You 'jump' is caused by the 1px height of the border, that make your li move
You might use
.navigation li:hover {
border-color: #ccc;
}
.navigation li {
border: 1px solid #<parentBackgroundColor/transparent>;
}
instead. This way, the border is here from the beginning, so no jump on hovering, and it's invisible, since it's the same color of the parent container or transparent.
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