London midday: Stocks stay down ahead of Budget

London stocks were still in the red by midday on Wednesday as jitters crept in ahead of the Autumn Budget, with tax rises and spending cuts on the cards.

The FTSE 100 was down 0.3% at 8,193.36, with Chancellor Rachel Reeves due to deliver the first Labour Budget in 14 years after Prime Minister’s Questions.

Russ Mould, investment director at AJ Bell, said: "Get ready for a Budget that’s a burden on business.

"The prospect of a higher rate of employer National Insurance, a rise in the minimum wage and changes to employment rights will all drive up costs. That’s likely to be seen as negative for job creation, wages and consumer prices, and businesses will inevitably pass on extra costs to the customer.

"Rachel Reeves might pitch the Budget as putting more pounds in people’s pockets, but their money might not go as far as they’d like or appetite could wane for splashing the cash.

"The bond market has already braced itself for higher levels of government borrowing, with gilt prices falling in recent weeks which has lifted yields. The 10-year gilt stood at 4.256% in early trading on Wednesday, having yesterday hit its highest level since June at 4.32%. The 10-year yield had eased back to 3.763% in the aftermath of the general election but changed direction in September upon indications that the government might move the goalposts to fund investments.

"Sterling remained calm ahead of the Budget, edging higher to $1.30216 but not wildly out of line with where it has traded for much of October.

"Investors will be hoping this isn’t simply the calm before the storm. The last thing the market wants is for Reeves to pull a Halloween-themed rabbit out of the hat that scares investors and causes another Liz Truss-era horror show.

"For all the wild speculation around what might be in the Budget, investors don’t seem to be on tenterhooks going into the announcement. All the classic UK stocks heavily tied into the economy such as banks, housebuilders and retailers were in demand in early trading on Wednesday. Whether that remains the case after 12.30pm is another thing."

In equity markets, Standard Chartered gained as it lifted its full-year outlook after a record performance in its wealth division helped third-quarter profits beat expectations.

Glencore advanced after a third-quarter production update.

Next rallied as the retailer boosted its guidance for both the crucial fourth quarter and the full year, after the recent cold snap caused sales to surge. Marks & Spencer was also higher.

Aston Martin was in the black as the car maker backed its full-year outlook and reported a smaller-than-expected loss for the third quarter.

GSK fell as the drug maker’s third-quarter sales missed expectations, while Bridgepoint slumped as Citi downgraded the shares to ‘neutral’ following an 80% increase in the share price over the past year.

BAE Systems lost ground after a fire broke out at its nuclear submarine shipyard in Cumbria.

Market Movers

FTSE 100 (UKX) 8,193.36 -0.32%
FTSE 250 (MCX) 20,633.52 0.05%
techMARK (TASX) 4,668.43 -0.78%

FTSE 100 - Risers

Smurfit Westrock (DI) (SWR) 3,556.00p 3.22%
Standard Chartered (STAN) 901.80p 2.90%
Entain (ENT) 728.20p 2.10%
Glencore (GLEN) 411.55p 1.72%
Next (NXT) 10,230.00p 1.59%
Marks & Spencer Group (MKS) 382.20p 1.54%
Admiral Group (ADM) 2,610.00p 1.52%
Croda International (CRDA) 3,669.00p 1.33%
Flutter Entertainment (DI) (FLTR) 17,380.00p 1.19%
Severn Trent (SVT) 2,635.00p 1.15%

FTSE 100 - Fallers

GSK (GSK) 1,402.00p -3.41%
Anglo American (AAL) 2,405.00p -3.14%
CRH (CDI) (CRH) 7,092.00p -1.69%
Diageo (DGE) 2,475.00p -1.65%
BAE Systems (BA.) 1,260.00p -1.52%
Spirax Group (SPX) 6,610.00p -1.42%
Whitbread (WTB) 3,181.00p -1.36%
Convatec Group (CTEC) 219.20p -1.35%
Experian (EXPN) 3,805.00p -1.30%
Lloyds Banking Group (LLOY) 53.86p -1.25%

FTSE 250 - Risers

Indivior (INDV) 719.00p 3.16%
Ocado Group (OCDO) 360.30p 2.53%
Trustpilot Group (TRST) 248.00p 2.27%
CMC Markets (CMCX) 308.50p 2.15%
Plus500 Ltd (DI) (PLUS) 2,368.00p 1.81%
PureTech Health (PRTC) 158.20p 1.80%
The Renewables Infrastructure Group Limited (TRIG) 98.80p 1.75%
OSB Group (OSB) 365.80p 1.61%
HICL Infrastructure (HICL) 125.40p 1.46%
Endeavour Mining (EDV) 1,816.00p 1.45%

FTSE 250 - Fallers

Close Brothers Group (CBG) 234.60p -4.01%
Dr. Martens (DOCS) 54.35p -3.89%
Kainos Group (KNOS) 847.00p -2.42%
Fidelity China Special Situations (FCSS) 213.00p -2.29%
Computacenter (CCC) 2,270.00p -2.24%
Foresight Group Holdings Limited NPV (FSG) 452.00p -2.16%
NCC Group (NCC) 157.40p -1.75%
RIT Capital Partners (RCP) 1,828.00p -1.72%
Softcat (SCT) 1,765.00p -1.67%
North Atlantic Smaller Companies Inv Trust (NAS) 3,660.00p -1.61%