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- UK Spring Budget: European defense stocks to benefit – Citibank
UK Spring Budget: European defense stocks to benefit – Citibank
The Citigroup analysts believe that the European budget stocks are expected to benefit from UK Chancellor Rishi Sunak’s spring budget, which will be announced on Wednesday.
Key quotes (via Bloomberg)
Sunak is likely to announce a “relatively modest” increase in defense spending, in line with inflation, after security became a priority for British voters following Russia’s invasion of Ukraine last month.”
“The public desire for the government to take some sort of action will register very clearly.”
“With the Labour Party also calling for a rise in defense spending, the government is unlikely to want to look weak on this issue.”
“Sunak may feel that, irrespective of the political capital defense increases may generate for the government, it will soon be eroded if inflation gets out of control.”
“Among companies, QinetiQ Group Plc and BAE Systems Plc would likely be the biggest beneficiaries of a U.K. defense spending uplift, while Italy’s Leonardo SpA and France’s Thales also have exposure.”
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