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FTSE 100 ends flat after Autumn Statement | |
(about 5 hours later) | |
(Close): The UK market opened higher but those gains withered as the lunchtime Autumn Statement sharply revised down UK growth prospects. | |
The Chancellor, Philip Hammond, said growth next year would now by 1.4%, well down on previous forecasts for 2.2% growth. | |
The FTSE 100 was down 2 at 6817.71. | |
In the FTSE 250, news of the ban on letting agents' fees hit property stocks hard. Foxtons was among the worst fallers, losing 14%. | |
Countrywide was down 5% and Berkeley Group down 4%. | |
News of the ban was described as a "hammer blow" to estate agents. | |
Neil Wilson, markets analyst at ETX Capital, said: "Estate agents have suffered since the Brexit vote - shares in Foxtons are still trading down around 30% from their pre-referendum level amid falling client activity. Countrywide stock is now worth a third of what it was in May 2015." | |
Investors' minds were on the prospect of rising inflation with £23bn promised in the Autumn Statement for infrastructure spending. | |
Bonds fell and yields rose. The rate of return to investors on 10-year British government bonds rose by 0.1% to 1.466%. | |
Michael Hewson, chief market analyst at CMC Markets, said: "It would appear that bond investors are starting to price in the prospect of higher inflation expectations as he [Philip Hammond] announced extra spending on rail, telecoms and housing as he pushed back plans to balance the books by the end of the parliament." | |
Dollar up | |
Away from the Statement, United Utilities was initially among the top risers, up 3%, after it posted a small increase in half-year profits, but those gains eroded throughout the day and it closed with a 1% rise. | |
Shares in travel company Thomas Cook rose more than 5% despite it reporting a dip in full-year profits. | |
Underlying earnings fell by £2m to £308m in a year where the travel industry has been affected by terror attacks in Europe and political instability in Turkey. | Underlying earnings fell by £2m to £308m in a year where the travel industry has been affected by terror attacks in Europe and political instability in Turkey. |
But the results were slightly better than expected, and Thomas Cook also announced a dividend payment, of 0.5p a share, for the first time in five years. | But the results were slightly better than expected, and Thomas Cook also announced a dividend payment, of 0.5p a share, for the first time in five years. |
On the currency markets, the pound rose 0.2% against the dollar to $1.2444, and gained 1% against the euro to €1.1794. |