2nd Oct 2013 06:37
LONDON (Alliance News) - London's main equity indices are indicated to open slightly lower Wednesday, while the budget shutdown in the US continues to weigh on sentiment.
Democrats and Republicans failed Monday night to agree on spending plans, due a fight over Obamacare, meaning the government lacks the authority to spend on non-essential services. Some 800,000 staff have been sent home on unpaid leave. Economists estimate the shut-down will cost the US economy USD300 million per day.
Speaking from the White House gardens Tuesday night, President Obama urged Republicans in Congress to reopen the government, saying one faction of the party can't hold the economy hostage over an "Ideological Crusade".
In the UK, lenders have voiced concerns over the government's Help-to-Buy scheme, the second stage of which was has been brought forward by three months and is set to start next week. Bankers have expressed concerns not only about the high loan-to-value mortgages encouraged by the scheme but also the political risks of every claiming the government guarantees, which could potentially be seen as another bank bailout. Currently, RBS and Lloyds, the the partially state-owned banks, are the only ones to sign up.
The FTSE 100 is being called to open 0.34% lower by IG index, at 6,438 points.
A big day for food and retail today with Tesco, Sainsbury's and Dominos reporting results.
In the data calendar for Wednesday morning, UK construction PMI at 0930 BST, the EU producer price index at 1000 BST. The ECB releases its interest rate decision at 1245 BST, which is expected to remain unchanged, with the usual press conference to follow.
By Jon Darby; [email protected]; @jondarby100
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