Business
FTSE 100 dips as BP and Shell fall amid oil slide
The FTSE 100 fell on Tuesday, weighed down by falls in defence and oil stocks, and after mixed economic data in the UK and US.
“A sell-off in the oil market served to pull down the FTSE 100, exacerbated by profit taking in defence contractors,” said Dan Coatsworth, head of markets at AJ Bell.
“Driving the declines was speculation that the Russia-Ukraine war could be near to a resolution. While that would be positive after nearly four years of fighting, it has negative consequences for the oil and defence sectors.”
The FTSE 100 index closed down 66.52 points, 0.7%, at 9,684.79. The FTSE 250 ended just 8.18 points lower at 22,040.98, and the AIM All-Share ended up by just 0.18 of a point at 749.41.
In Europe on Tuesday, the CAC 40 in Paris closed down 0.2%, while the DAX 40 in Frankfurt ended 0.6% lower.
In London, economic data pointed to a pick-up in business activity post the Budget, and a cooling in wage growth, plus a further softening in the labour market.
Figures from the Office for National Statistics on Tuesday showed the unemployment rate rose to 5.1% in the three months to October, up from 5.0% in the three months to September.
The jobless figure came in line with the FXStreet-cited market consensus and is the highest level since 2021, as the country emerged from the Covid-19 pandemic.
The increase in people out of work in the UK came alongside a decline in employment and a moderation in earnings growth.
Analysts at ING said the UK labour market is now cooling quickly enough to make it less of an inflation outlier.
ING’s James Smith said: “Wage growth is losing steam as the broader job market continues to cool.”
He noted that private sector pay is now rising by 3.9% annually, slowing from close to 6% at the start of the year.
“Those annual growth rates should steadily move lower over the coming months,” Mr Smith said, adding that “a rate cut on Thursday is highly likely, and we expect two further moves in the first half of 2026.”
A separate report showed the UK’s private sector performed better than anticipated in December.
The flash UK purchasing managers’ composite output index rose to 52.1 points in December from 51.2 in November, outperforming FXStreet-cited expectations of a milder increase to 51.4 in December.
The flash services business activity index climbed to 52.1 in December from 51.3 in November, beating the consensus of 51.5 for December.
Rob Wood, at Pantheon Macroeconomics, said the improvement came as businesses finally put a “chaotic few months of Budget speculation behind them” and looked towards the year ahead with greater policy certainty.
The pound was quoted higher at 1.3429 dollars at the time of the London equities close on Tuesday, compared with 1.3390 dollars on Monday.
The euro stood at 1.1775 dollars, up against 1.1764 dollars. Against the yen, the dollar was trading lower at 154.79 yen compared with 155.24 yen.
Stocks in New York were lower at the time of the London equity close on Tuesday.
The Dow Jones Industrial Average was down 0.5%, as was the S&P 500 index, while the Nasdaq Composite was down 0.4%.
The yield on the US 10-year Treasury was quoted at 4.17%, unchanged from Monday. The yield on the US 30-year Treasury was at 4.83%, also flat compared with Monday.
Data from the Bureau of Labour Statistics (BLS) showed US nonfarm payroll employment rose 64,000 in November, beating the FXStreet-cited consensus of 50,000.
However, in October, nonfarm payrolls dropped by 105,000, compared with expectations for a 25,000 decline, while September and August’s totals were revised down by a combined 33,000.
Federal government employment declined by 6,000 in November, following a loss of 162,000 in October.
The BLS data showed the unemployment rate climbed to 4.6% in November, the highest level since September 2021, above FXStreet-cited expectations of 4.4% and up from 4.2% a year earlier.
Wells Fargo said the US labour market remains in “a precarious position”.
The three-month average pace of job growth is now just 22,000 through November, compared with 62,000 heading into the report, the broker noted, while the unemployment rate rose to 4.6%, marking a new high since the end of the pandemic.
Back in London, oil majors BP and Shell fell by 3.4% and 2.7% respectively, while defence stocks Babcock International and BAE Systems declined by 3.6% and 1.7% respectively.
Brent oil was quoted at 59.01 dollars a barrel at the time of the London equities close on Tuesday, down from 60.39 dollars late Monday as hopes grow of a peace deal between Ukraine and Russia.
“The prospect of an end to the war in Ukraine and continued strong production from Opec+ is also weighing on prices. Even though US growth has been upgraded for 2026, this is not filtering through to a stronger oil price,” said Kathleen Brooks at XTB.
“Until we get a clearer demand picture or supply restraint from Opec+, it is hard to see how the oil price will recover.”
On the FTSE 250, trading platform IG rose 8.5% after extending its share buyback amid encouraging trading. Goodwin, meanwhile, slumped 11% despite reporting pre-tax profit more than doubled in the half-year to the end of October.
Elsewhere, four large London-listed growth stock investment trusts said their net asset values got a boost from a raised valuation for Elon Musk’s Space Exploration Technologies.
Scottish Mortgage Investment Trust, a FTSE 100 index constituent, together with FTSE 250 constituents Edinburgh Worldwide Investment Trust and Baillie Gifford US Growth Trust, as well as Schiehallion Fund, said a trigger event has required an upwards adjustment in the valuation of their holdings in SpaceX.
SpaceX is moving ahead with plans for an initial public offering that would seek to raise significantly more than 30 billion dollars, in a transaction that would make it the biggest listing of all time, Bloomberg reported on Tuesday last week.
Scottish Mortgage said the new valuation for SpaceX raised its NAV per share to 1,297.23 pence on Monday from the 1,205.12p it had reported for Friday last week. SpaceX now makes up 15.3% of its portfolio by value, up from 8.2% at the end of November.
Scottish Mortgage shares were up 0.9%, Edinburgh Worldwide was up 2.6%, Baillie Gifford US Growth was up 1.2% and Schiehallion Fund was up 1.5%.
Gold was quoted at 4,304.60 dollars an ounce on Tuesday, higher against 4,296.68 dollars.
The biggest risers on the FTSE 100 were easyJet, up 15.90 pence at 512.80p, Endeavour Mining, up 106.00p at 3,708.00p, JD Sports Fashion, up 2.14p at 83.18p, Fresnillo, up 68.00p at 2,924.00p and Convatec, up 4.80p at 234.80p.
The biggest fallers on the FTSE 100 were Babcock International, down 45.00p at 1,214.00p, BP, down 14.95p at 422.50p, Informa, down 27.00p at 864.00p, Shell, down 72.00p at 2,626.50p and Polar Capital Technology Trust, down 11.00p at 450.50p.
Wednesday’s economic calendar has UK inflation data and producer price inflation figures.
Wednesday’s UK corporate calendar has a trading statement from Serco.
– Contributed by Alliance News
The Bank of England has cut interest rates to the lowest level in nearly three years, as it said measures in the Budget will help bring down inflation quicker than previously thought.
The Bank’s Monetary Policy Committee (MPC) voted to reduce rates from 4% to 3.75%.
Governor Andrew Bailey said the UK has “passed the recent peak in inflation and it has continued to fall”, allowing the MPC to cut borrowing costs for the fourth time this year.
It takes the bank’s base interest rate to its lowest level since early 2023.
The nine-person committee voted five-to-four for a cut, with Mr Bailey among those preferring to lower rates at the Bank’s final meeting of the year.
The decision comes after official figures showed Consumer Prices Index (CPI) inflation fell sharply to 3.2% in November, from 3.6% in October.
Minutes of the MPC’s meeting read: “This was above the 2% target but, following the Budget announcements on administered prices and indirect taxes, headline inflation was now expected to fall back more quickly in April, to closer to 2%.”
It means CPI will near the Bank’s target level considerably earlier than the early 2027 timeframe that it had forecast in November.
Measures in the autumn Budget, delivered by Chancellor Rachel Reeves last month, are likely to lower CPI inflation by around 0.5 percentage points, according to the MPC.
This includes one-off support for household energy bills and freezing fuel duty which will kick in from April next year.
“We still think rates are on a gradual path downward,” Mr Bailey said.
“But with every cut we make, how much further we go becomes a closer call.”
Meanwhile, the MPC said it was expecting the economy to show no growth over the final quarter of 2025.
This comes after official data showed a 0.1% contraction in October, which was weaker than it had been expecting.
Meagre economic growth as well as a weakening jobs market and slower pay growth pointed to underlying inflation pressures reducing, the Bank said.
However, the four MPC members who voted to keep interest rates unchanged were more concerned about prolonged inflation persistence, particularly within the services sector and among wage growth.
Getty ImagesInsurers need to do more to improve how they handle claims and make it clearer to customers what their policies cover, the UK’s finance regulator has said.
The Financial Conduct Authority (FCA) was responding to a “super-complaint” by consumer group Which? about the home and travel insurance sectors.
The regulator acknowledged some problems needed addressing, and said it would expand its scrutiny of how claims are processed and how clear policies are to customers.
Consumer groups said the FCA must follow this up with strong action and see it as a first step to fundamental reform.
A super-complaint is rare, and only used by consumer groups when they believe a large number of people are being significantly harmed by practices across a particular sector.
Consumer group Which? had argued that the home and travel insurance sectors were “broken”. It said that in some cases making a claim to an insurance company could be a worse experience than the distress of the original incident.
The super-complaint was based on three areas of concern. The first was the way that claims are handled, with many being outsourced by insurers to specialists.
The second was the sales practices of insurers, which the consumer group argued were inappropriate and led to widespread confusion over what was covered in a policy.
Finally, it accused the FCA, as the regulator, of failing to provide an appropriate degree of protection for consumers.
Getty ImagesMillions of people across the UK take out insurance policies they hope they will never need to draw on.
Some 22 million home insurance policies were in force last year, with consumers paying more than £7bn in premiums. During the year, consumers made almost 900,000 claims, with insurers paying out a total of £3.2bn.
There were more than 6.8 million travel insurance policies, with premiums of £1.2bn paid last year. Some 600,000 claims led to payouts of more £400m.
But Which? highlighted that acceptance of claims and subsequent payouts were much less likely among home and travel insurance than motor and pet policies.
The FCA found that in 2024, 99% of motor claims were accepted, compared with 80% of standalone single trip travel claims and 74% of home content-only claims.
The regulator said that this, in part, reflected the lower levels of understanding among consumers of what their insurance policy covered.
Graeme Reynolds, director of competition at the FCA, said the regulator would “expand our existing workplan” to ensure improvements to the claims process and consumer understanding of their cover.
“We will continue to hold firms and their senior leaders to account for making improvements, to help build trust and make sure people get fair value insurance,” he said.
The Association of British Insurers (ABI), which represents companies, said the improvements demanded by the FCA were “a top priority” for the sector.
The FCA said it had already addressed various areas of concern in the sector, but consumer groups – including Which? – said more action was needed.
Rocio Concha, Which? director of policy and advocacy, said the FCA must now bring about meaningful change for consumers.
“These issues have been allowed to fester for years, so the FCA must now seize the opportunity to take strong action to stamp out widespread bad practice and issues with how the markets are working,” she said.
James Daley, managing director of consumer group Fairer Finance, said: “The [FCA] response is unlikely to be sufficient to get to grips with the many and growing problems in this sector.
“The insurance market is caught in a race to the bottom on price – leading to the hollowing out of products, as well as poorer claims experiences.”
Mahindra’s New Tata Sierra Rival SUV: Mahindra has several new models lined up, including petrol, diesel, hybrid and electric SUVs across various segments. One of the most talked-about upcoming products is a new midsize SUV that will take on the Hyundai Creta and Tata Sierra. Mahindra has not officially shared product details yet. Still, this new SUV is expected to carry the XUV badge. It will likely be built on Mahindra’s new NU_IQ modular platform. This platform supports ICE, hybrid and electric powertrains. That gives the brand a lot of flexibility for future models.
Reports suggest this Sierra rival could be the production version of the Vision S concept. Mahindra showcased this concept on Independence Day earlier this year. Some reports also hint that the final model might join the Scorpio family lineup.
The Vision S concept has a bold design. At the front, it gets Mahindra’s Twin Peaks logo and triple vertical LED lights on either side. The headlamps have an inverted L shape. The bumper looks sporty and houses radar and parking sensors. A raised bonnet and pixel-style fog lamps add to the tough look.
From the side, the SUV looks off-road ready. It has a tall stance, massive cladding and wheel arches, and large 19-inch wheels with red brake calipers. The concept even shows a jerry can and a side ladder. Some of these features may not make it to the final version or could be offered as accessories.
At the rear, the concept gets inverted L-shaped tail-lamps, pixel lighting on the bumper and a spare wheel mounted on the tailgate. Inside, the Vision S shows a modern cabin. It has a new steering wheel with Vision S branding, a large touchscreen with NU UX software, wireless phone connectivity and a panoramic sunroof.
The cabin uses dual-tone upholstery across seats, doors and dashboard. The visible fuel cap suggests an ICE setup. The production version is expected to come with petrol and diesel engine options. Mahindra’s new Sierra rival is likely to hit the market around 2027.
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