British Equities Rise as Energy Stocks Propel Gains Amid Budget Update

British equities closed higher, driven by energy stocks, following a budget update by finance minister Rachel Reeves. The FTSE 100 and FTSE 250 indices rose by 0.3%. While Reeves' budget cuts reassured some investors, forecasts for public borrowing and inflation increased, instigating fresh economic concerns.

British equities ended on a high note as energy stocks rallied on Wednesday, following a crucial budget update from finance minister Rachel Reeves. With the FTSE 100 and FTSE 250 indices each gaining 0.3%, investors found some respite despite underlying economic challenges.

Reeves, faced with a sluggish economy, scaled back the government's spending plans, partially allaying investor concerns. Despite this, the UK's budget watchdog lowered its economic growth forecast and raised expectations for public borrowing and inflation, highlighting ongoing fiscal strains.

The energy sector led gains, driven by a 2% rise in oil prices, with Shell and Ithaca Energy notably advancing. Meanwhile, bond investors welcomed the cut in spending, though they cautioned that persistent economic weakness could necessitate future tax hikes.

(With inputs from agencies.)