A surge in defence shares yesterday helped lift the FTSE 100 to another record close.
BAE Systems and Babcock were among those businesses gaining ground as Keir Starmer said Britain must ‘go faster’ in increasing military spending.
That helped lift the FTSE by 27.3 points to 10,473.7, an all-time closing high.
The Prime Minister said yesterday the defence budget must continue to be ramped up, even if there is a peace deal for Ukraine.
‘That will not extinguish the Russian threat, and we need to be alert to that – so we need to step up,’ Starmer said.
‘That means on defence spending, we need to go faster.’
High alert: Britain has already committed to increasing defence spending to 2.5% of gross domestic product by next year, with an ambition to rise to 3% in the next Parliament
Britain has already committed to increasing defence spending to 2.5 per cent of gross domestic product by next year, with an ambition to raise this to 3 per cent in the next Parliament.
Reports suggest Starmer is considering bringing forward the 3 per cent goal to 2029.
Shares in BAE, Britain’s largest defence contractor, climbed 3.1 per cent, submarine firm Babcock gained 3.6 per cent, and engine maker Rolls-Royce rose 2.1 per cent.
Also contributing to yesterday’s FTSE rally was a sharp rise for banking giant NatWest, which climbed 4.8 per cent.
DIY INVESTING PLATFORMS
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.