UK stock futures fumble ahead of naming of new PM

Futures for UK’s blue-chip index fell on Monday as markets remained nervous ahead of the announcement of the country’s new prime minister, poised to take charge when Britain faces a cost of living crisis, industrial unrest, and a recession.

The FTSE 100 futures fell 1% at 6:07 GMT.

The sterling hit a new 2-1/2-year low, and remained close to its pandemic trough.

Both the FTSE 100 and the FTSE 250 index fell more than 1% last week on fears around surging prices, a looming recession, and the policy direction under the new prime minister.

Liz Truss is expected to be named leader of the governing conservative Party and Britain’s next prime minister at 11:30GMT.

Race to become UK PM down to the final two, Liz Truss and Rishi Sunak 25 July 2022:

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Some investors are alarmed that tax cuts promised by Truss could aggravate Britain’s inflation problem, speeding up the bank of England’s interest rate hikes and worsening a recession that the BoE expects to start this year and end only in 2024.

In Europe, stock index futures slid more than 3% after Russia extended a halt to the Nord Stream 1 gas pipeline to Europe, spurring some governments to announce emergency measures amid fears of winter fuel shortages.