If you want,you can Cast numeric as varchar.this can use SQl ‘like’.If you only aim is to achieve,
UPDATE TABLE2
SET prefixNo= left(ContactNo, 3)
Is a good choice.But to ensure that your data format
like this
UPDATE TABLE2 SET
prefixNo=B.prefixNo FROM TABLE1 B WHERE contactno LIKE CAST( B.prefixNo AS VARCHAR)+'%'