UK Stock Market Open Tomorrow (26 November 2025): 10 Things Investors Need To Know After Budget Jitters

London – Tuesday 25 November 2025

UK equities ended Tuesday higher as traders braced for Rachel Reeves’s make‑or‑break Autumn Budget and a pivotal Bank of England rate decision next month. With the FTSE 100 and FTSE 250 both rallying and sterling volatility spiking, tomorrow’s open (26 November) is set to be dominated by fiscal, monetary and consumer‑demand stories rather than company‑specific news. ^[1]

Below is a concise pre‑open playbook based on today’s (25 November) news and data.

Key takeaways at a glance

FTSE 100 closed up about 0.8%, FTSE 250 up 1% on Tuesday as financials, consumer staples, construction and industrial metals led gains ahead of Wednesday’s Budget; non‑life insurers and Compass Group underperformed. ^[2]
Autumn Budget 2025 lands at around 12:30 (UK time) on Wednesday, with leaks and briefings pointing to frozen income‑tax thresholds, a cut to the cash ISA limit, property and EV taxes, and targeted cost‑of‑living measures rather than broad giveaways. ^[3]
Bank Rate is still 4.0%, but markets are pricing an ~80–90% chance of a 25 bp cut on 18 December after inflation eased to 3.6% in October and growth slowed. ^[4]
UK retail sentiment has fallen at the steepest pace in 17 years, with the CBI’s Distributive Trades Survey showing confidence tumbling and November sales judged “poor” ahead of the Budget. ^[5]
Sterling is hovering near $1.31 but short‑dated FX options are the priciest in months, and 10‑year gilt yields around 4.5% reflect heavy positioning for a December BoE cut and a potentially tax‑heavy Budget. ^[6]
Global risk sentiment is positive: stocks in Europe and the US are on a three‑day winning streak on growing Fed cut expectations and tentative Ukraine peace prospects, while oil drifts and gold holds firm. ^[7]
Minimum wage policy has just tightened the labour‑cost backdrop: the government has approved a 4.1% rise in the UK’s main minimum wage to £12.71 from April 2026, triggering warnings from hospitality that prices will rise. ^[8]
Gas prices in Europe, including the UK, are subdued, with Dutch and British wholesale gas near the lowest levels since mid‑2024 thanks to strong supply and warm weather – a modest relief for energy‑intensive UK industry. ^[9]
Tomorrow’s UK corporate diary is mid‑cap heavy, with results from names such as Auction Technology Group, Helical, Impax AM, Iomart and Speedy Hire likely to drive stock‑specific moves in the FTSE 250 and small caps. ^[10]

Now let’s unpack what all of this means before the London Stock Exchange opens on Wednesday.

1. How UK equities closed on 25 November

The final session before the Budget saw a clear “positioning” rally rather than a classic risk‑on surge.

The FTSE 100 gained about 0.8%, while the more domestically focused FTSE 250 rose roughly 1%, its best day in over a month. Financials, consumer staples, personal goods, construction and materials, and industrial metals all advanced. ^[11]
Burberry jumped nearly 5%, personal goods stocks collectively rose close to 4%, and UK brickmaker Ibstockclimbed almost 6%, highlighting renewed interest in UK cyclicals and construction. ^[12]
Retailers gained about 2.4% overall, aided by a 5.9% surge in Kingfisher, whose upbeat trading update and upgraded profit outlook stood out against an otherwise gloomy consumer backdrop. ^[13]
Banks outperformed after reports suggested the sector would avoid a windfall tax raid in the Budget. Shares in Lloyds, Barclays and NatWest rose between roughly 2–4% as investors priced out some of the worst‑case tax scenarios. ^[14]
On the downside, non‑life insurers fell around 2.7%, dragged lower by a double‑digit drop in Beazley following a cut to its premium‑growth outlook, while Compass Group slipped after flagging slower revenue growth in 2026 and Domino’s Pizza Group weakened on another senior departure. ^[15]

The sector pattern tells you a lot about how traders are thinking: rotate into domestic cyclicals and banks that might benefit from targeted growth measures and avoid areas exposed to regulatory or profit‑warning risk.

2. Autumn Budget 2025: the central event for UK assets

Chancellor Rachel Reeves will deliver the Autumn Budget on Wednesday 26 November around 12:30pm UK time, with the Office for Budget Responsibility publishing revised economic and fiscal forecasts at the same time. ^[16]

The fiscal backdrop

The House of Commons Library notes that UK GDP has been growing at about 1.5% annually since mid‑2024, but growth has slowed through 2025 and remains weak per head. ^[17]
A separate background briefing stresses that Reeves is trying to cut NHS waiting lists, cut the national debt and cut the cost of living without breaching strict fiscal rules. ^[18]
Commentators estimate a spending and revenue gap of £20–30bn, with some analysis suggesting the government may ultimately need around £40bn in tax rises and spending cuts to build a durable buffer under its rules. ^[19]

That mix – tight fiscal headroom, slowing growth and political promises not to raise headline income‑tax or VAT rates – is driving the “hokey cokey Budget” of leaks, trial balloons and reversals cited by the Speaker, Sir Lindsay Hoyle. ^[20]

Measures markets are watching

Based on today’s press coverage and official briefings, investors heading into tomorrow’s open will focus on a few recurring themes: ^[21]

Stealth income‑tax hikes rather than headline rate rises
- Plans for an outright increase in income‑tax rates appear to have been dropped. Instead, Reeves is widely expected to extend the freeze on income‑tax thresholds (and potentially National Insurance thresholds) for at least two more years from April, raising billions via “fiscal drag” as pay packets grow.
Cash ISA and savings changes
- Multiple reports suggest a cut in the annual cash ISA limit from £20,000 to around £12,000, nudging more savings into risk assets and potentially boosting flows into UK equities and corporate bonds – a key point for brokers, asset managers and platforms.
Property and “mansion tax”‑style measures
- The Guardian and others report that Reeves is poised to revalue the top three council‑tax bands and introduce higher charges on homes worth over £2m, amounting to a de facto “mansion tax”. The Treasury could also revisit inheritance‑tax rules and caps on lifetime gifting. ^[22]
Targeted cost‑of‑living support
- Expected measures include frozen regulated rail fares, a continued freeze in fuel duty, and potential changes to energy levies (for example, moving green and social charges off household electricity bills and into general taxation). ^[23]
Sector‑specific taxes and incentives
- A 3p‑per‑mile tax on electric‑vehicle drivers, more generous EV purchase grants and charging‑infrastructure support, an expanded sugar levy covering milkshakes and bottled lattes, and a potential tourism or hotel tax for local authorities are all being flagged. Gambling and private‑hire transport levies are also on the watch list. ^[24]

For equity markets, what matters is not just the headline tax take, but which sectors end up on the hook and whether the Budget looks coherent enough to reassure gilt investors and the ratings agencies.

3. Domestic macro backdrop: slowing growth, sticky inflation, rich wages

The latest Economic Indicators briefing for the UK, published today by the House of Commons Library, paints a picture of a low‑growth, still‑inflationary, but cooling economy: ^[25]

GDP grew just 0.1% in Q3 2025 compared with the previous quarter; the economy is only modestly above pre‑pandemic levels once you adjust for population.
CPI inflation is 3.6% in October, down from 3.8% but still well above the Bank of England’s 2% target.
Bank Rate has been held at 4.0% since early November after a cumulative 1.25 percentage points of cuts since 2024. ^[26]
Average wages (ex. bonuses) are 4.6% higher than a year ago, meaning real pay is only slightly positive once inflation is accounted for.
Unemployment has climbed to 5.0% – its highest level since 2021 – and business surveys show weaker hiring intentions. ^[27]

A Reuters poll of economists last week found nearly 80% expect the Bank of England to cut rates by 25 bps to 3.75% on 18 December, with a follow‑up cut in early 2026 now seen as likely. ^[28]

For equity investors, the combination of slowing growth but easing inflation and approaching rate cuts is classic “late‑cycle balancing act” territory: it can be supportive for duration‑sensitive sectors (utilities, infrastructure, property) but leaves cyclical earnings vulnerable if the slowdown deepens.

4. Consumers under pressure: retail sentiment at a 17‑year low

Despite Tuesday’s rally in retailers, the underlying data remains grim:

The CBI’s quarterly Distributive Trades Survey shows retail sentiment falling at its sharpest rate in 17 years, with the business‑situation measure plunging to –35 from –10. ^[29]
Respondents judged November sales as “poor” for the time of year, and still expect sales to fall again in December, albeit slightly less severely. ^[30]
A separate Reuters piece last week highlighted a 1.1% fall in retail sales volumes in October and sliding household‑confidence indices, underlining the squeeze on discretionary spending. ^[31]

The picture is nuanced:

On the positive side, Kingfisher’s Q3 update shows UK DIY spending holding up, with like‑for‑like sales in the UK and Ireland up 3% and company guidance raised. ^[32]
On the negative side, the industry‑wide surveys indicate that many retailers are delaying investment and hiring, and expect trading to remain tough into the New Year. ^[33]

Tomorrow morning, expect investors to keep favouring retail names that have strong balance sheets, market‑share gains or essential‑goods exposure, while remaining cautious on marginal, highly leveraged or fashion‑sensitive plays.

5. Sterling, gilts and volatility: calm surface, choppy undercurrents

Pound and FX options

Sterling has been remarkably resilient into the Budget:

GBP/USD is trading close to 1.31, having risen nearly 5% so far this year. ^[34]
The Finimize newsroom notes that sterling has just logged a fourth straight daily gain even as traders scramble for short‑dated options protection. ^[35]
Reuters and TradingView data show overnight implied volatility in euro/sterling options spiking to its highest level since April, when global tariff headlines last roiled FX markets. ^[36]

In other words, the spot price of the pound looks calm, but the insurance premium around it is not. That’s a classic sign that traders see tail‑risk around the Budget – both to the upside (relief rally if the plan is seen as credible) and the downside (if tax hikes are larger or more growth‑negative than expected).

Gilts and rate expectations

FXStreet reports 10‑year gilt yields around 4.54%, with markets assigning roughly an 80% probability of a 25 bp cut in December, helped by October inflation easing to 3.6%. ^[37]
The Bank of England’s own communication confirms Bank Rate is still 4% after being held in the November meeting, following a narrow 5–4 vote. ^[38]

Bond investors will scrutinise the Budget not just for the headline deficit path, but for whether Reeves can convince markets that medium‑term growth will improve enough to stabilise debt. A coherent plan could narrow gilt spreads and support bank and housing‑related stocks; a messy one risks pushing yields higher and re‑awakening “mini‑Budget” ghosts.

6. Global backdrop: Fed cuts, weak US data and Ukraine peace hopes

The UK open tomorrow will also be shaped by global moves:

Global equities are on track for a third straight day of gains as investors bet the US Federal Reserve will cut rates again in December, sending Treasury yields lower and supporting risk assets worldwide. ^[39]
US data released Tuesday show retail sales rising less than expected and signs of labour‑market softness, reinforcing the case for easier policy. ^[40]
In Europe, the STOXX 600 climbed about 0.9%, with Germany’s DAX and France’s CAC up around 1% and 0.8% respectively. Sentiment has been buoyed by prospects of a peace framework in Ukraine and expectations of a US rate cut. ^[41]
European construction and materials stocks led gains; the European defence sector recovered slightly after a sharp sell‑off last week on peace hopes, a dynamic that remains important for London‑listed defence names like BAE Systems. ^[42]

On commodities:

Brent crude is trading in the low‑$60s per barrel, modestly lower on the day on concerns about a supply glut and cautious sentiment ahead of the Fed. ^[43]
Gold is holding near record highs above $4,100 an ounce as markets price an 80–85% chance of a Fed cut next month, offering support to precious‑metal miners and diversified miners alike. ^[44]
European gas prices, including the UK benchmark, remain range‑bound but low, thanks to abundant LNG flows, stable Norwegian supply, relatively warm weather and talk of a Ukraine ceasefire. ^[45]

For the FTSE 100, which is still heavy on energy, miners and global earners, this mix – softening oil, firm gold, low gas prices and a weaker dollar – is broadly supportive, though individual companies will respond differently.

7. Labour market and wages: minimum wage hike adds to cost pressures

The government has just approved a 4.1% increase in the main minimum wage (National Living Wage) to £12.71 an hour from April 2026, with even larger percentage rises for younger workers and apprentices. ^[46]

Key points:

The hike will affect around 2.4 million workers aged 21+ and another 300,000 younger workers and apprentices, according to government estimates. ^[47]
Trade body UKHospitality warns that many businesses are “taxed out” and that the additional wage bill – around £1.4bn for hospitality alone – will largely be passed on to consumers, “ultimately fuelling inflation”. ^[48]
With inflation still at 3.6% and productivity weak, several Bank of England policymakers see wage growth above ~3% as a risk to meeting the inflation target by mid‑2027. ^[49]

Investors will be thinking about margin pressure in labour‑intensive sectors – hospitality, retail, care, support services – versus the demand boost from higher pay at the bottom of the income distribution.

8. Corporate diary for Wednesday 26 November 2025

While the Budget will dominate the macro narrative, tomorrow’s micro newsflow is concentrated in mid‑caps and smaller companies. According to the latest UK earnings calendar: ^[50]

Scheduled results and trading updates include:

Auction Technology Group – full‑year results (online marketplaces and auction technology; sensitive to digital‑commerce spend).
Cake Box Holdings – half‑year results (UK franchised food retailer).
Helical – half‑year results (London‑focused property developer and investor, giving fresh read‑through on commercial property valuations).
Hill & Smith – trading statement (infrastructure and galvanizing products; important for UK capex and construction sentiment).
Impax Asset Management – full‑year results (specialist sustainable‑investment manager; watch for flows and fee margins).
Iomart Group – half‑year results (cloud‑hosting and managed services).
Speedy Hire – half‑year results (equipment hire, cyclical bellwether for construction and industrial activity).

These aren’t FTSE‑100 heavyweights, but they can move the FTSE 250 and sector peers, and provide bottom‑up confirmation or contradiction of the top‑down macro narrative on investment, construction and demand.

9. Sectors to watch at the UK open

Based on today’s news flow, here’s where attention is likely to cluster when markets open tomorrow:

1. Banks and financials

Benefiting from reports that they will avoid a new windfall tax, but still exposed to the overall tax‑and‑growth mix. ^[51]
If the Budget is seen as credible and market‑friendly, gilt yields could ease further and bank valuations may see a relief bounce, as some analysts suggest. ^[52]

2. Domestic consumer & retail

Kingfisher’s upgraded outlook shows that well‑run retailers can still grow in this environment, but the CBI survey and October data confirm that the average retailer is under real pressure. ^[53]
Wage hikes and potential sugar, gambling and tourism taxes make this a complex sector: there’s a tug‑of‑war between higher disposable incomes at the bottom and rising input and regulatory costs.

3. Property, housebuilders and REITs

Watch for reaction to any council‑tax revaluation and “mansion tax”‑type measures, plus tweaks to inheritance‑tax treatment of property. ^[54]
Lower gas and power prices, together with potential BoE rate cuts, are modest positives for property yields and affordability, but down‑valuations and rising unemployment are headwinds. ^[55]

4. Green energy, EV and transport

Possible 3p‑per‑mile tax on EVs, larger EV purchase grants, charging‑infrastructure spending and a continued freeze in fuel duty put transport, autos and charging‑infrastructure plays in focus. ^[56]

5. Energy, miners and gold‑linked stocks

Soft oil, firm gold and subdued European gas prices create an unusual backdrop: oil majors may face mild price‑pressure headwinds, while gold‑exposed miners and energy‑intensive industrials could benefit. ^[57]

10. What this all means before the opening bell

Going into Wednesday’s UK open:

Positioning is cautiously optimistic – UK equities have rallied into the event, sovereign yields are off their highs and sterling is firm, but options markets and sentiment surveys scream “nervous”. ^[58]
The Budget is the key catalyst for gilts, sterling and domestically focused equities – especially banks, retailers, infrastructure and property. The combination of tax measures, spending choices and OBR forecasts will determine whether the reaction is a relief bounce or a renewed risk‑premium in UK assets. ^[59]
The Bank of England and Federal Reserve are the second and third pillars: if markets stay confident about December rate cuts on both sides of the Atlantic, risk appetite can stay supported even if the Budget is fiscally tough. ^[60]

For traders and investors, the practical takeaway before tomorrow’s open is simple:
map your exposure to UK fiscal policy, domestic demand and sterling, and be ready for volatility – especially around banks, consumer names and interest‑sensitive sectors – as the Autumn Budget lands.

This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Always do your own research or consult a regulated financial adviser before making investment decisions.