UK stocks mixed as markets digest Budget and rate decisions

Summarised from 3 outlets · 4 reports · Updated 30 Oct, 06:21 · Archive

London stocks ended marginally higher on Thursday as investors assessed central bank decisions in Europe and the US.

Stocks in London closed higher on Thursday, with the FTSE 100 index rising 27.57 points, or 0.3%, to 10,722.07. The FTSE 250 advanced 34.90 points, 0.1%, to 24,674.16, while the AIM all-share rose 2.53 points, 0.3%, to 763.45. European markets also gained ground following central bank decisions, with the CAC 40 in Paris climbing 1.1% and the DAX 40 in Frankfurt rising 1.3%.

The European Central Bank left all interest rates unchanged, maintaining its deposit facility rate at 2.50%, main refinancing operations rate at 2.65% and marginal lending facility rate at 2.90%. The bank warned that 'energy prices have continued to rise, posing upside risks to the inflation outlook and downside risks to the growth outlook'. JPMorgan analyst Greg Fuzesi observed that the decision was expected by financial markets, and noted that there had been a debate about hiking rates at the meeting.

Thursday's trading also reflected investor reaction to Chancellor John Healey's first Budget, announced earlier in the week. Healey emphasised 'fiscal discipline' and said the government's plans would give 'breathing space' to households and bring 'innovation and growth in every postcode'. The Budget included tax increases on profits earned by banks and betting companies to help fund support for rising energy bills.

Forecasts from the Office for Budget Responsibility painted a challenging economic backdrop. While growth this year was upgraded to 1.2% from 1.1%, the watchdog cut its estimate for next year from 1.5% to 1%. Inflation is forecast to reach 3.1% in 2026 and 3.4% in 2027, returning to 2% in 2028, around a year later than previously forecast. Fiscal headroom against the current Budget rule is estimated at about £15 billion in 2029-30, down from £23.6 billion in the March 2026 forecast.

On Thursday, ECB president Christine Lagarde announced that she would step down on 7 February 2027, eight months before her term was due to expire in October. Lagarde, who has led the central bank since November 2019, informed the Governing Council and European Council president Antonio Costa of her decision.

How it is being reported

• FTSE 100 Live: Stocks to rise; oil up as US considers Iran strikesWelcome to City AM‘s FTSE 100 liveblog. It’s Friday morning and stocks are set to open higher. Oil prices are on the march this morning, up above $112 per barrel after dropping on Thursday afternoon. This follows news that a senior US commander has briefed Trump on his options for resuming its assault on Iran [...]City AM · 30 Oct, 06:17
• European stocks rally after ECB and Fed holdsIn London, the FTSE 100 Index ended up 27.57 points, 0.3%, at 10,722.07.Evening Standard · 29 Oct, 17:22
• European stocks rally after ECB and Fed holdsIn London, the FTSE 100 Index ended up 27.57 points, 0.3%, at 10,722.07.Independent Business · 29 Oct, 17:22
• Eyes turn to US Fed call as markets ‘tolerate’ UK BudgetIn London, the FTSE 100 index ended up 7.96 points, or 0.1%, at 10,694.50.Independent Business · 28 Oct, 17:17

In this story: John Healey · Christine Lagarde · European Central Bank · Office for Budget Responsibility · London · Paris · Frankfurt

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