24th Mar 2025 06:54
(Alliance News) - Stocks in London are set to open higher on Monday, following the announcement of UK plans to slash Civil Service spending by as much as GBP2 billion.
IG says futures indicate the FTSE 100 to open up 14.9 points, 0.2%, at 8,661.69 on Monday. The index of London large-caps closed down 55.20 points, 0.6%, at 8,646.79 on Friday.
Rachel Reeves on Sunday denied that Labour is heading towards austerity, as she confirmed plans to cut the UK Civil Service running costs by 15%.
The chancellor pointed to money poured into capital spending and the NHS, saying the government's actions were a "far cry" from those of their Conservative predecessors.
At the same time, she said Labour was looking to cut back the Civil Service, which she said had swelled during the Covid-19 pandemic, by slashing its "back office functions, the administrative and bureaucracy functions" by the end of this parliament.
The Cabinet Office will tell departments to cut their administrative budgets by 15%, which is expected to save GBP2.2 billion a year by 2029-30.
In the US on Friday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.1%, the S&P 500 also 0.1% higher and the Nasdaq Composite up 0.5%.
"US stock indexes are poised for a positive opening amid optimism about the possibility of de-escalating trade tensions between the United States and China and moving toward negotiations. This could reduce the risk of a broader trade war after the two economic powers' mutual escalation, which has caused uncertainty in the markets," commented XS.com analyst Samer Hasn.
US and Russian officials are due to meet in Saudi Arabia on Monday for talks on a partial ceasefire in the Ukraine war, a day after delegates from Washington and Kyiv had their own discussions.
US President Donald Trump is pushing for a rapid end to the three-year war and hopes talks in Riyadh could pave the way for a breakthrough.
Sterling was quoted at USD1.2938 early Monday, higher than USD1.2914 at the London equities close on Friday.
The euro traded at USD1.0838 early Monday, up from USD1.0819 late Friday. Against the yen, the dollar was quoted higher at JPY149.59 versus JPY149.05.
"This feels like a mere ‘pause for breath’ in the broader USD downtrend, as opposed to any particular sign of the tide turning back in favour of the greenback," said Pepperstone analyst Michael Brown.
"Of course, the recent bout of weakness came a very long way, in a very short space of time, with the EUR vaulting 6 big figures higher in the space of a fortnight at the start of the month. Perhaps its no surprise, then, that we’ve seen some wind come out of the dollar bears’ sails, as profits have been taken, though I’d still be keen to fade any USD strength at this juncture, with the idea of US exceptionalism stone dead, and the buck the most exposed of all to the ongoing circus around tariffs."
In Asia on Monday, the Nikkei 225 index in Tokyo was marginally higher. In China, the Shanghai Composite was trading down 0.5%, while the Hang Seng index in Hong Kong was down 0.2%. The S&P/ASX 200 in Sydney closed 0.1% higher.
Gold was quoted at USD3,022.20 an ounce early Monday, rising from USD3,013.40 on Friday. Brent oil was trading at USD72.04 a barrel early Monday, higher than USD72.01 late Friday.
In Monday's corporate calendar, Science Group and Abingdon Health are due to release full-year and half-year results.
In the economic calendar on Monday, the eurozone, UK and US flash composite PMIs at 0900 GMT, 0930 GMT and 0945 GMT.
By Emily Parsons, Alliance News reporter
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