LIVE: Wall Street and FTSE tumble as traders digest end of longest US government shutdown and weak UK growth

The UK economy is forecasted to keep growing in the fourth quarter of the year, according to The National Institute of Economic and Social Research (NIESR) on Thursday.

NIESR predicted that quarterly growth will recover slightly to 0.2% in the three months to December, up from this morning’s disappointing reading of just 0.1% for the July to September period.

NIESR said:

Confidence among food and drink manufacturers has fallen to the lowest level since COVID as they brace for tax rises from Rachel Reeves’ budget.

According to the Food and Drink Federation (FDF), some 90% of food makers were feeling pessimistic or nervous about the upcoming fiscal event on 26 November.

Confidence fell to a reading of minus 60% in the third quarter, marking the sixth negative quarter in a row.

Karen Betts, chief executive of the FDF, said:

Gold prices rose for a fifth consecutive session on Thursday morning, reaching their highest level in more than three weeks, as investors bet that the reopening of the US government would restore the flow of economic data and reinforce expectations of further interest rate cuts.

Gold futures (GC=F) gained 0.4% to $4,231.50 per ounce, while spot gold rose 3% to $4,232.68 an ounce at the time of writing.

“Gold is extending its winning streak driven by a weaker dollar, expectations of Federal Reserve rate cuts, and persistent central bank accumulation,” said Jigar Trivedi, senior research analyst at Reliance Securities.

“While near-term consolidation is possible after rapid gains, the broader outlook remains constructive. There is scope for highs above $4,300 an ounce by year-end, provided real yields stay subdued and monetary policy remains accommodative,” he said.

The rally came after US president Donald Trump signed legislation to end the longest government shutdown in US history. The 43-day closure, which began on October 1, had frozen the publication of key economic indicators, including payroll and inflation data.

Economists said the US Labor Department would now prioritise the release of November’s employment and price reports to provide the Federal Reserve with timely information ahead of its December policy meeting.

A Reuters poll found that 80% of economists expect the Fed to cut rates by another 25 basis points next month as it seeks to cushion a slowing labour market.

Gold, a non-yielding asset, typically benefits from lower interest rates and heightened uncertainty. Prices have surged 60% so far this year, hitting a record $4,381.21 an ounce on 20 October.

A new report from Morta finds that Britain’s lower middle class is being priced out of homeownership in 42 of 47 major UK cities, exposing the scale of the country’s housing affordability crisis.

Drawing on data from the Office for National Statistics (ONS) and average property prices across 47 cities, Morta estimated affordability using a mortgage capacity model based on a 36% gross debt-to-income ratio, 25-year term, 4.52% interest rate, and a 20% deposit.

Below are some notable key findings:

• Lower middle-class households can no longer afford to buy a home in 42 out of 47 UK cities.

• London tops the list as the least affordable market where homes exceed lower-middle affordability by £341,917.

• Oxford and Cambridge follow, with gaps of £308,871 and £293,676, respectively.

• Even high-earning middle-class buyers face constraints, unable to afford second homes in 30 of the cities analysed.

• Locally, high-earning middle-class households would still struggle to buy in 18 areas, including 12 in London.

Shares in Wizz Air (WIZZ.L) surged more than 12% on Thursday morning, currently up around 9% at the time of writing, on the back of the low-cost airline’s half-year results.

Wizz Air reported total revenue of €3.34bn (£2.95bn) for the first half, up 9% compared to a year ago, while earnings before interest, tax, depreciation and amortisation (EBITDA) increased 18.8% to €981.3m.

József Váradi, CEO of Wizz Air, said that the company’s first half results reflect the increased capacity year-on-year deployed over the summer season.

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The UK economy is expected to remain subdued until the end of the year thanks to budget uncertainty, Deutsche Bank has said.

Sanjay Raja, its chief UK economist, said it was “clear that the summer of 2025 was a little disappointing” as inflation and unemployment rose while the growth “took another step down”.

He warned Rachel Reeves budget, due on 26 November, would keep goss domestic product (GDP) around 0.1%-0.2% in the coming quarters.

He added:

A nuclear power station, the first-of-its-kind, is set to be built on Anglesey, bringing up to 3,000 jobs and billions of pounds of investment.

The plant at Wylfa, on the Welsh island’s northern coast, will have the UK’s first three small modular reactors (SMR), although the site could potentially hold up to eight.

Work is due to start next year, with the aim of generating power by the mid 2030s.

The BBC has the details…

Prime Minister Sir Keir Starmer said that Britain was once a world leader in nuclear power but “years of neglect and inertia has meant places like Anglesey have been let down and left behind. Today, that changes.”

The news was also welcomed by First Minister Eluned Morgan, who said she had been “pressing the case at every opportunity for Wylfa’s incredible benefits”.

Using the Welsh name for Anglesey, she described it as “the moment Ynys Môn and the whole of Wales has been waiting for”.

The project, which could power about three million homes, will be built by publicly owned Great British Energy-Nuclear and is backed by a £2.5bn investment from the UK government.

SMRs work similarly to large reactors, using a nuclear reaction to generate heat that produces electricity – but are a fraction of the size, with about a third of the generating output.

Ed Milliband, Secretary of State for Energy and Climate Change, called the announcement “exciting” and said Britain is in the race for new reactors.

Speaking on BBC Radio Wales Breakfast, Milliband added they hope to “work with local colleges to make sure that there are local skills providers, skills training opportunities, so local people get these jobs”.

UK exports to the US have fallen to their lowest level since January 2022, as Donald Trump’s trade war has hit demand for British goods.

New data from the Office for National Statistics (ONS) showed that the value of exports, including precious metals, fell by £500m or 11.4% in September.

The trade report shows that exports of UK chemicals to the US fell by £300m, while exports of machinery and transport equipment fell by £100m, partly due to the Jaguar Land Rover cyber attack which froze its operations for the month.

Total UK goods exports declined £1.7bn or 5.5% during the month, with a decrease in exports to both EU and non-EU countries.

This pushed the UK’s trade in goods deficit wider – it increased by £3.0bn to £59.6bn in the third quarter of the year.

The ONS said:

The drop in trade comes despite the deal agreed by Donald Trump and Keir Starmer this summer, under which the UK aerospace sector faces no tariffs at all from the US, while the auto industry now has 10% tariffs, down from 25%.

Bitcoin (BTC-USD) traded flat over the past 24 hours, even as US equities surged to new all-time highs. The Dow Jones Industrial Average hit a fresh record on Wednesday amid optimism that the record-long government shutdown could end with a late-night vote in Washington.

At the time of writing, bitcoin is holding steady around $103,663, while ether (ETH-USD) has climbed more than 3% in the past day to $3,541. Ethereum remains the dominant blockchain for stablecoin issuance, and trading volumes in the stablecoin market have risen significantly over the past year, signalling persistent demand for dollar-pegged crypto assets.

Jasper De Maere, desk strategist at Wintermute, emphasised that bitcoin’s correlation with the US equity markets remains high, but it trades with a bearish skew, reacting more to pain than optimism. He noted that bitcoin continues to move in line with US equity indices, though its reactions have become increasingly asymmetric.

On Wall Street, investors were buoyed by the end of the 42-day government shutdown, the longest in US history. President Donald Trump signed a short-term funding bill late Wednesday night, just hours after the house of representatives passed the measure in a 222–209 vote.

The bill, which funds the government through January 2026, passed with support from 216 Republicans and six Democrats.

Read the full article here

Burberry cheered its first rise in store sales for two years as turnaround efforts helped the luxury fashion label cut half-year losses.

Comparable same store sales rose 2% in the second quarter and remained flat overall in the first half, compared with a 20% plunge a year earlier.

It reported pre-tax losses of £48m for the six months to 27 September, against losses of £80m in the same period the previous year. On an underlying earnings basis, it swung to a £19m operating profit from losses of £41m a year ago.

Sales in the most recent quarter rose 1% in Europe, Middle East, India and Africa, while they lifted 3% in the Americas and 3% in the key Chinese market, and were flat across the Asia Pacific.

The rise marked a rebound for Greater China, following a slowdown in luxury spending in the market, which had hit Burberry hard.

Burberry booked £37m of restructuring charges due largely to redundancy costs as it shed jobs to cut costs.

Joshua Schulman, chief executive of Burberry, said:

The UK housing market cooled further in October as uncertainty ahead of the autumn budget dampened buyer sentiment and slowed sales activity, according to a survey of surveyors.

Buyer demand, agreed sales and new instructions all slipped deeper into negative territory, the Royal Institution of Chartered Surveyors (RICS) said in its latest UK Residential Market Survey.

Property professionals attributed the slowdown to mounting concern over potential tax-raising measures expected to feature in the autumn budget.

A net balance of 24% of respondents reported a fall in new buyer enquiries, the weakest reading since April. An identical 24% recorded a decline in agreed sales, while a net balance of 20% said new instructions to sell had fallen rather than risen, marking the lowest level since 2021.

House price pressures also continued to ease, with a net balance of 19% of surveyors reporting declines. RICS said downward pressure was particularly pronounced in London, the South East and East Anglia.

Prices are expected to soften slightly over the next three months, although respondents anticipate a modest recovery over the coming year once fiscal policy becomes clearer.

In the lettings market, landlord instructions fell sharply, with a balance of 33% of professionals reporting declines, the weakest reading since 2020. Tenant demand flattened, with a balance of 4% recording a fall.

Expectations for rent increases have cooled compared to the strong growth of recent years, as surveyors highlight concerns over potential tax rises that are undermining landlord confidence.

Read the full article here

The Bank of England had forecast 0.2% growth for the quarter, as had analysts surveyed by Reuters, citing weaker exports to the US and the impact of the cyber attack.

Today’s weak data now points to increased odds of further and faster interest rate cuts from Threadneedle Street, as soon as next month.

Rob Wood, chief UK economist at Pantheon Macroeconomics said:

And Thomas Pugh, chief economist at RSM UK said:

Meanwhile, ICAEW economics director Suren Thiru said:

Responding to the latest GDP figures published today, Unite general secretary Sharon Graham said:

Meanwhile, Fergus Jimenez-England, associate economist at the National Institute of Economic and Social Research (NIESR), said:

The data comes as chancellor Rachel Reeves prepares to raise taxes in her upcoming budget to help plug a gap in the public finances of as much as £30bn.

The planned fiscal tightening threatens to weigh further on an economy already showing signs of strain, with unemployment now at 5% and hiring slowing across key sectors.

On the back of the news, Reeves said:

The UK fell behind France for growth in the last quarter, but did better than some other large European countries.

Both Germany and Italy stagnated during the period, while France bounced ahead with 0.5% growth.

Among other G7 countries, Canada is estimated to have grown by 0.1% in the quarter and we are waiting for Japan’s Q3 growth report.

The US GDP data was delayed by the government shutdown.

Growth across the UK economy slowed to a near standstill in the third quarter, as weakness in manufacturing and faltering consumer demand dragged on output ahead of the autumn budget.

Gross domestic product (GDP) expanded by just 0.1% between July and September, down from 0.3% in the previous quarter, according to the Office for National Statistics. Adjusted for population, GDP per head showed no growth at all.

The services sector grew by 0.2%, construction edged up by 0.1%, while the production sector contracted by 0.5%. Monthly figures showed GDP falling by 0.1% in September, following flat output in August, revised down from an initial estimate of 0.1% growth, and a 0.1% decline in July.

The cyber-attack on Jaguar Land Rover in September was among the factors that hammered activity in the manufacturing sector.

The breach disrupted operations across roughly 5,000 organisations, including JLR’s network of affiliated dealerships, repair centres and hundreds of small parts and materials suppliers.

Production at the carmaker was halted on September 1 and remained largely suspended for five weeks, with factories only gradually returning to full capacity in October. The disruption was severe enough to trim 0.17 percentage points from UK economic growth in September.

ONS director of economic statistics Liz McKeown said: “

The 0.1% growth recorded in July-September appears to be the slowest quarterly growth since the short recession in the second half of 2023.

A record-long US government shutdown came to an end last night after 43 days, with president Donald Trump signing the funding legislation that was passed in a 222-209 vote by the House of Representatives.

The package passed by Congress includes three bills of full-year funding for specific departments including agriculture and veteran affairs, but with most government agencies being funded through 30 January.

Jim Reid at Deutsche Bank said:

Stocks in Asia were higher overnight, with the Nikkei (^N225) rising 0.4% on the day in Tokyo, as Japanese producer inflation increased 2.7% year-on-year in October. This slightly exceeded expectations for the month, keeping markets alert to hawkish signals from the Bank of Japan.

Meanwhile the Hang Seng (^HSI) climbed 0.5% in Hong Kong and the Shanghai Composite (000001.SS) was 0.7% up by the end of the session.

In South Korea, the Kospi (^KS11) added 0.5% on the day.

Across the pond on Wall Street, the S&P 500 (^GSPC) rose almost 0.1%, and the tech-heavy Nasdaq (^IXIC) was 0.3% down. The Dow Jones (^DJI) gained 0.7%, posting a new all-time high.

Airlines (+4.84%) were the biggest winners within the S&P amid the impending shutdown end but it was a defensive session overall, with the healthcare sector (+1.36%) also outperforming.

By contrast, the Mag-7 lost 1.2%, weighed down by losses for Meta (META) (-2.88%), Tesla (TSLA) (-2.05%) and Amazon (AMZN) (-1.97%).

Energy was the worst performing sector within the S&P 500, down 1.4%, with Brent crude (BZ=F) falling as much as 3.8% to $62.71/bbl amid growing supply glut concerns as OPEC acknowledged that the oil market moved into surplus sooner than expected.

Good morning, and welcome back to our markets live blog. Stay tuned as we will be taking a deep dive into what’s moving markets and, as usual, updating you with what’s happening across the global economy.

To the day ahead now, we have the UK’s October RICS house price balance, September monthly GDP, Eurozone September industrial production.

We will also hear from the Fed’s Musalem, the ECB’s Villeroy and Elderson, and the BOE’s Greene, plus we’ll receive the ECB’s economic bulletin. Earnings today include Walt Disney and Applied Materials. The US is also hosting an auction for 30-yr bonds ($25bn).

Here’s a snapshot of what’s on the agenda:

• 7am: Trading updates: Rolls-Royce, Aviva, Burberry, B&M European Value Retail, Spirax-Sarco, ConvaTec, United Utilities, Persimmon, Qinetiq, 3i Group, Premier Foods, Kier, Grafton Group, Marks Electrical, Endeavour Mining, Pershing Square

• 7am: UK GDP report for September, and Q3 2025

• 7am: UK trade report for September

• 9am: IEA’s monthly oil market repor

• 12pm: Bank of England policymaker Megan Greene: Panellist at Chatham house event ‘Is the age of central bank independence under threat?’