FTSE 100 Live September 23: Chancellor Kwasi Kwarteng’s mini-budget, GfK consumer confidence at record low

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FTSE 100 stable, Smiths Group up 3%

The FTSE 100 index is approaching its opening price, despite weaker oil stocks BP and Shell and 1% declines for Lloyds and NatWest.

The top flight, which fell 1% yesterday following the Federal Reserve’s interest rate decision, was 8.82 points lower at 7150.70.

Smiths Group, the industrial conglomerate, led the risers’ council after full-year results showed a 5% increase in dividends and forecast revenues to grow more than 4% this year. Shares were up 3% or 37.5p to 1508p.

Other stocks that rose more than 1% included GSK and Haleon, the drug giant’s former consumer health division.

Marks & Spencer shares rose 1.9p to 112.3p, but the broader FTSE 250 index fell 15.51 points to 18,316.18.

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Consumer confidence at record low

GfK’s consumer confidence index today recorded its worst reading since measurements began in 1974, as the crisis continues to bite the cost of living.

The headline figure fell five points to minus 49 in September, the fourth time in the past five months at an all-time low.

Confidence in personal finance over the next year fell nine points to minus 40 and confidence in the economy fell eight points over the next 12 months to minus 68. The main purchasing index, an indicator of confidence in buying big tickets, remained unchanged at minus 38.

GfK Director Joe Staton said: “Consumers are succumbing to the pressure of the growing cost of living crisis in the UK, driven by rapidly rising food prices, domestic fuel bills and mortgage payments. They wonder when and how the situation will improve.

“Today’s mini-budget and the longer-term agenda to drive the economy and rebalance household finances will be the first major opportunity to make that improvement.”

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Wall Street fall contributes to FTSE 100 pressure

Fears of the impact of more major rate hikes in the US continue to dominate markets after another major fall for Wall Street last night.

The S&P 500 index fell 0.8% and the Nasdaq lost 1.4%, with futures market trades pointing to another negative session when trading resumed this afternoon.

The potential for a hard landing in the US economy has increased after Fed Chair Jerome Powell pledged to do everything possible to tackle inflation. Traders are now seeing a Fed funds rate of 4.5%-4.75% in early 2023.

European markets were also hit yesterday as the FTSE 100 index closed at its lowest level in two months after losing 1.1% below 7200. The FTSE 250 index, already in bear market territory, fell 2% .

Sterling weakened to $1.12 after the flurry of central bank meetings this week, with the Federal Reserve rising 0.75% and the Bank of England 0.5% to 2.25%.

There has been speculation that the Bank could rise by 0.75%, but economists believe such a move could still happen in November if the current mini-budget makes inflation more likely to stay high for longer.

CMC Markets expects an unchanged start for the FTSE 100 index today.

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