The FTSE 100 rose, the pound strengthened, while gilt yields fell on Wednesday as financial markets gave a guarded welcome to Rachel Reeves’s Budget.

The Chancellor increased taxes by £26 billion to bolster her fiscal headroom against future economic shocks, a move welcomed by analysts, although questions remain.

Modupe Adegbembo, of Jefferies, said that at first glance, the Budget looks “robust”.

“However, credibility hinges on execution,” Ms Adegbembo said.

“Many measures are heavily back-loaded, with the deficit higher in the near-term and only narrowing in the final years of the forecast when the income tax threshold freeze takes effect.

“Recent policy reversals underscore the risk of further U-turns.

“Sustained confidence will depend on delivering these commitments.”

The FTSE 1

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