London midday: Stocks slip as govt admits UK worse-off in all Brexit scenarios
London stocks had slipped into the red by midday on Wednesday, with housebuilders under pressure as investors digested government estimates that the UK will be much worse off under any Brexit scenario.
The FTSE 100 was down 0.2% to 7,004.97 as the government's assessment of the impact of different Brexit outcomes revealed that Theresa May's Brexit deal could cut Britain's GDP by up to 3.9% over the next 15 years, while leaving without a deal would curtail GDP by 9.3% over the same period.
The economic analysis paper from the Treasury found that government borrowing could be forced up by up to £119bn by 2035 if the UK quits the EU without a deal and up to £26.6bn under a plan similar to May's.
Earlier, Chancellor Philip Hammond acknowledged that all forms of Brexit will make the UK economy worse off, but insisted that May's plan is the best available.
Sterling took the news in its stride, trading up 0.4% against the dollar and the euro at 1.2798 and 1.1342, respectively. Analysts said the move against the dollar was mostly down to the US currency losing its safe-haven appeal amid renewed hopes that China and the US will reach a truce on trade.
Later on Wednesday, the Bank of England will publish its Brexit analysis, alongside its biannual Financial Stability Report and the results of its 2018 bank stress tests. All three are due at 1630 GMT, after a last-minute change saw the release pushed back from a morning publication. The Financial Conduct Authority will also publish its own Brexit impact report at the same time.
Banks were mostly firmer ahead of the stress test results, with Lloyds Banking Group, Standard Chartered, Barclays and RBS in the green.
CMC Markets analyst Michael Hewson said: "Banking stocks in the UK have had a disappointing year, weighed down by concerns about a no deal Brexit which would suggest that a lot of the bad news is already baked into the price, with Lloyds Banking Group and Royal Bank of Scotland both down over 15% year to date."
Miners were on the rise as copper prices rebounded, with Antofagasta, Glencore, Anglo American and BHP Group all higher.
Just Eat was boosted as Liberum upped its price target on the buy-rated stock to 1,250p from 850p, while there was also a report that talks between rivals Deliveroo and Uber Eats had come to a halt.
EasyJet paced the broader decline, however, suffering the worst losses on the FTSE 100 as Kepler Cheuvreux downgraded the budget airline to 'hold'.
Housebuilders were also on the back foot amid worries about Brexit, with Taylor Wimpey, Persimmon, Barratt Developments, Bovis Homes and Galliford Try all weaker.
IT services company Softcat rallied after saying that first quarter customer demand had remained strong across all segments, helping to deliver year-on-year growth in revenue, gross profit and operating profit without specifying numbers.
On the Beach was the standout gainer on the FTSE 250 after the online travel agent delivered final results ahead of market expectations, as it reined in marketing spending after the summer heatwave put Brits and Scandinavians off overseas holidays.
Experian fared well, up a touch even as it emerged that its agreed takeover of start-up credit scoring rival Clearscore could be blocked by UK competition authorities. An investigation by the Competition and Markets Authority has found that the deal is "likely to result in less intense competition" and potentially harming digital developments in the personal finance market.
Marks & Spencer was downgraded to 'sector perform' at RBC Capital Markets, while Thomas Cook was under the cosh again after a downgrade to 'equalweight' at Morgan Stanley following another profit warning on Tuesday.
Market Movers
FTSE 100 (UKX) 7,004.97 -0.17%
FTSE 250 (MCX) 18,650.02 -0.06%
techMARK (TASX) 3,465.17 0.40%
FTSE 100 - Risers
Antofagasta (ANTO) 811.00p 4.16%
Just Eat (JE.) 594.40p 2.84%
Burberry Group (BRBY) 1,859.00p 2.20%
Ocado Group (OCDO) 833.40p 2.13%
Sage Group (SGE) 601.40p 1.93%
Glencore (GLEN) 287.45p 1.72%
Anglo American (AAL) 1,563.80p 1.61%
Fresnillo (FRES) 769.00p 1.50%
Rightmove (RMV) 445.20p 1.48%
Randgold Resources Ltd. (RRS) 6,326.00p 1.25%
FTSE 100 - Fallers
easyJet (EZJ) 1,172.00p -3.86%
Smurfit Kappa Group (SKG) 2,118.00p -3.38%
SSE (SSE) 1,097.50p -2.57%
Taylor Wimpey (TW.) 143.95p -2.47%
Persimmon (PSN) 2,063.00p -2.37%
Smith (DS) (SMDS) 333.10p -2.35%
TUI AG Reg Shs (DI) (TUI) 1,190.50p -2.34%
Reckitt Benckiser Group (RB.) 6,566.00p -2.00%
Shire Plc (SHP) 4,457.50p -1.93%
International Consolidated Airlines Group SA (CDI) (IAG) 644.40p -1.92%
FTSE 250 - Risers
UDG Healthcare Public Limited Company (UDG) 623.50p 4.61%
Indivior (INDV) 99.66p 4.07%
Spectris (SXS) 2,437.00p 2.87%
On The Beach Group (OTB) 413.00p 2.74%
Energean Oil & Gas (ENOG) 589.00p 2.43%
QinetiQ Group (QQ.) 290.80p 2.43%
Moneysupermarket.com Group (MONY) 307.70p 2.40%
Dixons Carphone (DC.) 163.00p 2.39%
Vivo Energy (VVO) 108.00p 2.31%
Aveva Group (AVV) 2,416.00p 2.11%
FTSE 250 - Fallers
Thomas Cook Group (TCG) 35.31p -5.98%
Senior (SNR) 245.40p -4.36%
Brewin Dolphin Holdings (BRW) 320.60p -3.61%
Victrex plc (VCT) 2,444.00p -3.55%
Galliford Try (GFRD) 756.00p -3.01%
Bovis Homes Group (BVS) 900.58p -2.95%
Keller Group (KLR) 619.00p -2.83%
Capital & Counties Properties (CAPC) 260.00p -2.69%
Crest Nicholson Holdings (CRST) 357.60p -2.61%
Stagecoach Group (SGC) 155.90p -2.50%