UK shares edge higher as miners and banks gain ahead of budget
- FTSE 100 up 0.2%, FTSE 250 up 0.3%
- UK budget announcement at 12:30 GMT
- Financials and materials lead gains
Nov 26 (Reuters) - UK stocks advanced on Wednesday, led by gains in financials and mining stocks, while investors braced for a potentially tax-heavy budget.
The blue-chip FTSE 100 .FTSE rose 0.2% by 10:55 GMT, while the domestically focused FTSE 250 .FTMC added 0.3%.
Precious metal miners .FTNMX551030 climbed 3.8% to lead the sectoral gains as gold prices hit to a near two-week high after benign U.S. economic data reinforced expectations of a Federal Reserve interest rate cut next month.
Fresnillo FRES.L rose 3.9%, Endeavour Mining EDV.L added 3.6%, while Hochschild HOCM.L gained 4.4%.
Industrial miners .FTNMX551020 added about 1% as copper prices also advanced. Anglo American AAL.L and Antofagasta ANTO.L rose 1.4% and 1.8%, respectively.
Banks .FTNMX301010 advanced 0.5%, extending gains from previous session after media reports of relief from tax hike in budget. Standard Chartered STAN.L gained 1.6%, while Barclays BARC.L rose 0.8%.
Investors now await the autumn budget, where Finance Minister Rachel Reeves is expected to outline tens of billions of pounds in tax increases.
“Any sizable spending hikes, potentially to welfare, combined with increases to borrowing, would be a big red flag to markets, and sterling and gilts would probably sell-off hard,” said Matthew Ryan, head of market strategy at global financial services firm Ebury in a note.
On Tuesday, UK government approved 4.1% rise in minimum wage for 2026, despite complaints from some employers that this will push up prices.
Meanwhile, a survey showed the British public's expectations for inflation over the next 12 months fell, with U.S. bank Citi saying the reading could boost the chances of a December rate cut by the Bank of England.
Also in focus was a Russia-Ukraine peace deal after Ukrainian President Volodymyr Zelenskiy signalled readiness to push forward a U.S.-backed framework to end the war. However, some uncertainty remained as Trump retracted the deadline for the deal.
Aerospace and defence .FTNMX502010 gained 0.7%, with BAE Systems BAES.L up 1%.
On the flip side, Beverages .FTNMX451010 dropped the most, falling 0.9%, with spirits maker Diageo DGE.L losing 1.4%.
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