Banking stocks gave the FTSE 100 a lift on Tuesday amid reports that the sector will be spared a tax hit in Wednesday’s budget.

The FTSE 100 index closed up 74.62 points, 0.8%, at 9,609.53. The FTSE 250 ended up 205.83 points, 1.0%, at 21,617.41, and the AIM All-Share closed up 4.93 points, 0.7%, at 742.09.

High street lenders Lloyds Banking Group rose 3.8%, NatWest Group climbed 3.7% and Barclays advanced 2.4% as the Financial Times said Chancellor Rachel Reeves is unlikely to impose further tax hikes on UK banks, calming fears that they could be hit.

The Chancellor will deliver the budget statement to Parliament around 1230 GMT on Wednesday, after Prime Minister’s Questions.

The budget is likely to contain further hefty tax increases as Ms Reeves looks to cover the expected fis

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