FTSE 100 edges up as pound holds steady after Budget
UK shares opened higher and sterling held steady on Thursday 29 October, the first trading session since Chancellor John Healey delivered his first Budget. The calm early reaction suggested investors had largely expected the cautious package unveiled the previous day, which balanced help for households with a smaller fiscal cushion than the government had in March.
What the Chancellor said
The FTSE 100 opened up 0.25 per cent, or 27 points, to 10,721, after closing level on Wednesday evening, while the FTSE 250 opened six points higher.
Why markets stayed calm
Healey told BBC Radio 4's Today programme on Thursday that there would be a reduction in the benefits bill and said he felt a moral duty to help young people into work. In the Budget itself, he said he would raise taxes on banks, gambling, savers and landlords, while tightening value-added tax rules for online marketplaces such as Amazon and eBay and easing the hit from rising energy bills.
The Office for Budget Responsibility raised its growth forecast for 2026 to 1.2 per cent but cut its 2027 estimate to 1 per cent. It also estimated a £19 billion rise in the welfare bill in the current financial year.
Sterling was last flat on the day at $1.3325, having gained about 0.52 per cent against the dollar during October, its best-performing major currency showing this month. Against the euro it was down 0.1 per cent at 83.62 pence, ahead of a European Central Bank decision widely expected to leave eurozone rates unchanged.
Analysts described the package as a continuity Budget that left Britain's fiscal outlook largely unchanged, which investors treated as a positive. Barclays strategists said the pound's perceived fiscal risks had moved to the background, while BNP Paribas strategists said reduced UK political uncertainty versus elsewhere supported sterling.
