The FTSE 100 closed 0.6% higher on Tuesday, adding 61.15 points to finish at 10,585.91, as investors responded positively to renewed assurances on fiscal policy from the UK government.
New Chancellor John Healey reiterated his commitment to fiscal discipline during the session, a stance that helped stabilize sentiment in London.
The market’s reaction suggests traders are rewarding the clarity on spending controls, particularly after a period of volatility driven by external macro pressures.
Defence equities emerged as the day’s clear outperformers, climbing on the back of the political developments.
The sector’s strength helped offset broader market caution, providing a lift to the index despite lingering concerns over energy costs.
This move follows a series of modest gains for the benchmark.