London stocks fell sharply on Friday, sterling lost ground and borrowing costs rose amid reports that Chancellor Rachel Reeves has ditched plans to raise income tax at the upcoming Budget, while fading hopes of a US December rate cut and worries about an AI bubble also dented the mood.

London stocks had tumbled by midday on Friday, with sterling weaker amid reports that Chancellor Reeves will ditch plans to raise income tax at the upcoming Budget, while fading hopes of a US December rate cut and worries about an AI bubble also dented the mood.

London stocks fell sharply in early trade on Friday as hopes of a rate cut from the Federal Reserve faded, with gilts rising amid reports that Chancellor Reeves will ditch plans to raise income tax at the upcoming Budget.