The FTSE 100 (^FTSE) fell back into the red on Wednesday afternoon having climbed to new highs earlier in the session, while European stocks gained as Downing Street said Sir Keir Starmer will fight any leadership challenge.
It comes as the BBC reported there are a number of high-profile names, and Starmer allies, that are being circulated as potential replacements for the PM if a coup is mounted, including Health Secretary Wes Streeting and Home Secretary Shabana Mahmood.
The cost of UK government borrowing rose at the fastest pace among major global markets on the back of the news. The yield on UK bonds, or gilts, rose as investors raised concerns about the possibility that the prime minister and chancellor Rachel Reeves could be ousted after the budget.
The yield on 30-year UK gilts rose four basis points to 5.21%, having hit their highest level since 1998 in August. The yield on two-year and 10-year gilts also climbed. This wipes out around half of yesterday’s fall in yields, when expectations of a UK interest rate cut in December pushed up bond prices.
Neil Wilson, an analyst at Saxo Markets, said: “It points to the very real risk that the budget leads to unrest within the parliamentary Labour party, a big market reaction, and the fall of Starmer and Reeves.
“Instability with the politics means fiscal instability, which means market instability regarding gilts – perhaps baking in a premium for an even more left-leaning, tax-and-spend government.
“We are heading to a fiscal showdown and political crisis that will show up in volatility in gilts and sterling – potentially a serious wobble in the pound if gilts run.
“The key risk is that if Reeves and or Starmer go then their fiscal rules which have underpinned an easing in gilt yields, would be in serious doubt.”
Read more: Trending tickers: AMD, SoftBank, Novo Nordisk, BAE Systems and Taylor Wimpey
Elsewhere, traders are hopeful for an end to the US government shutdown while the latest jobs data boosted the chances of a third successive interest rate cut from the Federal Reserve.
After passing the Senate, a spending bill to reopen the US government is due before the House of Representatives and then Donald Trump, with hopes that services can resume as soon as Friday.
The House is expected to vote on the bill to keep most of the government open until 30 January and some agencies until 30 September next year.
In a Veterans Day speech at Arlington National Cemetery on Tuesday, Trump said: “We’re opening up our country — it should have never been closed.”
He later told ESPN: “Only people that hate our country want to see it not open,”
Jim Reid at Deutsche Bank said: “At this stage who knows whether we’ll see a mini version of what we’ve been through over the last 43 days as the end of January approaches, but that’s a topic for another day.”
Meanwhile, expectations for a Fed rate cut in December rose after data from private payrolls firm ADP revealed that US companies shed 11,250 jobs per week on average in the four weeks ended 25 October.
The figure followed several reports pointing to a softening labour market, which is putting pressure on the US central bank to reduce rates further.
London’s benchmark index (^FTSE) was just below the flatline by early afternoon trade, with the 10,000-point mark in sight
Germany’s DAX (^GDAXI) rose 1.4% and the CAC (^FCHI) in Paris also headed 1.4% into the green
The pan-European STOXX 600 (^STOXX) was up 0.8%
Wall Street is set for a positive start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the green despite ongoing worries about elevated tech valuations
The pound was 0.25% down against the US dollar (GBPUSD=X) at 1.3116
FTSE Index – Delayed Quote • USD
As of 13:04:20 GMT. Market open.
Follow along for live updates throughout the day:
LIVE 13 updates UK government borrowing costs climb
The cost of UK government borrowing rose at the fastest pace among major global markets on Wednesday after Downing Street said Sir Keir Starmer will fight any leadership challenge.
The yield on UK bonds, or gilts, rose as investors raised concerns about the possibility that the prime minister and chancellor Rachel Reeves could be ousted after the budget.
The yield on 30-year UK gilts rose four basis points to 5.21%, having hit their highest level since 1998 in August. The yield on two-year and 10-year gilts also climbed. This wipes out around half of yesterday’s fall in yields, when expectations of a UK interest rate cut in December pushed up bond prices.
AMD says its data centre revenue will jump 60% over the next 3 to 5 years
Shares in Advanced Micro Devices (AMD) jumped nearly 6% in pre-market trading on Wednesday morning, after the chipmaker said it expects to see its data centre revenue grow by 60% over the next three to five years.
This came as part of an outlook unveiled at AMD’s financial analyst day in New York on Tuesday, in which the CEO Lisa Su said the company sees a total addressable market for AI data centres increasing to $1tn (£760m) over the next five years.
“With the broadest portfolio of products and our deepening strategic partnerships, AMD is uniquely positioned to lead the next generation of high-performance and AI computing,” Su said.
AMD expects overall revenue to increase by 35% over the next three to five years, the majority of which will come from the company’s data centre business.
In third quarter results released last week, AMD topped expectations, reporting earnings per share (EPS) of $1.20 on revenue of $9.25bn. Analysts were anticipating EPS of $1.17 on revenue of $8.74 billion, according to Bloomberg consensus estimates.
However, AMD’s outlook for the fourth quarter failed to impress investors, with the company forecasting revenue of about $9.6bn (£7.4bn) in the fourth quarter, plus or minus $300m. According to a Bloomberg report, the average analyst estimate was $9.2bn, though some projections were as high as $9.9bn.
PayPal re-launches in the UK after nearly two years
PayPal said on Wednesday that it is set to re-launch in the UK for customers to shop online and in stores, nearly two years after it restructured its operations there following Brexit.
The digital payments platform said customers in Britain will have access to debit cards that can be used worldwide without any transaction fees, credit cards, and its PayPal+ loyalty programme.
Gold prices above $4,100 as investors eye Fed rate cuts
Gold (GC=F) prices hovered above the $4,100 mark on Wednesday morning as investors awaited a vote in the US House of Representatives on a deal to reopen the federal government, a move that could restore the flow of economic data and provide clearer guidance on the Federal Reserve’s next steps with interest rates.
Gold futures gained 0.5% to $4,134.30 per ounce, while spot gold edged down 0.1% to $4,132.08 an ounce at the time of writing.
“Everyone is awaiting more clarity on the government shutdown and when the data is coming out of the US again,” said Giovanni Staunovo, an analyst at UBS. “It’s probably some stability before prices keep going up … we are still in an uptrend when it comes to the gold prices. Nothing from the structural side has completely changed.”
Market expectations of US monetary easing have firmed, with CME Group’s FedWatch tool showing a 67% probability of a 25 basis-point rate cut at the Fed’s next meeting on 10 December, up from 62% a day earlier.
“Gold’s prices have broken above the $4,050 resistance level after a consolidation. This confirms a continuation of the prevailing bullish momentum,” analysts at ANZ said in a note. “Yet, the next resistance zone is $4,160–$4,170/oz, breach of this range will push prices towards the record high of $4,380/oz.”
JP Morgan said in a separate report that it expects “central banks and consumers to emerge as reliable buyers during price dips” and forecast gold prices to exceed $5,000 by the fourth quarter of 2026.
“The dip in dollar has suited gold and silver, which have both been posting gains this week,” KCM Trade chief market analyst Tim Waterer said.
“It appears that ‘normal service has resumed’ for gold, with the precious metal trading back above $4,100 while eyeing targets further north should US macro data continue to be supportive for additional monetary policy easing.”
Thousands of NHS staff in England to lose jobs after deal approved
Thousands of NHS staff redundancies in England will now go ahead after a deal was reached with the Treasury to allow the health service to overspend this year to cover the cost of pay-offs.
The BBC has the details…
The government said earlier this year 18,000 admin and managerial jobs would go with NHS England, the body that runs the NHS, being brought into the Department of Health and Social Care alongside cuts to local health boards.
NHS bosses and health ministers had been in talks with the Treasury over how to pay for the £1bn one-off bill with the health service wanting extra money.
The Treasury blocked that, but the BBC understands a compromise has been reached with the NHS permitted to overspend this year.
As the job cuts result in savings in future years, the NHS will be expected to recoup the costs further down the line.
Overall, government sources said no extra money is going into the NHS beyond what was agreed at the spending review this year – an extra £29bn a year above inflation by 2028-29.
Health Secretary Wes Streeting told BBC Breakfast that patients and NHS staff had told him the health service had “too many layers of management, too many layers of bureaucracy”.
“People want to see the front line prioritised, and that is exactly what we’re doing,” he said, adding he would tell NHS leaders “we’re finally on the road to recovery” in his speech later on Wednesday.
In a speech to health managers at the NHS Providers’ conference in Manchester later, Streeting is expected to say:
Taylor Wimpey warns budget uncertainty weighing on demand
UK housebuilder Taylor Wimpey (TW.L) warned on Wednesday that sales growth slowed in its usually busy autumn season.
It described recent trading as resilient, amid challenging conditions, pointing to continued affordability pressure. But it also highlighted uncertainty ahead of the November budget.
The sales rate for the second half of 2025 so far came in lower than the equivalent period last year by 11%, while the forward order book is slightly smaller as well, down 7%. Underlying prices look flat year-on-year, although build cost inflation is expected to be a low-single-digit headwind.
Management continues to guide to operating profit of £424m for full year 2025. This is an £8m increase on last year’s figure, and while the target is achievable, it must be noted that operating profit in the first six months was around £20m lower than the year before, and today’s trading statement suggests that performance in H2 is so far no better than it was last year.
Most sell-side estimates expect the company to achieve the 2025 guidance.
Jennie Daly, chief executive of Taylor Wimpey, said:
FTSE risers and fallers
Here are the FTSE risers and fallers this morning:
Japan’s finance chief issues warning over weakening yen
Japan’s finance chief Satsuki Katayama has issued a warning over a weak yen, telling the country’s parliament that the government was monitoring the situation closely.
She said:
The yen has been weakening since the start of October, and is approaching the significant level of ¥155 to the dollar, a point in which Toyko has previously intervened in the markets.
Katayama also warned that the negative aspects of the weak yen are becoming clearer.
The yen’s weakness may be a sign tht the “yen carry trade” is growing in popularity, as risk returns to the markets. This is the situation where investors borrow yen, and use it to buy other, higher-yielding currencies such as the US dollar.
Universal credit claimants rise more than a million in a year
The number of universal credit (UC) claimants has soared to 8.3 million people, up from 7.2 million at the same time last year, according to new government figures.
This marks a 1.1 million increase in the space of a year, and is the largest annual rise in total claimants since early in the COVID pandemic, the 12 months to April 2021.
UC is a payment to help with living costs and is available for people in work who are on low incomes, as well as those who are out of work or cannot work.
There has also been a sharp rise in the number of people claiming UC who have “no work requirements”.
Statistics from the Department for Work and Pensions showed that four million people were in this category in October, up from 2.9 million people a year ago.
Claimants in the “no work requirements” bracket are people in full-time education, over the state pension age, with a child aged under one, and who are considered to have no prospect of work – they make up 48.7% of all claimants.
Other claimants must do certain work-related activities to receive the UC benefit, such as attending interviews to plan for their return to work or be actively searching for work.
The number of people in the searching for work category stood at 1.6 million in October, and the number of working people on UC stood at 2.2 million last month – both unchanged year-on-year.
FTSE 100 hits fresh record high
The FTSE 100 (^FTSE) has continued to rise this morning, adding to yesterday’s gains and heading towards the 10,000 point mark.
Dan Coatsworth, head of markets at AJ Bell, said:
Asia and US overnight
Stocks in Asia were mostly higher overnight, with the Nikkei (^N225) rising 0.4% on the day in Japan, while the Hang Seng (^HSI) jumped 0.9% in Hong Kong, led by technology stocks and reaching a level not seen in over a month.
The Shanghai Composite (000001.SS) was 0.1% down by the end of the session and in South Korea, the Kospi (^KS11) added 1.1% on the day.
Across the pond on Wall Street, US markets struggled for much of the day following the euphoria around the possibility the government shutdown ending over the previous 36 hours.
The S&P 500 (^GSPC) rose 0.2%, and the tech-heavy Nasdaq (^IXIC) was 0.3% lower. The Dow Jones (^DJI) gained 1.2% on what was otherwise a quiet day due to the Veterans Day holiday, which kept the US bond market shut.
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Coming up
Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what’s moving markets, and all that’s happening across the global economy.
To the day ahead we have data releases including Germany’s September current account balance, Italy’s September industrial production, and Canada’s September building permits.
From central banks, we’ll also hear from the Fed’s Barr, Williams, Waller, Miran, Paulson and Bostic, the ECB’s Schnabel and de Guindos, and the BoE’s Pill. Finally, earnings include Cisco and TransDigm.
Here’s a snapshot of what’s on the agenda:
7am: Trading updates: Experian, Flutter Entertainment, SSE, BAE Systems, Taylor Wimpey, ICG, Marshalls, Volex, Fuller Smith & Turner, Motorpoint, Avon Technologies, WH Smith
7am: German inflation report for October
12pm: US weekly mortgage approval data
2.15pm: Treasury Committee hearing on property taxes ahead of the budget
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