As Brits reel from a cost-of-living crisis, the UK stock market quietly booms to an all-time high
The sun rises over the city on Feb. 6, 2023 in London, United Kingdom.
Leon Neal | Getty Images News | Getty Images
LONDON — The U.K. is facing the weakest growth prospects in the G-7 and a catalogue of cost-of-living pressures that are pushing the poorest into crisis and intensely squeezing the budgets of middle-income households.
At the same time, more investor money has never been pumped into the U.K.’s biggest companies. The FTSE 100 index has smashed through three intraday records over the last week, starting last Friday and hitting new heights in Wednesday’s and Thursday’s sessions.
That’s also coming off the back of a year in markets that was dominated by doom and gloom, with risk assets selling off and indexes from the pan-European Stoxx 600 to the U.S. S&P 500 to Shanghai’s SSE Composite emerging bruised.
The most recent uptick for the FTSE 100 shows that, as well as occurring despite harsh cost-of-living pressures, they are also linked to them.
Energy firms such as Shell and BP have reported record profits and promised higher shareholder dividends, boosting their share prices (with calls for higher windfall taxes to support consumers struggling with higher bills doing little to dampen their appeal).
Thursday’s FTSE climb to an all-time high of 7,944 points at midday in London was boosted by gains at Standard Chartered, one of many banks that have seen profits jump as a result of higher interest rates.
Meanwhile, the strong performance of commodity stocks has also lifted the index higher as they have been boosted by a rise in prices, supply constraints and, recently, the prospect of China’s Covid-19 reopening.
FTSE 100 chart.
“The U.K. FTSE 100 is not about the U.K. domestic economy,” said Janet Mui, head of market analysis at RBC Brewin Dolphin, noting over 80% of firms’ corporate revenue exposure is derived from overseas.
Mui told CNBC a confluence of factors had taken the index to a record high, including the plunge in sterling helping those overseas revenues (collected in dollars); its heavy weighting in energy, commodities and financials; and the relatively strong performance too of defensive staples in consumer products — such as Unilever — and health care — such as AstraZeneca.
What the U.K. stock market has frequently been criticized for — a lack of new, buzzy tech firms and preponderance of stalwarts of the “old economy” — has been a boon as monetary and financial cycles have turned.
The wider FTSE 250 does have stronger domestic links but still has 50% of revenue exposed to overseas, Mui added.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said that among other factors, the FTSE’s rise could be explained by glimmers of hope in the economic picture, such as housebuilder Barratt reporting a “modest uplift” in reservations of new homes. She also pointed to forward-looking signals of Europe avoiding a recession and an abating of the energy crisis.
Banks would perform even better if their net income margins improve but bad loans don’t come through, she noted.
Shell share price.
Among the factors weighing on the U.K. public are interest rate rises increasing borrowing costs, grocery price inflation at a record high of 16.7% and overall inflation above 10%.
A report published Wednesday by the National Institute of Economic and Social Research argued the U.K. was likely to avoid a technical recession this year — though growth would be near zero — but that one in four households will be unable to fully pay their energy and food bills, and middle-income households will face up to a £4,000 ($4,873) drop in disposable income.
And the disjunct between stock market gains and the dire outlook still facing many households jars for many.
“It is a cruel paradox that on the day that the FTSE 100 index hit a record high, campaigners on behalf of up to 7 million people on lower incomes in the UK were calling for the government to extend the support provided to them with regard to their energy bills,” Richard Murphy, professor of accounting practice at Sheffield University Management School, told CNBC.
In March, the U.K. government is set to end a broad household energy bill compensation program that has run through the winter. It comes as many governments attempt to wind down fiscal support to rein in public spending, with the European Central Bank recently arguing that maintaining support packages risks maintaining inflation.
But Murphy said that without the support, and with bills still elevated, “many will not be able to make ends meet and will go hungry, cold or even homeless as a result.”
“The picture that this provides of a country enormously divided by differing incomes and wealth is almost Victorian in its starkness,” said Murphy.
If you’ve ever wondered what happens when you combine a fruit cart, a cargo bike, and a Piaggio Ape all in one vehicle, now you’ve got your answer. I submit, for your approval, this week’s feature for the Awesomely Weird Alibaba Electric Vehicle of the Week column – and it’s a beautiful doozie.
Feast your eyes on this salad slinging, coleslaw cruising, tuber taxiing produce chariot!
I think this electric vegetable trike might finally scratch the itch long felt by many of my readers. It seems every time I cover an electric trike, even the really cool ones, I always get commenters poo-poo-ing it for having two wheels in the rear instead of two wheels in the front. Well, here you go, folks!
Designed with two front wheels for maximum stability, this trike keeps your cucumbers in check through every corner. Because trust me, you don’t want to hit a pothole and suddenly be juggling peaches like you’re in Cirque du Soleil: Farmers Market Edition.
To avoid the extra cost of designing a linked steering system for a pair of front wheels, the engineers who brought this salad shuttle to life simply side-stepped that complexity altogether by steering the entire fixed front end. I’ve got articulating electric tractors that steer like this, and so if it works for a several-ton work machine, it should work for a couple hundred pounds of cargo bike.
Featuring a giant cargo bed up front with four cascading fruit baskets set up for roadside sales, this cargo bike is something of a blank slate. Sure, you could monetize grandma’s vegetable garden, or you could fill it with your own ideas and concoctions. Our exceedingly talented graphics wizard sees it as the perfect coffee and pastry e-bike for my new startup, The Handlebarista, and I’m not one to argue. Basically, the sky is the limit with a blank slate bike like this!
Sure, the quality doesn’t quite match something like a fancy Tern cargo bike. The rim brakes aren’t exactly confidence-inspiring, but at least there are three of them. And if they should all give out, or just not quite slow you down enough to avoid that quickly approaching brick wall, then at least you’ve got a couple hundred pounds of tomatoes as a tasty crumple zone.
The electrical system does seem a bit underpowered. With a 36V battery and a 250W motor, I don’t know if one-third of a horsepower is enough to haul a full load to the local farmer’s market. But I guess if the weight is a bit much for the little motor, you could always do some snacking along the way. On the other hand, all the pictures seem to show a non-electric version. So if this cart is presumably mobile on pedal power alone, then that extra motor assist, however small, is going to feel like a very welcome guest.
The $950 price is presumably for the electric version, since that’s what’s in the title of the listing, though I wouldn’t get too excited just yet. I’ve bought a LOT of stuff on Alibaba, including many electric vehicles, and the too-good-to-be-true price is always exactly that. In my experience, you can multiply the Alibaba price by 3-4x to get the actual landed price for things like these. Even so, $3,000-$4,000 wouldn’t be a terrible price, considering a lot of electric trikes stateside already cost that much and don’t even come with a quad-set of vegetable baskets on board!
I should also put my normal caveat in here about not actually buying one of these. Please, please don’t try to buy one of these awesome cargo e-trikes. This is a silly, tongue-in-cheek weekend column where I scour the ever-entertaining underbelly of China’s massive e-commerce site Alibaba in search of fun, quirky, and just plain awesomely weird electric vehicles. While I’ve successfully bought several fun things on the platform, I’ve also gotten scammed more than once, so this is not for the timid or the tight-budgeted among us.
That isn’t to say that some of my more stubborn readers haven’t followed in my footsteps before, ignoring my advice and setting out on their own wild journey. But please don’t be the one who risks it all and gets nothing in return. Don’t say I didn’t warn you; this is the warning.
FTC: We use income earning auto affiliate links. More.
Environment
Podcast: Trump/GOP go after EV/solar, Tesla, Ford, GM EV sales, Electrek Formula Sun, and more
In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss Trump’s Big Beautiful bill becoming law and going after EVs and solar, Tesla, Ford, and GM EV sales, Electrek Formula Sun, and more
Today’s episode is brought to you by Bosch Mobility Aftermarket—A global leader and trusted provider of automotive aftermarket parts. To celebrate Amazon Prime Day July 8th through 11th, Bosch Mobility is offering exclusive savings on must-have auto parts and tools. Learn more here.
The show is live every Friday at 4 p.m. ET on Electrek’s YouTube channel.
As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.
After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:
We now have a Patreon if you want to help us avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.
Here are a few of the articles that we will discuss during the podcast:
- Electrek FSGP 2025: New teams, new cars, same solar spirit
- Congress votes to send 2 million US jobs to China, increase deficit, energy costs
- Tesla (TSLA) confirms 384,000 deliveries in Q2 2025, right on expectations
- Tesla prototype sparks speculation: a Model Y, maybe slightly smaller
- Tesla launches Oasis Supercharger with solar farm and off-grid batteries
- Tesla unveils its LFP battery factory, claims it’s almost ready
- Here’s why Ford’s electric vehicle sales crashed by nearly a third in Q2
- The Chevy Equinox EV is GM’s breakout star, but that’s not the only surprise
- Xpeng launches G7, a new Tesla Model Y competitor for just $27,000
Here’s the live stream for today’s episode starting at 4:00 p.m. ET (or the video after 5 p.m. ET:
FTC: We use income earning auto affiliate links. More.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike