FTSE 100 stumbles as investors look to UK economy

The FTSE 100 closed lower on Wednesday, despite a gain from Burberry, as investors weighed the outlook for the UK economy given the prospect of tax rises and spending cuts.

The FTSE 100 index fell 28.02 points, 0.3%, to 9,424.75. The FTSE 250 fell only 7.22 points to 22,020.96, and Objective The All-Share fell 2.14 points, 0.3%, to 787.42.

Joshua Mahoney, chief market analyst at Scope Markets, said the FTSE 100 was “underwhelming” due to renewed fiscal concerns. chancellor Warned of significant tax increases and spending cuts that could exceed what is needed to close the public finance gap.

“While such measures may reduce the risk of repeated tax rises later in his term, they also raise the risk of new pressures on UK growth,” he said.

Rachel Reeves Told Sky News she is considering both tax increases and spending cuts BudgetIn his first interview since being briefed on the scale of the fiscal black hole.

When the Chancellor was asked how she would tackle the country’s economic challenges in her statement on 26 November, she said: “Of course, we are also looking at tax and spending.”

The better news for Ms Reeves is that the recent decline in bond yields continued, keeping government interest costs down.

The yield on UK 10-year gilts stood at 4.53% on Wednesday, compared with around 4.72% a week earlier.

Kathleen Brooks at

At the close of the London equity market on Wednesday, the pound was priced at $1.3395, compared to $1.3294 on Tuesday.

The euro stood at $1.1635, higher than $1.1591. The dollar was trading at 151.20 yen against the yen, lower than 151.83 yen.

London’s performance was slow compared to strong gains in New York ParisHowever Frankfurt also failed to fire.

In European equities on Wednesday, the CAC 40 in Paris closed up 2.0%, while the DAX 40 in Frankfurt closed down 0.2%.

Lifting the CAC 40, gains at luxury goods makers followed LVMH’s better-than-expected third-quarter results, which analysts said bode well for a better luxury reporting season.

Late Tuesday, Paris-based luxury brand holding company LVMH reported organic sales growth of 1% in the September third quarter, defying expectations for a similar-sized decline.

LVMH said in a statement: “The third quarter saw improvement across all business groups and all regions except Europe, where revenues from tourist spending declined, impacted by currency fluctuations, which had a greater impact on the quarter than earlier in the year.”

In response, LVMH shares rose 12% in Paris. The feel-good factor in the luxury sector helped Gucci owner Kering gain 5.2% and Hermes gain 6.9% in Paris.

In London, Burberry was a major FTSE 100 riser, up 3.4%, although well down from early highs.

Deutsche Bank said investors are hopeful that LVMH and potentially the broader luxury sector has “turned the corner”.

Stocks were higher in New York at London’s close. The Dow Jones Industrial Average was up 0.6%, the S&P 500 was 0.9% higher, while the Nasdaq Composite rose 1.2% as expectations for a rate cut increased.

The yield on US 10-year Treasuries was reported at 4.02%, down from 4.05% on Tuesday. The yield on the US 30-year Treasury fell to 4.61% from 4.64% on Tuesday.

Bank of America jumped 5.5% higher after strong third-quarter results. The bank guided full-year net interest income to be at the top end of its prior range.

Morgan Stanley fared even better, climbing 6.6% after its numbers.

At XTB, Brooks said the earnings season in the US has got off to a good start.

“So far, 39 of the 500 companies listed on the S&P 500 have reported positive sales and growth surprises. Sales grew 7.9% and earnings grew 14%, largely led by the finance sector,” he said.

In London, Entain fell 2.4% due to a lack of guidance growth and ongoing fears of higher taxes on the gambling sector.

Ladbrokes and Coral owner Enten said net gaming revenues in the third quarter of 2025 were up 6% year-on-year, or 7% at constant currency. Excluding the US, it rose 4% or 5% at constant currency.

Enten said this was despite an impact of one to two percentage points year-on-year from adverse sports results in September. It saw a hit last month from “customer-friendly sports margins”.

On a conference call after the trading statement, Enten’s finance chief, Rob Wood, said the game’s results were “unimpressive, but a little volatility is par for the course”.

“However, without the £20m margin loss, a guidance increase was likely,” he said.

Asked about potential tax rises, chief executive Stella David said: “On UK tax, my primary aim right now is to make sure we put forward our arguments that increasing taxation does not lead to increased revenues for the government.”

Defense stocks also declined, with Babcock International down 3.2% and BAE Systems down 2.7%.

Elsewhere in London, Pets at Home added 1.6% to the best FTSE 250 performers, while CVS Group added 0.7%.

The UK competition watchdog proposed “major reforms” to the £6.3 billion veterinary services market to “enable pet owners to choose the right vet, the right treatment and the right way to buy medicine”.

The Competition and Markets Authority believes that pet owners “are often unaware of the prices of the services they commonly use and whether their local practices are part of larger national chains”.

Analysts at RBC Capital Markets said there were “no surprises or concerns” from the CMA’s provisional decision.

“No applicable asset disinvestment is underway, and priority is being given to focus on improved transparency to create a more competitive market for veterinary pharmaceuticals, rather than any major focus on pricing controls,” the broker said.

“We believe today’s publication should finally remove the barrier from this region,” RBC said.

The price of gold rose once again due to increasing rates cut bets and was trading at $ 4,199.71 an ounce on Wednesday, which was $ 4,141.29 on Tuesday. Brent oil traded at $62.20 per barrel from $61.87 late Tuesday night.

The biggest risers on the FTSE 100 were WPP, which rose 12.2p to 352.2p; Burberry, up 39p on 1,200p; Pershing Square, from 134p to 4,670p; Pearson, up 24p at 1,089p; and Ashtead, up 116p at 5,264p.

The biggest faller on the FTSE 100 was easyJet, which fell 20.5p to 480.7p; Babcock International, down 39p at 1,170p; BAE Systems, down 53.5p at 1,901p; Beasley, down 23.5p at 905.5p; and Antenne, down 20.4p at 819p.

Thursday’s global economic diary features UK GDP and trade data and the Philadelphia Fed manufacturing index in the US.

Thursday’s UK corporate calendar features a trading statement from specialty chemicals maker Croda and half-year results from Premier Inn owner Whitbread.

Contributed by Alliance News.