Investment accounts
Adult accounts
Child accounts
Choosing Fidelity
Choosing Fidelity
Why invest with us Current offers Fees and charges Open an account Transfer investments
Financial advice & support
Fidelity’s Services
Fidelity’s Services
Financial advice Retirement Wealth Management Investor Centre (London) Bereavement
Guidance and tools
Guidance and tools
Choosing investments Choosing accounts ISA calculator Retirement calculators
Share dealing
Choose your shares
Tools and information
Tools and information
Share prices and markets Chart and compare shares Stock market news Shareholder perks
Pensions & retirement
Pensions, tax & tools
Saving for retirement
Approaching / In retirement
Approaching / In retirement
Speak to a specialist Creating a retirement plan Taking tax-free cash Pension drawdown Annuities Investing in retirement Investment Pathways
London pre-open: FTSE to nudge down; Hunt to make emergency statement on fiscal plan
(Sharecast News) - London stocks were set to nudge down at the open on Monday, with new Chancellor Jeremy Hunt expected to make an emergency statement on tax and spending plans later in the day.
The FTSE 100 was called to open five points lower at 6,853.
CMC Markets analyst Michael Hewson said: "While European markets finished last week on the up, US markets did not, finishing the week lower, with the S&P500 within touching distance of a key support level at 3,500.
"This weak finish looks set to translate into a slightly lower European open against a backdrop of a negative start in Asia trading, which followed in the footsteps of last week's weak finish in the US.
"Markets can be a fickle beast, with Friday's reaction to the news a classic case in point after UK PM Liz Truss decided to go full reverse ferret on the recent mini budget, along with the departure of Kwasi Kwarteng as Chancellor of the Exchequer, to be replaced by former health secretary, Jeremy Hunt.
"Gilt yields, which had been falling in expectation of that decision, rallied strongly once the decision had been confirmed, while the pound underwent a sharp slide, reversing some of its gains for the week.
"There is little doubt that the government's handling of recent events has been incompetent, even as some of the policies they were looking to implement could be easily justified."
Jeremy Hunt is expected to make an emergency statement later in an effort to calm markets, bringing forward measures from the medium-term fiscal plan that will support fiscal sustainability, with the full plan to be set out on 31 October.
As prime minister Liz Truss fights for survival, a delay to the reduction in cutting the basic income tax to 19p from 20p is likely to be announced.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said there could also be changes to the new VAT-free shopping scheme for tourists, and possibly a reversal of plans to relax the way tax is collected from self-employed people.
"We could even see a rise in VAT. But filling the black holes in the government's finances will be far from easy so highly unpalatable spending cuts across government departments are also expected," she said.
"Jeremy Hunt had already been setting the scene for this bonfire of tax cuts over the weekend. Those pledges and speculation that Liz Truss' days are numbered are likely to have been behind sterling's rise of 0.5% during trade in Asia, which saw it nudge back above $1.12.
"Since the emergency budget statement was announced, it's gained further ground. But sterling is still weaker than before Kwasi Kwarteng was ruthlessly axed, with the chief architect of the disastrous mini-budget still, for now, in place."
In corporate news, telecommunications group Vodafone has created a new joint venture with French firm Altice to deploy fibre-to-the-home services to up to 7.0m German homes over a six-year period.
Vodafone said that FibreCo, its 50/50 partnership with Altice, will offer wholesale access to telecommunications service providers in Germany. Creation of FibreCo was expected to be completed in the first half of 2023.
ASOS confirmed it was in the final stages of agreeing an amendment to its revolving credit facility after reports that a leading credit insurer cut cover for its suppliers.
Allianz Trade reduced its insurance cover for ASOS suppliers by more than half, media reported over the weekend.
"This action will give ASOS significantly increased financial flexibility, against the uncertain economic backdrop. ASOS retains a strong liquidity position and this is a prudent step in the current environment," the company said.
Share this article
Related Sharecast Articles
Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.
Award-winning online share dealing
Search, compare and select from thousands of shares.
Expert insights into investing your money
Our team of experts explore the world of share dealing.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity and Inclusion | Doing Business with Fidelity | Fidelity gender pay report | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Security | Statutory and Regulatory disclosures | Whistleblowing policy
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.