Gold prices tick higher on fresh U.S. tariff threats, Fed rate cut hopes
Investing.com -- U.K. stocks were slightly higher on Wednesday as Chancellor Rachel Reeves unveiled her latest spending review, pledging increased funding for government departments alongside substantial investments in infrastructure, defense, and social housing.
The blue-chip index FTSE 100 rose 0.1% and the British pound rose 0.4% against the dollar to 1.3555.
DAX index in Germany dropped 0.3%, the CAC 40 in France fell 0.4%.
Chancellor Reeves unveils spending review
British finance minister Rachel Reeves announced that government departmental budgets will increase by 2.3% annually in real terms as part of her plan to allocate more than £2 trillion ($2.7 trillion) in public spending.
In her address to parliament, Reeves stated that her fiscal rules would enable the allocation of an additional £190 billion ($256.3 billion) for day-to-day public services spending throughout the spending review period. This represents an increase compared to the plans set by the previous government.
Latest on U.S.-China trade talks
U.S. President Donald Trump announced Wednesday that Washington and Beijing have finalized a trade agreement involving 55% U.S. tariffs and 10% Chinese tariffs.
In a post on Truth Social, Trump called the U.S.-China relationship “excellent” and said the deal includes provisions for China to supply rare earth materials. He added that the agreement still requires final approval from both himself and President Xi Jinping.
The comes as U.S. and Chinese delegates wrapped up two days of talks in London by agreeing on a preliminary framework aimed at reviving the Geneva truce and tackling ongoing trade tensions.
U.K. homebuilders rally over Reeves’ spending review
Shares of U.K. homebuilders rose on Wednesday ahead of Chancellor Rachel Reeves’ Spending Review, where she is anticipated to outline long-term departmental budgets.
Markets are reacting to expectations of a £39 billion, 10-year plan to expand affordable housing, nearly doubling the current annual spending.
Stocks of major developers like Taylor Wimpey (LON:TW), Persimmon (LON:PSN), and Barratt Redrow (LON:RDW) rose modestly, while Vistry Group (LON:VTYV) surged almost 6%, and Bellway (LON:BWY) gained close to 2.6%.
BoE’s Saporta urges banks to rethink liquidity
U.K. banks are being urged to review their liquidity approaches and increase reliance on Bank of England (BoE) lending options, Reuters reported Wednesday, quoting Vicky Saporta, the BoE’s executive director for markets.
She highlighted that ongoing BoE bond sales, along with forthcoming loan repayments, will decrease overall liquidity in the financial system.
Quilter shares jump 5% over UBS upgrade
Shares of Quilter PLC (LON:QLT) climbed over 5% following an upgrade from UBS Global Research, which raised its rating from “neutral” to “buy” due to improved expectations for client inflows and platform performance in the medium term.
Ibstock shares plunge as profit margins remain under pressure
Ibstock PLC (LON:IBST) shares dropped over 15% following a trading update from the building materials maker, which cautioned that profit margins continue to face challenges despite increased first-half sales driven by a rebound in new residential construction.
The company reported that market activity levels were significantly higher compared to the same period last year.
Assura accepts takeover offer from KKR-Stonepeak consortium
Assura plc’s stock climbed over 2% on Wednesday after the healthcare real estate firm accepted a £1.70 billion all-cash acquisition proposal from Sana Bidco, a consortium supported by KKR and Stonepeak.
The company turned down a competing offer from Primary Health Properties plc, citing apprehensions about the proposal’s financial arrangement and feasibility, while the approved deal offers shareholders 60 pence per share in cash.
U.K. regulator reviews Evri-DHL merger for potential market impact
The U.K.’s Competition and Markets Authority (CMA) said it is evaluating whether a planned merger between delivery firms Evri and DHL could significantly reduce competition within the British market.
The regulator has called for feedback from stakeholders and the public regarding the potential deal. However, it emphasized that a formal probe into the merger has not yet begun.
GlobalData ends acquisition talks with ICG
GlobalData PLC (LON:DATA) said it has ended talks with private equity firm ICG over a possible buyout.
The announcement follows a failed acquisition attempt by KKR & Co LP (NYSE:KKR) last month, and ICG has since confirmed it will not pursue a formal offer.
WSP Global to acquire U.K.’s Ricardo
WSP Global, headquartered in Canada, announced Wednesday it plans to acquire U.K.-based environmental and engineering consultancy Ricardo for approximately £363.1 million ($489.6 million), inclusive of debt.
Under the terms of the agreement, Ricardo shareholders will receive 430 pence per share in cash — a 28.4% premium over the company’s closing share price on June 10.