European markets were mixed on Tuesday afternoon in London, as UK public borrowing data was better than the Office for Budget Responsibility had expected.
The UK government borrowed another £31.7bn ($45bn) in April amid the continued fight against the worst of COVID-19.
It borrowed £15.6bn less than the same month in 2020, when the UK was still deep in its initial lockdown.
However, the borrowing is still the second highest since records began in 1993.
The German DAX (^GDAXI) was up 0.2% after the long weekend.
"At the budget, I set out the steps we are taking to keep the public finances on a sustainable footing by bringing debt under control over the medium term," said chancellor Rishi Sunak.
"But we also need to focus on driving a strong economy recovery from the pandemic. That is why the government is continuing a comprehensive package of support to help businesses and workers get back on their feet – and the evidence shows that our Plan for Jobs is working.”
“The FTSE 100 was struggling for direction like a drunkard in a blindfold on Tuesday morning, not unfairly given the continuing uncertainties over vaccines versus variants, the risks of inflation and the continuing volatility in the commodity and cryptocurrency markets,” said AJ Bell investment director Russ Mould.
“A relatively resilient jobs market has helped government borrowing come in a little lower than expected for April. The question longer term is if this means tax increases and spending cuts can be eased slightly from the current projections."
Watch: What is inflation and why is it important?
There were positive moves overnight in Asia following a Wall Street rally, with major indices ending the day strongly in the green. Markets got a boost from a combination of soothing comments from the Federal Reserve and efforts by China to nail down commodity prices.
The Fed said it expects price pressures to be transitory rather than lasting as the economy rebounds.
The tech-weighted Nasdaq (^IXIC) lost its early gains, trading flat while it was 0.5% higher earlier.
"Markets are now even more convinced that the Fed will stick to its current policy path no matter how shocking the inflation data is over the coming months," said Raffi Boyadjian, senior investment analyst at XM.
"The Fed’s renewed campaign to talk down the inflation threat just days before the core PCE price index is expected to show a jump in America’s most important inflation metric has dampened the chances of a big market overreaction to the data on Friday."
"Inflation is still a major concern among investors and traders while they are also keeping a close eye on cryptocurrencies," said Naeem Aslam, chief market analyst at AvaTrade. "If we look at the volatility index, it appears that traders are still favoring its price action as they are not fully sure about the risk-on trade."
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