FTSE 100 Drifts Lower As Budget Deficit Widens

U.K. stocks drifted lower on Tuesday after data showed the U.K. budget deficit widened more than estimated in September and also hit the highest level for the month since 2021.

Public sector net borrowing increased to GBP 16.6 billion in September from GBP 14.5 billion in the previous year, the Office for National Statistics said. This was the third highest September borrowing since monthly records began in January 1993.

Chancellor Rachel Reeves is set to deliver the Autumn Budget 2024 on October 30. The budget is expected to hike taxes and reduce spending worth GBP 40 billion.

Chief Secretary to the Treasury Darren Jones said the budget would require difficult decisions to fix the foundations of the economy and begin delivering on the promise of change.

The benchmark FTSE 100 was down 40 points, or half a percent, at 8,278 after declining half a percent on Monday.

In corporate news, Mulberry Group shares tumbled 3.2 percent after the luxury fashion brand rejected a second takeover proposal from Mike Ashley’s Frasers Group, saying it was “untenable”.

Oil services engineer Hunting plunged 17 percent after cutting its full-year earnings guidance.

Cycling and motoring specialist Halfords Group jumped 5.3 percent after reporting stable first-half sales and backing its full-year guidance.

InterContinental Hotels dropped 1 percent after saying its revenue per available room (RevPAR), a key industry metric, increased 1.5 percent for the third quarter.