The FTSE 100 fell slightly on Tuesday, recovering most of its early losses after the International Monetary Fund hiked its prediction for UK economic growth.
London’s blue-chip index closed just 0.14% down, losing 11.7 points to finish on 8,306.54.
The FTSE fell in early trading, but recovered later in the day amid the IMF’s updated outlook for the UK said drops in inflation and interest rates will help drive spending.
The organisation’s top economist also cautioned that the UK and other countries must tread a “narrow path” in efforts to reduce debt ahead of next week’s Budget, amid speculation the Chancellor could make changes to UK fiscal rules.
It came as the financial agency held its forecasts for the global economy broadly steady and declared that the battle against inflation has “largely been won”.
At the end of the day in Europe Frankfurt’s Dax index fell 0.15%, while the Cac 40 in Paris had closed down 0.02%.
In New York a little while after markets had closed in Europe the S&P 500 was trading down 0.27%, while the Dow Jones was 0.11% lower.
On currency markets the pound was trading 0.12% lower against the dollar at 1.2969 and had dropped 0.04% against the euro at 1.2001.
In company news, HSBC unveiled an overhaul of its global structure as new boss Georges Elhedery seeks to reduce costs and focus on the bank’s strongest divisions.
The bank said it is simplifying operations by splitting into four key units, and geographically into east and west. It also announced the appointment of the first female finance chief in the bank’s history.
The simplification plans include merging its commercial and institutional banking operations, and creating a new international wealth and premier banking division.
Shares rose 0.9%.
Meanwhile, Halfords cautioned that uncertainty about the economy and upcoming tax changes mean consumers are still holding back from making costlier purchases.
Sales dipped 0.1% over the six months to September 27, compared with the same period a year ago.
However, investors still cheered the performance, as it came against a backdrop of significantly stronger demand during 2023.
The retailer also revealed there were signs of consumer sentiment improving despite people still spending cautiously.
Shares rose 10.7% for the day.
Brent Crude Futures were up 2.584% to 76.210 US dollars at the close of trading.
The biggest risers on the FTSE 100 were Fresnillo, up 21.5p to 769p, Melrose Industries, up 8.8p to 448.5p, Intercontinental Hotels Group, up 148p to 8714p, British American Tobacco, up 38p to 2669p, and Entain, up 10p to 717.2p.
The biggest fallers on the FTSE 100 were Admiral Group, down 53p to 2645p, Persimmon, down 29.5p to 1601p, Taylor Wimpey, down 2.75p to 157.6p, British Land, down 7.2p to 421.4p, and Barratt Redrow, down 8p to 473.4p.