On October 10, 2024, the FTSE 100 index experienced a slight decline, falling by 1 point to 8,235.83 as of 13:36 BST. This drop comes as investors digest the latest US inflation data, which revealed a year-on-year increase of 2.4% for September, surpassing expectations of 2.3%. Core inflation also exceeded forecasts, coming in at 3.3% compared to the anticipated 3.2% [853f4cb1].
The index's performance reflects ongoing caution in the market, especially following a more significant drop earlier in the week. On October 9, the FTSE 100 had increased by 30 points, recovering from previous economic pressures [eb313687]. However, the overall sentiment remains cautious as UK businesses face significant challenges. The ICAEW reported a decline in UK business confidence from 16.7 to 14.4 in Q3 2024, attributing this to a heavy tax burden that deters investment [eb313687].
In addition to inflation concerns, the UK government is preparing for a challenging Budget on October 30, aimed at addressing a £22 billion public finance shortfall, which could further complicate the economic landscape [5339c61a].
In corporate news, GSK shares surged by 5.2% after the company agreed to a settlement of up to $2.2 billion to resolve approximately 80,000 lawsuits related to its Zantac product [853f4cb1]. Meanwhile, Unilever announced the sale of its Russian business to Arnest Group, marking a significant exit from the region [853f4cb1].
On a positive note, UK house prices have risen for the first time in two years, indicating a potential recovery in the real estate market [853f4cb1]. However, the financial landscape remains mixed, with government borrowing costs reaching a three-month high and yields on 10-year gilts at 4.23% [853f4cb1]. Additionally, Aldi plans to hire 3,500 workers for the Christmas season, while TSB has been fined £10.9 million for inadequate treatment of indebted customers [853f4cb1]. Mortgage defaults have also increased for the seventh consecutive quarter, highlighting ongoing financial pressures on households [853f4cb1].
Despite the FTSE's recent dip, there were gains in Chinese equities, with the Shanghai Composite up 1.3% and the Hang Seng up 3.0%, showcasing a divergence in market performance [8a0ee7fb]. Overall, the performance of the FTSE 100 continues to be influenced by both domestic economic challenges and international market dynamics, with investors closely monitoring upcoming economic indicators [5339c61a].