London stocks drifted lower on Thursday as the mood soured again over US-China tensions. The FTSE 100 slipped 0.2% to 9,402, while mid-caps and small-caps followed suit.
US Treasury Secretary Scott Bessent turned up the heat on Beijing, describing China’s rare earth export controls as “China versus the world.” He insisted that Washington and its allies “will neither be commanded nor controlled,” adding that the time had come to “de-risk and diversify.” Strong words, but not the sort that calm investors’ nerves. With IMF and World Bank meetings under way in Washington, the timing felt deliberate, a public show of resolve rather than diplomacy.
The uneasy truce between Washington and Beijing is fraying again. Tariff threats are back on the table, with President Trump hinting at a fresh 100% levy on Chinese goods from 1 November. He even confirmed what everyone already suspected, “you’re in one now,” he said when asked about the trade war.
Asian markets were mixed, and Wall Street managed to stay afloat overnight, though it’s hard to tell whether that’s resilience or denial. The US government is still in shutdown, yet traders are clinging to earnings optimism and AI enthusiasm. For now, that’s enough to keep the S&P 500 rising. But if the rally starts wobbling, the question is who blinks first, the White House or the market?
Back in the UK, GDP data showed meagre growth of 0.1% in August, barely offsetting a revised decline in July. Analysts at Deutsche Bank said third-quarter growth could come in at just 0.2%, roughly half the pace the Bank of England expects.
Whitbread was the biggest drag on the FTSE 100, tumbling 9% after posting a 7% fall in half-year profit. The Premier Inn owner said forward bookings look solid but cut its outlook for Germany, now guiding for profit at the lower end of its range.
Croda gained 2.4% after confirming its full-year outlook, saying cost savings and steady demand had helped offset the global slowdown. Sabre Insurance also picked up, rising more than 4% after flagging signs that claims inflation, the industry’s biggest headache, may finally be easing.
Gold climbed to $4,238 an ounce as traders continue to seek cover, while Brent inched up to $62.64. Nothing dramatic, just the familiar flight to safety whenever Washington and Beijing square off again.