Closing post
Time to wrap up….
Britain’s blue-chip stock index has risen through the 9,000-point mark to touch a new high today, before falling back.
The FTSE 100 share index hit 9,016.98 points in early trading on Tuesday, taking its gains during 2025 to more than 10%.
Analysts said the London stock market had benefited from a range of factors this year, including a move by some investors to diversify away from US shares because of concerns about Donald Trump’s economic policies.
The US president’s trade war has also helped UK stocks, as Britain is one of the few countries to have reached a trade deal guaranteeing lower tariffs
Inflation shot up in June as the impacts of Donald Trump’s tariffs slowly started to show in US prices.
Business leaders have said for months that the high, volatile rates of Trump’s tariffs will force companies to raise consumer prices. Prices remained stable in the spring, particularly as many of Trump’s highest tariffs were paused; however, they started increasing in May and have continued to rise in June.
Annual inflation rose to 2.7% in June, up from 2.4% in May, according to the Consumer Price Index (CPI), which tracks the prices of a basket of goods and services each month. Core CPI, which leaves out energy and food prices, ticked up slightly to 2.9%, compared with 2.8% in May.
The prices of appliances, furniture and toys, products typically manufactured outside the US, all rose. Food prices increased by 3%, with the price of beef rising by more than 2% over the month, coffee up 2.2% and citrus fruit prices rising 2.3%. While the price of eggs has been dropping over the last few months, a dozen eggs are still 27% more expensive than last year…
China’s economy grew more strongly than expected in the second quarter as it proved resilient in the face of Donald Trump’s trade war.
China’s gross domestic product (GDP) grew 5.2% in April to June compared with a year earlier, slowing from 5.4% in the first quarter, but just ahead of analysts’ expectations for a rise of 5.1%.
Rachel Reeves has unveiled a package of City changes meant to cut “unnecessary” red tape and encourage more financial risk-taking by companies and consumers in the hopes of spurring economic growth.
In a financial services strategy dubbed the Leeds Reforms, the chancellor outlined initiatives designed to boost the financial services sector, including plans to cut “unnecessary costs” related to accountability rules for senior bankers, and to launch an advertising campaign to get consumers investing cash savings in stocks.
Thames Water has said it could collapse into temporary nationalisation if emergency talks with creditors fail, as it slumped to a £1.6bn annual loss.
The loss for the 12 months to 31 March comes after a profit of £154m the previous year, even though revenues climbed by 8.7% to £2.7bn. It had net debt of £16.8bn, up from £15.2bn the year before.
Thames’ top management were also warned they could be held in contempt of Parliament if they continue to refuse to hand over board minutes related to the takeover approach from KKR, which collapsed last month.
Updated
FTSE 100 closes lower
The Footsie’s historic day has ended with a whimper, not a bang.
After breaching the tape on the 9,000-point mark in early trading, the FTSE 100 has slipped back during the day.
The index of blue-chip shares has just closed down almost 60 points, or 0.66%, at 8938 points, after the jump in US inflation dampened hopes of early interest rate cuts in America.
That’s lower than yesterday’s closing high of 8998 points, as well as (obviously) lower than the new intraday high of 9016.98 points set this morning.
But the mood in the City is still upbeat.
Here’s Neil Wilson, UK investor strategist at Saxo:
Overall, I’d say the FTSE has attraction from a value, income and defensive perspective given the volatility we have seen and changed macro backdrop and assumptions about US exceptionalism.
a) it’s offering some relative shelter with defensive names,
b) benefitting from flow dynamics as investors look beyond the US,
c) is enticing value-focused investors with relatively low multiples when growth is at a premium,
d) offers a good dividend income yield and
e) may be picking up a little juice from the government’s capital investment plans for defence/energy/houses. 10,000 here we come.
