The FTSE 100 started Wednesday’s session on a strong note, climbing 0.3% (31.82 points) to a fresh high of 9,515.40, led by gains in mining and banking stocks after the Financial Conduct Authority (FCA) published its long-awaited motor finance redress consultation and gold prices hit an all-time high.

Lloyds, Close Brothers Gain Despite £11 Billion Redress Estimate

The FCA’s 360-page paper on the UK’s motor finance commission redress scheme estimated an industry-wide cost of around £11 billion, including £8.2 billion in redress and £2.8 billion in operational expenses.

This figure, though below earlier projections of £9-£18 billion, still suggests that lenders may need to set aside further provisions. 

Analysts at Shore Capital said the new estimates show a £2.5 billion improvement in the central case but warned that existing provisions of £2 billion across the industry remain insufficient.

Lloyds Banking Group, expected to bear a significant share of the total cost, opened higher, with shares rising 1.9% to £84.88, extending their 52% gain this year. 

Close Brothers, listed on the FTSE 250, also rose £8 to £505, signaling investor relief that the regulatory cost projections came in below worst-case estimates.

Miners Shine as Gold Surges Past $4,000

Mining stocks were among the biggest gainers after gold prices soared past the $4,000 per ounce mark, the highest in history. Fresnillo gained 3.39% to £2,378. Endeavour Mining advanced 3.35% to £3,266, and Standard Chartered and Experian each rose over 1%.

The surge comes amid a 52% year-to-date rally in gold, driven by geopolitical tensions, inflation concerns, and expectations of US Federal Reserve rate cuts. Analysts said gold’s strength reflects investors’ desire for safe-haven assets amid fears of currency debasement and fiscal uncertainty.

Chris Weston, head of research at Pepperstone UK, remarked, “Funds and reserve managers are increasingly treating gold as a hedge against fiscal recklessness and policy unpredictability.”

Also Read: Stock Market Today: Sensex Down 0.21%, Nifty Drops 0.27%; Titan, Infosys Lead Gainers

Corporate Updates: Vertu Motors, Greencore, and Marston’s

Vertu Motors said profits could be hit by up to £5.5 million after its Jaguar Land Rover dealerships were affected by the automaker’s recent cyberattack, sending shares flat at £60.

In the FTSE 250, Greencore surged 6% after posting stronger-than-expected annual results, while Marston’s rose 10% on higher profit guidance, buoyed by improved margins and cost efficiency.

Outlook

As gold price is at an all-time high and FTSE 100 is continuing its uptrend, investor sentiment remains broadly positive. However, because of the regulatory issues hanging over the motor credit market and macroeconomic difficulties, periods of sudden volatility may appear.