The FTSE 100 was flat on Tuesday morning as the latest US debt ceiling talks ended with the impasse between Democrats and Republicans still in place.
Experience tells investors that these stand-offs always end with a last-minute deal so the market is mostly taking this saga in its stride, particularly given commentary from both sides seems to be increasingly conciliatory.
AJ Bell investment director Russ Mould said: “Just how close Washington must push for there to be a genuine fear of default is an open question, but right up to the eleventh hour, or in other words the end of this month, the expectation is likely to remain that a deal will be done.
“UK public borrowings increased more than expected at the start of the year as like many borrowers the government felt the pain of increased interest costs.
“Telecommunications giant BT was in demand as its largest shareholder Altice, a vehicle for Patrick Drahi, increased its stake to nearly 25%. Altice is continuing to deny any plans to make an offer for the business but the move will raise eyebrows, particularly given the national security sensitivities around BT and its assets entering foreign ownership.”