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Banks rise on Budget boost

Wed close: Barclays rallied 2% after CEO Antony Jenkins was forced out, giving the market a lift, but housebuilders took a hit from reforms introduced by George Osborne.

The banks were boosted after Mr Osborne said he would reduce a levy charged on the assets of financial institutions and replace with it with a surcharge on bank profits.

Aviva was the highest riser just before the close after the Budget saw the chancellor reduce the tax advantages of buy-to-let by capping mortgage interest cost relief at the basic rate, which some analysts argued may be positive for retail investment companies.

The FTSE 100 closed up 0.9% at 6,490.70 just off its lowest close since mid-January in the previous session.

But the Chancellor’s tightening of “non-dom” tax rules hit residential stock. Barratt, Persimmon and Taylor Wimpey dropped between 5.7 and 4.7 percent, making up the top three FTSE 100 losers.

However, the budget cuts in corporation tax and raising income tax thresholds left traders believing it was a broadly business friendly budget. Britain’s biggest defence contractor BAE Systems added 3.5% after the government said it would commit to NATO’s defence spending pledge for the next five years.

 

Euro zone members have given Greece until the end of the week to come up with a proposal for sweeping reforms in return for loans that will keep the country from crashing out of Europe’s currency bloc and into economic ruin.

 

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