FTSE 100 Falls by Over 1%
The FTSE 100 fell over 1% due to rising UK gilt yields and a weakening pound, following reports of potential changes in income tax plans. Banks and homebuilders were among the worst performers, while Shell and BP gained as oil prices rebounded. Fiscal uncertainty and reduced expectations for Bank of England rate cuts contributed to the pressure on the index.
The FTSE 100 fell over 1% on Friday, lagging European markets, as UK gilt yields surged and the pound weakened following reports that Chancellor Rachel Reeves may drop plans to raise income tax in the Nov. 26 budget.
The move revived worries about the UK’s fiscal outlook, prompting money markets to scale back expectations for Bank of England rate cuts to under 60 bps by end-2025.
Banks were among the worst performers, with Lloyds, Barclays and NatWest down over 3.5%, while Standard Chartered (-2.8%) and HSBC (-1.6%) also dropped.
Homebuilders slumped as well, with Barratt Redrow (-3.9%), Persimmon (-3.8%) and Berkeley (-3.5%) falling sharply, and Rolls-Royce slipped nearly 2%.
Only a few names gained, including Shell and BP as oil prices rebounded.
Despite recent record highs in 2025 driven by its defensive, value-tilted mix and low tech exposure, the FTSE 100 faced renewed pressure amid fiscal uncertainty.
