Branding is seen inside the LSEG (London Stock Exchange Group) headquarters in Paternoster Square, London, Britain, April 25, 2025. REUTERS/Toby Melville/File Photo Purchase Licensing Rights , opens new tab

Summary

Companies FTSE 100 rises 0.4%, FTSE 250 adds 0.7%

Watches of Switzerland slumps after margin hit warning

Currys up after beating profit expectations

UK services sector expands at fastest pace since August

July 3(Reuters) – The UK’s main stock indexes rose on Thursday in broad-based gains after British Prime Minister Keir Starmer’s office gave finance minister Rachel Reeves his full backing, easing concerns over her future.

The blue-chip FTSE 100 (.FTSE) , opens new tab and the midcap index (.FTMC) , opens new tab had closed in the red on Wednesday after Reeves’ tearful appearance in parliament following a series of U-turns on welfare reforms that blew a hole in her budget plans.

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Britain’s bond markets also steadied after debt worries led to a selloff in the previous session.

The government managed to pass its welfare reform bill on Tuesday but had to remove long-term cost saving measures, resulting in concerns that balancing the public finances will require raising taxes or cutting spending elsewhere.

“Some worries remain about the government being backed into a corner and losing its grip on public finances,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“Investors may still be on alert to fresh opposition to government plans to trim spending, to try and abide by its fiscal rules and keep bond markets onside.”

Among individual stocks, luxury retailer Watches of Switzerland (WOSG.L) , opens new tab fell 8.3% and was among the top midcap decliners after warning of a margin hit due to tariff pressures.

Data from the S&P UK services PMI showed that the British services sector activity expanded at the fastest rate in almost a year, while the prices charged rose at the slowest pace in nearly four years.

The Bank of England is closely assessing service sector prices to gauge inflation pressure. Investors widely expect a rate cut in August.

Across the Atlantic, U.S. nonfarm payrolls data, due later in the day, will be monitored as a key indicator that could influence Federal Reserve rate cuts.

Reporting by Twesha Dikshit; Editing by Saumyadeb Chakrabarty

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