The UK's benchmark stock indexes fell on October 31, 2024, as investor optimism for significant interest rate cuts diminished. The FTSE 100 declined by 0.6%, reaching its lowest level since early August, while the FTSE 250 dropped 0.5%.
Throughout the month, the FTSE 100 has seen a 1.5% decrease, and the FTSE 250 has receded by 2.5%. Concerns over inflation and the Bank of England's potential rate decisions have intensified following Finance Minister Rachel Reeves's announcement of the largest tax increases in three decades.
Market forecasts now suggest approximately 95 basis points of rate reductions by the end of 2025, down from an earlier projection of 125 basis points. This shift follows a reevaluation of rate cut expectations after the unveiling of new extensive budget plans.
Despite the overall downturn, Shell's shares rose over 1% after reporting third-quarter profits of $6 billion, exceeding expectations due to increased LNG sales. The personal goods sector also performed well, with Burberry's shares climbing 1.7% following an upgrade from HSBC.
In contrast, Smith + Nephew experienced a significant 12% drop after revising its annual revenue growth projection downward, attributed to weaker performance in China. Coca-Cola HBC saw a 2.3% increase after raising its annual forecast, driven by strong demand in various beverage sectors. Whitbread's shares fell 2.1% as it traded without the entitlement to its recent dividend payout.