Sharecast - The FTSE 100 was down 0.6% at 7,450.85.
Figures released earlier by the Office for National Statistics showed that public borrowing came in lower than expected in the first seven months of the financial year.
Between April and October, public sector net borrowing excluding banks was £98.3bn, up £22bn on the same period a year earlier but almost £17bn less than forecast by the Office for Budget Responsibility (OBR) in March.
Public sector net borrowing excluding banks was £14.9bn in October, the second-highest level of borrowing for the month since records began in 1993. It was also higher than consensus forecasts and the OBR's March estimate of £13.7bn.
Tax receipts were £2.7 billion higher year on year at £57.9bn.
Victoria Scholar, head of investment at Interactive Investor, said: "Although borrowing in October was only £3 billion less than in October 2020 at the height of the pandemic when billions were being spent on expensive programmes such as the furlough scheme, the government’s finances are in a much better position than the OBR had predicted earlier this year.
"This potentially provides some wiggle room for the Chancellor Jeremy Hunt when he makes his announcements tomorrow."
Market participants were also eyeing the latest FOMC minutes, due after the close, for any clues as to the Federal Reserve's next moves.
In equity markets, IAG (LON:ICAG) flew lower as the BA and Iberia owner set out its medium-term targets and pledged its commitment to resume paying dividends once its balance sheet and investment plans are "secure".
Softcat (LON:SCTS) was knocked lower by a downgrade to ‘underweight’ from ‘neutral’ at JPMorgan (NYSE:JPM) Cazenove. The bank said it sees a more challenging outlook versus peers not yet fully captured in the stock’s premium valuation.
Workspace (LON:WKP) fell after saying it swung to a big loss in the first half of the year as a result of a £178m reduction in valuations.
On the upside, Coca-Cola (NYSE:KO) HBC shot to the top of the FTSE 100 after announcing the launch of a share buyback programme that will see it return up to €400m to shareholders.
Admiral pushed higher after an upgrade to ‘buy’ from ‘sell’ at Citi, while Direct Line rose as it reiterated its ‘buy’ rating on the shares.
CRH (LON:CRH) advanced as it lifted its full-year earnings guidance and said it had agreed to buy a portfolio of cement and ready-mixed concrete assets in Texas from Martin Marietta Materials for $2.1bn.
Big Yellow gained after well-received first-half results released late on Monday.
Food producer Cranswick (LON:CWK) rallied after it said adjusted pre-tax profit for the year to the end of March was set to be at the upper end of market consensus as it posted a jump in interim profit and revenue.
Business process outsourcing group Capita surged after announcing plans to shed 900 jobs by ramping up its cost-saving programme.
Electrical goods retailer AO World (LON:AO) was also on the rise as it lifted its bottom-line guidance for the full year after swinging to a profit in the first half despite a reduction in sales.
Market Movers
FTSE 100 (UKX) 7,450.85 -0.61%
FTSE 250 (MCX) 18,502.96 -0.52%
techMARK (TASX) 4,079.67 -0.46%
FTSE 100 - Risers
Coca-Cola HBC AG (CDI) (CCH) 2,193.00p 4.98%
Admiral Group (LON:ADML) (ADM) 2,689.00p 2.56%
CRH (CDI) (CRH) 4,834.00p 1.92%
Taylor Wimpey (LON:TW.) 127.90p 1.35%
Barratt Developments (LON:BDEV) 492.60p 1.11%
National Grid (LON:NG.) 1,029.00p 0.83%
Imperial Brands (LON:IMB) 1,863.00p 0.81%
Sage Group (LON:SGE) 997.20p 0.79%
Reckitt Benckiser Group (RKT) 5,364.00p 0.68%
Pearson (LON:PSON) 962.00p 0.67%
FTSE 100 - Fallers
Ocado Group (LON:OCDO) 569.60p -4.40%
Entain (LON:ENT) 832.00p -3.17%
Centrica (LON:CNA) 147.70p -2.12%
International Consolidated Airlines Group (LON:ICAG) SA (CDI) (IAG) 160.15p -2.11%
Glencore (LON:GLEN) 456.30p -1.98%
Prudential (LON:PRU) 922.20p -1.89%
Flutter Entertainment (CDI) (FLTR) 12,845.00p -1.72%
Barclays (LON:BARC) 140.22p -1.63%
JD Sports Fashion (JD.) 136.85p -1.62%
Compass Group (LON:CPG) 2,019.00p -1.51%
FTSE 250 - Risers
Big Yellow Group (LON:BYG) 1,103.00p 2.70%
Direct Line Insurance Group (DLG) 188.65p 2.30%
Crest Nicholson Holdings (LON:CRST) 190.00p 1.93%
Intermediate Capital Group (LON:ICP) 1,560.50p 1.86%
Cranswick (CWK) 3,702.00p 1.59%
888 Holdings (DI) (LON:888) 81.35p 1.43%
QinetiQ Group (QQ.) 319.40p 1.33%
North Atlantic Smaller Companies Inv Trust (NAS) 3,940.00p 1.29%
GCP Infrastructure Investments Ltd (GCP) 71.00p 1.28%
NB Private Equity Partners Ltd. (NBPE) 1,640.00p 1.11%
FTSE 250 - Fallers
Workspace Group (WKP) 551.00p -6.61%
Savills (LON:SVS) 849.00p -3.52%
Drax Group (LON:DRX) 435.20p -3.33%
Ninety One (N91) 180.40p -3.11%
Softcat (SCT) 1,262.00p -3.07%
Dr. Martens (DOCS) 112.50p -2.85%
Harbour Energy (LON:HBR) 227.30p -2.82%
PureTech Health (PRTC) 166.00p -2.47%
Ceres Power Holdings (LON:CWR) 214.60p -2.45%
Liontrust Asset Management (LON:LIO) 590.00p -2.32%