Financial markets rose slightly higher in the aftermath of Jeremy Hunt’s spring Budget as companies digested the introduction of a British Isa.
The chancellor’s reforms – including a 2p cut to national insurance – sprung few surprises upon participants, with the FTSE 100 closing out Wednesday (March 6) at 7,675, up 0.38 per cent.
The biggest boost to the stock market arrived in the form of a British Isa, which aims to boost flows into domestic companies from retail investors.
“After a consultation on its implementation I will introduce a brand new British Isa which will allow an additional £5,000 annual investment for UK equities with all the other tax advantages of other Isas,” said Hunt in the speech.
“This will be on top of existing Isas and will ensure UK savers can benefit from the most promising UK businesses as well as supporting those businesses with the capital to expand.”
Many of Hunt’s policies had been rumoured in advance, which can in part explain the FTSE 100’s muted reaction to the statement.
But both the FTSE 250 and Aim 100, two indices that are more exposed to British companies with high domestic revenues than their large-cap contemporary, enjoyed slightly bigger gains as a result.
The FTSE 250 closed at 19,467, up 1 per cent, and the Aim ended the day’s trading at 3,572, marking a 0.6 per cent increase.
Meanwhile, sterling also held firm, rising slightly to $1.27.
joseph.wilkins@ft.com
