Pound slips as UK growth forecasts downgraded and oil prices plunge
The FTSE 100 moved 12.48 points lower, or 0.17%, to close at 7,469.51.
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Your support makes all the difference.The pound has fallen and London’s FTSE 100 slipped further as oil prices plunged, and downgraded forecasts for the UK economy accompanied the Chancellor’s autumn statement on Wednesday.
The UK’s top share index dropped slightly with energy giants and banks among the biggest fallers of the day.
The FTSE 100 moved 12.48 points lower, or 0.17%, to close at 7,469.51.
NatWest’s share price dipped after Chancellor Jeremy Hunt revealed the Government was considering selling its stake in the bank to members of the public through a retail share sale.
The Government wants to get rid of its shareholding by 2026 and said the sale could be a chance to bring in everyday investors.
Meanwhile, new projections from the fiscal watchdog predict the UK economy will grow slower then previous thought for the next three years.
The pound has dipped below 1.25 US dollars as investors assess sluggish forecasts for the economy, and the dollar gains a bit more muscle
The Office for Budget Responsibility said gross domestic product (GDP) will grow by 0.6% this year, having previously predicted a decline, before growing slower than earlier forecasts between 2024 and 2026.
The pound dipped by more than 0.6% against the US dollar to 1.248, and sterling was down by around 0.2% against the euro to 1.1463.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Given the latest forecasts from the OBR, Houdini Hunt might be able to boast that the UK has narrowly escaped recession, but the economy faces deteriorating growth prospects.
“The difficulties facing the UK have overshadowed the Chancellor’s giveaways. Inflation is projected to fall to 2.8% by the end of 2024, but the economy will still struggle to bust out of the clutches of stagflation.
“The FTSE 100 has remained in negative territory, the energy giants weighed down by a lower oil price, and the more domestically-focussed FTSE 250 has lost a bit of ground.
“The pound has dipped below 1.25 US dollars as investors assess sluggish forecasts for the economy, and the dollar gains a bit more muscle.”
It was a stronger session for markets outside the UK, with Germany’s Dax climbing 0.36% and France’s Cac 40 up 0.47%.
In New York, the S&P 500 was up 0.45% and Dow Jones up 0.5% by the time European markets closed.
The price of Brent crude oil dropped by 3.66% to 79.43 US dollars per barrel.
In company news, shares in Kingfisher tumbled to the bottom of the FTSE 100 after the owner of B&Q downgraded its profit outlook for the second time in two months.
The company has faced falling DIY sales across its Castorama and Brico Depot stores in France, and sales were lower in other European markets including Poland.
Unusually warm autumn weather was cited as one factor for a delayed start to insulation, plumbing and heating sales.
Kingfisher’s share price fell by 7% at close.
Shares in Johnson Matthey were also given a boost after the chemicals manufacturer said it was on track to make £150 million in yearly savings by 2025, after revealing it was shedding about 600 jobs across its support functions.
The firm said it was transforming “at pace” in efforts to simplify the business and reduce costs, as well as focusing on being a global energy transition company.
Investors were optimistic about the update despite falling profits and the adverse impact on workers.
Its share price closed 5% higher.
The biggest risers on the FTSE 100 were Sage Group, up 132.8p to 1,130p, Entain, up 49.2p to 880.8p, JD Sports, up 5.75p to 150.35p, BT, up 4.4p to 122.45p, and Halma, up 45p to 2,123p.
The biggest fallers on the FTSE 100 were Kingfisher, down 16.1p to 214.5p, Rolls-Royce, down 5.5p to 237.5p, BP, down 10.4p to 466.15p, Shell, down 56.5p to 2,556.5p, and Glencore, down 8.05p to 448.95p.