UK – October Market Update

Market News |

October marked a significant month for the UK economy, with Labour’s first budget since 2010 introducing major tax increases aimed at strengthening public services and infrastructure. Alongside these fiscal changes, rising wages and expanded worker rights signal the government’s focus on social welfare and employment standards. These measures, coupled with an improved IMF growth outlook, set a transformative path for the UK.

UK economy updates

  • Chancellor Rachel Reeves has presented Labour’s first budget since 2010, announcing the largest tax increases since 1993 to raise £40 billion for the NHS and public services. Key measures include higher business social security contributions, increased capital gains taxes, an extended freeze on inheritance tax thresholds, and a commitment to £100 billion in capital spending over five years for health, education, and infrastructure, including HS2.
  • The International Monetary Fund (IMF) has raised its growth forecast for the UK economy to 1.1% this year, up from 0.7%. Chancellor Rachel Reeves welcomed the positive outlook but emphasized the need for continued efforts to strengthen economic performance.
  • Minimum wage rates in the UK will increase next April, with the National Living Wage for over-21s rising to £12.21 an hour, a 6.7% increase from £11.44. This change is expected to benefit over three million workers, but businesses have expressed concerns that the increased labor costs may lead to reduced hiring.
  • The U.K. Labour government has introduced the Employment Rights Bill, granting workers new rights such as improved sick pay and parental leave, along with restrictions on practices like fire and rehire. These changes, described as the most significant enhancement of workers’ rights in a generation, will take effect in 2026 after further consultations.
  • As of October 1, a new law mandates that all tips from customers must be passed entirely to employees, banning businesses from withholding any portion of these payments. This legislation is expected to benefit over three million service workers in England, Scotland, and Wales, allowing them to file claims against companies that do not comply.

UK stock market updates

October started with a challenging note for the UK markets! The FTSE 100 index fell 2.01% to £8,110.10, while the FTSE All-Share Index declined 2.06% to £4,431.83. Investors are navigating through economic uncertainty, impacting market performance.

  • AstraZeneca’s China President, Leon Wang, is under investigation by Chinese authorities, with the company stating it will cooperate fully. This investigation follows previous detentions of AstraZeneca employees in September.
  • Mondi PLC has announced the permanent closure of its Stambolijski paper mill in Bulgaria following extensive damage caused by a fire on September 24. This decision will impact around 300 employees and is expected to incur approximately €100 million in closure costs.
  • Intertek has opened a new Caleb Brett laboratory in Algeciras, Spain, to enhance its services in the Iberia region. This strategically located facility will support international trade, particularly in the maritime and energy sectors, by providing essential testing services for fuel management to vessels navigating the Strait of Gibraltar.
  • Sage has partnered with Artis Trade Systems to enhance document automation for secured finance lenders and commercial companies. This collaboration will streamline document processing through Sage’s AI Document Services, enabling faster and more accurate workflows, ultimately reducing manual effort, and improving efficiency in financial operations.
  • Reckitt Benckiser and Abbott Laboratories saw their shares increase after a U.S. court ruled that they were not liable in a lawsuit related to their baby formulas for premature infants. Reckitt’s stock surged around 10%, marking its biggest rise in 16 years, while Abbott’s shares gained 3.9%.

UK top gainer and top loser stocks for October

Summary

As the UK navigates through economic reforms and market volatility, both fiscal policy shifts and corporate developments indicate a time of recalibration. Investors and businesses face challenges but also opportunities as the government prioritizes economic resilience and enhanced worker protections.

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