FTSE 100 today: Stocks edge up as budget, Fed pause reassure investors

British stocks edged higher on Thursday as investors welcomed a budget with few market surprises and a Federal Reserve decision to leave rates unchanged.

The FTSE 100 was up 0.56%, as of 04:28 ET (08:28 GMT). Germany’s DAX rose 0.46% and France’s CAC 40 gained 0.84%. Sterling traded slipped to 0.10% to $1.3316.

Shell led the FTSE 100, rising 3.25% after it reported third-quarter adjusted earnings of $10.81 billion, its highest since 2022, and raised its quarterly buyback to $5 billion on stronger refining margins and LNG prices.

Chancellor John Healey said "Fiscal discipline is my first commitment" as he raised taxes on banks and betting firms. ING said the budget kept the deficit on course to fall to 3.4% of GDP in 2027, left defence funding unresolved, and avoided complicating an expected Bank of England rate rise next week.

The Office for Budget Responsibility raised its 2026 growth forecast to 1.2% from 1.1% but cut 2027 to 1% from 1.5%, and put inflation at 3.1% in 2026 and 3.4% in 2027, returning to the Bank of England’s 2% target in 2028, about a year later than forecast in March.

Headroom against the current budget rule is seen at about £15 billion in 2029-30, down from £23.6 billion in March.

ING said the deficit improvement rests on frozen tax thresholds rather than the bank levy, with “fiscal drag” accounting for all of next year’s narrowing. It said the £312 billion gross financing requirement was below most expectations.

Temporary energy support, including a VAT cut on electricity and a £100 rebate for some households, adds about 0.2% of GDP in stimulus this year and 0.1% in 2027, ING said. It expects that to trim near-term inflation by 0.1-0.2 percentage points.

BAE Systems rose 2.27% and Babcock International 1.78%, a day after the Budget reaffirmed the government’s commitment to 3% NATO spending by 2030,

The Fed held rates at 3.75%-4% in a 10-2 vote on Wednesday, with Lisa Cook and Beth Hammack favouring a hike. ING, which still expects a December hike, said Chair Kevin Warsh gave no guidance and called Cook’s dissent a surprise. The ECB decides at 1315 GMT.

UKMTO said a vessel was on fire after an apparent attack in the Strait of Hormuz, 17 km north of Khasab, Oman. Iran says the strait stays shut until Washington accepts its seven-day plan.

U.S. President Donald Trump speaking to reporters said he approved Vice President JD Vance’s outreach to Iran as "they need help with medical supplies and various things", denying media reports that he directed a restart of peace talks. Foreign Minister Abbas Araghchi said Tehran was "in close and ongoing contact" with mediators.

Washington has told Gulf allies to prepare for possible strikes on Iran after Tuesday’s U.S. midterms.

Brent crude futures fell 1.1% to $110.40 a barrel and U.S. WTI slipped 1.4% to $101.31. Gold futures eased 0.19% to $4,044.30 an ounce, while spot gold fell 0.86% to $4,032.02.

UK round up

TotalEnergies reported third-quarter adjusted net income of $9.1 billion, up 127% year on year and above expectations, as record refining margins and stronger gas prices boosted earnings.

WPP said its turnaround plan was on track as third-quarter like-for-like revenue less pass-through costs fell 2.1%, an improvement on the previous quarter, and it reiterated its full-year guidance.

Lloyds Banking Group reported third-quarter pretax profit of £2.3 billion, up from £1 billion a year earlier and in line with forecasts, as it remained on track to meet its annual targets.