Budget: FTSE 100 rallies as Chancellor Rishi Sunak plans help for home buyers
A mortgage guarantee scheme to be announced by Chancellor Rishi Sunak in his Budget this week lifted house building stocks.
Monday 1 March 2021 17:06, UK
Britain's leading share index has risen sharply on the prospect of more help for the housing sector in Rishi Sunak's Budget later this week, as well as a boost for government stimulus in the US.
The FTSE 100 was up by about 2% - or more than 100 points - in morning trading, with builders such as Persimmon, Taylor Wimpey and Barratt Developments leading the way though the momentum eased slightly in the afternoon.
It was part of a global rally for stocks following the approval by the US House of Representatives on Friday of President Joe Biden's $1.9trn coronavirus pandemic relief bill.
In London, the rally for house builders came after it was revealed over the weekend that a scheme to guarantee 95% of mortgage loans for first-time buyers will be announced in the Budget.
They are also in line to benefit if, as reported, the chancellor extends a stamp duty holiday announced last summer.
Persimmon and Taylor Wimpey were each up by around 5% by the close, with mining and oil stocks also climbing amid the global upturn in sentiment.
Hopes for the reopening of the UK economy - as the number of people receiving vaccines in the UK passed 20 million - also buoyed British Airways owner International Airlines Group, up 7%.
The FTSE ended the day 1.6% higher at 6,588 - a rise of just over 100 points.
The optimism globally reversed sell-offs seen at the end of last week as markets worried about the potential for an inflation spike when economies emerge from lockdowns - and what that might mean for interest rates.
In Europe, France's Cac 40 and Germany's Dax were also more than 1% higher, while in Japan, the Nikkei rose 2% - its biggest gain in seven months - and indices in Hong Kong and Shanghai were also ahead.
Wall St also began the week on the front foot with investors, buoyed by the additional stimulus, also cheering a positive vaccine development.
The major indices were all up by more than 2% on confirmation Johnson & Johnson had begun shipping its single-dose jab, making it the third authorised COVID-19 vaccine in the United States.