Published by Global Banking & Finance Review®
Posted on November 26, 2025
2 min readLast updated: January 20, 2026
Add as preferred source on GoogleUK stocks rose as Rachel Reeves announced a tax-raising budget. FTSE 100 gained 0.9%, with financials and mining stocks leading the rise.
By Utkarsh Hathi
(Reuters) -UK stocks climbed on Wednesday, boosted by gains in financials and mining stocks, as finance minister Rachel Reeves announced a big tax-raising budget.
The blue-chip FTSE 100 closed 0.9% higher, logging its best day in two weeks. The domestically focused FTSE 250 climbed 1.2%, its best day in more than a month.
Reeves delivered a budget that will take more tax from workers, people saving for a pension and from investors to give herself more room for meeting her borrowing targets.
In a release first reported by Reuters, the Office for Budget Responsibility said the headroom now stood at almost 22 billion pounds ($28.9 billion) in five years' time.
UK 30-year gilt yields - more sensitive to long-term fiscal concerns - fell 10.5 bps to 5.21%, in their biggest one-day drop since April, suggesting investors were largely comfortable with the budget plan.
"What the market is very much reacting to is the fact that the Chancellor has increased her fiscal buffer... She has pretty much doubled it and that's something that the market is really latching onto and it's calming the bond market," said Fiona Cincotta, senior market analyst at City Index.
Heavyweight banks advanced 2.1%, with Standard Chartered up 2.8%, while Barclays added 3.2%, after the budget spared banks from fresh targeted taxes.
Precious metal miners climbed 5.1% as gold prices climbed to their highest in more than a week after benign U.S. economic data reinforced expectations of a Federal Reserve interest rate cut next month.
Fresnillo rose 5.2%, Endeavour Mining added 4.8%, while Hochschild gained 6%.
Industrial miners gained about 1.5%, tracking higher copper prices. Anglo American and Antofagasta rose 3.2% and 2.1%, respectively.
Homebuilders dropped 1% after Wednesday's budget increased tax on high-value properties. Berkeley group fell 2.9%.
Also in focus was renewed talk of a Russia-Ukraine peace deal after Ukrainian President Volodymyr Zelenskiy signalled readiness to push forward a U.S.-backed framework to end the war. Aerospace and defence stocks gained with BAE Systems up 1.4%.
Beverages fell 0.7%, with Diageo losing 1%.
(Reporting by Utkarsh Tushar Hathi, Sukriti Gupta, and Rashika Singh in Bengaluru; Editing by Tasim Zahid and Gareth Jones)
The FTSE 100 is a stock market index that represents the 100 largest companies listed on the London Stock Exchange, based on market capitalization.
Corporate tax is a tax imposed on the income or profit of corporations, which varies by country and can impact business investment decisions.
A pension is a retirement plan that provides a regular income to individuals after they retire, typically funded during their working years.
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