FTSE 100 Dips as GSK Warns of Lower Vaccine Sales Amid Anticipated UK Tax Hikes

The UK's FTSE 100 index saw a decline, influenced by GSK's forecast of reduced annual vaccine sales and anticipation of the government's first budget promising major tax hikes. While GSK's shares fell, the beverages and aerospace sectors also experienced notable impacts. Attention sharpens on the imminent fiscal announcements by Finance Minister Rachel Reeves.

The UK's benchmark FTSE 100 index experienced a decline on Wednesday, predominantly due to drops in healthcare shares following GSK's warning of decreased annual vaccine sales. Investors are keenly awaiting the current government's inaugural budget, which is anticipated to introduce the largest tax hikes seen in 30 years.

Britain's new Finance Minister, Rachel Reeves, is set to announce what could be the most significant tax increases in three decades as part of efforts to rejuvenate the country's struggling public services. This includes billions of pounds of additional borrowing to stimulate economic restructuring. Ahead of her announcement, the UK's 10-year bond yield fell to 4.264%.

GSK's 3.5% drop came after the drugmaker cautioned about reduced sales for its vaccines. This announcement negatively impacted the pharma and biotech sector. The beverages sector suffered the most, with a decline rooted in Diageo's slide following Campari's missed earnings expectations. Meanwhile, aerospace and defense stocks also decreased, while Glencore reported favorable trading profit forecasts despite decreased production volumes.

(With inputs from agencies.)