UK stocks climb ahead of budget led by financials, consumer staples stocks

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FTSE 100 up 0.8%, FTSE 250 gain 1%

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Retailers' confidence drops to 17-year low before budget, survey shows

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Compass Group (CMPGF) falls on moderate 2026 revenue forecast

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Nov 25 (Reuters) - UK stocks climbed on Tuesday, boosted by gains in financials and consumer staples stocks ahead of Wednesday's budget that is expected to include significant tax measures. The blue-chip FTSE 100 closed up 0.8%. The FTSE 250 index of domestically oriented UK firms rose about 1%, logging its best day in over a month. Personal goods stocks led the sectoral gains, rising 3.9% with Burberry (BBRYF) up 4.7%. Construction and materials advanced 2.5%, with Ibstock (IBJHF) up 5.9%. Retailers added 2.4% helped by a 5.9% gain in Kingfisher after the home improvement retailer raised its annual profit forecast.

A survey showed British retailers reported the sharpest drop in confidence in 17 years and their sales fell again ahead of Wednesday's budget.

The government appears unlikely to raise income tax but is expected to target increases in several other levies in Wednesday's budget. Banks gained 1.5% after a Goldman Sachs note referred to a Financial Times report that the sector would be spared from taxes. Lloyds Banking (LYG) rose 3.8%, Barclays (BCS) added 2.4% and NatWest Group (NWG) climbed 3.7%. Industrial metal miners gained 1.2%, tracking higher copper prices. Anglo American added 1.6%. The travel and leisure sector recovered from early losses, and gained 0.9%. Wizz Air (WZZAF) rose 3.6%. EasyJet (EJTTF) fell 1.5% on winter sales concerns.

On the flip side, non-life insurers fell 2.7% after speciality insurer Beazley plunged 9.2% after the company cut its annual insurance written premiums forecast. Among other moves, Compass Group (CMPGF) shares fell 2.7% after the food catering firm reported that revenue growth will be moderate in 2026 due to lower inflation. Domino's Pizza Group lost 1.4% after CEO Andrew Rennie stepped down, marking another senior departure as the company shifts strategy to tackle weak sales and rising costs. Meanwhile, British government bonds rallied on Tuesday, a day before the budget. Data in the U.S. showed retail sales fell short of expectations in September, while a separate report showed producer prices rebounded in September. (Reporting by Utkarsh Tushar Hathi; Editing by Shreya Biswas and Ros Russell)