LONDON: The UK’s FTSE 100 rebounded on Friday from near three-month lows touched in the prior session, as gains in Reckitt Benckiser helped offset concerns about inflation sparked by the first Labour government budget in 14 years.
The blue-chip FTSE 100 rose 0.8% by 1632 GMT, with Reckitt surging 7.4% after the consumer goods company, along with US-based Abbott Labs, was cleared of liability in a preterm formula case.
The midcap FTSE 250 index edged up 0.5% but hovered near a three-month trough touched on Thursday as Britain’s finance minister Rachel Reeves faced criticism after her first budget was heavy on spending, tax increases, and borrowing but light on economic growth.
The indexes logged weekly declines after the budget raised concerns about inflation pressures building again, prompting traders to scale back expectations of rate cuts from the Bank of England.
Investors stuck to bets that the BoE will cut rates by 25 basis points next week, but reduced the chance of a December cut to less than 50%. They also expect fewer rate cuts next year.
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