The FTSE 100 was fairly steady on Thursday as investors continued to digest the economic implications of Rachel Reeves’ Autumn Budget.
With the US closed for Thanksgiving, there were few other catalysts for stocks on Thursday, and the FTSE 100 index retreated by 0.2% after a strong run yesterday afternoon.
“It’s the morning after the day before – voters, back-benchers and markets are all digesting Chancellor Rachel Reeve’s 2025 Autumn Budget,” said Emma Wall, Chief Investment Strategist, Hargreaves Lansdown.
“The back-benchers will hopefully be happy – the manifesto pledge not to explicitly change the rate of the big three taxes was not broken and the long contentious two child benefit cap lifted. The voters reaction will be clear come the local elections in May.
“The markets reacted reasonably well to all this. After an initial rapid fluctuation in bond yields, following the leaked OBR report ahead of the Chancellor’s speech, gilt yields trended flat – and down from last week, indicating the bond market at least thinks this is a fiscally responsible Budget. This will be a very welcome sign for the Chancellor.”
Beyond yesterday’s rally following the budget, there were encouraging signs for UK-centric stocks on Thursday.
Housebuilders Persimmon and Berkeley Group were between 0.8%-1.7% higher on Thursday, suggesting a vote of confidence from the market on the housing outlook.
Rightmove was also marginally higher.
UK-focused retailers were also among the gainers. The balance of measures implemented yesterday doesn’t seem to have worsened the consumer’s short-term propensity to spend, boosting interest in Sainsbury’s and Marks & Spencer.
UK banks NatWest and Lloyds also rose as the budget uncertainty cleared.
Investment manager rose amid hope that savers hit by the slashing of the Cash ISA allowance would take up investing products. Schroders rose 1.2% and St James’s Place was the FTSE 100’s top riser with a 2.5% gain.
Miners dragged on the index with Anglo American and Rio Tinto losing around 1%.
Imperial Brands, down 2.9%, was the top faller as it traded ex-dividend.