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Market lifted by response to Chancellor

London Stock ExchangeThe London market reacted positively to news that George Osborne had found an extra few billion pounds, as the Office for Budget Responsibility (OBR)’s more optimistic assessment of future tax revenues allowed the Chancellor to scrap some of his most controversial cuts.

The FTSE 100 closed around 1% higher or 60.4 point to close at 6,337.64 following an Autumn Statement which delivered slightly less pain to the public sector than had been anticipated.

The OBR also helped markets by edging up its forecasts for growth in the UK economy, to 2.4% next year and 2.5% in 2017.

Housebuilders, which had jumped in early trade in anticipation of generous new measures to boost construction, gave back some of their gains as the Chancellor’s largesse was concentrated on the affordable end of the market. Even a new help to buy scheme for London had little impact.

Persimmon was up 54p at 1,836p and Taylor Wimpey ended the day 6.7p higher at 184.8p.

Plans published alongside the statement disclosing that the Government would sell £25bn of Royal Bank of Scotland shares didn’t lift the company’s stock. It closed 1.8p lower at 300.5p.

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