FTSE 100 closes lower after Sunak's £150bn spending spree

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FTSE 100 closes lower after Sunak's £150bn spending spree
Speaking to a packed house on Wednesday, Sunak emphasised the growing proportion of people in work as well as the economic bounce back so far, saying: 'Our plan is working.' Photo: Daniel Leal-Olivas/AFP via Getty

European markets had a softer start on Wednesday as traders looked ahead to the UK’s autumn budget.

In London, the FTSE 100 (^FTSE) was down 0.3% on the day, while the CAC (^FCHI) was 0.2% lower in Paris, and the DAX (^GDAXI) was down 0.3%.

It came as UK chancellor Rishi Sunak laid out sweeping plans for the next three financial years in his Autumn Budget and Spending Review speech in parliament.

The key pillars of health, transport and the cost of living were brought into sharp focus in his speech, with changes announced including the removal of the freeze on public sector pay and an increase in the national living wage.

Speaking to a packed house on Wednesday, Sunak emphasised the growing proportion of people in work as well as the economic bounce back so far, saying: "Our plan is working."

"The budget does not draw a line under COVID, we have challenging times ahead," he said.

Read more: Sunak resets UK's spending focus for a post-COVID economy

Across the pond, the S&P 500 (^GSPC) was trading flat, and the tech-heavy Nasdaq (^IXIC) rose 0.6% by the time European markets closed. The Dow Jones (^DJI) edged 0.3% lower.

Wall Street continued to surge on Tuesday, with the Nasdaq joining the S&P and the Dow in setting new record highs, as optimism over company earnings continued to offer a tailwind for stocks.

Richard Hunter, head of markets at Interactive Investor, said: “Investors are riding the wave of surging company earnings, as the reporting season continues to outpace expectations.”

In the year to date, markets have provided a strong return despite the various challenges of the immediate outlook, with the Dow Jones up by 16.8%, the S&P 500 by 21.8% and the Nasdaq by 18.2%.

Watch: Wall Street hits record but Facebook weighs

Hong Kong led most Asian markets lower on Wednesday with tech firms in the firing line after China Telecom was banned from the US over national security concerns.

The Hang Seng (^HSI) fell 1.7% while the Shanghai Composite (000001.SS) dipped 1% and the Nikkei (^N225) was flat in Tokyo.

The US Federal Communications Commission (FCC) voted to revoke the company’s licence in America, meaning it now must discontinue US services within 60 days.

China Telecom is the largest Chinese telecommunications company, and has had authorisation to provide its services for nearly 20 years in the United States.

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