U.K. Stocks Rise After Budget; Barclays Gains, Homebuilders Fall

Updated on
Photographer: Simon Dawson/Bloomberg

U.K. stocks rebounded from their lowest level since January amid gains in Europe’s stocks, while Chancellor of the Exchequer George Osborne delivered the nation’s budget.

Barclays Plc climbed 2 percent as Chairman John McFarlane ousted Chief Executive Officer Antony Jenkins to speed up an overhaul. Aviva Plc added 3.5 percent. Hikma Pharmaceuticals Plc climbed 2.9 percent after Citigroup Inc. said it may do a transformative deal in the U.S.

The FTSE 100 Index rose 0.9 percent to 6,490.7 at the close of trading in London. The gauge lost 9.5 percent from its record in April through Tuesday, following European equities lower amid the Greece impasse. The FTSE All-Share Index added 0.6 percent on Wednesday, and Ireland’s ISEQ Index retreated 0.5 percent.

The U.K. will maintain the pace at which it cuts the budget deficit with the new budget, the first by a Tory majority government since 1996. It is the first time Osborne has been able to set out his plans for tax and spending without being constrained by the Liberal Democrats.

Homebuilders declined as the new budget limits tax relief for so-called non-domiciled people living in Britain. Lloyds Banking Group dropped 2 percent and Standard Chartered Group Plc fell 1.5 percent as Osborne said banks’ profits will be taxed by an additional 8 percent on top of their corporate tax, starting from next year. Lenders earlier extended gains after he announced a reduction in the bank levy.

Drax Group Plc, the utility converting the biggest U.K. coal station to burning wood pellets, plunged 28 percent to a record low after the government said clean power won’t be exempt from a climate-change tax.

Read this next:

Before it's here, it's on the Bloomberg Terminal. LEARN MORE