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UK markets were mostly calm on Thursday following Wednesday’s budget announcement, with continued gains for banking stocks but with gambling companies criticising the budget’s taxation increases. The FTSE 100 index closed up just 2.35 points at 9,693.93. The FTSE 250 gained 205.95 points, 0.9%, at 22,091.47, and the AIM All-Share closed up 5.73 points, 0.8%, at 748.99. The Cboe UK 100 closed flat at 969.77, the Cboe UK 250 ended 1.2% higher at 19,180.53, and the Cboe Small Companies climbed 0.6% at 17,335.02. Wednesday’s budget continued to provoke debate with analysts welcoming the increased fiscal headroom delivered by the chancellor but suggesting important questions remain unanswered. Citi’s Callum McLaren-Stewart said: ‘The fiscal position was better than anticipated, and headroom against the fiscal rules was more than doubled, but the subsequent budget was a tax-and-spend event which frontloaded expenditure increases while backloading revenue measures. ‘The result is a fiscal forecast that pushes back important economic questions rather than answers them.’ More optimistically, Joshua Mahony at Scope Markets said that after the budget, there is ‘greater confidence’ that the Bank of England will respond with a rate cut next month, with measures taken to bring down household costs helping to lower inflation expectations. Despite the increased rate cut hopes, the pound held onto Wednesday’s gains against the dollar. The pound was quoted higher at $1.3251 at the time of the London equities close on Thursday, compared to $1.3232 on Wednesday. Banks continue to be seen as budget winners with Lloyds Banking Group, NatWest and Barclays up 3.0%, 2.3% and 1.7% - a third day of gains in a row. St James’s Place, seen as a beneficiary from changes aimed at boosting contributions to stock and shares ISAs, rose 2.0%. USB noted the investment manager only offers investment ISAs, with no income generated from cash holdings. UBS also sees St James’s Place as a beneficiary of lower interest rates, helping reduce its cost of equity. Bookmakers were mixed after outlining the scale of the financial hit from gaming duty changes in the budget. William Hill owner Evoke fell a further 4.1%, while Coral owner Entain declined 0.7%. But Paddy Power owner Flutter Entertainment rose 2.2%. Per Widerstrom, chief executive of Evoke, attacked the tax increases as ‘ill-thought-through, counter-productive, and highly damaging’. Betting technology provider Playtech was the sector’s big winner, as it confirmed its 2026 guidance. Shares rose 8.6%. In European equities on Thursday, the CAC 40 in Paris closed little changed, while the DAX 40 in Frankfurt gained 0.2%. European Central Bank officials said a ‘broadly unchanged outlook’ provided the basis for its decision to leave interest rates unchanged at its most recent meeting, despite acknowledging two-sided risks to inflation, according to minutes from October’s meeting. Looking ahead, the ECB will maintain ‘full optionality’ for future meetings and be ‘agile’ in order to react quickly to the materialisation of risks or large shocks if necessary, the minutes said. But officials are divided as to whether the rate-cutting cycle is over. Some argued that the rate-cutting cycle had come to an end, since the current favourable outlook was likely to be maintained unless risks materialised. But others felt it was important to remain ‘entirely open-minded’ on the possible need for a further cut. Financial markets in New York were closed for Thanksgiving Day. The euro stood little changed at $1.1599 on Thursday, against $1.1598 on Wednesday. Against the yen, the dollar was trading lower at JP¥156.27 compared to JP¥156.35. On London’s FTSE 250 Pennon advanced 4.5% after hailing a ‘strong return to profitability’ driven by cost management and revenue growth. The Exeter, England-based water utility swung to a pretax profit of £65.9 million for the six months ended September 30 from a loss of £38.8 million a year before. Revenue rose 25% to £658.1 million from £527.2 million a year ago. ‘With a strong return to profitability and disciplined cost control, we are on track financially and growing sustainably,’ Chief Executive Susan Davy said. But Unite fell 3.5% after it warned financial 2026 adjusted earnings per share will fall 7% to 10% in financial 2026 year-on-year, reflecting lower occupancy, property activity and rising finance costs. Panmure Liberum analyst Tim Leckie said that works out to 43 pence to 44.6p per share versus his previously downgraded 47p forward path, a ‘huge cut’. Leckie said there ‘is a sense of incoherency between the messaging that weakness is confined to a few cities and the new guidance.’ Elsewhere, Macfarlane rose 10%, as it said operations at its Pitreavie business are recovering as it reiterated recently reduced profit guidance. The Glasgow-based packaging and labelling supplier expects results for 2025 to be in line with market expectations for full-year adjusted operating profit, which it put at £19.1 million. Back in October, Macfarlane lowered its outlook, warning that full-year adjusted operating profit would be 20% to 25% below market expectations, which at the time were £24.7 million. Macfarlane said operations at the Pitreavie business are recovering after a fatal incident there in October. Brent oil was quoted at $63.28 a barrel at the time of the London equities close on Thursday, up from $62.41 late Wednesday. Gold was quoted at $4,153.66 an ounce, down against $4,163.25. Analysts at TD Economics said gold’s ‘meteoric rally’ is taking a breather, but ‘further monetary easing, continued central bank buying activity, and ongoing geopolitical risks are likely to see the yellow metal test record highs again in 2026. Silver prices should follow suit.’ The biggest risers on the FTSE 100 were Persimmon, up 40.50p at 1,342.00p, Lloyds Banking Group, up 2.80p at 96.60p, Centrica, up 4.70p at 170.70p, NatWest Group, up 14.00p at 632.40p and St James’s Place, up 27.00p at 1,388.00p. The biggest fallers on the FTSE 100 were Imperial Brands, down 77.00p at 3,200.00p, Burberry Group, down 24.00p at 1,173.50p, Rio Tinto, down 106.00p at 5,355.00p, 3i, down 50.00p at 3,196.00p and LondonMetric Property, down 2.80p at 187.60p. Friday’s economic calendar has GDP data in Canada and CPI figures in France and Germany. Friday’s UK corporate calendar has half-year results from Foresight Environmental Infrastructure. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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