FTSE 100 ended slightly in the green on Friday after Liz Truss resigned as the Prime Minister of the United Kingdom.
Truss cost U.K. markets $500 billion
She spent only 44 days in office that makes her the shortest-serving Prime Minister in the history of the Great Britain. Still, her disastrous mini-budget costed markets at least $500 billion.
U.K. is now set to get a new Prime Minister (its third this year) next week. Explaining what it could mean for markets, Russ Mould of AJ Bell said:
Even though there’s some sense of peace in markets now, this could all change next week when we have a clearer idea of who’s in the running for No10 and how each candidate might reshape the country’s policies to avoid economic shocks.
Among the candidates is Rishi Sunak and Penny Mordaunt. Then, of course, there’s a possibility that Boris Johnson could return to the office.
FTSE 100 is testing a key support
Also on Friday, retail sales in the United Kingdom were reported down 1.4% for September versus a 0.5% decline expected.
The blue-chip index is currently down about 7.0% for the year. Further downside pressure related to the political and economic uncertainty, however, could push it below the 6,858 level – a key support that could clear way for continued descent to 6,707 level, according to DailyFX.
Inflation still sits at a forty-year high of 10.1% in the U.K. (link) and government borrowing jumped £20 billion last month.
Chancellor Jeremy Hunt is set to make full fiscal plan speech on October 31st.
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