Finance
UK shares mixed as investors assess fiscal worries, rate cut path
Published by Global Banking & Finance Review®
Posted on July 4, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on July 4, 2025
2 min readLast updated: January 23, 2026
UK stock markets closed mixed amid fiscal concerns and potential rate cuts, with FTSE 100 steady and FTSE 250 down. Homebuilder stocks led losses.
(Reuters) -London's main stock indexes closed mixed on Friday, with investors assessing domestic fiscal worries and the rate cut path, while weak global investor sentiment persisted ahead of a U.S. tariff deadline.
The blue-chip FTSE 100 was unchanged on the day but notched up a second weekly gain, while the domestically-focussed FTSE 250 lost 0.7% on Friday and ended the week lower.
The midcap index had logging its largest quarterly gain in more than four years by the close of trade on Monday, but then came under pressure as U-turns on welfare reforms blew a hole in Finance Minister Rachel Reeves' budget plans.
The reform bill passed on Tuesday, but with limited cost-reduction measures from the initially expected 5 billion pounds ($6.83 billion) in savings, leading to concerns of raised taxes or spending cuts elsewhere.
S&P Global said the inability to make modest cuts to welfare spending showed the government's "limited budgetary room for manoeuvre".
Homebuilder stocks led sectoral losses on Friday, dropping 2.1% after MJ Gleeson warned of profit being at the lower end of market expectations for fiscal 2026 due to subdued demand.
The group slumped 6.7% and was the top decliner on the smallcap index.
Larger peers Vistry, Persimmon and Taylor Wimpey fell 2.8%, 1.3% and 1.6%, respectively.
Industrial metal stocks fell, tracking lower metal prices. Anglo American, Antofagasta and Glencore slipped more than 1% each. Atalya lost 3%.
The Bank of England's Alan Taylor said on Friday that cutting interest rates now would be better than waiting and risking cutting them later in a hurry. Traders are currently pricing in an 80% chance of a rate cut in August, according to LSEG data.
Data from S&P's UK construction PMI showed Britain's construction industry downturn reduced in June with homebuilding growth, but commercial building tumbled due to economic worries.
Elsewhere, global markets were subdued after U.S. President Donald Trump said Washington will start sending letters with tariff rates to countries on Friday.
Britain remains one of the only countries to have got a deal with the U.S.
Among individual stocks, greeting card and gifting retailer Moonpig fell 8.7% to the bottom of the midcap index after a rating downgrade by Deutsche Bank.
($1 = 0.7323 pounds)
(Reporting by Twesha Dikshit; Editing by Sonia Cheema)
The FTSE 100 was unchanged but recorded a second weekly gain, while the FTSE 250 fell by 0.7% and ended the week lower.
Investors are assessing domestic fiscal worries and the potential path for interest rate cuts, amidst weak global investor sentiment.
Homebuilder stocks led sectoral losses, with MJ Gleeson warning of lower profits due to subdued demand, causing a 2.1% drop in the sector.
Alan Taylor suggested that cutting interest rates now would be preferable to waiting and risking a hurried cut later.
Global markets were subdued following U.S. President Donald Trump's announcement regarding the start of sending letters with tariff rates to various countries.
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