FTSE 100 within a whisker of 7,000
FTSE rises, pound falls as Hammond reins in austerity
Chancellor Philip Hammond (pictured), addressing the Conservative party conference, indicated a shift in strategy from the austerity policies of his predecessor.
He said he will prioritise spending on new homes and transport rather than following his George Osborne’s aim to balance the books by 2020.
He told delegates the new political climate demanded different response.
Mr Osborne’s policies “were the right ones for that time” but he said times had changed since the vote to leave the EU.
He said the Brexit process will be “complex” and that it will mean a “rollercoaster” ride for the economy.
Mr Hammond said there will be more details of his plans in next month’s Autumn Statement, including an extra £2 billion of borrowing to speed up house building. This would include releasing public sector land.
His comments led to a rise in the shares of house builders.
In early afternoon trading the index of leading companies peaked at 6996.43 – up 97 points on Friday’s close – as investors also priced in currency benefits for companies with business outside the UK. It closed at 6,983.52, up 84.2 point of 1.2%.
The pound was trading at €1.14530 against the euro after earlier hitting a three year low.
SNP Treasury spokesman Stewart Hosie said: “After the Chancellor’s summer of silence on Brexit this was an incredibly complacent speech.
“Alongside the Tories damaging austerity plans they are now planning on taking the UK out of the single market, putting jobs, investment and trade at risk. The Chancellor is set to preside over an act of economic vandalism that is simply reckless.
“Philip Hammond at least acknowledged there was great uncertainty because of his government’s disastrous Brexit vote, but the Chancellor had no answers. No answers on tariffs; no answers on access to the single market; no answers on anything.
“The Chancellor admitted his own government’s failure to turn around the UK’s poor productivity levels but there was no mention of the Conservative Government’s failure to stimulate it.’’