The FTSE 100 saw an upward movement on Monday, continuing its recovery from the previous week’s volatility. Building on Friday’s gains, the index opened higher, reflecting renewed market confidence. Across Europe, Germany’s DAX and France’s CAC 40 also experienced similar growth, each climbing approximately 0.6%. The broader pan-European STOXX 600 followed suit with a 0.4% rise in early trading.
Meanwhile, attention shifted to the annual Confederation of British Industry (CBI) conference in London, where criticism of recent tax decisions by the UK chancellor, Rachel Reeves, took centre stage. The CBI voiced concerns over the economic impact of tax hikes like the national insurance increase, warning that such measures could lead to significant job cuts and dampen investment. Despite this, Reeves is expected to defend her decisions, citing the necessity of balancing the budget in the absence of viable alternatives.
In the US, markets are poised for a positive start, with futures for the Dow, S&P 500, and Nasdaq all signalling gains. The pound also strengthened against the dollar, recovering from a sharp drop last Friday. Trading at $1.2558, sterling’s rally reflects adjusted expectations regarding the Bank of England’s monetary policy. Investors now anticipate a steady path with interest rates likely to remain at 4.75% through December and gradually decrease to 4% by 2025. Supporting the pound’s rise was a weakened dollar and renewed investor optimism over US economic leadership under the incoming Treasury secretary, Scott Bessent.
Investor focus remains on upcoming speeches by key Bank of England officials, Clare Lombardelli and Swati Dhingra, as markets seek greater clarity on the central bank’s future policy direction. Final thoughts, the broader markets appear to be finding their footing, with strengthening currencies and stabilising investor sentiment leading the way.
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