- FTSE 100 finishes in the green to finish at 6,859
- PM confirms corporation tax to rise to 25%
- New chancellor will present medium-term budget at the end of the month
4.45pm: FTSE rebounds
The UK's blue-chip index rebounded slightly at the close to eke out a positive finish.
By the time the closing bell sounded, the FTSE 100 was ahead 0.1% to finish at 6,859 points.
But investors are still digesting the roller-coaster of a day that saw Liz Truss U-turn on the corporate tax rate and install a new Chancellor.
The Prime Minister’s actions amount to a full 360, Myron Jobson, senior personal finance analyst at interactive investor said.
"We are almost back to square one with the decision to reinstate the increase in corporation tax from 19% to 25%, drawn up by the previous administration, and to bin the plan to axe the 45% additional rate income tax band," Jobson commented.
"We are now set for another fiscal event on Halloween headed by the new Chancellor, Jeremy Hunt. Far from spooking the markets, the Government will hope that unpicking some of the mini-Budget headline and market quaking announcements will stave off a nightmare before Christmas for the UK economy."
3.45pm: FTSE off highs, Truss fails to convince markets
Heading to the close and the FTSE 100 has fallen back sharply after the statement from prime minister, Liz Truss, failed to convince the markets.
At 3.50pm the lead index was trading just 25 points higher at 6,876, with falls in the US further denting the mood.
Paul Dales, chief UK economist at Capital Economics said: “It's unlikely that the removal of Kwasi Kwarteng as Chancellor and the new plans to cancel the cancellation (!) of the rise in corporation tax from 19% to 25% from next April will be enough on their own to regain the full confidence of the financial markets.”
So far that has proved the case with sterling under renewed pressure and yields in the bond market rising once again.
Dales continued “As a result, if the situation stays the same we estimate that the Office for Budget Responsibility (OBR) will conclude on 31st October that a fiscal hole of £43bn will still need to be filled to ensure that the debt to GDP ratio is falling in three years’ time.”
“Even if that rule is changed to in five years’ time, as appeared likely under the now-former Chancellor Kwarteng, a hole of £22bn would need to be filled. So this isn’t, at the moment at least, a full U-turn on the mini-budget. It’s more a mini-U-turn.”
The adverse market reaction is likely to heap further pressure on the prime minister as fevered speculation as to her future in the job mounts.
3.20pm: Bond yields rise after PM's statement
Not the reaction in the bond market that the prime minister would have wanted. Long-term interest rates have spiked following her statement.
????MARKET REACTION????
This line is heading the WRONG way, as far as Liz Truss is concerned.
She will have hoped that these long term interest rates wld FALL following her speech.
Instead they’re on the way UP.
Early days. Lots of other stuff going on.
But still: not encouraging. pic.twitter.com/CsQsL6CuI0
— Ed Conway (@EdConwaySky) October 14, 2022
Meanwhile, Paul Johnson at the Institute for Fiscal Studies commenting on the reversal of the corporation tax cut said it is unlikely to be enough by itself to plug the fiscal gap with more than £20bn of tax cuts still in place and also that it probably the least growth friendly option.
If growth were the only consideration income tax and/or NI would be going back up instead, he said.
3.00pm: Sterling back down after PM's address
The FTSE 100 remained in rude health following the address from Liz Truss, supported by the gains in the US, but the pound fell back following the brief statement.
The pound is now trading down 1.2% against the US$ at US$1.119.
Reaction to the PM's statement has not been glowing so far.
That 'press conference' was worse than having no press conference at all.
????All the answers were the same, whatever the question.
????Looked more robotic than ever with those pauses. ????Walked off woodenly but abruptly.
A true car-crash of comms. https://t.co/f9u47et66q
— Paul Waugh (@paulwaugh) October 14, 2022
Tory MPs already texting to say they think that Liz Truss's press conference has actually made things worse.
— Pippa Crerar (@PippaCrerar) October 14, 2022
That was a dreadful press conference. The PM looks even more hunted than before.
— Christopher Hope???? (@christopherhope) October 14, 2022
2.40pm: Corporation tax to rise to 25% - PM
Prime Minister Liz Truss has announced a U-turn on the government’s plan to scrap the planned rise in corporation tax from 19% to 25% next April. The rise will now go ahead, and will raise £18bn per year.
"It is clear that parts of our mini-budget went further and faster than markets were expecting," she said, adding "We need to act now to reassure the markets of our fiscal discipline."
In a short statement she said her "mission remains" to pursue a low tax, high wage and high growth economy.
Truss added that the new chancellor, Jeremy Hunt, is one of the “most experienced and widely respected parliamentarians” and will present a medium-term budget at the end of the month.
The prime minister also said that spending will grow less rapidly than previously planned.
Asked by the Telegraph’s Ben Riley-Smith whether she should remain as prime minister, Truss said: “I’m absolutely determined to see through what I promised” to deliver the growth plan and “to see us through the storm we face."
2.35pm: FTSE 100 pushes higher, ahead of PM's address, as US stocks open higher
FTSE 100 extended its gains ahead of the address from Liz Truss at which she is expected to scrap parts of the mini-budget which caused turmoil on the markets.
Ahead of that Kwasi Kwarteng was sacked as chancelor and replaced by Jeremy Hunt.
In the US, the Dow Jones Industrial Avergae opened 200 points higher and the S&P advanced 0.63% extending yesterday's strong gains.
Results from the big banks were mixed with JP Morgan Chase and Wells Fargo topping expectations while Morgan Stanley (NYSE:MS) missed on profits.
2.05pm: Pound rises on news of appointment of Jeremy Hunt as chancellor
News that Jeremy Hunt has been named as chancellor has pushed sterling higher recovering some of its earlier falls.
The pound is now down 0.6% at $1.126, after falling below $1..12 on news that Kwasi Kwarteng had been sacked.
1.55pm: Ocado shares jump 11pc on Kroger merger
Away from the political turmoil and back to equities - Ocado PLC is the biggest mover by some margin on the FTSE 100 today on reports that Kroger, one of its biggest customers, is to merge with a major rival.
Kroger, the US grocery chain, has agreed to acquire rival Albertsons for $25bn, creating a new American food giant. Ocado has been supplying its robotic warehouse technology to Kroger to help it boost food deliveries.
"The runway for additional Ocado technology sales into the US could expand significantly for Ocado," analysts at Jefferies said.
Ocado shares were up 11pc on Friday on news of Kroger's merger.
1.38pm: Pound falls on confirmation chancellor has been sacked
Sterling has slumped 1.4pc against the dollar as news of the sacking of Chancellor Kwasi Kwarteng was confirmed.
The pound was worth just under $1.12, down from highs of around $1.135 in trading overnight, amid ongoing uncertainty over the fate of the mini-Budget and an anticipated Government U-turn.
Government sources have confirmed that Jeremy Hunt will replace Kwasi Kwarteng as chancellor.
Reports also suggest Chris Philp is out as chief secretary to the treasury - he's expected to move to the cabinet office.
Rachel Reeves, Labour’s shadow chancellor, has responded to Liz Truss’s decision to fire the chancellor Kwasi Kwarteng after his disastrous mini-budget.
"Changing the chancellor doesn’t undo the damage that’s already been done."
"It was a crisis made in Downing Street. Liz Truss and the Conservatives crashed the economy, causing mortgages to skyrocket, and has undermined Britain’s standing on the world stage."
"We don’t just need a change in chancellor, we need a change in government. Only Labour offers the leadership and ideas Britain needs to secure the economy and get out of this mess."
The government's press conference has been pushed back to 2.30pm.
1.05pm: Kwarteng departure confirmed
Kwasi Kwarteng has confirmed his departure as chancellor.
In a letter to the prime minister, Liz Truss, he said he had accepted her request for him to step aside.
Victoria Scholar, head of investment at interactive investor, “HMS Britain has lost another lieutenant as it awaits its fourth chancellor in four months. The captain of the ship is looking wobbly too as she puts on her lifejacket and hopes to steady her ship soon.”
She added "“By letting Kwarteng go, Truss hopes that she can draw a line under the gilt market madness and the plunge in the pound, reinstate investor confidence and prove to the electorate that she is focused on fiscal discipline, rather than unfunded tax cuts.”
It’s official. He’s out… https://t.co/huHDWblMd0
— Ed Conway (@EdConwaySky) October 14, 2022
1.00pm: Jeremy Hunt lined up to replace Kwarteng - reports
Multiple sources are reporting that Jeremy Hunt is being lined up to replace Kwasi Kwarteng as chancellor.
The Times has also reported that the departure of the chancellor will not be only ministerial change at the Treasury with other departures expected.
12.52pm: Truss to face challenge to leadership next week - BBC
Whatever the outocome of today's U-turn the future of prime minister, Liz Truss, is also under threat according to the political editor of the BBC's Newsnight, Nick Watt.
He tweeted that a group of senior Tories have been holding discussions and have decided that the sacking of Kwasi Kwarteng will prompt them to come out publicly next week and call on the prime minister to resign.
He quoted a source as saying “These are serious people. The PM will find it difficult to survive.”
A group of senior Tories have been holding discussions + have decided the following: the sacking of @KwasiKwarteng will prompt them to come out publicly next week + call on @trussliz to resign. My source: “These are serious people. The PM will find it difficult to survive.”
— Nicholas Watt (@nicholaswatt) October 14, 2022
12.33pm: Kwarteng to go after clash on policy - The Guardian
The Guardian's Political Editor, Pippa Crerar said Kwasi Kwarteng will be sacked as chancellor as Liz Truss tries to restore her political authority ahead of a U-turn on parts of her disastrous mini-budget later on Friday, citing sources..
A Downing Street source confirmed to the Guardian the prime minister intended to get Kwarteng to “carry the can” over her climbdown as she sought to calm the markets and the nerves of jittery Tory MPs.
Truss is meeting Kwarteng, previously her closest political ally and co-architect of her plan for growth, for crisis talks in Downing Street after he dashed back overnight from an International Monetary Fund (IMF) meeting in Washington, the Guardian said.
Whitehall insiders told the Guardian the pair held different views on how far the government should go in reversing key elements of its plan to steady the markets and placate anxious Conservative MPs.
12.25pm: Kwarteng sacked as chancellor - BBC
The BBC's Laura Kuenssberg has reported that the chancellor, Kwasi Kwatrteng has been sacked.
Source confirms @Steven_Swinford’s scoop that Kwarteng is out ???????? - extraordinary events https://t.co/vEFIYfa06K
— Laura Kuenssberg (@bbclaurak) October 14, 2022
12.15pm: Equities higher, bonds rally and sterling off lows ahead of 2pm press conference
UK government bonds continued their recent rally, amid expectations that key parts of the mini-budget will be scrapped, and reports that Kwasi Kwarteng will be sacked as chancellor.
It is also the last day of the Bank of England’s emergency bond-buying programme.
The rally has pushed bond yields dramatically lower, reducing the cost of government borrowing. The two-year yield has fallen 17 basis points to 3.67%, the lowest since the day of the mini-budget, and the 10-year bond is yielding 3.96%, down 23 bps.
The 30-year yield has tumbled 31 bps to 4.28% while the 20-year yield has dropped 26 bps to 4.37%. Both surged above 5.1% on Wednesday.
European stock markets have all risen more than 1%, with the FTSE 100 in London up 1.26% higher at 6,936, a gain of 86 points.
The pound was down 0.5% to $1.1269 but offearlier lows.
11.50am: Kwarteng to go as government plans mini budget U-turn - reports
So where are we?
The government is set to give a press conference at 2pm today at which it is expected to announce that parts of its mini-budget will be scrapped.
The Telegraph reported that the planned frezze to corporation tax will not now happen with the rate increasing to 25% from 19%.
The planned cust to national insurance and the 1p reduction to the basic rate of income tax will remain in place, the report said.
Meanwhile, the future of the chancellor himself is in doubt with The Times reporting that he will be sacked.
The Guardian cited Treasury sources as saying Nadhim Zahawi or Sajid Javid could replace him at No 11.
11.35am: Kwarteng to be sacked - The Times
In a fast moving story, The Times has reported that the chancellor, Kwasi Kwarteng is set to be sacked.
EXCLUSIVE:
I'm told that Kwasi Kwarteng is being sacked as Chancellor as Liz Truss prepares to reverse the mini-Budget
Not clear who will be replacing him
Events moving very, very quickly this morning
No 10 not commentinghttps://t.co/LoUAVxD00N
— Steven Swinford (@Steven_Swinford) October 14, 2022
11.30am: Corporation tax will rise to 25% - Telegraph
The Telegraph has reported that corporation tax will rise to 25% from 19% this April, Liz Truss will announce at 2pm press conference today.
The report said the government will keep the national insurance cut and the 1p income tax basic rate cut.
????Exclusive: Corporation Tax will **rise** to 25% from 19% this April, Liz Truss will announce at 2pm press conference today.
A huge climb down. Sticking to Rishi Sunak’s original plan. Removes central plank of her leadership bid. More here: https://t.co/tJvN01vDSd
— Ben Riley-Smith (@benrileysmith) October 14, 2022
11.17am: Government confirms press conference later today
Downing Street has confirmed that Liz Truss will will hold a press conference later today.
Equities rallied on the news, extedning thier gains, the FTSE 100 is now up 75 points
11.00am: U-turn to be announced today
The Times has reported that Liz Truss and Kwasi Kwarteng will announce mini-budget u-turn *today.*
They will meet shortly after the chancellor flies back from Washington and plans to freeze corporation tax will be reversed.
It will rise next year, the report said.
EXCLUSIVE:
Liz Truss and Kwasi Kwarteng to announce mini-budget u-turn *today*
They are meeting shortly after chancellor flies back from Washington
Plans to freeze corporation tax will be reversed - it will rise next year
PM statement expected laterhttps://t.co/64OUKhEkmg
— Steven Swinford (@Steven_Swinford) October 14, 2022
10.48am: A sign from the sky
Is the pilot guiding chancellor Kwasi Kwarteng's plane back to London trying to tell him something?
Flight trackers point out the plane has conducted its own U-turn as it approaches London's Heathrow airport..
Chancellor's flight* doing a U-turn on approach to Heathrow https://t.co/Nshn3O1ANE *reportedly @flightradar24 pic.twitter.com/QeGlluRVRk
— Andrew Hill (@andrewtghill) October 14, 2022
10.35am: FCA gives Amigo the green light to resume lending
Shares in Amigo Holdings PLC (LSE:AMGO) jumped 41% on Friday to 5.30p after the industry regulator gave the embattled firm the all clear to resume lending.
The guarantor lender, which was derailed by a barrage of customer complaints over alleged mis-selling, restricted lending at the start of the pandemic before suspending all activity in November 2020.
Following a lengthy investigation, the Financial Conduct Authority agreed a rescue plan with Amigo, which included paying compensation to creditors and returning to lending by 26 February 2023.
The high court sanctioned the scheme in May, and on Friday Amigo said the FCA was now satisfied it had met the threshold conditions for Amigo to return to lending.
Amigo said lending would resume via pilot scheme, which would limit the level of new loans for at least two months.
Danny Malone, chief executive, said: "We return to lending with FCA approval as a changed company in terms of our values and the way we operate, with a focus on supporting financial inclusion and mobility for customers.
"A successful pilot will also move us a step closer to paying out compensation to redress creditors under the terms of the scheme."
10.10am: Bond markets in calmer mood
There are just a few hours to go before the end of the Bank of England’s emergency bond-buying programme and the bond markets have settled down, for now, with a further drop in yields today following the sharp falls yesterday.
Sky’s Ed Conway pointed out the fall in yields can be clearly linked to the first reports of a government U-turn yesterday and the later news that the chancellor was heading home to the UK from Washington for crisis talks.
Certainly true that financial markets respond to all sorts of imponderables.
But there’s been a definite pattern in past 24 hours.
When news of u-turn came, interest rates on govt bonds fell sharply.
Look at the reaction to @SamCoatesSky story. And @KwasiKwarteng’s return
— Ed Conway (@EdConwaySky) October 14, 2022
Russ Mould, investment director at AJ Bell said: “Always look at the bond market if you want to know what the smart investors are thinking, and a drop in gilt yields on Friday tells you one of two things.”
“Either the Bank of England is hoovering up gilts sold by pension funds (pushing up the price and pulling down the yield) before the end of its support measures today, or markets believe the chancellor is going to rip up his mini-budget and start again. The smart money is probably on the latter” he said.
9.40am: Credit Suisses warns of deeper UK recession
Credit Suisse’s head of UK economics, Sonali Punhani, has warned that the UK’s recession could be worse than expected because of the recent market turmoil.
“Owing to the market turmoil that has followed the announcement of the mini-budget, risks are rising that the recession in the UK is deeper than we forecast.”
“If the market moves are sustained or worsened, they can offset the impact of the tax cuts and increase the depth of the recession through much higher mortgage costs and currency-led inflation.”
“Real incomes could be squeezed further by 1-1.5% in 2023 if the recent market moves are sustained, which is likely to add downside risks to our growth forecast of -0.2% in 2023” the investment bank said.
“For the moves to stabilise, the Bank of England would need to restore credibility by hiking aggressively in the near term. We expect the BoE to hike 100bps in November and raise rates to 4.5% by early 2023.”
“More importantly, the markets would need to see a credible fiscal plan on October 31 to reverse these moves” Credit Suisse said.
“We calculate that fiscal tightening of 2.5% of GDP (£60billion in 2026-27) would likely be needed to stabilize the debt to GDP in the medium term.
“This is possible via a combination of a U-turn on tax cuts as well as spending cuts.”
“It would be challenging to deliver the scale of these cuts, but for them to be credible, these need to be delivered sooner rather than in the latter part of the forecast.”
9.12am: Union slams Royal Mail management, calls for urgent meeting
The CWU union has called for an urgent meeting with the management of Royal Mail owner International Distributions Services PLC (LSE:IDS) after the company announced plans to cut up to 10,000 jobs.
Its general secretary Dave Ward said: "The announcement is the result of gross mismanagement and a failed business agenda of ending daily deliveries, a wholesale levelling-down of the terms, pay and conditions of postal workers, and turning Royal Mail into a gig economy style parcel courier."
"What the company should be doing is abandoning its asset-stripping strategy and building the future based on utilising the competitive edge it already has in its deliveries to 32 mln addresses across the country."
"The CWU is calling for an urgent meeting with the Board and will put forward an alternative business plan at that meeting."
"This announcement is holding postal workers to ransom for taking legal industrial action against a business approach that is not in the interests of workers, customers or the future of Royal Mail. This is no way to build a company."
9.00am: FTSE 100 higher, bond yields fall
Equity markets remained upbeat but off earlier highs as speculation that the government could be set to scrap all or parts of the mini-budget, which included £45bn of tax cuts, gathered pace.
FTSE 100 is up 70 points led by financials with Barclays PLC (LSE:BARC) (up 2.4%) and Lloyds Banking Group PLC (LSE:LLOY) (up 2%) leading the way.
Bond yields dropped further today, after hefty falls yesterday, as chancellor Kwasi Kwarteng cut short his visit to the International Monetary Fund in Washington.
It is understood that Kwarteng is travelling home ahead of schedule for emergency talks with prime minister Liz Truss and other Conservative MPs, with the expectations that changes to the mini-budget will be made.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown commented: "There is a sense of urgency in this move and it would seem the market is optimistic that Kwarteng’s romcom-worthy dash through the airport suggests a dramatic reconciliation between stubborn existing policy and the U-turn investors have been waiting for."
But she cautioned: "It’s worth keeping in mind that the FTSE will remain over-sensitive to any changes from here, if U-turns fail to materialise, or are deemed too small, we’re likely to see an adverse reaction."
Shares in Royal Mail owner International Distributions Services PLC (LSE:IDS), slumped 15% after it disclosed the full financial impact of industrial action at its UK parcels and letters business and told the market it would be cutting 10,000 jobs.
In a downbeat update on trading, the company said just three days of industrial action had cost the business £70mln as warned the market it expects the Royal Mail delivery arm to make an operating loss of £219mln.
8..39am: Bond yields fall further
Speculation on a change to government policy has helped push yields on UK government bonds down further today, lowering the cost of government borrowing.
The yield on the two-year gilt has fallen 16 basis points to 3.69%, the lowest since the mini-budget, the 30-year yield has also fallen further, by 14 basis points to 4.4% while the 20-year yield is at 4.6%.
NEW
BIG fall in benchmark 10yr UK govt bond yield this morning.
Was 4.3% yday.
Down to just over 4% when trading opened in UK markets just now. pic.twitter.com/wsGVPIwxlF
— Ed Conway (@EdConwaySky) October 14, 2022
On Wednesday, both jumped above 5.1%.
The 10-year bond is yielding 4.01%, the lowest since 6 October.
8.13am: FTSE 100 soars at the open
FTSE 100 made a strong start on Friday reflecting gains in the US and Asia, and as talk of a U-turn in government policy intensified.
At 8.10am the FTSE 100 had surged 94 points to 6,944, while the FTSE 250 soared 294 points to 17,223.
Chancellor Kwasi Kwarteng has left the IMF conference in Washington on reports that he is set for crisis talks with prime minister Liz Truss regarding changes to the mini budget.
Various reports have suggested that corporation tax may be increased, rather than left unchanged, as the chancellor planned, in a bid to boost the financial credibility of the government’s fiscal measures.
Reports suggested that Kwarteng’s tenure as chancellor is also under threat, while there is also mounting speculation of a challenge to the prime minister herself, with reports that conservative MPs are plotting to oust her as polls show support for the government now below 20%.
The pound rose sharply yesterday on speculation of the U-turn and held most of those gains today, trading at $1.1308.
Packaging firm Mondi PLC (LSE:MNDI) said volume and price growth is more than offsetting inflationary pressure sending shares higher.
In the third quarter of 2022, underlying earnings before interest, tax, depreciation and amortisation surged 55% year-on-year to EUR450mln from EUR290mln.
"Higher average selling prices and overall volume growth more than offset significant cost pressures," it said. "While significant geopolitical and macroeconomic uncertainties remain and we anticipate continued inflationary pressures on our cost base as we enter the fourth quarter, we are confident that the group will continue to demonstrate its resilience and deliver a year of good progress" the company said.
Shares rose 2.43% to 1,409.50p.
7.52am: Senior Tory MP calls on chancellor to act swiftly
Chancellor Kwasi Kwarteng should change course on his budget policy within 48 hours in order to regain the confidence of financial markets and the public, a senior conservative MP, Mel Stride, said today.
Stride - who chairs the House of Commons' treasury committee and is an ally of prime minister Liz Truss's leadership rival Rishi Sunak - said it was important that Kwarteng reversed his plans on corporation tax and avoided piecemeal measures.
"I think we have reached a point now where we need this very powerful, significant signalling to the market that fiscal credibility is now firmly back on the table. And I think that means doing something right now," Stride told the BBC's Today programme.
"He has got to really get out there emphatically and nail it. And I think he has to start in the next 48 hours," he added.
7.30am: Royal Mail looks to axe 10,000 jobs
Royal Mail said it was looking to cut 10,000 jobs by the end of August 2023 as it warned of financial losses due to industrial action and lower parcel volumes.
Parent company, the newly renamed International Distribution Services, said the job loss figure could include up to 6,000 redundancies.
For the current fiscal year, Royal Mail forecast an adjusted operating loss of around £350mln, including the direct, immediate impact of eight days of industrial action which have taken place or been notified to Royal Mail, but excluding any charges for voluntary redundancy costs.
"This may increase to around a £450mln loss if customers move volume away for longer periods following the initial disruption," it added.
The group forecast first half 2022-23 adjusted operating losses of £219mln including around £70mln of direct negative impacts from 3 days of industrial action.
7.20am: Chancellor heads home early from Washington
Kwasi Kwarteng has dramatically cut short his visit to the International Monetary Fund, flying home early from Washington in response to the mounting political crisis over his tax-cutting budget.
Adding to signs that the government is preparing to announce a U-turn over its plan to scrap a rise in corporation tax, the chancellor left the US capital a day earlier than planned.
Treasury sources said the chancellor had two constructive days in Washington but was keen to get back to London to engage with colleagues over his medium-term fiscal plan, due to be announced on 31 October.
But his unscheduled departure on a late-night flight from Washington capped a day of drama for the Truss government and prompted comparisons with the sterling crisis suffered by the Labour government in 1976.
In Sep 1976, following a slide in the pound, Denis Healey abandoned his plans to travel to a summit of finance ministers.
In Oct 2022 @KwasiKwarteng cut short his trip to an IMF meeting in DC.
Worrying echoes. Healey later had to ask the IMF for a bailouthttps://t.co/dtBdweoPKF
— Ed Conway (@EdConwaySky) October 14, 2022
Then, the chancellor Denis Healey turned around at Heathrow rather than fly out to an IMF meeting in Manila after pressure mounted on the pound.
Expectations of a change to government policy pushed sterling higher yesterday.
7.00am: FTSE set for strong gains
FTSE 100 set to make a bright start on Friiday following strong gains in the US where markets shrugged aside stronger than expected CPI figures.
Spread betting companies are calling the lead index up by 70 points.
US markets recovered from some hefty early losses to post some startling gains by the close with the Dow Jones Industrial Average rising 823 points, or 2.83%, to 30,039, a 1,400 point swing from its earlier lows.
The S&P 500 advanced 93 points, or 2.60%, to 3,670 and the Nasdaq Composite jumped 232 points, or 2.23%, to 10,649.
These gains were also reflected in Asia with the Nikkei 225 and Hang Seng both sharply higher.
The gains were also helped by talk of a u-turn on government policy in the UK with speculation that some of the measures in the mini-budget will be scrapped.