© Provided by City AM The FTSE 100 pared some of its gains after today's Budget, as investors reacted to a combination of further business support and future tax hikes.
Having been up 1.2 per cent by the mid-morning, London's blue chip bourse fell back to 6,639 points, up 0.4 per cent.
Read more: Budget 2021: Live news and updates
Despite a raft of new measures designed to keep the economy going until the end of the pandemic, including an extension to the furlough scheme, Sunak pledged to raise the rate of corporation tax from 19 to 25 per cent for the biggest companies from 2023.
Immediately off the back of Sunak's speech the FTSE's heavyweight stocks, including a raft of bankers and builders, showed impressive gains.
Housebuilding trio Persimmon, Taylor Wimpey, and Barratt were all up over 5.0 per cent after the Chancellor confirmed a much-trailed extension to Stamp Duty relief.
In addition, banking stocks reacted positively to the Budget, with Barclays rising 3.6 per cent, Lloyds up 2.1 per cent, NatWest gaining 1.7 per cent and HSBC increasing 1.6 per cent.
Better than expected forecasts for the UK economy's recovery lay behind the boost, said AJ Bell investment director Russ Mould.
These also propped up sterling, which held onto its gains against both the dollar and the euro. Cable is currently sitting at $1.39.
The extension of furlough, as well as a continuation of a 5 per cent reduced rate of VAT until September helped hospitality and leisure firms.
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Airlines group IAG is up 5.4 per cent, while Premier Inn owner Whitbread rose 5.1 per cent.
However, the knowledge that tax rises are now on the horizon did limit gains.
Simon Harvey, senior analyst at Monex, said: "The positive impact the spending pledges has on growth has been somewhat offset by concerns of fiscal consolidation later down the line.
While we didn't expect Chancellor Sunak to drop the fiscal anchor at today's budget given the fluid nature of the economic recovery at present, the rise in the projected deficit from £164bn to £234bn has stoked the bond market's concerns over the financing of this debt at a time when yields are rising.
"Today's budget hinted at the consolidation efforts expected in the near future, likely in the Autumn budget, with the highly talked about corporation tax increase in April 2023 to 25% being announced - this is earlier and larger than most expected."
Read more: Spac revolution set to unlock Big Bang 2.0 for the City of London
Today's Budget comes alongside a review by Lord Jonathan Hill calling for a range of deregulatory measures to ensure the UK remains an attractive place for investment.
The landmark report, which is believed to have been well received in Number 10 and 11, calls for regulators to allow Spacs to list in London and ease a range of share listing restrictions.
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