UK braces for tax hikes as global markets face AI and trade uncertainty:

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, was trading down around 0.74% on 07 November 2025.

Macro Update: Finance Minister Rachel Reeves has informed the budget watchdog that her November 26 budget may include significant personal tax increases—signalling major fiscal tightening aimed at cost-of-living pressures and debt targets. Meanwhile, analysts at Morgan Stanley, Citigroup, and UBS Global Research now expect the Bank of England to cut interest rates in December, a marked shift following the central bank’s recent 5–4 decision to hold at 4 % despite inflation at 3.8 % and signs of labour market softness. At the same time, UK house prices rebounded in October (+0.6 % m/m, +1.9 % y/y) to a new record ~£299,862, suggesting housing market resilience even as affordability concerns persist.

Top Market Movers: Among top gainers on FTSE 100 index, Hikma Pharmaceuticals PLC (LSE: HIK) witnessed a rise of 1.26% followed by Vodafone Group PLC (LSE: VOD) which gained around 0.61%.

Commodity Update: A mild pullback in the U.S. dollar and uncertainty over the prolonged U.S. government shutdown supported market sentiment on Friday. Gold rose 0.26% to USD 4,001.10 per ounce, while silver advanced 0.34% to USD 48.10. Copper added 0.37% to USD 10,715.00. Brent crude inched up 0.40% to USD 63.65 after three days of losses tied to oversupply and weakening U.S. demand, though it remained on track for a second weekly decline.

Our Stance: The global outlook is increasingly cautious: Ahead of the Federal Reserve’s October 28-29 meeting, the Fed is relying on alternative data from executive surveys and tech firms as official government reports are limited. Meanwhile, triple-digit pay for Tesla, Inc.’s CEO and a tech-led earnings rally haven’t prevented a sharp pull-back in AI-driven stocks, with markets already off their highs amid weak U.S. labour data and disappointing Chinese trade figures. Coupled with the sense that the global cycle of interest-rate cuts has peaked, the dollar is firming and risk sentiment is under pressure—suggesting that even with corporate earnings holding up, macro and policy uncertainties may set a slower pace for further market upside.

FTSE 100

The FTSE 100 slipped 31.07 points to 9,704.71 but continues to trade comfortably above key support at 8,900. The index also remains above the 21-day SMA (9,586.96) and the 50-day SMA (9,417.49), reflecting a stable technical setup with room for near-term consolidation. The RSI remains below the overbought zone yet still in bullish territory, suggesting a mildly positive tone. Immediate support is near 8,950, with resistance at 9,800 and 10,000.

Source - EODHD/Others