FTSE 100 Live September 23: Chancellor Kwasi Kwarteng mini-budget, GfK consumer confidence at record low

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FTSE 100 stable, Smiths Group up 3%

The FTSE 100 index is close to its opening level despite weaker oil stocks from BP and Shell and 1% falls in Lloyds and NatWest.

The highest group, which declined 1% yesterday after the Fed rate decision, was 8.82 points lower at 7150.70.

Industrial conglomerate Smiths Group topped the risers board after annual results showed a 5% dividend increase and guidance for revenue growth of more than 4% this year. Shares rose 3%, or 37.5p, to 1508p.

Other stocks up more than 1% included GSK and Haleon, the pharma giant’s former consumer healthcare division.

Marks & Spencer shares rose 1.9p to 112.3p, but the broader FTSE 250 index fell 15.51 points to 18,316.18.

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Consumer confidence at record low

GfK’s Consumer Confidence Index today recorded its worst reading since records began in 1974 as the cost of living crisis deepens.

The headline fell five points to minus 49 in September, its fourth all-time low in five months.

Confidence in personal finances over the coming year fell nine points to minus 40 and confidence in the economy over the next 12 months fell eight points to minus 68. The bulk purchase index, an indicator of confidence in buying large ticket items, was unchanged at minus 38.

GfK Director Joe Staton said: “Consumers are collapsing under the pressure of the UK’s growing cost of living crisis, caused by soaring food prices, heating bills and mortgage payments. They wonder when and how the situation will improve.

“Today’s mini-budget and longer-term agenda to stimulate the economy and rebalance household finances will be the first major opportunity to achieve that improvement.”

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Wall Street decline adds pressure to FTSE 100

Fears over the impact of another large rate hike in the US continue to dominate markets after another sharp fall on Wall Street last night.

The S&P 500 index fell 0.8% and the Nasdaq shed 1.4%, with trading in futures markets pointing to another negative session when trading resumes this afternoon.

The potential for a hard landing in the US economy has increased after Federal Reserve Chair Jerome Powell vowed to do whatever it takes to fight inflation. Traders are now looking at a policy rate of 4.5% to 4.75% through early 2023.

European markets were also hit yesterday as the FTSE 100 index closed at its lowest level in two months after falling 1.1% below the 7200 mark. The FTSE 250 index, already in bear market territory, fell 2%.

Sterling weakened to $1.12 after multiple central bank meetings this week, which saw the Federal Reserve rise 0.75% and the Bank of England climb 0.5% to 2.25%.

There has been speculation that the bank could rise 0.75%, but economists believe such a move could still happen in November if today’s mini-budget makes it more likely that inflation will remain high for longer.

CMC Markets expects an unchanged start for the FTSE 100 Index today.