FX.co ★ UK Stocks Hold Onto Gains

The FTSE 100 maintained its upward trajectory on Wednesday, buoyed primarily by a depreciated pound following a surprise dip in UK inflation to 2.8%, benefiting London-based companies with international revenues. However, investor sentiment was not significantly bolstered by Chancellor Rachel Reeves’ Spring Statement. The address included mostly anticipated measures regarding welfare and NHS reforms, which had negligible impact on the markets. The most significant setback came from the Office for Budget Responsibility (OBR), which downgraded its UK growth forecast for 2024 from 2% to a mere 1%. This revision weighed heavily on the housing sector, initially pushing down shares of leading homebuilders before a subsequent rebound. The government conceded it would not achieve its target of 1.5 million homes, adjusting the goal to 1.3 million, leaving investors longing for aggressive planning reforms to drive expansion. On a brighter note, defence stocks, notably BAE Systems, experienced renewed interest following Reeves’ commitment to increased military expenditure, while Shell saw its shares rally further after releasing its strategic plan update.