London’s markets continued to struggle to start the week as Brexit decisions continue to weigh down stocks. The markets started the week much like they ended the previous week down. The FTSE 100 lost 0.9% on Monday following a week where the index fell 2.3%.
The British parliament’s Brexit discussions are only part of the market’s concerns this week.
The United States and China will be the focus of investors, as scheduled trade talks begin. The Federal Reserve will also be meeting on Wednesday to discuss interest rates.
The Bank of England also announced that consumers are saving more and spending less, as borrowing rates hit their lowest growth levels since 2014. The BoE has also cut rate hike expectations due to concerns surrounding Brexit.
Concerns heading into the end of the week are still causing investors to remain cautious. Lloyds Banking Group (LLOY) announced that the bank will be cutting 292 jobs in cost-cutting measures. The Group has been working to reduce redundancies.
Tesco PLC’s announcement that the company is planning to cut as many as 9,000 jobs has led to markets struggling. The UK’s biggest retailer is rumored to possibly be cutting as many as 15,000 jobs. The company plans to close some of the fresh food counters, as competition continues to increase.
Cost cutting measures are expected to increase at the retailer despite being able to outperform Aldi and Lidi during the Christmas holidays. The company will consider overhauling their in-store bakeries, replacing them with frozen items. Some staff members will also be replaced by vending machines.
The announcement will impact the majority of the company’s 732 larger stores. Restructuring under the guidance of chief executive Dave Lewis has the company planning to cut £15 billion in costs. Lewis took over as the head of the company in 2014 and has already cut 10,000 jobs in an effort to reduce costs.
The FTSE 100 ended Wednesday up 1.42% after posting gains of 1.24% on Tuesday.
Oil and tobacco stocks helped fuel the indexes on Tuesday. British American Tobacco and Imperial Brands rose 135p and 50p on Tuesday. Oil prices also rose after the United States sanctioned Venezuela’s oil firm. The move is expected to help reduce the country’s crude exports, causing Brent Crude oil to rise 2.3%.
European markets also rose on Tuesday, with the German DAX rising 0.08% and the French CAC 40 rising 0.81%. Markets are expected to fluctuate further on Thursday and Friday as investors digest trade and Brexit discussions.