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FTSE 100 up 0.9%, FTSE 250 up 1.2%

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Bonds rally, pound strengthens

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Banks gain, Homebuilders lose

(For a Reuters live blog on U.S., UK and European stock

markets, click LIVE/ or type LIVE/ in a news window)

By Utkarsh Hathi

Nov 26 (Reuters) - UK stocks climbed on Wednesday,

boosted by gains in financials and mining stocks, as finance

minister Rachel Reeves announced a big tax-raising budget.

The blue-chip FTSE 100 closed 0.9% higher, logging

its best day in two weeks. The domestically focused FTSE 250

climbed 1.2%, its best day in more than a month.

Reeves delivered a budget that will take more tax from

workers, people saving for a pension and from investors to give

herself more room for meeting her borrowing targets.

In a release

first reported by Reuters

, the Office for Budget Responsibility said the headroom now

stood at almost 22 billion pounds ($28.9 billion) in five years'

time.

UK 30-year gilt yields - more sensitive to

long-term fiscal concerns - fell 10.5 bps to 5.21%, in their

biggest one-day drop since April, suggesting investors were

largely comfortable with the budget plan.

"What the market is very much reacting to is the fact that

the Chancellor has increased her fiscal buffer... She has pretty

much doubled it and that's something that the market is really

latching onto and it's calming the bond market," said Fiona

Cincotta, senior market analyst at City Index.

Heavyweight banks advanced 2.1%, with

Standard Chartered ( SCBFF ) up 2.8%, while Barclays ( BCS )

added 3.2%, after the budget spared banks from fresh targeted

taxes.

Precious metal miners climbed 5.1% as

gold prices climbed to their highest in more than a week after

benign U.S. economic data reinforced expectations of a Federal

Reserve interest rate cut next month.

Fresnillo rose 5.2%, Endeavour Mining ( EDVMF ) added

4.8%, while Hochschild gained 6%.

Industrial miners gained about 1.5%, tracking

higher copper prices. Anglo American and Antofagasta ( ANFGF )

rose 3.2% and 2.1%, respectively.

Homebuilders dropped 1% after Wednesday's

budget increased tax on high-value properties. Berkeley group

fell 2.9%.

Also in focus was renewed talk of a Russia-Ukraine peace

deal after Ukrainian President Volodymyr Zelenskiy signalled

readiness to push forward a U.S.-backed framework to end the

war. Aerospace and defence stocks gained with BAE

Systems up 1.4%.

Beverages fell 0.7%, with Diageo ( DEO )

losing 1%.