28th Oct 2026 06:56
(Alliance News) - Stocks in London are set to open lower on Wednesday as investors brace for Chancellor John Healey's first budget, with UK banks in focus amid expectations of higher taxes on the sector, while interest rate decisions from the US and Canada also are scheduled.
IG says futures indicate the FTSE 100 to open 20.8 points lower, 0.2%, at 10,665.74 on Wednesday. The index of London large-caps closed down 0.8% at 10,686.54 on Tuesday.
Healey will deliver his first government budget at 1230 GMT, facing the challenge of balancing commitments to higher defence spending and easing household bills against limited fiscal headroom.
The budget comes as rising inflation and borrowing costs, largely driven by the US-Iran war, add pressure to government finances, businesses and households. UK annual inflation accelerated to 3.5% in September, partly reflecting soaring fuel prices amid the conflict.
"We can't stop these shocks that hit Britain, but we can make Britain more resilient when they do," Healey said in a statement released ahead of the budget. "This budget is about getting through this difficult moment," he added, promising "breathing space" for households and "targeted support" for businesses.
Prime Minister Andy Burnham, who replaced Keir Starmer in July, said on Monday that the budget would set out how the government intends to finance the defence investment programme announced by his predecessor.
However, Healey is expected to delay until next year details of how the UK will meet Nato's target of increasing defence spending to 3.5% of gross domestic product by 2035.
UK banks will be closely watched during Wednesday's session amid expectations that the sector could face higher taxes in the budget.
The fiscal announcement also coincides with a busy week for UK bank earnings, with Standard Chartered shares jumping 7.9% in Hong Kong after the lender reported stronger third-quarter profit and raised its guidance.
The London-based, Asia-focused bank said pretax profit increased 27% to USD2.25 billion in the three months ended September 30 from USD1.78 billion a year earlier.
The results follow a negative market reaction to HSBC's third-quarter earnings on Tuesday, when its shares closed down 4.7% in London despite a sharp increase in profit.
Bank of Ireland is reporting results on Wednesday and Lloyds Banking on Thursday.
Sterling was quoted at USD1.3285 early Wednesday, lower than USD1.3307 at the London equities close on Tuesday. Against the euro, sterling rose to EUR1.1950 from EUR1.1943.
The euro traded at USD1.1118 early Wednesday, lower than USD1.1142 late Tuesday. Against the yen, the dollar was quoted at JPY157.86, marginally down from JPY157.88.
Brent oil was trading at USD111.23 a barrel early Wednesday, lower than USD114.13 late Tuesday.
US President Donald Trump announced a sweeping rollback of regulations restricting methane emissions from oil and gas producers, targeting rules designed to limit the release of the potent greenhouse gas.
Trump made the announcement at a rally supporting Texas Attorney General Ken Paxton, who faces a closely contested US Senate race in the November 3 midterm elections.
In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average marginally higher, the S&P 500 up 0.6% and the Nasdaq Composite up 1.2%.
Visa shares lost 1.2% in after-hours trading on Tuesday despite the credit card and payments group reporting a strong finish to its financial year, with revenue and earnings ahead of expectations.
In Asia on Wednesday, the Nikkei 225 index in Tokyo was up 1.2%. In China, the Shanghai Composite was up 0.8%, while the Hang Seng index in Hong Kong was up 0.2%.
The S&P/ASX 200 in Sydney was down 0.1%, as data showed Australian inflation accelerated more than expected in September.
According to the Australian Bureau of Statistics, the consumer price index rose 4.3% in the 12 months to September, accelerating from a 4.0% annual increase in August.
The reading exceeded the FXStreet-cited market consensus forecast of 4.2%, with transport and housing among the main contributors to the increase.
Gold was quoted at USD4,030.00 an ounce early Wednesday, lower than USD4,057.67 on Tuesday.
Israeli Prime Minister Benjamin Netanyahu and opposition rival Gadi Eisenkot both vowed to form a government after exit polls suggested neither bloc had secured a parliamentary majority in Israel's general election.
Tuesday's vote, the first since the October 7, 2023 Hamas attack, saw the highest voter turnout in decades as Israelis delivered their verdict on Netanyahu's leadership and the wars that followed the attack.
Exit polls showed Eisenkot, a former military chief, and his opposition bloc running neck and neck with Netanyahu's right-wing alliance, with both falling short of the seats needed to command a majority in parliament.
In Wednesday's corporate calendar in addition to Bank of Ireland, Unilever and S4 Capital issue trading statements, while Aston Martin, GSK and International Paper report third-quarter results.
In the economic calendar on Wednesday, Germany releases consumer confidence figures, while Ireland publishes gross domestic product and retail sales data.
In North America, US wholesale inventories are due, ahead of interest rate decisions from the Bank of Canada, followed by the US Federal Reserve.
By Eva Castanedo, Alliance News senior economics reporter
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