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London’s blue chip index underperformed against its peers in Paris and Frankfurt on Tuesday, amid fresh concerns about UK inflation and the economy, following OECD forecasts. The FTSE 100 index closed down just 3.36 points at 9,223.32. The FTSE 250 ended 98.42 points higher, 0.5%, at 21,695.35, and the AIM All-Share closed up 3.72 points, 0.5%, at 781.25. The Cboe UK 100 was up 0.1% at 925.79, the Cboe UK 250 climbed 0.5% at 19,010.64, and the Cboe Small Companies rose 0.7% at 17,503.56. The Organisation of Economic Co-operation & Development forecast UK inflation will reach 3.5% in 2025, 0.4 percentage points higher than its previous forecast, and the highest in the G7. The OECD expects headline inflation to cool to 2.7% in 2026, still above the Bank of England’s 2% target, and only surpassed by the US in the G7. The economic think tank raised its projection for economic growth in the UK to 1.4% in 2025 from the 1.3% it predicted in June but expects GDP growth to then slow to a paltry 1.0% in 2026. The UK will be held back by ‘a tighter fiscal stance, higher trade costs and uncertainty’ which the OECD said would ‘drag on external and domestic demand’. The report came as figures showed economic activity grew at a slower pace than forecast in September. According to S&P Global’s flash UK purchasing managers’ index report, the composite output index posted 51.0 points for September, its lowest reading in four months and easing markedly from a 12-month high of 53.5 in August. This underperformed against the 52.7 points reading forecast by the FXStreet-cited consensus. The manufacturing PMI flash estimate was a five-month low of 46.2 points in September, down from 47.0 in August and missing the consensus forecast, which had expected no change, month-on-month. Economists at Barclays said the report points to a broad-based weakening in private sector activity at the end of the third quarter. ‘Labour market conditions remain soft, with the composite employment index signalling further reductions in headcount,’ the bank noted. But Barclays did point out that on inflation, the latest data offers encouraging signs. ‘Both input and output price metrics declined at the composite level, indicating easing price pressures,’ the broker explained. In better news for the UK economy, fintech Revolut unveiled plans to invest £3 billion into its expansion in the country. The UK chancellor Rachel Reeves welcomed the pledge at the opening of the financial firm’s new head office in London’s Canary Wharf. ‘The UK is well and truly open for business under this government,’ she said. Revolut’s cash injection, spread across five years, is set to go towards the creation of 1,000 jobs in the UK. The pound was quoted higher at $1.3509 at the time of the London equity market close on Tuesday, compared to $1.3501 on Monday. The euro stood at $1.1792, higher against $1.1773. Against the yen, the dollar was trading at JP¥147.87, slightly higher compared to JP¥147.84. In European equities on Tuesday, the CAC 40 in Paris closed up 0.5%, while the DAX 40 in Frankfurt ended 0.4% to the good. Stocks in New York were mixed at the time of the London close. The Dow Jones Industrial Average was up 0.4%, the S&P 500 index was down 0.1%, and the Nasdaq Composite was 0.2% lower. The yield on the US 10-year Treasury was quoted at 4.14%, trimmed from 4.15%. The yield on the US 30-year Treasury was quoted at 4.76%, narrowed from 4.77%. On the FTSE 100, Kingfisher was the star performer, soaring 15% as it delivered better than expected interim results, coupled with an upgraded outlook. The London-based DIY and home improvement retailer owns the B&Q, Screwfix, Castorama and Brico Depot brands. It reported adjusted pretax profit of £368 million for the six months that ended July 31, which Deutsche Bank noted landed ‘significantly ahead’ of the consensus of £326 million. Kingfisher also said it is now targeting the upper end of its full-year guidance for adjusted pretax profit of between £480 million to £540 million. Last year, this metric was £528 million. The results gave a boost to builders merchants, with Howden Joinery up 2.3%, Wickes up 2.9% and Travis Perkins, up 3.3%. The upbeat mood spilled over to the general retail sector with Marks & Spencer, up 2.3% and JD Sports, up 1.7%. But after a bright start Smiths Group closed down 3.4%. The London-based engineering firm is preparing to break-up the company and confirmed the separation processes for Smiths Interconnect and Smiths Detection is progressing, with an announcement on Smiths Interconnect expected by the end of 2025. The news came alongside broadly in line results and guidance and saw the shares, which have risen 32% in 2025 so far, take a breather. On the FTSE 250, Serco firmed 4.7% as it reported MT&S had secure a US Air Force contract as sole provider of training and simulator services. Serco said the award to MT&S, which it bought from Northrop Grumman in May, has a ceiling value of $972 million, or £720 million, over the next five years. Gold continued its record-breaking run, trading at $3,778.27 an ounce on Tuesday, up against $3,729.11 on Monday. Brent oil was quoted higher at $67.98 a barrel on Tuesday, from $66.48 late Monday. The biggest risers on the FTSE 100 were Kingfisher, up 36.90p at 289.10p, ConvaTec, up 6.80p at 238.80p, Antofagasta, up 58.00p at 2,418.00p, Howden Joinery, up 19.50p at 858.00p and Marks & Spencer, up 8.00p at 360.30p. The biggest fallers on the FTSE 100 were Smiths Group, down 80.00p at 2,298.00p, St James’s Place, down 32.50p at 1,253.50p, AstraZeneca, down 242.00p at 11,258.00p, Babcock International, down 23.00p at 1,179.00p and British American Tobacco, down 74.00p at 3,897.00p. Wednesday’s global economic calendar has an Australian inflation print overnight, plus US new home sales figures. Wednesday’s UK corporate calendar has half year results from sports clothing and footwear retailer JD Sports Fashion. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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