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5pm: Stock pummelled

The budget was even more expansionary than expected, reinforcing concerns over the impact on government borrowing with the deficit set to surge over the next year.

UK bonds fell sharply with markets also close to pricing in a further sharp rise in the interest rate at the November meeting.

The FTSE 100 index fell below 7,000 and at the close was down 140.92 points (1.97%) at 7,018.60. The pound slumped to fresh 37-year lows against the dollar to $1.105, below $1.10 for the first time since 1985.

8.05am: London lower

The FTSE 100 defied expectations of a rise and opened 6 points lower at 7,153.23.

7am: Made.com review and job cuts

Online furniture retailer Made.com is to cut its workforce as it looks at a number of options including a sale of the business amid declining consumer expenditure and supply chain problems.

The board considered raising new capital to strengthen the balance sheet but because of uncertain trading conditions, it does not believe it can raise sufficient equity from public market investors.

A strategic review will involve a broad range of options including additional funding, such as debt financing, or investment by a business partner, or by the sale of the group or its assets.

The stock debuted in London in June last year at 200p per share, but closed on Thursday at 5.75p.

Global markets

The FTSE 100 was expected to open higher, looking to end the week on a brighter note after heavy losses yesterday, with attention in London focused on the mini budget due at 9.30am.

Wall Street stocks closed weaker as investors digested the Federal Reserve’s decision to hike interest rates by 75 basis points and indicated that more tough action was to come.

At the close, the Dow Jones Industrial Average was down 0.35%, as the S&P 500 lost 0.84% and the Nasdaq Composite was off 1.37%.

News that the Fed was expecting to raise its year-end rate to 4.4% this year created concern that the US economy may tip into recession.

On the macro front, Americans filed first-time unemployment claims at an accelerated pace in the week ended 17 September, according to the Department of Labor.