Oct 14 (Reuters) - UK stocks rose on Wednesday, lifted by consumer staples and defence stocks, as investors weighed a report that Finance Minister John Healey would avoid more borrowing in the budget later this month.
The blue-chip FTSE 100 index rose 0.47% to 10,700.08 points by 10:06 AM GMT, while the midcap FTSE 250 climbed 0.8%.
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UK's Finance Minister John Healey is expected to fund new initiatives through higher taxes or spending cuts rather than more borrowing, the FT reported on Wednesday
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Separately, the IMF backed Britain's fiscal strategy, urging it to "stay the course" on deficit reduction, in contrast with other big economies that have little plan to reduce borrowing at a time of rising interest rates
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Meanwhile, the Bank of England Chief Economist Huw Pill said he is sceptical of market expectations for four rate hikes over the next year, despite growing inflation risks
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"The BOE's caution is well established, and given the weakness of the labor market, any hike would be framed as insurance," said Geoff YU, senior EMEA markets strategist at BNY
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Among consumer staple firms, Unilever and British American Tobacco gained 1% each, while spirits maker Diageo was up 1.6%
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Luxury fashion firm Burberry gained 2.9%, the most on the FTSE 100
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Big Yellow rose 5.8%, after activist investor Ancora called for a strategic review, saying the self-storage firm trades at an unjustified discount and could attract takeover interest
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Admiral slipped 1.5% after Peel Hunt cut its price target, warning the insurer's UK motor policy growth could slow as it raises rates to protect margins
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The broader non-life insurers slipped 1.1%
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Defence products maker Chemring climbed 3.8% after its Roke unit secured a partnership with a major US contractor, including an initial $16 million order and a minimum $170 million agreement over five years
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Investors await US inflation data later in the day, and UK August GDP figures on Thursday
Reporting by Darshan Kumar in Bengaluru; Editing by Vijay Kishore
Source: Reuters