The FTSE 100 is expected to open sharply lower on Tuesday, with futures indicating a 40-point drop, as global equity markets extend their cautious tone.
The London benchmark fell 15.88 points (0.16%) on Monday to 9,701.37, starting November on the back foot despite recent strength. However, sentiment could improve later in the session if positive quarterly results from BP and Primark owner Associated British Foods (AB Foods) help lift investor confidence.
Overnight, Wall Street offered a mixed picture — the Dow Jones Industrial Average fell 0.5%, while the broader S&P 500 rose 0.17% and the Nasdaq Composite gained 0.46%, supported by strength in major technology stocks.
In Asia, markets traded firmly in the red, with Japan’s Nikkei down 1.7% and Hong Kong’s Hang Seng falling 0.7%, reflecting weaker global risk appetite ahead of key economic data and central bank meetings later in the week.
Goldman Sachs says Reeves’s budget could lower borrowing costs — but tax rises likely
Analysts at Goldman Sachs expect Chancellor Rachel Reeves’s upcoming budget to help reduce government borrowing costs, provided she reassures bond markets of her commitment to tackling the deficit.
In a research note to clients issued on Friday, Goldman said the chancellor’s fiscal measures and pre-budget signals could lower the yield on 10-year UK government bonds by up to 0.2 percentage points over the next decade.
The bank also suggested that Reeves may opt for targeted tax rises to balance the public finances and strengthen confidence among investors after a period of elevated gilt yields and fiscal uncertainty.
Goldman added that credibility with markets will be key to ensuring the government can sustain lower long-term borrowing costs while pursuing its growth and investment agenda.
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