The FTSE 100 closed higher at 8,690, benefiting from a weaker pound which boosted overseas earners. Gains were somewhat constrained by a downward revision to the UK’s growth forecast and a lack of new market-moving announcements from the Spring Statement. Housing sector stocks initially dipped on growth concerns but later recovered.
- The FTSE 100 closed at 8,690.
- A weaker pound boosted the FTSE 100.
- UK inflation unexpectedly fell to 2.8%.
- The OBR revised UK growth forecast down from 2% to 1% for 2024.
- The government will fall short of its 1.5 million homes target, now expecting 1.3 million.
- Defence stocks like BAE Systems rebounded after increased spending pledges.
- Shell extended gains following its strategic update.
For the FTSE 100, a weaker pound provides a tailwind, particularly for companies with significant overseas revenues. However, the reduced growth forecast presents a headwind, suggesting a potentially less robust economic environment. While increased defense spending is positive for related stocks, failure to meet housing targets points to underlying economic challenges that could impact market sentiment more broadly. The overall effect appears to be one of mitigated gains, where positive factors are balanced by concerns about the larger economic picture.