FTSE 100 rises ahead of government U-Turn on tax plan

After rumours circulated that the UK government was discussing scaling back its mini-budget, equities rose, with consumer discretionary and tech stocks rising to the top of the index. Meanwhile, yields on the 10-year gilts fell 24.5 bps, while the pound rose 2.2% against the dollar.

The rally continues today, with the FTSE 100 up 1.1% at 10am GMT, as investors await the Liz Truss announcement of a U-Turn on parts of its unfunded tax cuts. Lenders Lloyds and Barclays are at the top of the index, and so is Legal & General, which rose 3%.

British finance minister Kwasi Kwarteng left Washington early ahead of a potential statement. 

This comes as the Bank of England's emergency bond purchases come to an end today.

Among stocks, International Distributions Services dropped 8.9% after it said that Royal Mail is set to cut as much as 5,000 jobs over 2023.

 

Things to read today:

Market turbulence pushes Liz Truss to the brink (Financial Times)

UK Pensions Crisis Exposes Structural Holes, Asset Manager Says (Bloomberg)