The FTSE 100 dropped by 0.6% and the FTSE 250 by 0.3% as investors prepare for Chancellor Rachel Reeves’ tax-focused Budget, which includes £40bn in measures to stabilise public finances.
Business leaders have urged Reeves to restore confidence, as growth stalled due to concerns over potential tax increases, including higher employer National Insurance.
Despite an early rally in bond markets, UK debt risk has increased, with 10-year gilt yields rising to 4.31%, their highest since June.
Analysts are focused on expected borrowing levels and Reeves' plans to revise fiscal rules for funding new investments.
Alex Phillips speaks with political commentator, Benedict Spence.
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