London midday: Stocks down as Hunt delivers Autumn Statement

London stocks were firmly in the red by midday on Thursday as Chancellor Jeremy Hunt delivered his Autumn Statement.

The FTSE 100 was down 0.6% at 7,305.33, while sterling was 0.6% lower against the dollar at 1.1846.

Hunt said the Office for Budget Responsibility expects inflation of 9.1% this year and 7.4% in 2023, down from 11.1% currently.

The Chancellor also noted that the UK is now in recession. The OBR is expecting growth of 4.2% this year, up from a previous forecast of 3.8%. In 2023, GDP is expected to fall by 1.4%, picking up to 1.3% growth a year later.

In equity markets, Ocado slid as hedge fund Kintbury Capital said it expects 50% downside in the shares at best.

Safety equipment firm Halma fell despite reporting record half-year revenue and profit.

Power generator Drax slumped after Hunt announced the introduction of a temporary 45% levy on electricity generators. He also confirmed that the energy industry windfall tax will rise to 35% from 25% from 1 January 2023 until March 2028.

British Gas owner Centrica traded down.

Spirax-Sarco Engineering lost ground even as it reiterated guidance for full-year operating profits and reported continued strong demand despite a weakening outlook for global industrial production.

Hargreaves Lansdown and Rathbones were both knocked lower by rating downgrades at RBC Capital Markets.

East Mediterranean-focused oil and gas producer Energean was under the cosh despite lifting annual production guidance as its Israel Karish gas field came onstream.

On the upside, Burberry rallied after the luxury fashion brand posted a jump in first-half and set new medium-term guidance for sales. In the 26 weeks to 1 October, adjusted operating profit rose 6% at constant exchange rates to £238m, while revenues grew 5% to £1.35bn.

Mitie surged after the outsourcer bumped up its full-year operating profit guidance as it posted a rise in interim revenues but a drop in profit amid fewer Covid-related contracts.