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The FTSE 100 (^FTSE) and European stocks crept up on Wednesday morning as chancellor Rachel Reeves prepared to deliver the government’s spending review, outlining day-to-day departmental budgets for the next three years.
It has already been confirmed that defence spending will rise to 2.5% of national income by 2027, and there are reports of an extra £30bn for the NHS.
Traders are also awaiting details of the US-China trade agreement and confirmation that it will satisfy both US president Donald Trump and his Chinese counterpart Xi Jinping.
Negotiators have agreed on a framework of how to implement the deal reached at talks in Geneva last month.
The main details came from commerce secretary Howard Lutnick, who said: “We do absolutely expect that the topic of rare earth minerals and magnets” will be resolved and that export controls implemented by the US should come down as China approves relevant export licences.
China’s trade representative Li Chenggang said the US and Chinese delegations will now take the proposal back to their respective leaders, with Lutnick noting that “once the presidents approve it, we will then seek to implement it”.
- London’s benchmark index (^FTSE) was 0.2% higher in early trade — this takes the index towards its record high of 8,908 points set in March before trade war turmoil hit the markets.
- Germany’s DAX (^GDAXI) rose 0.1% and the CAC (^FCHI) in Paris headed 0.3% into the green
- The pan-European STOXX 600 (^STOXX) was up 0.05%, hovering just above the flatline
- Wall Street is set for a negative start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red.
- The pound was 0.1% down against the US dollar (GBPUSD=X) at 1.3487
FTSE Index – Delayed Quote•GBP
FTSE 100 (^FTSE)
8,873.47
+20.39
+(0.25%)
As of 9:39:22 BST. Market open.
| Date | 11/06 8:48 am |
| Close | 8,867.16 |
| Open | 8,865.95 |
| High | 8,867.50 |
| Low | 8,865.83 |
1D5D1M6MYTD1Y5YAll
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Where have rental prices slowed the most?
Following on from our last post, here’s a deeper dive into the rental data across the regions:
- Yorkshire and Humber was the biggest victim of the slowdown, where rental price growth stood at 1.1% — down from 6.4% in 2024.
- In the North East, rental growth slowed to 5.2%, down from 9.4% in 2024.
- The heat has also come out of the London rental market, with areas including north west London down 0.2% and west central London 0.6% lower.
The slowdown in the rate of rental growth is a result of weaker rental demand and growing affordability pressures, rather than an increase in supply, Zoopla said. Rental demand is 16% lower over the last year, but this remains more than 60% above pre-pandemic levels.
Lower migration into the UK for work and study is a key factor with a 50% decline in long-term net migration in 2024, the housing platform added.
The UK’s rental boom is over
Rental price growth has slowed significantly, according to the latest figures from Zoopla’s Rental Price Index, with the average rents for new lets agreed 2.8% higher in April 2025 than the same time a year ago.
That’s less than half of the average rental growth in April 2024, which stood at 6.4%, and the lowest growth in nearly four years.
The average monthly rent now stands at £1,287 per calendar month, up £35 over the last year.
A cool down in the rental market has been on the cards for some time now, with unsustainable price rises squeezing tenants to the edge of their affordability.
Data shows that rents have increased five times faster than house prices over the past three years.
Average UK rents for new tenancies are 21% higher since 2022, compared to just 4% for house prices, Zoopla said.
The average monthly rent has increased by £219 over this time, broadly the same as the increase in average mortgage repayments. Average annual UK rents have increased by £2,650 over the last three years, from £12,800 to £15,450.
Rachel Reeves to deliver government’s spending review
June 10, 2025, London, England, United Kingdom: Chancellor of the Exchequer RACHEL REEVES is seen outside 11 Downing Street. (Credit Image: © Tayfun Salci/ZUMA Press Wire) EDITORIAL USAGE ONLY! Not for Commercial USAGE! · ZUMA Press, ZUMA Press, Inc.
Chancellor Rachel Reeves is set to unveil the UK government’s spending review today, which sets the budgets for all government departments over the next few years.
The review will confirm how much of taxpayers’ money will be spent on the NHS and other public services used by millions.
It will also set out how much cash the government plans to invest in projects like new public transport schemes.
She is expected to:
- Place a £39bn affordable homes plan at the centre of the review
- Give the NHS a 2.8% real-terms rise in annual day-to-day spending over three years
- Announce increases in spending on defence and schools
- Pledge £11.5bn of new state funding for the Sizewell C nuclear project in Suffolk, taking the total taxpayer investment in the site to £17.8bn
- Reinstate winter fuel payments for pensioners, in a major policy U-turn by the UK treasury
- Extend the £3 bus fare cap until March 2027
- Give £15.6bn for public transport projects in England’s city regions and £445m for upgrades to Welsh railways
The spending review will be delivered by Reeves later today. She will make the announcement at around 12h30 BST, after prime minister’s
US-China agree framework deal to restore trade war truce
US and Chinese negotiators have agreed on a framework of how to implement the agreement reached at talks in Geneva last month.
The main details came from commerce secretary Lutnick, who said: “We do absolutely expect that the topic of rare earth minerals and magnets” will be resolved and that export controls implemented by the US should come down as China approves relevant export licenses.
China’s trade representative Li Chenggang added that the US and Chinese delegations will now take the proposal back to their respective leaders, with Lutnick noting that “once the presidents approve it, we will then seek to implement it”.
Jim Reid at Deutsche Bank (DB) said:
“There was no evidence of progress on topics such as the fentanyl-related 20% tariffs on China that the US has implemented since February.
“So while the mood music has stayed positive, investors may be wary of the pattern that emerged during the previous US-China trade talks in 2018-19, when apparently constructive in person meetings seemed to take a step back as the negotiating teams returned to their capitals.
“So there’s perhaps a little disappointment this morning that we haven’t yet got a bigger announcement, even though there’s time to hear the full conclusions of the meeting.”
Asia and US overnight
Stocks in Asia were higher overnight, supported by hopes for improved trade relations with the US, with the Nikkei (^N225) rising 0.6% on the day in Japan, thanks to a boost for tech stocks.
Meanwhile the Hang Seng (^HSI) climbed 0.8% in Hong Kong, the Shanghai Composite (000001.SS) was 0.5% up by the end of the session, and the KOSPI (^KS11) also advanced 1.2%, reaching a new 11-month high.
Early morning data showed that producer prices in Japan increased by 3.25% year-on-year in May, a deceleration from a revised 4.1% rise the previous month. This fell short of the market consensus of 3.5%, and the lowest annual rate observed since last September.
Across the pond on Wall Street, the S&P 500 (^GSPC) rose 0.6%, and the tech-heavy Nasdaq (^IXIC) was 0.6% higher. The Dow Jones (^DJI) also gained 0.3%.
