London’s FTSE 100 holds on to gains ahead of US debt ceiling crunch talks

The FTSE 100, which is internationally focused and impacted by news in the US, gained 14.12 points, or 0.18%, to 7,770.99.

Modest banking gains helped set London’s FTSE 100 on the front foot (John Walton/ PA) (PA Wire)

Modest banking gains helped set London’s FTSE 100 on the front foot as investors prepare for a busy week of UK economics figures.

The blue-chip index closed in the green after an early-afternoon dip amid remarks from banking giant Goldman Sachs, estimating the US will run out of cash in three weeks unless it solves its banking crisis.

The comments come ahead of a meeting between President Joe Biden and Republican politician Kevin McCarthy on Monday to discuss increasing the government’s spending limit, known as its debt ceiling.

Meanwhile, the UK’s Office for National Statistics (ONS) will be releasing the latest public sector finances figures on Tuesday, showing how much the UK Government borrowed in April.

Borrowing has shot up in recent months as the Government spent billions on supporting households and businesses with energy costs.

The ONS is also set to reveal the latest UK inflation figures on Wednesday, an important indication of how well the Bank of England is meeting its remit to bring down inflation to the 2% target.

Craig Erlam, senior market analyst for OANDA, said: “It hasn’t been the most thrilling start to the week but that is highly unlikely to continue, with debt ceiling talks, inflation releases, PMIs and Fed minutes all to come.”

The FTSE 100, which is internationally focused and impacted by news in the US, gained 14.12 points, or 0.18%, to 7,770.99.

It was helped up by gains for banks Standard Chartered, HSBC and NatWest, after NatWest revealed the UK Government had sold £1.26 billion of its stake in the bank.

It brings the state’s minority stake down to 38.69% from around 41% in its path to eventually becoming private.

Other European markets started the week on the back foot, with the German Dax down 0.32% and French Cac declining 0.18% at close.

It was a mixed start to trading over in the US, with the S&P 500 up 0.1% and Dow Jones down 0.2% when European markets closed.

The pound was down 0.15% against the US dollar to 1.243, and down 0.1% against the euro to 1.15.

In company news, payments firm Wise saw its share price dip after revealing its chief financial officer would step down next year to focus on making a full recovery after suffering a cycling accident.

It follows an announcement earlier this month that chief executive Kristo Kaarmann would be taking a three-month sabbatical from September to spend time with his family and newborn son.

Wise’s share price was down 3.7% at close.

In cheerier news for investors, airline Ryanair said it returned to an annual profit after benefiting from a resurgence in travel demand and higher air fares.

The company said fares were 50% higher than levels seen a year ago, to an average of 41 euros (£36). Its profit hit more than £1.2 billion in the year to the end of March. Shares in Ryanair were 2.1% higher.

The biggest risers on the FTSE 100 were Standard Chartered, up 19.2p to 653.2p, Admiral Group, up 57p to 2,306p, Ocado, up 9.4p to 403.4p, BT, up 2.9p to 147.85p, and Flutter Entertainment, up 325p to 16,725p.

The biggest fallers on the FTSE 100 were Frasers, down 17.0p to 748.5p, ConvaTec, down 4.0p to 222.2p, Vodafone, down 1.4p to 81.65p, Halma, down 43.0p to 2,455p, and Smiths Group, down 25.5p to 1,685.5p.