- FTSE 100 up 2 points at 9,693
- Banks and builders top the index
- Boohoo surges as turnaround makes mixed progress
4.52pm: FTSE little changed
The FTSE 100 finished the day just slightly higher, adding 2 points at 9,693.
“UK assets continue to hold up well in the wake of the Budget, with the FTSE 100’s session led by Persimmon and a host of banks also gaining,” IG chief market analyst Chris Beauchamp noted.
“The day has been one of drift for global indices without US liquidity, but the rebound from last week’s lows remains intact. Once more stock markets have avoided significant downside, continuing the theme of the last six months, namely a rally that no one quite trusts, but one they can’t ignore.”
3.40pm: Relief for banks and builders
So, the tax raid that wasn’t has floated the UK banking sector. Rachel Reeves’ decision not to target lenders in Wednesday’s Budget has met with a collective sigh of relief, with Lloyds and NatWest both up just over 2%.
The day’s biggest riser, up 3%, was Persimmon, with RBC Capital pointing the Budget’s ‘bark being worse than its bite’.
What does that mean?
The typical homebuyer, RBC says, has been “broadly protected” from the main tax rises, a shift that could help unfreeze activity after a subdued summer.
Home movers who put plans on hold may now feel able to get going again, especially if interest rates edge down before Christmas. After a sluggish second half of the year, RBC expects housebuilders to return to something like business as usual.
2.15pm: Brakes tapped on SSE
UBS tapped the brakes for SSE, a stock that has already sprinted 50% higher since February. The bank nudged its price target up to 2,350p, but with only 7% headroom from here, the call shifted from “buy” to a distinctly cooler “neutral.”
UBS analyst Mark Freshney argues the big fear factors, zonal pricing and regulatory asset base growth under the next transmission price control, RIIO-T3, have largely been dealt with.
But the numbers still do not quite add up. SSE’s headline plan to pour £33 billion into its networks and projects between 2026 and 2030 shrinks to £26.3 billion when run through Freshney’s model.
Then there is the small matter of planning. Six major overhead-line consents are still stuck in the slow lane, and UBS expects delays to drag on given the recent track record of large infrastructure approvals.
Even so, the bank sees 2030 earnings per share at 233p and expects Ofgem’s final RIIO-T3 ruling on 4 December to lift allowed returns for the transmission arm to 6% in real terms. Thermal assets also score a thumbs-up, with life extensions at Marchwood and Keadby 2 adding £200 million of value.
The snag? Valuation. SSE now trades at 13 times forecast FY27 earnings with a 2.4% yield — hardly standout in a sector where National Grid offers richer income and Ørsted scores better risk-adjusted growth on a cheaper 2028 EV/EBITDA multiple.
1:30pm: FTSE 100 static, investors thankful for quiet session
A simple way to say it is that by Thursday afternoon, London's stock market has something of an impetus issue - and, after yesterday's busy but not unexpected budget day perhaps that's something to be thankful for.
Thanksgiving, meanwhile, is the other reason that it's shaping up to be a quiet afternoon with Wall Street closed for the 'Turkey day'.
At 9,979, the index was down around 12 points at 1:30pm.
12.14pm: Ciggie stocks take a hit
After bounding out of the traps, the FTSE 100 soon found itself nursing a bout of post-Budget lethargy. Early gains evaporated as a welter of stocks going ex-dividend hit valuations and the miners and tobacco stocks applied the brakes.
The drag for the latter was hardly a mystery. The Chancellor confirmed a fresh round of inflation-plus duty increases for the cigarette makers, with rates set to rise by the Retail Prices Index figure (expected to be 4.5% plus an extra two percentage points. All tobacco products will face the same treatment, and the new regime kicked in yesterday.
Investors were also digesting the earlier decision in the Autumn Budget 2024 to slap a flat-rate excise duty of £2.20 per 10 millilitres on vaping liquid from 1 October 2026. Alongside that, ministers outlined a longer-term path to keep tobacco duties moving higher by RPI plus two percentage points.
Imperial Brands fell 3%, while BATs, which is US-focused, was collateral damage.
11.08am: Small cap movers
There are some bigger movers among the small caps, as usual.
Revolution Beauty jumped 10% initially but this has been pared down to under 1% after reporting lower first-half sales and profits, but some progress in the months since the co-founders returned, laying what they say are "foundations for a more disciplined, focused and resilient business". (Pun intended?)
Anglo Asian Mining Plc jumped 14% after trading resumed this morning following a brief suspension linked to takeover speculation.
Halfords Group fell 3% as investors seem to be unimpressed as the retailer confirmed a solid set of first-half results, reaffirmed full-year guidance and unveiled a refreshed strategy under new chief executive Henry Birch, focused on improving execution and long-term growth.
Macfarlane Group strengthened after it told investors that it expects its performance for the calendar year would be in line with market expectations.
Earnz PLC shares climbed 22% after saying the UK Chancellor’s decision to end the Energy Company Obligation scheme will have no impact on its operations or outlook.
Pensana rose 8% after the company said a detailed review of its Longonjo project indicates it can dramatically increase production of high-value heavy rare earths.
10.27am: Lack of direction for markets this morning
European markets are "showing a distinct lack of direction this morning, and traders shouldn’t expect too much given a threadbare economic calendar and US Thanksgiving market closure", says Joshua Mahony at Scope Markets.
His take on the Budget is that now "there is a feeling that we have finally overcome a hurdle that has been looming large over the UK economy and markets for months".
On one side some businesses are complaining about higher taxes, such as bookmakers, while on the other, JP Morgan plans to build a three-million square foot "landmark tower" in Canary Wharf, which Mahony says is being touted as "a vote of confidence" in what pro-growth elements of the Budget there were.
"We are also seeing greater confidence that the Bank of England will respond with a rate cut next month, with measures taken to bring down household costs helping to lower inflation expectations.
"With that in mind, the weakness seen in the pound this morning should come as no surprise."
Russ Mould at AJ Bell says the FTSE 100 says a decent showing for retailers is being balanced out by weakness in the property and mining space.
"After seeing considerable volatility yesterday amid leaks and mixed messages about the UK economic outlook and the implications of Rachel Reeves’ decisions, gilt yields ticked a little higher this morning. The government is likely to be breathing a sigh of relief at the market reaction to date."
Top riser on the FTSE 350 is Playtech PLC (LSE:PTEC), up 8.4%.
While the gambling sector was "dealt a major blow" by the chancellor yesterday, Mould points out that for most of the London-listed gambling stocks the UK is only one of a few countries where they operate.
"That helps to cushion the blow, but the duty hikes still cause a headache for management and mean they must rearrange the furniture in terms of marketing spend, resources and operations."
Playtech estimated an EBITDA impact of "up to high-teens millions of euros before mitigation", with its geographic diversity across meanign it "remains comfortable that it can meet market expectations for the full year 2026".
9.49am: UBS calculates Budget impact on leisure, airlins, insurers
UBS warns that measures unveiled in the UK government's Autumn Budget are set to increase operating costs across the travel, leisure and gambling sectors, highlighting headwinds for firms with significant UK exposure.
The 4.1% rise in the minimum wage from April 2026 will be a particular concern for labour-intensive businesses such as Whitbread PLC (LSE:WTB), SSP Group plc (LSE:SSPG) and Compass Group PLC (LSE:CPG).
“Absent mitigation,” UBS said, “this could lead to significantly higher cost bases,” particularly for Whitbread, which is heavily UK-focused and reliant on low-skilled labour.
Online gaming operators such as Flutter and Entain have also issued their own warnings about higher tax bills, which UBS estimates will raise the blended tax rate for some operators to around 35%, up from approximately 20% today.
UBS also noted the planned increase in air passenger duty, which the OBR expects to climb from £4.1 billion in 2024/25 to £6.5 billion by 2030/31.
While the mechanics remain unclear, any rise in the cost of travel “could negatively impact passenger volumes,” with knock-on effects for airlines, hotels, and travel retailers.
The introduction of tourist taxes, if implemented, would add further pressure to accommodation providers such as Whitbread, UBS added.
In a separate note, UBS said lower gilt yields are likely to "positively impact the UK insurers” by reducing their cost of equity and boosting AUM, while falling rates could lift protection and equity release sales.
Salary sacrifice changes are a "marginal headwind" for workplace pension providers like Aviva PLC (LSE:AV.), Legal & General Group PLC (LSE:LGEN) and Phoenix Group Holdings PLC (LSE:PHNX). As an example, Aviva and L&G "currently accumulate £1 billion and £0.8 billion of inflows into their workplace businesses per month," analysts noted.
Taxes on dividends, savings and property would be a "marginal headwind" for St James’s Place, but ISA changes are "marginally positive".
9.17am: UK market roundup
The FTSE 100 is down 15 points or 0.15%, and the FTSE 250 is up 51 or 0.2%.
"Post-Budget, gilt markets seem reasonably quiet though we have seen a slight tick-up in yields this morning after declining yesterday," says market analyst Neil Wilson at Saxo, while sterling trades at its best in a month against the dollar.
His summary of the Budget is that is was "frontloaded with spending and backloaded with paying for it".
With borrowing rising and debt issuance next year sharply higher, he says the reason gilt yields are down and the pound is at a month's high is "probably down to a reduction in the political risk associated with the Starmer/Reeves leadership, which has been key to holding the bond market on a relatively tight leash".
"That doesn’t mean political risk has gone away with this patchwork of tax hikes and giveaways – start pulling at the threads and the whole thing might unravel."
"The market for now is rewarding more fiscal headroom with lower yields, but I would note that the move in the US 10yr yesterday, which spiked and then settled below 4%, was pretty close to that of the 10yr gilt.
"Today is Thanksgiving so there should be little from the US until Monday. Gilts will have to manage on their own for a day or two."
He notes that bank shares have continued to inch higher after popping yesterday as they were spared from a tax raid.
"JPMorgan, with impeccable timing, says it will open a giant new skyscraper in Canary Wharf. Clearly the banks bought the three-line whip on supporting the Budget. Maybe they’re also buying gilts?"
8.47am: Boohoo surges but analysts' reaction mixed
Boohoo shares bounced over 20% higher as the online marketplace reported underlying profits ahead of expectations and gave higher guidance than analysts had forecast.
Analyst John Stevenson at Peel Hunt says EBITDA guidance for the full year of £45 million is ahead of consensus expectations of £33 million after "strong progress" for the Debenhams platform.
However, he noted that the Youth Brand segment, including PrettyLittleThing, boohooMAN, and Nasty Gal, saw significant continued declines.
"There is still a lot of heavy lifting going on, with significant reduction in stock, fixed costs, and PLT still up for sale," Stevenson noted.
Aarin Chiekrie, analyst at Hargreaves Lansdown, felt it was "another disappointing set of results", with the previously announced strategy change "failing to have the desired effect so far".
He said the rebranding as Debenhams to tap into the heritage of the iconic British brand has "done little to revive customer numbers and stem its falling sales".
8.15am: FTSE hit by ex-divs
The FTSE 100 has opened down 10.4 points at the open at 9,681.
Among the biggest early fallers were Land Securities Group, Severn Trent, LondonMetric Property, all down over 1.5% as their shares went ex-dividend.
Several blue-chips went ex-div this morning, with Imperial's and 3i Group's the largest index adjustments, followed by IAG, Severn Trent, Land Sec, LondonMetric, Marks & Spencer and Alliance Witan.
Entain dropped after sharing more details overnight on the impact of new Budget taxes.
7.59am: Boohoo sales fall, so do losses
Boohoo Group PLC (AIM:DEBS), or Debenhams PLC as it plans to try and change its name to again, has reported a return to underlying profitability across all its brands in the first half of its financial year, despite a fall in sales.
Adjusted EBITDA rose 5% year-on-year to £20 million in the six months to 31 August, while statutory losses from continuing operations narrowed to £3.4 million from £126.7 million.
Revenue fell 23% to £296.9 million, while gross merchandise value (GMV, or the value of all goods sold via the group’s new marketplace model) fell 19% to £630.8 million, or 23% to £406.9 million when returned items are taken into account.
Boss Dan Finley says the "turnaround is gathering real pace" and the "results show that our strategy is working".
A second attempt to change its corporate name to Debenhams will be launched, after Mike Ashley's Frasers Group blocked its last attempt in March.
7.39am: Bookies warning
Yesterday and this morning, bookmakers Entain PLC (LSE:ENT), Evoke PLC (LSE:EVOK) and Flutter Entertainment PLC (LSE:FLTR, NYSE:FLUT) have warned investors of "highly damaging" consequences from the new UK gambling tax measures announced in yesterday's Budget.
Under Rachel Reeves' proposed changes, online gaming duty will rise to 40% from next April, and a new 25% remote betting duty will apply to online sports betting, excluding horse-racing, from April 2027.
Paddy Power and Betfair owner Flutter said in an RNS this morning that it expects an adjusted EBITDA impact of approximately $320 million in 2026 and $540 million in 2027 before mitigation, while Ladbrokes and Coral owner Entain put its number at around £200 million, with about £100 million expected in 2026.
William Hill owner Evoke, the smallest of the three, predicted an annualised increase in duty costs of £125-135 million, with £80 million of that in 2026. Evoke is withdrawing its medium-term financial targets and said it will begin immediate execution of mitigation plans, including reduced UK investment and likely job cuts.
FTSE 250-listed Rank Group PLC (LSE:RNK), which owns Grosvenor casinos and Gala bingo halls, said it expected an annualised reduction of circa £40 million on operating profit before mitigation, driven by a £46 million increase in digital gaming duty partially offset by the abolition of bingo duty.
Evoke, Entain and Flutter bosses warned that the Budget measures would result in thousands of industry-wide job losses and increase black-market betting.
Flutter’s UK chief executive said the remote gaming duty is "now above countries such as the Netherlands, where a recent tax increase saw a rise in illegal gambling".
7.16am: FTSE 100 called slightly lower as Budget scrutiny continues
A slow start for the FTSE 100 on Thursday is predicted, as the scrutiny of yesterday's Labour Budget continues.
London's blue-chip benchmark is seen dropping by around six points at the open, according to the futures market, after the index added 82 points to close at 9,691.58 in the wake of the Chancellor's speech.
The pound continued to climb and gilt yields to fall overnight, as the Budget was seen as moderately deflationary, with Rachel Reeves piling on taxes to give the government much more fiscal headroom in future years.
Across the Atlantic, Wall Street's major indexes all finished higher, achieving their best four-day run since May as traders headed into the Thanksgiving break feeling more confident about the odds of an interest-rate cut next month.
On the last full trading day of the week, the Nasdaq and Russell 2000 climbed 0.8%, while the Dow Jones and S&P 500 gained 0.7%.
US stock markets will be closed today and will close early on Friday for the Thanksgiving holiday.
Asian markets are all in green again this morning, with Japan's Nikkei advancing the most, up 1.2%, with other gains modest.