UK’s FTSE 100 hits near one-month high after Healey backs fiscal discipline

On October 15, London's blue-chip stocks reached a near one-month high, propelled by financial institutions, according to Reuters. The benchmark FTSE 100 index increased 0.54% to 10,782.98 points by 09:50 GMT, marking its highest level since September 18. Meanwhile, the midcap FTSE 250 fell 0.07%. Finance Minister John Healey affirmed the government's dedication to fiscal discipline in his recent budget speech, reinforcing sentiment among investors.

He emphasized that he and Prime Minister Andy Burnham shared a common goal of maintaining fiscal responsibility. UK's 10-year bond yield dropped to 5.34% following Healey's remarks. The UK's GDP grew by 0.1% in August, driven by optimism surrounding artificial intelligence, surpassing expectations of a 0.1% decline. Bank of England Chief Economist Huw Pill cautioned that any future interest rate hike should not be perceived by investors as the beginning of a prolonged series of rate increases.

Economists polled by Reuters anticipate the Bank of England to raise rates to 4% in November but still expect to hold from there. Consumer staples firms, such as British American Tobacco, extended their gains, surging 2.6%. However, industrial metal miners experienced a setback, falling 3.1%, due to weaker copper prices and concerns over additional US Federal Reserve interest rate hikes.

British Land, a commercial property firm, rose 2.6% after reporting higher-than-expected half-year profit from office and retail park demand. Antofagasta, a Chilean miner, declined 5.8% after its third-quarter copper production decreased year-over-year. Among midcap stocks, e-commerce group THG surged 18% after raising its annual profit forecast.

In contrast, Workspace, a flexible office-space provider, slipped 5.6% following lower quarterly occupancy and a downgrade from Jefferies to "hold" from "buy" due to a tougher sales market.