UK stock markets ended Monday in positive territory as investors positioned themselves ahead of the autumn Budget and a week of central bank decisions. The FTSE 100 index rose 76.97 points, or 0.7%, to 10,767.33, while the FTSE 250 climbed 263.86 points, or 1.1%, to 24,501.25. The AIM all-share advanced 6.51 points, or 0.9%, to 753.18.
Attention is focused on Wednesday's Budget announcement, where Chancellor John Healey is expected to outline investment measures and tax changes. According to the Financial Times, the Government is preparing to announce £20.4 billion in additional funding for the country's state-backed business lender and infrastructure bank over roughly five years. The Treasury said this funding is expected to create and support 100,000 jobs in sectors including artificial intelligence, defence and green energy by 2035. The National Wealth Fund will receive an additional £15.4 billion, including £2.0 billion for a renewables-focused Energy Wealth Fund, while the British Business Bank will receive £5.0 billion, bringing its total financial capacity to £30.6 billion from £25.6 billion. Tom Stevenson, investment director at Fidelity International, said long bond yields in the UK approaching 6% mean reassuring investors about borrowing, growth and public finances will be the Chancellor's most important task.
Defence stocks gained ground on reports of increased spending in the sector. Prime Minister Andy Burnham said the Budget will set out a path for defence spending to reach 3% of national income by 2030. Rolls-Royce, Babcock International, BAE Systems and Melrose Industries advanced 6.1%, 6.4%, 4.1% and 3.5% respectively. Computacenter soared 13% after reporting better-than-expected third quarter performance and forecasting annual pre-tax profit of at least £425 million for 2026, ahead of consensus of £387.1 million.
European markets also rose, with the CAC 40 in Paris ending up 0.8% and the DAX 40 in Frankfurt climbing 0.9%. In New York, the Dow Jones Industrial Average was up 0.3%, the S&P 500 was 0.8% higher and the Nasdaq Composite added 1.0%. On Wall Street, artificial intelligence company Anthropic made public its plans to sell shares, with sales reaching 11.6 billion dollars in the April-June quarter, up from 787 million dollars a year earlier.
The pound was quoted at 1.3353 dollars, down from 1.3376 dollars on Friday. Against the euro, sterling eased to 1.1940 euros from 1.1946 euros. Brent crude oil strengthened to 117.02 dollars a barrel on Monday, up from 116.34 dollars on Friday. Gold was quoted at 4,017.92 dollars an ounce, up from 3,996.30 dollars. The week ahead includes interest rate decisions in the US, Europe and Japan, with all three central banks expected to leave rates on hold. JP Morgan's Michael Feroli expects the US Federal Reserve's target range for the federal funds rate to remain unchanged at 3.75-4.0%.
For UK savers and borrowers, the Budget's investment plans and the outcome of central bank decisions will influence borrowing costs and inflation prospects going forward.