The cautiousness, along with a retreat from gains earlier in the week, left the FTSE 100 down for the day by 24.35 points, or 0.33%, at 7253.27.
Shares in some of the pubs and hospitality sector enjoyed a boost from the Chancellor’s announcements, particularly around alcohol duty changes, but with the Office for Budget Responsibility (OBR) warning of inflation being at 4% for the next year, there was caution.
Joshua Mahony, senior markets analyst at IG, said: “With the OBR predicting 2021 growth of 6.5% (up from 4%), the UK economy is expected to return to pre-pandemic levels by the end of the year.
“However, while the economic outlook is looking up, the Chancellor’s push towards fiscal discipline could raise questions for a Bank of England that are predicted to raise rates next week.
“The idea of raising rates at the same time and fiscal tightening does signal a potential squeeze on an economy that is still getting back on its feet after a hugely damaging 19-months.”
In Europe, the German Dax and French Cac closed down 0.33% and 0.19% respectively.
The pound was up 0.14% against the dollar at 1.374 and up 0.12% against the euro to 1.184 when markets closed compared to the same point a day earlier.
In company news, it was the pubs groups that enjoyed the spoils from the Budget.
Mitchells and Butler closed up 14p at 260.6p, a rise of 5.7%, and Wetherspoon’s closed up 52p, or 5.27%, at 1,039p.
Both will benefit from alcohol duty changes and should also enjoy some of the latest business rates discounts announced at the Budget.
Elsewhere, GlaxoSmithKline (GSK) revealed turnover was ahead of expectations for the past quarter after strong trading its drugs and vaccine arms, up 5% to £9.1 billion.
It said pharmaceuticals sales lifted by 5.5% to £4.4 billion on the back of strong growth from new and speciality medicines and the group’s vaccines business saw sales rise by 7% to £2.2 billion for the period.
Shares closed up 7.6p at 1,441.8p.
Publisher Bloomsbury said sales and profits were up as customers snapped up Christmas presents early to avoid disruption.
Revenues were up 29% to £100.7 million for the six months to the end of August, sending shares up 15p, or 4.3%, to 367p.
Home improvement retailer Wickes said sales in the last three months fell slightly compared with a year ago, but were still 27% higher than the same period in 2019.
Shareholders reacted fearfully that the boom was over, with shares closing down 10.2p at 215.8p.
And On The Beach saw shares plunge 32.5p, or 9.6%, to 305p as bosses revealed they had seen “suppressed trading” due to the pandemic in the past six months.
The company only started selling holidays again in September after criticising the Government’s traffic light system.
The biggest risers on the FTSE 100 were Taylor Wimpey up 4.05p at 156.2p; Entain up 47p at 2,049p; SSE up 35p at 1,662p; Compass up 29.5p at 1,524p and Sainsbury’s up 5.1p at 306.5p.
The biggest fallers were Admiral down 168p at 2,879p; Fresnillo down 31p at 855p; Pearson down 18.6p at 607.2p; Aveva down 106p at 3,534p and Glencore down 9.8p at 360.1p.