26th Oct 2026 17:05
(Alliance News) - Stocks in London started the week on the front foot, ending Monday in the green, as investors looked ahead to the Autumn Budget and a busy week of central bank interest rate calls.
In London, the FTSE 100 index ended up 76.97 points, 0.7%, at 10,767.33. The FTSE 250 ended 263.86 points higher, 1.1%, at 24,501.25, and the AIM all-share advanced 6.51 points, 0.9%, at 753.18.
The Cboe UK 100 ended up 0.9% at 1,068.90, the Cboe UK 250 closed 1.2% higher at 21,558.86, and the Cboe small companies fell 0.2% to 18,871.71.
In London, investors are looking ahead to Wednesday's Autumn Budget at which Chancellor John Healey is expected to announce an investment boost, and modest tax rises, as he seeks to placate the City, and keep backbench MPs on side.
"Wednesday's Budget will be the main event for UK investors, with the reaction in bond and currency markets likely to matter more than the individual measures announced," commented Tom Stevenson, investment director at Fidelity International.
"With long bond yields in the UK approaching 6%, the most important job for the Chancellor, John Healey, will be to reassure investors about the outlook for borrowing, growth, and the public finances," he added.
The Financial Times reported that Healey is preparing to announce GBP20.4 billion in additional funding for the country's state-backed business lender and infrastructure bank.
The funding, to be provided over roughly five years, is expected to create and support 100,000 jobs in sectors including artificial intelligence, defence and green energy by 2035, according to the Treasury.
The National Wealth Fund will receive an additional GBP15.4 billion, allowing it to maintain its current lending rate until the 2030-31 financial year. This includes GBP2.0 billion for a renewables-focused Energy Wealth Fund.
Meanwhile, the British Business Bank will receive GBP5.0 billion, increasing its financial capacity to GBP30.6 billion from GBP25.6 billion.
According to the FT, the government plans to finance the additional investment through borrowing while taking advantage of flexibility in its fiscal rules.
Deutsche Bank Chief UK Economist Sanjay Raja said the investment plans exceed expectations.
"The investment surprise allows the chancellor to drive the narrative that this is ultimately a growth budget," he added.
In European equity markets on Monday, the CAC 40 in Paris ended up 0.8%, while the DAX 40 in Frankfurt climbed 0.9%.
In New York, markets were higher. The Dow Jones Industrial Average was up 0.3% at the time of the closing bell in London on Monday. The S&P 500 was 0.8% higher and the Nasdaq Composite added 1.0%.
On Wall Street, Anthropic, one of the world's leading artificial intelligence companies, made public its plans to sell shares on the stock market, revealing soaring sales but also political and safety risks in a major test of whether the AI boom can deliver profits.
Its filing warns investors of dangers ranging from its conflict with the Trump administration to AI systems acting on their own, alongside huge spending commitments on computing power.
Anthropic's business has grown very quickly. Sales reached USD11.6 billion in the April-June quarter, up from USD787 million a year earlier. That compares with USD4.6 billion in sales for all of 2025.
After early falls, the oil price strengthened once more. Brent was quoted at USD117.02 a barrel on Monday, up from USD116.34 at the same time on Friday.
Against the dollar, the euro eased to USD1.1183 from USD1.1196. Against the yen, the dollar was trading at JPY157.53, up from JPY156.85.
The yield on the US 10-year Treasury was quoted at 4.98%, narrowed from 5.00%. The yield on the US 30-year Treasury was quoted at 5.30%, down from 5.32%.
The pound was quoted at USD1.3353, down from USD1.3376. Against the euro, sterling ebbed to EUR1.1940 from EUR1.1946.
Along with the budget, the week sees interest rate decisions in the US, Europe and Japan, with all three central banks expected to leave interest rates on hold.
In the US, JP Morgan's Michael Feroli expects the target range for the federal funds rate to remain unchanged at 3.75-4.0%.
"We look for two hawkish dissents from Hammack and Logan, with a risk that Kashkari also dissents," he said.
Feroli thinks that the post-meeting statement will say that policy will deliver a timely return to price stability.
But he thinks the press conference could prove challenging if Chair Kevin Warsh insists on providing little colour on the FOMC's plan to deliver on that vow.
"Ideally, he will reiterate the message from his deputies that the Committee is biased to hike but wants to take a little more time to observe the impact of the last hike on the economy," Feroli added.
On the FTSE 100, Computacenter soared 13% as it said it performed better than expected in the third quarter, and it now forecasts annual profit ahead of consensus.
The Hatfield, England-based technology services provider expects adjusted pretax profit of at least GBP425 million for 2026, ahead of company-compiled consensus of GBP387.1 million.
Aerospace and defence firms were lifted by reports of increased spending on defence in the budget.
Prime Minister Andy Burnham said the budget will set out a path for defence spending to hit 3% of national income by 2030, and that national security was "at the top of the priority list."
But asked whether he would set out how to reach the target on Wednesday, Burnham told ITV's Good Morning Britain: "[Healey] will set out on Wednesday the path to meet out Nato commitments."
Rolls Royce, Babcock International, BAE Systems and Melrose Industries advanced 6.1%, 6.4%, 4.1% and 3.5% respectively.
TEK4 shares soared as the engineering company made its AIM debut.
The Leicestershire-based company manufactures specialist machinery used to drill cooling holes in jet engine and industrial gas turbine components.
Shares in the firm listed at 200 pence per share, giving it a GBP42.0 million market capitalisation on admission. It raised GBP24.8 million as part of the listing, with TEK4 noting GBP22.8 million "for the benefit of" selling shareholders and GBP2.0 million stemming from the issue of new shares in the firm to institutional investors.
By the close of play on Monday, TEK4 shares traded at 299.00p, up nearly 50% from the IPO price.
Gold was quoted at USD4,017.92 an ounce, up from USD3,996.30.
The biggest risers on the FTSE 100 were Computacenter, up 600.00p at 5,190.00p, Babcock International Group, up 60.00p at 999.20p, Rolls Royce Holdings, up 70.60p at 1,234.80p, International Consolidated Airlines Group, up 16.70p at 411.40p and BAE Systems, up 80.00p at 2,012.00p.
The biggest fallers on the FTSE 100 were Experian, down 208.00p at 2,900.00p, Autotrader Group, down 14.20p at 528.00p, Sage Group, down 29.50p at 1,157.50p, London Stock Exchange Group, down 170.00p at 9,3400.00p and SSE, down 37.00p at 2,485.00p.
Tuesday's local corporate calendar has third quarter results from Asia-focused bank HSBC, and a trading statement from consumer goods firm Reckitt Benckiser.
Tuesday's global economic calendar sees the start of the Federal Reserve meeting, US durable goods orders data, Conference Board consumer confidence report and building permits and house price figures.
By Jeremy Cutler, Alliance News reporter
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