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FTSE 100 down 0.1%. FTSE 250 falls 1.3%

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UK Gilts and pound dip

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Spectris ( SEPJF ) gains on KKR's acquisition bid

(Updates with market closing prices)

July 2 (Reuters) - British stocks fell on Wednesday,

part of a wider selloff of UK assets, amid rising concerns over

public finances after finance minister Rachel Reeves appeared in

tears in parliament following a series of costly U-turns on

welfare reforms.

The blue-chip FTSE 100 lost 0.1%, while the

domestically-focussed midcap index declined 1.3%, widely

underperforming European peers.

Concerns over Reeves surfaced after her distressed

appearance during a session of Prime Minister's Questions in the

House of Commons, a day after the government's welfare reform

bill was approved only after excluding measures that would have

led to fiscal savings in the long run.

Prime Minister Keir Starmer's press secretary tried to quell

rumours that Reeves might be replaced by saying "the chancellor

is going nowhere, she has the prime minister's full backing".

Asked about Reeves, a Treasury spokesperson said it was

a "personal matter" that had caused her distress.

Government bond prices fell by the most since October 2022

and the pound dropped by more than 1%.

"This is a sign of fiscal stress, which the UK has had to

weather before," said Kathleen Brooks, research director at XTB.

"The FTSE 100 is less exposed to domestic policies; however,

the FTSE 250 is down. With all the main UK asset classes under

stress today, the government needs to be careful about its next

steps."

Household goods and home construction index

declined 5.9%, leading sectoral losses. Bellway ( BLWYF ) fell 8%,

while Taylor Wimpley lost 4%

Industrial metals and mining stocks led gains

on the chart, tracking higher metal prices. Ferrexpo ( FEEXF )

rose 3.6% and Antofagasta ( ANFGF ) added 4.2%. Glencore ( GLCNF )

rose 5.1%, also aided by $1 billion share buyback starting.

Oil and gas companies gained 2%, with

heavyweights BP and Shell adding 3.2% and 1.7%

each.

Among individual stocks, Spectris ( SEPJF ) gained 4.3% after

the firm agreed to a debt-inclusive 4.7 billion pounds ($6.46

billion) offer from KKR over Advent's rival offer.

Bytes Technology slumped 31.5% to the bottom of the

midcap index after warning of lower operating profit for the

first half of 2026.

British fast food chain Greggs ( GGGSF ) fell 15.1% on saying

its annual operating profit could dip as a heatwave in the UK

discouraged customers from eating out.

Restaurant chain operator SSP Group ( SSPPF ) climbed to the

top of the midcap index, rising 7% after filing for Indian IPO

of airport lounge operator Travel Food Services.