John Healey's first Budget passed without a market wobble, as the tax rises in the firing line proved less painful than feared.
Neil Wilson, strategist at Saxo UK, called it a "do-nothing Budget" and said it pointed to an early election in 2027.
Fiscal headroom, the cushion against the Chancellor's borrowing rules, was £15 billion, at the low end of what markets will tolerate, but gilts barely moved.
The 10-year yield slipped from 5.35% to 5.32%, while sterling recovered slightly to $1.33 after hitting a two-week low before the speech.
Bond market relieved
James Bilson, global fixed income strategist at Schroders, said the Budget was "uneventful", which was exactly what bond investors wanted.
He pointed to the absence of large unfunded giveaways, and said the package was broadly consistent with market expectations.
Bookies and banks
Machine gaming duty rises from 20% to 25%, less than the industry feared.
Ladbrokes owner Entain jumped 6% and Rank gained 11% to lead the FTSE 250.
The bank surcharge rises from 3% to 6%, also better than expected.
Lloyds, NatWest, Shawbrook and Barclays rose 2% to 4%.
Standard Chartered gained 4%, mainly on its earnings, while HSBC lagged after yesterday's results miss.
Defence and housebuilders
Healey plugged a £4.7 billion funding gap in defence investment, but pushed detail on the 3% NATO spending target to next year's spending review.
Rolls-Royce rose 1%, and BAE Systems recovered earlier losses.
Housebuilders edged up 1% to 2% on extra detail on the Your First Home scheme.
Vistry briefly rose 4% on £1.5 billion for affordable housing, before the market remembered its plan to cut completions by a third.
The numbers
The FTSE 100 was up 10.91 points, or 0.1%, at 10,697.45, led by the banks.
It traded between 10,643.33 and 10,722.76 during the session.
The FTSE 250 was down 69.73 points, or 0.28%, at 24,646.64.
Borrowing is forecast at 4.2% of GDP this year, falling to 1.8% by 2030-31.
The Office for Budget Responsibility expects growth of 1.2% this year and 1.0% next, down from 1.6% forecast in March.
