The FTSE 100 (^FTSE) and European markets were in the green on Monday afternoon as business parses the latest speech by chancellor Rachel Reeves at the Labour party conference.
The speech, which was light on new policy announcements, hinted at her approach to the Autumn budget, which is set to be read to Parliament on 26 November.
Reeves pledged an approach rooted in “securonomics” — emphasising economic stability and sensible spending over calls to shake up fiscal rules.
Reeves faces tough questions over the UK’s fiscal headroom, with the latest data showing government borrowing surged to £18bn in August.
“Last month’s borrowing was the highest August total since the pandemic. Although overall tax and national insurance receipts were noticeably up on last year, these increases were outstripped by higher spending on public services, benefits and debt interest,” Grant Fitzner, chief economist for the ONS, said when the figures were released.
In an interview on Radio 4 this morning, Reeves refused to say whether there would be tax rises.
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London’s premier index rose 0.6% by the afternoon. GSK (GSK.L) was among the top risers in the index as the drugmaker said it is implementing a top-level changeover as CEO Emma Walmsley steps down.
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The DAX (^GDAXI) in Germany rose slightly.
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Over in Paris, the CAC 40 (^FCHI) ticked 0.2% into the green.
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The pan-European STOXX 600 (^STOXX) gained 0.3%.
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Sterling ticked up 0.2% against the dollar (GBPUSD=X) retracing lost ground from last week as traders look to the potential government shutdown in the US.
LIVE 15 updates
- How US stocks are faring at the opening bell
- A nod to the upcoming budget…
Reeves said: “In the months ahead, we will face further tests, with the choices to come made all the harder by harsh global headwinds and the long-term damage to the economy, which is becoming every clearer.”
- ‘Nothing Labour’ about debt costs: Reeves
There is “nothing Labour” about paying debt interest, says Reeves.
“Our first year in power was about fixing the foundations. Our second year must be about building a renewed economy,” she said.
- Government to push ahead with ‘northern powerhouse rail’
Reeves just reiterated the pledge to finish the touted northern powerhouse rail.
Earlier this week, Starmer defended a decision to delay plans to extend high-speed rail services across the north-west of England.
He said that while “the commitment to Northern Powerhouse Rail remains… I just want to make sure we get it right”.
- New ‘hit squad’ to investigate COVID fraud
Reeves says there will be new powers to investigate COVID fraud — and to deploy those powers there will be a new “hit squad”.
“We want our money back, we are getting that money back, and we are putting it where it belongs,” she said.
- Reeves pledges school library investment push
There hasn’t been much substantially new in this speech by Reeves. The standout investment pledge is for education.
Reeves said the government will provide a library in every primary school by the end of this parliament. That means 1,700 new school libraries, according to her speech.
- Chancellor rules out wealth tax: Bloomberg
Ahead of her conference speech, Reeves has ruled out a much-touted wealth tax, adding more detail on her potential upcoming budget.
“We already have taxes on wealthy people; I don’t think we need a standalone wealth tax,” Reeves said in an interview with Bloomberg TV at the Labour Party’s conference in Liverpool. She cited capital gains tax and inheritance tax.
She also reiterated a pledge made in Labour’s election manifesto not to increase income tax, national insurance, the VAT sales tax or corporation tax.
“Working people paid a heavy price in the last Parliament,” she said.
The issue has been a contentious one as budget strains continue to plague the government. When polled by Yahoo Finance UK, 51% of readers previously said they disagreed with a wealth tax.
- Oil prices swing lower on Opec+ output plans
Oil prices swung lower on Monday following a week of gains, amid signals that Opec+ will hike production again in November, stoking concerns about oversupply. The restart of a pipeline from Iraq added to those worries.
Brent crude futures (BZ=F) dipped around 1.1%, to $69.38 a barrel. Last week, crude futures had advanced more than 3%. West Texas Intermediate (CL=F) fell nearly 1.5% to trade at $64.76.
Bloomberg reported that Opec+ is considering raising output by at least as much as the 137,000 barrel-a-day hike scheduled for next month, citing people familiar with the plans.
- Genmab dips
Yahoo Finance UK’s Vicky McKeever writes:
In Denmark, biotechnology company Genmab (GMAB.CO) announced that it is acquiring Dutch firm Merus (MRUS) in an all-cash transaction worth approximately $8bn.
The proposed acquisition would add Merus’ treatment petosemtamab, a therapy for head and neck cancer, to Genmab’s portfolio.
Getmab’s shares were down nearly 3% following the announcement on Monday, while Merus shares climbed just over 1%.
Jan van de Winkel, CEO of Genmab, said: “The proposed acquisition of Merus clearly aligns with our long-term strategy. It has the potential to significantly accelerate our evolution into a global biotechnology leader by providing durable growth for the company well into the next decade.”
- AstraZeneca jitters
AJ Bell investment director Russ Mould said:
- GSK CEO Emma Walmsley to step down
The big news in big pharma this morning is that GSK’s (GSK.L) CEO Emma Walmsley has resigned.
She said:
The company’s stock has popped in early trade, up more than 3.1% at the time of writing.
Walmsley has been at the helm of the firm since 2017. She will serve out her notice at the business, before leaving at the end of September 2026.
Chief commercial officer Luke Miels will succeed her.
- US stock futures higher
From our US team:
US stock futures climbed early on Monday as investors regrouped from a losing week that saw cracks emerge in AI-focused stock trading as well as surprise tariff announcements from president Trump for 1 October.
Contracts tied to the Dow Jones Industrial Average (YM=F) climbed 0.3% while S&P 500 futures (ES=F) rose 0.4%. Futures on the tech-heavy Nasdaq 100 (NQ=F) popped 0.5%.
Last week, all three major averages slipped. The S&P 500 (^GSPC) fell 0.3% for its worst week since early August, while the Nasdaq (^IXIC) slid 0.7%. The Dow (^DJI) lost 0.2%, snapping a three-week winning streak.
Meanwhile, a government shutdown remains possible by Wednesday this week, leaving an air of doubt over whether the government will release key economic data — including the highly anticipated jobs report on Friday. A meeting between Trump and congressional leaders is set for Monday, serving as potentially the last hope to avoid a shutdown.
- Good morning!
Hello from London. It’s party season — no, not Christmas — but political party conference season.
Chancellor Rachel Reeves speaks at noon following a broadcast round happening … right now. Her speech should be the big moment of the day for the Labour party conference.
There’s also fresh Bank of England data today, on money and credit including mortgage approvals.
In the US, cruise operator Carnival (CCL) reports results.
Let’s get to it.
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