Chancellor George Osborne delivered an autumn statement and spending review long on detail and politicking on Wednesday.
Most of the big proposals had been well-flagged and the overall impact on London’s stock market was limited, but the U-turn on tax credits and maintained spending on the police were already making the headlines.
The FTSE 100 was up around 60 points soon after George Osborne sat down, consolidating gains made earlier in the day.
Big risers after the speech were engine maker Rolls Royce (LON:RR.), which rose 20p, or 3.3%, to 607p with other defence stocks also higher as the government committed to spend 2% of national income on the sector.
New equipment for war-fighting military, new capabilities for special forces, new defences for cyberspace, and investments in remarkable intelligence agencies was promised.
“By 2020-21 the defence budget will rise from £34bn today to £40bn,” he said.
Elsewhere, small and medium sized businesses were given a boost as the chancellor agreed to extend its small business rate relief scheme for another year.
“Our overall review of business rates will report at the budget, but I am today helping 600,000 of our smallest businesses”, he said.
The news boosted small and medium enterprise software provider Sage (LON:SGE), which gained around 3% to 575p.
The big winners throughout the day remained the housebuilders, however, after policies due to be announced in the statement were released early this morning.
Osborne said he was doubling the housing budget to £2bn per year to deliver 400,000 affordable new homes by the end of the decade.
By contrast, estate agencies Foxtons (LON:FOXT) and Winkworths (LON:WINK) sank as the Chancellor raised stamp duty on second homes and buy-to-let properties by 3% in an effort to help first-time buyers.
On energy, the Chancellor said he is to double spending on research with a particular commitment to nuclear reactors.
He also backed the controversial shale gas industry, “by ensuring that communities benefit from a Shale Wealth Fund, which could be worth up to £1bn.”
It is hoped that this will soften local communities’ stances on the industry, which has largely been viewed as negative.
Infrastructure-related companies also ticked higher on the £61 bn commitment to boost Britain’s roads, railways and flood defences.