning is that the Chancellor is being urged to increase income tax in order to send a "decisive signal" to calm jittery bond markets.
The Resolution Foundation thinktank says Rachel Reeves should also cut national insurance to protect workers’ pay in November's Budget.
A 2p cut in national insurance, matched by a 2p rise in income tax, the thinking goes, would raise £6 billion,
Making both changes simultanously would help tackle "unfairness" in the tax system, as income tax is paid by more people, including pensioners and landlords.
8.16am: Kingfisher leads FTSE higher
The FTSE 100 has started higher, up 23 points to 9,250, led by a big jump for Kingfisher.
B&Q owner Kingfisher has flown 16% higher on the back of its interim results.
The FTSE 250 is also higher, up 121 points as Travis Perkins is lifted by the Kingfisher read-across.
Raspberry Pi has been splatted somewhat, down 5%.
7.59am: Raspberry Pi keeps guidance unchanged
Raspberry Pi Holdings PLC (LSE:RPI) has reported an "encouraging first half with momentum building", and kept its profit guidance unchanged for the full year.
Volumes are expected to be higher in the second half, the maker of single-board computers said this was supported by strengthening demand and a "substantial" order backlog.
After worries were raised by some analysts about supplies of dynamic random-access memory (DRAM), the FTSE 250 group said it has sufficient supply on hand and on order to meet its sales goals for the year, and has "several commercial and technical options to mitigate shortages or further price rises" for next year.
This year, it said, is "on-track to be the first full year in which semiconductor unit volumes are higher than board unit volumes".
7.36am: Kingfisher raises outlook
Kingfisher PLC (LSE:KGF) interim results come with an upgrade to full-year guidance for profit and free cash flow.
The first half saw a good UK performance across its B&Q and Screwfix chains, with like-for-like sales up 4.4% and 3.0% respectively, alongside improving trends in France and Poland.
Revenues came in at £6.8 billion, in line with expectations, while group like-for-like sales growth of 1.3% was better than the 0.8% consensus forecast.
CEO Thierry Garnier said underlying like-for-like sales growth was 1.9%, removing a calendar impact, was driven by increased volumes and transactions.
"In a higher cost environment, we remain disciplined on managing costs and cash. Our margin and operating cost initiatives combined with the positive impact of our strategic drivers enabled us to deliver 10.2% growth in adjusted PBT and 16.5% growth in adjusted EPS. Free cash flow rose by 13.5%."
He says the board's expectations for the group's markets are little changed, though he acknowledges "mixed consumer sentiment and political uncertainty".
We now expect to deliver FY 25/26 adjusted PBT at the upper end of the previously guided range of approximately £480m to £540m. This reflects our strong profit performance in the first half, alongside second half weighted investment in marketing and technology to support our strategic growth initiatives.
We have also raised our FY 25/26 free cash flow guidance range to c.£480m to £520m, up from the previous range of £420m to £480m.
7.25am: Markets analysis
Some analysis of where we are with global markets from Deutsche Bank macro strategist Jim Reid.
US stocks gains, including a new high for the Nasdaq, were driven by tech news again, he says, as Nvidia announced a strategic deal with OpenAI that will see the chipmaker invest as much as $100 billion in helping OpenAI build new data centers and other AI infrastructure
"So increasingly, the profile of US equity gains is looking very much like 2023 and 2024 again, where the annual gains are being driven by a very narrow group of stocks," Reid says, pointing to the S&P 500's 13.8% gain so far this year, whereas the equal-weighted version is only up 7.7%.
"Or in other words, it’s been the Magnificent 7 driving the gains, and most of the index has seen a steady, but not spectacular performance this year."
Gold also reached more record highs, up 1.67% to $3,747 an oz, up more than 42% for the year to date and putting gold prices on track for their strongest annual performance since 1979, when prices surged 127% against the backdrop of the oil crisis after the Iranian revolution and ensuing inflation surge.
After some Fedspeak, "the week kicked off in a slightly hawkish direction", says Reid, apart from Stephen Miran's expectedly dovish comments.
Comments included that there is "limited room for easing further" and that current policy was only "very mildly" restrictive, Reid says this led investors to "slightly dial back the expected pace of rate cuts over the months ahead".
By the close, futures priced in 43bps of cuts by the December meeting, down less than 2bps compared to Friday.
In Europe, there was a more of a risk-off tone yesterday, with an underperformance for the DAX driven by declines for Porsche and its parent Volkswagen after they cut their forecast for this year’s profit.
7.16am: FTSE 100 expected to add furter gains
The FTSE 100 has been called higher on Tuesday, on a day that will bring a couple of views on the UK and other major economies.
On the futures market, the London index is being predicted to rise around 12 points at the open, adding to the increase of 10 seen the day before that left it at 9,226.68.
Overnight, the major US stock indices all battled back from a wobbly start to finish higher, led by the tech-powered Nasdaq, which rose 0.7% thanks to sizeable gains for Nvidia, Apple and Oracle.
The Dow Jones advanced 0.1% and the S&P 500 finished up 0.4%.
Later this morning the OECD (the Organization for Economic Co-Operation and Development) will publish its interim economic outlook for the world economy and G20 countries. In June, the view on the UK was downgraded to 1.3% growth in 2025, slowing to 1% in 2026.
Just before that, at 9.30am, we will get the 'flash' PMI (purchasing managers' index) surveys for the UK, from S&P Global, with timings for other economies such as the EU and US dotted around the day.