FTSE 100 set to rise as Rishi Sunak prepares to spend another £20 billion on Covid support in his Budget
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The FTSE 100 was set to rise in early trading as markets awaited Chancellor Rishi Sunak’s Budget.
London shares were expected to shrug off falls last night on Wall Street with early calls on the FTSE at spread betting platform IG saying the index would rise 30.5 points to 6656.1.
In Asia this morning, Japan’s Nikkei closed up around 0.4% while China’s CSI 300 and Hong Kong’s Hang Seng gained 1.4% and nearly 2% respectively after bouncing back from the previous session’s falls. Asia’s Tuesday tumble had been provoked by its top banking regulator warning of bubbles in Western stock markets.
Markets will have been heartened in London at the news that Rishi Sunak’s Budget speech is to approve radical changes to the stock exchange rules here to make them more attractive to tech companies.
The UK has lost out to Wall Street, Asia and even Amsterdam when it comes to technology company flotations.
The Hill report, published last night, recommends relaxing the listing rules to make them far more accommodative to entrepreneurial founders wanting to keep some control over their young companies after floating them on the public markets.
The threat from overseas bourses was made plainer today after a US special purpose acquisition vehicle (SPAC) declared it was specifically hunting for UK and European tech unicorns to buy and take public in New York.
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SPACs are controversial but have raised billions of dollars in the US and Amsterdam to do tech IPOs. Britain’s Cazoo online car dealership is considering reversing into one to give itself a multi-billion dollar valuation.
The SPAC in New York, called Tailwind International, raised $345 million on the New York Stock Exchange last month and is hunting for European deals.
The Budget has been possibly the most heavily leaked in recent memory. It will extend the Treasury’s Covid 19 support packages for firms and employees until September, with the furlough scheme being extended to the end of June in its current form before being tapered away to the end of September, the FT reported.
The business rates holiday will be extended as well, boosting prospects for retailers and hospitality companies, while a £5 billion grant scheme for the High Street is also hoped to ease their plight.
These various booster packages will total well over £20 billion, the FT reported.
He will also talk about future tax rises to pay for it all, with corporation tax set to be the most high profile one to be hiked, albeit not immediately.
The Chancellor wants to keep unemployment below the 7.5% level forecast as a the peak for joblessness by the Office for Budget Responsibility in November.
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