UK Stocks Surge as Budget Speculations Drive Market Movements

UK stocks rose sharply as financial and consumer staples sectors anticipated Wednesday's budget and potential tax measures. The FTSE 100 and FTSE 250 indices saw notable gains, led by personal goods and construction. However, non-life insurers dipped, and bond markets rallied prior to new fiscal policies.

UK stocks experienced a significant uptick on Tuesday, bolstered by advances in financial and consumer staples sectors ahead of the much-anticipated Wednesday budget announcement. The FTSE 100 closed with a 0.8% rise, while the FTSE 250 recorded its best performance in over a month, climbing 1%.

Despite a survey revealing a significant drop in retailer confidence, financial institutions such as Lloyds Banking, Barclays, and NatWest Group performed well, spurred by speculation of tax relief confirmed in a Financial Times report. Additionally, personal goods and construction stocks led sector gains with firms like Burberry and Ibstock surging notably.

Conversely, non-life insurers faced a downturn following Beazley's forecast downgrade on insurance premiums. In contrast, British government bonds rallied and U.S. retail sales data pointed to mixed economic signals, setting the stage for Wednesday's budget developments.

(With inputs from agencies.)