Sharecast - At 0825 GMT, the FTSE 100 was down 0.1% at 7,485.70.
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.
The figures will heighten calls for Hunt to ease the tax burden on families, especially as decisions taken by he and Prime Minister Rishi Sunak to freeze income tax thresholds have pulled millions of people into higher tax brackets - a stealth measure known as fiscal drag.
Susannah Streeter, head of money and markets at Hargreaves Lansdown (LON:HRGV), said: "The latest government borrowing figures won’t pop the balloon of Jeremy Hunt’s expected tax-cut party on Wednesday, but it does squeeze his wiggle room a bit.
"Public sector net borrowing came in at £14.9 billion, higher than the OBR forecast by £1.2 billion. However, given that borrowing during the fiscal year to date is still almost £17 billion, he will feel he has the space to offer sweeteners.
"Although tax receipts are still flooding in at higher levels, as more people are nudged into higher bands, government spending overshot expectations in October. Debt interest payments were more painful than expected, coming in at a whopping £7.5 billion. This is the highest interest payable in any October since monthly records began."
In equity markets, Admiral (LON:ADML) pushed higher after a double upgrade to ‘buy’ from ‘sell’ at Citi, while Direct Line (LON:DLGD) rose as it reiterated its ‘buy’ rating on the shares.
CRH (LON:CRH) gained 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.
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 (LON:CPI) surged after announcing plans to shed 900 jobs by ramping up its cost-saving programme.
Electrical goods retailer AO World (LON:AO) was trading up 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.
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.
Office, industrial and workshop space provider Workspace (LON:WKP) was in the red after saying it swung to a big loss in the first half of the year as a result of a £178m reduction in valuations.
Market Movers
FTSE 100 (UKX) 7,485.70 -0.14%
FTSE 250 (MCX) 18,604.45 0.03%
techMARK (TASX) 4,096.87 -0.04%
FTSE 100 - Risers
Admiral Group (LON:ADML) (ADM) 2,693.00p 2.71%
Coca-Cola (NYSE:KO) HBC AG (CDI) (CCH) 2,133.00p 2.11%
CRH (CDI) (CRH) 4,801.00p 1.22%
Fresnillo (LON:FRES) 550.80p 1.18%
Endeavour Mining (EDV (LON:EDV)) 1,732.00p 1.17%
Ashtead Group (LON:AHT) 4,747.00p 1.13%
Marks & Spencer Group (MKS (LON:MKS)) 255.10p 1.03%
Antofagasta (ANTO) 1,422.00p 0.99%
Anglo American (JO:AGLJ) (AAL) 2,275.50p 0.98%
Airtel Africa (AAF) 114.00p 0.88%
FTSE 100 - Fallers
Compass Group (LON:CPG) 2,023.00p -1.32%
Ocado Group (LON:OCDO) 588.00p -1.31%
HSBC Holdings (LON:HSBA) 610.60p -0.91%
Standard Chartered (LON:STAN) 659.20p -0.81%
Centrica (LON:CNA) 149.70p -0.80%
DCC (CDI) (LON:DCC) 5,232.00p -0.76%
Shell (LON:RDSa) (SHEL) 2,621.00p -0.76%
Entain (LON:ENT) 853.40p -0.68%
Smurfit Kappa Group (CDI) (LON:SKG) 2,682.00p -0.67%
BAE Systems (LON:BAES) (BA.) 1,054.00p -0.66%
FTSE 250 - Risers
Octopus Renewables Infrastructure Trust (ORIT) 94.90p 3.15%
Essentra (LON:ESNT) 162.60p 2.52%
Intermediate Capital Group (LON:ICP) 1,569.50p 2.45%
WH Smith (LON:SMWH) 1,349.00p 2.20%
Auction Technology Group (ATG) 614.00p 2.16%
Cranswick (CWK) 3,714.00p 1.92%
Indivior (INDV) 1,375.00p 1.85%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 275.50p 1.85%
Big Yellow Group (LON:BYG) 1,093.00p 1.77%
Aston Martin Lagonda Global Holdings (AML) 234.20p 1.74%
FTSE 250 - Fallers
Primary Health Properties (PHP) 95.55p -3.87%
Softcat (SCT) 1,254.00p -3.69%
Derwent London (DLN) 2,164.00p -2.35%
Savills (LON:SVS) 860.00p -2.27%
UK Commercial Property Reit Limited (UKCM) 57.20p -2.22%
Baltic Classifieds Group (BCG) 206.00p -1.90%
FDM Group (Holdings) (LON:FDM) 405.00p -1.70%
Merchants Trust (MRCH) 520.00p -1.52%
Great Portland Estates (GPE) 415.80p -1.47%
Harbour Energy (LON:HBR) 231.00p -1.24%