28th Oct 2026 12:12
(Alliance News) - Stock prices in London were mixed at midday on Wednesday, with the FTSE 100 edging lower ahead of Chancellor John Healey's first budget, though banking stocks rallied on a report that a planned tax increase on the sector would be less severe than feared.
The FTSE 100 index was down 32.43 points, 0.3%, at 10,654.11. The FTSE 250 was up 13.42 points, 0.1%, at 24,729.79, and the AIM All-Share was up 3.34 points, 0.4%, at 761.83.
The Cboe UK 100 was down 0.3% at 1,057.03, the Cboe UK 250 was down 0.1% at 21,735.13, and the Cboe Small Companies was up 0.3% at 18,963.72.
In European equities on Wednesday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was marginally higher.
The pound was quoted at USD1.3288 at midday Wednesday, lower than USD1.3307 at the London equities close on Tuesday. Against the euro, sterling fell to EUR1.1939 from EUR1.1943.
The euro declined to USD1.1129 from USD1.1142 late Tuesday. Against the yen, the dollar edged up to JPY157.90 from JPY157.88.
In the UK, Chancellor John Healey is preparing to deliver his first budget at 1230 GMT, facing the challenge of balancing commitments to higher defence spending and easing household bills against limited fiscal headroom.
The budget comes against a difficult economic backdrop, with rising inflation and borrowing costs, largely driven by the US-Iran war, putting pressure on government finances, businesses and households.
UK annual inflation accelerated to 3.5% in September, partly reflecting soaring fuel prices amid the conflict.
"We can't stop these shocks that hit Britain, but we can make Britain more resilient when they do," Healey said in a statement released ahead of the budget.
"This budget is about getting through this difficult moment," he added, promising "breathing space" for households and "targeted support" for businesses.
Meanwhile, Bloomberg reported that the government is preparing to increase taxes on banks by less than previously feared, as Healey seeks to balance the competitiveness of the City of London with the need to raise revenue.
Citing people familiar with the plans, Bloomberg said the chancellor would raise the bank surcharge, currently levied at 3% on top of the 25% corporation tax rate, but would stop short of restoring it to the previous 8% level that applied until 2023.
The increase is also expected to be temporary rather than permanent, according to the report.
UK banking stocks rallied following the news, with NatWest rising 2.3%, Barclays advancing 2.0% and Lloyds Banking Group climbing 1.8%. The lenders were among the leading gainers in the FTSE 100.
The Treasury has also announced plans to scrap standing charges on household gas bills for around 23 million households in 2027, or as soon as possible thereafter, as part of measures to be outlined in the budget.
At the other end of the blue-chip index, GSK fell 4.8% after reporting a decline in third-quarter profit.
The pharmaceutical company said pretax profit dropped 21% to GBP1.94 billion from GBP2.46 billion a year earlier, despite revenue rising 4.0% to GBP8.89 billion from GBP8.55 billion.
Unilever declined 2.2% despite slightly upgrading its full-year 2026 outlook for underlying volume growth to at least 3.0%, following strong third-quarter trading.
In the FTSE 250, Raspberry Pi Holdings gained 4.8% amid a rally in technology stocks, supported by positive earnings from SK Hynix in Seoul.
Hunting plunged 11% after cutting its full-year 2026 adjusted earnings before interest, tax, depreciation and amortisation guidance to between USD128 million and USD133 million.
The energy services company cited disruption from the ongoing Middle East conflict, slowing activity in North America and supply chain issues affecting its Advanced Manufacturing business.
Among smaller companies, Gem Resources jumped 14% after agreeing to sell the Gravelotte emerald mine to Global Gem Mines for USD2.4 million.
88 Energy climbed 12% after securing USD11 million in farm-out funding for the Augusta-1 exploration well on Alaska's North Slope.
On the downside, Ironveld plunged 50% after announcing a rare earths and phosphate discovery at Layer 21.
Georgina Energy fell 20% after reporting that road closures and adverse weather conditions had hindered the mobilisation of its Ensign 970 drilling rig.
Stocks in New York were called mixed, with the Dow Jones Industrial Average set to open down 0.2%, while the S&P 500 was called up 0.2% and the Nasdaq Composite up 0.5%.
Investors are also awaiting the US Federal Reserve's latest monetary policy decision, due at 1800 GMT on Wednesday, followed by a press conference with Chair Kevin Warsh.
Markets widely expect the Federal Open Market Committee to leave interest rates unchanged following last month's increase, although another hike in December is already being anticipated as elevated energy prices keep inflation above target.
The yield on the US 10-year Treasury was quoted at 5.02% at midday Wednesday, widening from 5.00% on Tuesday. The yield on the US 30-year Treasury widened to 5.32% from 5.31%.
Brent oil was trading at USD115.35 a barrel at midday Wednesday, higher than USD114.13 late Tuesday, as diplomatic efforts to ease tensions in the Middle East continued despite renewed Houthi attacks.
Gold was quoted at USD4,046.90 an ounce, lower than USD4,057.67 on Tuesday.
Still to come on Wednesday's economic calendar, US wholesale inventories figures are due, ahead of interest rate decisions from the Bank of Canada and the US Federal Reserve.
By Eva Castanedo, Alliance News senior economics reporter
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