London open: Stocks little changed ahead of mini-budget

London stocks were little changed in early trade on Friday as investors eyed the mini-budget, with Chancellor Kwasi Kwarteng set to announce the biggest tax cuts since Margaret Thatcher was in No 10 Downing Street.

At 0825 BST, the FTSE 100 was down 0.1% at 7,155.00, while sterling fell to a fresh 37-year low against the dollar, below $1.12.

CMC Markets analyst Michael Hewson said: "At the very least we’ll see the national insurance rise that was so heavily criticised in April reversed, from November, while the corporation tax rise that was due to take effect next year will be cancelled.

"Other trial balloons this week have been cuts to stamp duty and the removal of the cap on bankers’ bonuses, which suggest a focus in areas that probably aren’t a high priority at this moment in time.

"Rather than focussing on stamp duty, it would be more helpful in the move towards renewables to encourage or mandate the installation of solar panels on all new house building projects, as one example, in order to help reduce carbon footprints, and improve the energy efficiency of the housing stock.

"What would be more helpful would be an overhaul of the business rates system, as well as simplifying the way online businesses pay tax, relative to their bricks and mortar peers. While this hasn’t been leaked it doesn’t mean that the Chancellor might not be forthcoming when it comes to what he has up his sleeve later today."

Ahead of the mini-budget - due to be delivered by Kwarteng at 0930 BST - investors were mulling the latest consumer confidence survey from GfK.

The GfK Consumer Confidence Index fell five points in September to a record low of -49, the worst overall index score since records began in 1974, as the cost-of-living crisis continues to weigh heavily.

Within that, the personal financial situation index for the next 12 months, which measures consumers’ expectations, slid nine points to -40, while the general economic situation index for the next year lost eight points to -68.

The major purchase index, which indicates how likely consumers are to spend on big ticket items, was unchanged at -38.

Joe Staton, client strategy director at GfK, said the falls seen on the forwarding-looking indices were "especially worrying".

"These numbers are where many forecasters look for signs of economic optimism among consumers, and the results deliver very bad news in that respect,” he said.

"Consumers are buckling under the pressure of the UK’s growing cost-of-living crisis, driven by rapidly rising food prices, domestic fuel bills and mortgage payments. They are asking themselves when and how they situation will improve."

In equity markets, wealth manager Investec ticked lower despite saying that it expects to post a jump in first-half adjusted operating pre-tax profit to between £372.6m and £406.2m, from £325.7m a year earlier.

Engineering company Smiths Group jumped to the top of the FTSE 100 as it said full-year organic revenues and pre-tax profits had grown ahead of expectations amid "high demand" across the majority of its end markets.

Market Movers

FTSE 100 (UKX) 7,155.00 -0.06%
FTSE 250 (MCX) 18,321.31 -0.06%
techMARK (TASX) 4,202.05 0.13%

FTSE 100 - Risers

Smiths Group (SMIN) 1,509.00p 2.62%
Haleon (HLN) 271.75p 2.16%
Prudential (PRU) 954.00p 2.12%
Airtel Africa (AAF) 139.00p 1.53%
GSK (GSK) 1,315.60p 1.51%
Ocado Group (OCDO) 563.20p 1.00%
Croda International (CRDA) 6,444.00p 0.85%
Associated British Foods (ABF) 1,344.00p 0.83%
Frasers Group (FRAS) 769.50p 0.79%
AstraZeneca (AZN) 9,997.00p 0.63%

FTSE 100 - Fallers

NATWEST GROUP (NWG) 254.90p -1.20%
Lloyds Banking Group (LLOY) 47.40p -1.17%
Shell (SHEL) 2,314.50p -1.03%
Melrose Industries (MRO) 102.60p -0.97%
Coca-Cola HBC AG (CDI) (CCH) 1,927.00p -0.90%
Harbour Energy (HBR) 478.00p -0.85%
Reckitt Benckiser Group (RKT) 6,102.00p -0.81%
InterContinental Hotels Group (IHG) 4,318.00p -0.80%
Barclays (BARC) 164.98p -0.77%
Standard Chartered (STAN) 593.40p -0.77%

FTSE 250 - Risers

Impax Environmental Markets (IEM) 428.50p 4.13%
Hipgnosis Songs Fund Limited NPV (SONG) 102.80p 2.59%
Molten Ventures (GROW) 344.80p 2.56%
UK Commercial Property Reit Limited (UKCM) 65.00p 2.20%
Pets at Home Group (PETS) 304.80p 1.80%
Hochschild Mining (HOC) 59.35p 1.80%
Hikma Pharmaceuticals (HIK) 1,220.00p 1.71%
Countryside Partnerships (CSP) 235.00p 1.21%
Marks & Spencer Group (MKS) 111.60p 1.09%
Vistry Group (VTY) 708.50p 1.07%

FTSE 250 - Fallers

Biffa (BIFF) 335.00p -4.61%
Spirent Communications (SPT) 255.80p -4.48%
CMC Markets (CMCX) 216.50p -4.42%
Aston Martin Lagonda Global Holdings (AML) 143.50p -3.82%
Polymetal International (POLY) 195.00p -2.50%
Dr. Martens (DOCS) 253.00p -2.09%
Tritax Big Box Reit (BBOX) 145.00p -2.03%
Babcock International Group (BAB) 317.00p -1.80%
TUI AG Reg Shs (DI) (TUI) 132.50p -1.78%
Shaftesbury (SHB) 387.00p -1.58%