The FTSE 100 managed to claw back losses on Tuesday, closing up 0.1% at 9,714.96, after an early morning dip to 9,574.15.
The FTSE 250 ended 0.5% lower at 21,995.48, while the AIM All-Share fell 1.6% to 759.55, reflecting ongoing investor caution amid a pre-Budget speech from Chancellor Rachel Reeves.
Reeves took the unusual step of speaking three weeks ahead of her November 26 Budget, signalling that tax rises are expected. She declined to recommit to Labour’s manifesto pledges not to increase income tax, national insurance, or VAT, saying that “we will all have to contribute” to reduce debt and protect public services. She cited both domestic challenges, including a likely downgrade of productivity forecasts by the Office for Budget Responsibility, and global pressures such as the US-China tariff dispute.
The pound fell further in the wake of the speech, while bond yields edged lower. Despite early weakness, gains among FTSE heavyweights helped the blue-chip index recover.
Pharmaceutical stocks GSK and AstraZeneca rose 1.9% and 1.3% respectively. BP also performed well, climbing 1.3% after reporting third-quarter underlying replacement cost profits of $2.21 billion, slightly down year-on-year but ahead of analyst expectations. The oil major announced a £750 million share buyback and increased its dividend to 8.32 US cents.
Meanwhile, AB Foods fell 3.0% after confirming a review that could split Primark from its Food division. Analysts welcomed the potential separation, highlighting the strong value of ABF’s food brands, which include Twinings, Kingsmill, Jordans, and Mazola.
UK betting stocks were among the day’s biggest fallers, reflecting investor caution over potential tax measures. Evoke, owner of William Hill, tumbled 4.0%, while Entain, owner of Ladbrokes, dropped 3.5%. Flutter Entertainment, owner of Paddy Power and Betfair, fell 3.9% following a downgrade to ‘neutral’ from ‘buy’ by Bank of America, citing UK tax risks.
Investor sentiment remains fragile as the market braces for further clarity in the upcoming Budget, with concerns focused on taxation, debt management, and the broader economic outlook.
