London’s FTSE 100 inched lower on Monday as declines in consumer staples and industrial stocks pressured the index, while investors looked ahead to the U.K. government’s closely watched budget announcement later this week.
The FTSE 100 slipped 0.1% at the close, whereas the mid-cap FTSE 250 rose 0.2%, ending its longest losing streak in more than two years.
Aerospace and defence stocks dropped 1.7% amid signs of progress in Ukraine peace talks. BAE Systems slid 3.6%, and Babcock International fell 1.6%.
Beverage stocks retreated 1.8% with Diageo down 2.2%. The personal care, drug and grocery sub-index declined 1.2%, led by a 2.6% drop in Marks & Spencer. Utilities also weakened, falling 1.3%.
In contrast, banking stocks advanced 1% after Morgan Stanley projected 4% net interest income growth for European banks in 2026. Standard Chartered rose 2.9% after an upgrade to “overweight,” while Barclays gained 2.1% following its inclusion as a top pick.
Precious metal miners outperformed, rising 5.9% as gold prices strengthened on renewed expectations for a Federal Reserve rate cut. Fresnillo jumped 9.1%, and Endeavour Mining added 4%.
Homebuilders also advanced after Goldman Sachs initiated coverage with a “constructive outlook.” Vistry climbed 3.8%. Travel and leisure shares gained 1.7%, with EasyJet up 3.6%.
Despite Monday’s rebound, the FTSE 250 remains about 5% below its October high due to global market volatility and uncertainty surrounding the upcoming budget.
Chancellor Rachel Reeves is expected to raise taxes by tens of billions of pounds—her second major tax increase since the 2024 election—as she aims to meet borrowing targets, avoid a bond market selloff, and expand welfare spending. She is unlikely to break the election pledge not to increase income tax, instead focusing on other tax categories.
Global equities also firmed after dovish comments from a U.S. Federal Reserve official last week improved expectations for a December rate cut. These gains follow a sharp correction driven by concerns over stretched valuations in AI-related stocks.
Anglo American rose 0.9% after BHP withdrew its final attempt to acquire the miner.
