FTSE 100 closed at 7,052.62 on Wednesday, FTSE 250 at 17,562.42
Dow Jones closed at 30,273.87, S&P 500 at 3,783.28
Fitch has become the latest ratings agency to lower the credit outlook for British government debt to "negative" from "stable".
"The large and unfunded fiscal package announced as part of the new government's growth plan could lead to a significant increase in fiscal deficits over the medium term," Fitch said last night.
Fitch maintained its "AA-" credit rating for Britain, which is one notch lower than S&P's.
It comes after sterling fell to a record low against the US dollar last week and some British government bonds tumbled by the most in decades, forcing the Bank of England to step in to stabilise markets.
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The Treasury will impose an additional £21bn of income taxes despite Liz Truss's "tax-cutting" mini-Budget, a detailed analysis released on Thursday has revealed.
The average household will be £1,450 per year worse off as a result of the stealth raid, according to the Institute for Fiscal Studies (IFS) think tank.
The typical basic rate taxpayer will pay an added £500 in income tax and National Insurance per year by 2026 while higher rate earners are facing a £3,000 annual increase.
5 things to start your day
1) Mortgage rates soar past 6pc for first time in 14 years as Kwarteng summons bankers The Chancellor summoned bank chiefs to Downing Street after turmoil in the mortgage market triggered a wave of deals being pulled.
2) Treasury set for £21bn income tax boost despite mini-Budget cuts The average household will be £1,450 poorer per year as a result of the stealth raid, according to the Institute for Fiscal Studies.
3) Ad-free Google rival to launch in the UK Founder of Neeva claims Google is abusing its dominance of internet search engines.
4) Elon Musk’s free speech vision for Twitter at risk from Britain’s ‘purse-lipped puritans’ Anti-hate speech campaigners 'fear for a Musk-owned Twitter'
5) Ben Marlow: Ukrainian heroics are testing the strength of the oil cartel What these major territorial advances mean for Opec is yet to be determined.
What happened overnight
The dollar rose 1pc on the euro and 1.3pc on sterling overnight. All three main indexes on Wall Street ended in the red, though they managed to claw back most of their earlier losses thanks to a late rally.
Asian markets were mixed as this week's global rally ran out of juice: Tokyo, Singapore, Seoul, Taipei and Jakarta all rose again, but Hong Kong retreated after leaping almost 6pc higher on Wednesday. Sydney, Wellington and Manila were also slightly lower.
Coming up today
Economics: Construction PMI (UK), retail sales (EU), jobless claims (US), factory orders (Germany).
Corporate: Imperial Brands, Chemring, CMC Markets, Ferrexpo, R S Group (trading statements); N Brown (interims); Volution (full-year results).