FTSE 100 flat as financial stocks rise

The blue-chip FTSE 100 closed flat, while midcap FTSE 250 slipped 0.2 per cent

The UK’s FTSE 100 ended flat on Tuesday as financial stocks rose after the Bank of England eased capital requirements for lenders in a bid to boost growth, while consumer staples and mining shares dropped.

The blue-chip FTSE 100 closed flat, while midcap FTSE 250 slipped 0.2 per cent.

The broader banks index jumped 1.2 per cent as Britain’s central bank cut the amount of capital it estimates lenders need to hold for the first time since the global financial crisis.

Shares of Lloyds Banking Group added 1.9 per cent, while Barclays gained 1.6 per cent.

The BoE also said that threats to Britain’s financial system had risen this year due to stretched valuations of companies investing in AI, risky lending and bets with borrowed money in government bond markets.

Aerospace and defence shares added 0.8 per cent. Rolls-Royce and BAE Systems advanced nearly 0.9 per cent each.

Meanwhile, the OECD said Britain’s economy would grow faster than previously expected next year, citing the impact of finance minister Rachel Reeves’ budget on consumption and drag from global uncertainty that could keep pressure on inflation.

Last week Reeves’ long-awaited budget soothed some concerns about Britain’s long-term finances.

Precious metal miners slipped 3.8 per cent after gold prices dropped. Fresnillo dropped 3.3 per cent, while Endeavour Mining shed 4.9 per cent.

Industrial metal miners slipped 1.1 per cent as copper prices dropped. Anglo American shed 1.3 per cent.

Home builders dropped 0.7 per cent, with Barratt Redrow down 1.7 per cent and Berkeley Group dropping 3.2 per cent after RBC downgraded both stocks.

Consumer staples such as Diageo, Unilever, and Marks & Spencer also dropped between 1.3 per cent and 2.1 per cent.