FTSE Reverses 2-Day Rout Posts a Gain on Calls for Increases in Defense Spending
Calls from Trump for Europe to spend more on defense have turned UK’s prime minister’s stance on military spending.
- FTSE up 0.76%
- Defense stocks lead rise in FTSE
- Lloyds take a hit in car loan miss-selling case
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The FTSE reversed a 2-day down trend on Monday, posting a gain of 0.76% thanks mainly to the talk of expanding defense spending in Europe. The UK Prime Minister stated that the country needed to do more for its defense against external threats.
Defense Stocks Lead the FTSE Higher
Aerospace and defense stocks were the lead gainers, with the sector index gaining 4.5% on Monday. BAE, a UK defense company, led the blue-chip FTSE by rising 9% as defense stocks across Europe rallied.
PM Keir Starmer stated that the UK was facing a generational change and that all of Europe needed to spend more on defense.
The EU Commissioner Ursula von der Leyen has proposed exempting defense spending from the government budget limits.
The change in direction on military spending comes after Trump and other White House officials called on European members of NATO to ramp up military expenditure.
FTSE Live Chart
Banks and Lenders Take a Hit in Suit Over Miss-Selling Car loans
The court case the banking industry is facing over miss-selling car loans may have put a dent in the banking sector’s performance. However, the FTSE as a whole is managing to keep its ground.
The UK Supreme Court ruled that Rachel Reeves, UK Treasury Minister, would have no say in a court case against banks and lenders regarding car loan miss-selling.
Lloyds was one of the banks most affected as it has a specific car loan business. The stock dropped nearly 2% after the news.
The news adds to the bank’s woes since it’s already facing a £1 billon tax bill related to a dispute over tax relief during the bank’s rescue of the bank HBOS during the 2008 crisis.
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