UK shares fall amid domestic fiscal worries, looming tariff deadline
As of 0910 GMT, the benchmark FTSE 100 (.FTSE), opens new tab was down 0.3%, while the domestically-focussed FTSE 250 (.FTMC), opens new tab lost 0.7%. Both indexes are set to end the week lower.
The midcap index ended the second quarter on Monday by logging its largest quarterly gain in over four years, but has since come under pressure as U-turns on welfare reforms have blown a hole in Finance Minister Rachel Reeves' budget plans.
The reform bill passed on Tuesday, but with limited cost-reduction measures from the initially expected 5 billion pounds ($6.83 billion) in savings, leading to concerns of raised taxes or spending cuts elsewhere.
S&P Global said the inability to make modest cuts to welfare spending showed the government's "limited budgetary room for manoeuvre."
Among sectors, homebuilder stocks (.FTNMX402020), opens new tab led sectoral losses on Friday, dropping 2% after MJ Gleeson (GLEG.L), opens new tab warned of profit being at the lower end of market expectations for fiscal 2026 due to subdued demand.
The group slumped 6.7% and was the top decliner on the smallcap index.
Larger peers Vistry (VTYV.L), opens new tab, Persimmon (PSN.L), opens new tab and Taylor Wimpey (TW.L), opens new tab fell 3.1%, 1.6% and 1.5%, respectively.
Industrial metal stocks (.FTNMX551020), opens new tab fell, tracking lower metal prices. Anglo American (AAL.L), opens new tab, Antofagasta (ANTO.L), opens new tab and Glencore (GLEN.L), opens new tab slipped over 1% each. Atalya lost 3%.
On the economic data front, S&P's UK construction PMI showed Britain's construction industry downturn reduced in June with homebuilding growth, but commercial building tumbled due to economic worries.
Elsewhere, global markets were subdued after U.S. President Donald Trump said Washington will start sending letters with tariff rates to countries on Friday.
Britain remains one of the only countries to have cinched a deal with the U.S.
Among individual stocks, greeting card and gifting retailer Moonpig (MOONM.L), opens new tab fell nearly 6% to the bottom of the midcap index after a rating downgrade by Deutsche Bank.
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